Becoming a landlord for the first time can be a very stressful situation. Finding a qualified tenant is probably the first thing on your mind, but it is also very important that you are complying with all the important rules and regulations that go along with rental properties.
So what are the most important aspects of being a landlord? Below are some tips that will give you a basic understanding of owning a rental property and what you should focus on to be the best landlord possible:
Screen Potential Tenants – In order to find the best tenant for your rental, you will have to do a little bit of research. Anytime a potential tenant fills out an application, you should run background and credit checks. It is also very important to contact all references you are provided with. This will give you a great idea of how likely the tenant will be to pay you on time each month.
Have a Contact List of Maintenance Partners Ready – It is always a good idea to be proactive and create the relationships with your maintenance partners before any issues arise. This way, if it is 2am and you receive a phone call that your property is flooding due to a broken pipe, you know exactly who to call. This can help to limit the damage you experience before it is too late.
Know the Market Rate For Your Property –Although you may think that your property is near flawless, you have to look at the situation from a potential tenant(s) perspective. What are the weaknesses of the property? Does it have a good layout? Is the home located in a good location? It is always a good idea to look at other similar homes for rent that are currently on the market. This will help to give you an idea of what your property will actually rent for.
Customize Leases – It is very easy to find a generic lease online that you can have your tenants sign. While this will cover you on many of the basics like rent, security deposits, and tenant rights, it may not cover the more in depth issues that you would like to outline (like your pet policy, how you handle late fees, and what maintenance the tenant will be responsible for). If you are not currently
customizing your leases, you may want to consider starting this practice.
Create a Property Inspection Report – By getting a property condition report signed by the tenant at move-in, you can decrease the chances of a dispute when the tenant moves-out. This will help to eliminate the excuse of “that problem was already there when I moved in” from your tenant, as it will show all of the issues the property had before the tenant moved in.
Being a rental property owner can be very rewarding, but also very stressful. If you would like to discuss the best way to manage your rental or if you are considering hiring a property management company, please contact us at FRE Property Management. We are the premier property management company in Utah and will provide you with the peace of mind knowing that your investment is being taken care of. Contact us today at 801-673-5692.
Remember when finding a new tenant meant throwing up a sign in the yard and placing an ad in the weekend paper? Times were simpler then. With sites like KSL and Craigslist attracting tons of local traffic and allowing free classified ads, the web has become your go to spot for finding quality tenants for your Utah rental property. But how can you make your rental stand out in the crowd? Following these simple steps will give your property a strong web presence and help find your next tenant faster.
Create visibility – Telling you to publish your vacancy to as many websites as possible may sound obvious, but do you know why? The more links available to your rental, the more likely it is to show up on your prospective tenants search results and ultimately on their radar.
Let your photos do the talking – Almost anyone can write a glowing description that will make even a toolshed sound luxurious, but searchers want to see it. In fact, you should add as many pictures as the site will let you. Make sure they highlight your property’s best features and watch your lighting, because dark photos can make your top floor condo look like a basement apartment.
Add video – Sometimes photos just don’t tell the whole story. A virtual tour can really help people visualize the space and picture themselves living in it. Another huge advantage to using video is it will limit your showings to only truly interest parties since everyone will have already had a chance to “walk through” your property.
Update your information regularly – One of the biggest advantages web marketing has over print is that it’s editable. If you change your price or forget to mention a particular benefit, you can easily make the change at no additional cost.
Make it convenient for tenants to contact you – Not everyone does their searching during daylight hours when it’s appropriate to call, so always make sure your prospective tenants can contact you by email to ask questions. In fact, if you hire a property management company, they typically offer software that will allow tenants to schedule showings or send an application right from their computer.
If you aren’t already marketing your vacancies on the web, I suggest you start now. Your competitors are already showing their properties off online. The web can be very competitive, but following these simple tips will help you build a web presence and decrease your vacancy rates.
How should I choose between multiple qualified applicants?
While many owners struggle to find qualified tenants for their property, a distinct few may be fortunate enough to have multiple applicants willing to rent their unit. While almost all owners would agree, having multiple qualified potential tenants is a good problem to have; many owners don’t know the exact protocol to follow in order to comply with the Fair Housing Act.
So you have multiple applicants willing to rent your property, what is the first step in order to determine who to rent the property to? First of all, you must create a qualification criteria and apply it equally to all potential tenants. This may be a minimum credit score and minimum income requirement that you will require from your tenants. In addition, you may require documentation of rental payment, as well as one positive reference from a past landlord. The most important aspect is creating a standard and applying this to all applicants.
What if multiple candidates exceed the minimum qualification requirements? In the event that multiple applicants exceed the criteria you have set, you will need to create a fair method to determine the tenant you choose. An example would be selecting the tenant that exceeds the qualification requirements the most. This may be the tenant with the highest credit score, longest documentation of timely rental payments, and/or the most positive references from past landlords. Another example would be selecting the first qualified tenant that was interested in the unit. While there are pros and cons to each, whichever method you choose, be sure to remain consistent and apply to all properties you rent.
Once you determine which applicant you would like to enter into a lease agreement with, be sure to provide written notice to all other applicants. This should include the reason for not renting the unit to the applicant. As long as the reason for denial is not correlated with the applicant’s status in a protected class, you should be in compliance of the Fair Housing Act. In the event it was based on information contained in the applicant’s credit report, you must state this as notice of the denial per the Fair Credit Reporting Act.
The Fair Housing Act can be very confusing and a costly mistake if an owner does not comply. If you would like to learn more about the Fair Housing Act or if you would like assistance in managing your investment, please consider hiring FRE Property Management. We are the premier property management company in Utah and will provide the peace of mind knowing that your investment will be taken care of. Contact us today at 801-673-5692.
Multi-Family Real Estate Investing — Why You Should Invest
It seems like everyone in Utah is investing in multi-family homes right now — the authorities issued465,000 building permits for these homes in 2018 alone — and with good reason. Sure, the stock market provides lucrative returns, but it’s way too volatile. Single-family homes also prove profitable, but there’s too much risk. Some of the world’s most successful people built their wealth from multi-family real estate, and you too can capitalize on this trend. In this guide, learn why multi-family homes are possibly the best investment you can make in Utah.
Multi-family homes are residential properties that contain multiple housing units. These units can be next to each other, behind each other, or stacked on top of each other. They might consist of one building or two buildings or several buildings. There’s no specific determination for multi-family homes in Utah, but they share the following characteristics:
Each unit has a separate address.
Each unit has its own entrance.
Typically, each unit has its own kitchen, bedrooms, and bathrooms. However, sometimes units share communal areas.
Multi-family homes are usually:
Student apartment buildings
Single-family homes, on the other hand, are residential properties that contain one housing unit. There might be multiple people living inside these properties, but there’s just one “household.”
Property investors view multi-family homes as the ultimate investment for the following reasons:
Greater cash flow
Multi-family homes have multiple housing units, so landlords make more rental income. It’s as simple as that. Some multi-family properties might contain five, 10, 20, 50, or even more housing units, allowing for much greater cash flow than single-family homes.
When tenants move out of single-family homes, the property might stay unoccupied for days, weeks, or even months. During this time, landlords won’t receive rental income and often experience a financial loss. Multi-family homes, however, generate rental income from many housing units. If tenants move out of one unit, landlords still receive income from tenants in other units. This will still impact cash flow, of course, but landlords have several income streams at the same time.
Greater potential for property management solutions
Although property management benefits landlords of both single-family and multi-family properties, there’s much greater scope for landlords of multi-family homes. With more cash coming in, these landlords can afford a property manager to screen tenants, handle maintenance, and facilitate all the other tasks associated with the day-to-day running of properties. This allows landlords to focus on other areas of their business without worrying about administrative responsibilities.
If a landlord has multiple single-family homes in Salt Lake City or across Utah, they need to manage properties in various locations. The landlord requires contractors — plumbers, builders, electricians, etc. — in all of these locations, and this is extremely expensive. Now imagine a landlord has multiple housing units within the same property. There would be one fixed, centralized location for repairs and maintenance, which could bring down costs significantly.
Less volatile than the stock market
People often think the stock market is the best place for investments, but this isn’t always the case. Stocks fluctuate and pose significant risks to investors with little experience. Investing in multi-family homes still comes with risk (like any other potential money-making opportunity), but the real estate market is far less vulnerable than the stock market. People will always require a place to live, and there has been a significant increase in demand for rental properties across the US over the last few years.
How to invest in Multi-family Homes
Calculate the return. Work out expected rental income and other revenue (storage fees, parking fees, etc.) and offset this against any expected expenses (repairs, for example). This determines whether multi-family investments are right for you.
Think long-term. Work out how long it will take for you to generate a return on your investment. How long until you pay off your mortgage? Will the property increase in value?
Understand your responsibilities. The federal and Utah governments require you to maintain a safe, livable space for all your tenants. This means regular maintenance and problem resolution management. If you don’t have the time or resources to do this, consider a Utah property manager.
As you can see, multi-family real estate investing can be lucrative. If you are looking for a long-term investment, these properties generate more cash flow than single-family homes, come with less risk, are cheaper to maintain, and are less volatile than stocks. Multi-family properties also offer great potential for property management solutions like Wolfnest.
How to Effectively Advertise Your Utah Rental Property
Learning how to advertise rental property can make it much easier for you to earn money from apartments and houses. The sooner someone moves into your property, the sooner you can start earning revenue.
Finding the perfect fit for your property will take some effort. Follow these advertising rental property tips to attract great applicants who will treat your house or apartment respectfully.
Tip 1: High-Quality Photos and Staging
As you learn how to make your rental property stand out, start by focusing on two things: staging and high-quality photos.
Terrific staging makes your property look like the kind of place that tenants will love renting. Fortunately, a little work can go a long way, so you don’t have to spend a lot of time or money on staging. You can often get good results by:
Using neutral colors and generic styles, so the property appeals to more people.
Cleaning every surface to make your rental property look ready for someone to occupy.
Giving every space a purpose (e.g., place a computer on a table to show its usefulness as a home office, position seats and a table in the living room to communicate its purpose as a place to gather with friends, and add candles to the bathroom to make it look like a relaxing place to unwind).
Learning how to take pictures is a part of learning how to advertise rental properties. You want the best possible images that will encourage potential renters to contact you. Taking great pictures requires skill and practice, though. If you don’t have time to learn, consider hiring a professional to do the job for you.
If you plan to avoid the cost of hiring a professional, you can improve the quality of your photographs by:
Using a wide-angle lens that can capture a full room.
Getting a tripod that helps ensure a level, stable image.
Taking advantage of natural light when possible.
Bringing at least two flashes (a large, bright one for big rooms and a smaller, less-bright one for closets and small rooms).
Buying the best camera you can afford (don’t count on your smartphone’s camera to do the job well without adding several accessories).
Taking multiple photos of the same area, so you have options when you create rental ads.
Using editing software to improve quality by adjusting colors, cropping out mistakes, and adding filters.
The more Utah properties you own, the more you should expect to invest in staging and photography. At some point, you might even want to explore aerial or 3D photographs that will help your rental properties stand out.
Tip 2: Attention-Grabbing Ad Copy
Combining high-quality photographs with attention-grabbing ad copy should make it much more likely that you find people who want to rent your property. Not everyone knows how to write terrific ad copy. Luckily, it’s a skill that you can practice and improve over time. Several online tools can also help make your copy more compelling.
Some tips for making your copy more attractive include:
Addressing the reader directly with “you” statements like, “You will love waking up to a beautiful view of the park” or, “With a washer-dryer in the kitchen, you don’t have to carry heavy clothes to the basement.”
Keeping sentences and descriptions short so you can appeal to all types of readers.
Putting the best amenities in bold to grab the reader’s eye.
Including emotional words that will appeal to readers and make them interested.
Knowing your audience so you can focus on the features that interest them most.
Asking other people to read your ad copy and give you suggestions for improvement.
You can also get suggestions for improvement from online editing tools like Hemingway. The free editor will analyze your copy to find unnecessary words and sentences some people will find hard to read.
Tip 3: What to Include in Your Rental Ad
Your rental property listing description allows you to explain why people should choose your rental over others in the area.
First, you need a headline for your ad copy. Effective headlines could include:
Attractive 2-bedroom overlooking Liberty Park.
Charming 3-bedroom home in Capitol Hill.
Newly renovated cabin near Zion Ntl Park.
Once you hook readers with a captivating headline, you should write straightforward copy that answers common questions while making your rental property seem as attractive as possible. Depending on the rental’s location, you might want to include information about:
Available parking spaces.
The number of bedrooms and bathrooms.
Access to laundry facilities.
Whether you allow pets.
Proximity to public transportation, landmarks, or entertainment districts.
When the property will become available.
The rental property’s price (you don’t want a lot of calls from people who cannot afford to pay the rent)
Lastly, look for one or two places in your rental property’s listing description to add a bit of flare. You could mention that the living room window offers a spectacular view of sunsets or that a remote location helps soothe people who want to stay in touch with nature.
Tip 4: What Not to Include
You might have an ideal tenant in mind for your rental property. However, chapter 21 of the Utah Fair Housing Act prevents you from choosing a renter based on factors like sex, disabilities, gender identity, and whether they have children.
You don’t want to give the impression that you favor one type of renter over others, so don’t get too specific in your rental ads. For example, do not include language like:
“This home is perfect for a couple.”
“A wonderful place for a single mom.”
“Ideal for a single man who loves the woods.”
To you, these descriptions might sound like innocent ways to make your property more appealing. Perhaps you don’t care whether a man or woman lives there, but you use the phrase “ideal for a single man who loves the woods” because you associate masculinity with activities like hunting and camping. You might also think that the phrase makes the property description more evocative, which is good when done correctly.
Utah’s fair housing laws have some gray areas. It’s best to avoid the possibility of fines, though, by only including objective descriptions in rental ads. Talk about the property, not the people who might live in it.
If you have any questions about your advertisement’s language, you can reach out to the Utah Labor Commission, which oversees housing discrimination cases, or seek advice from Wolfnest Property Management Firm. Keep in mind that Wolfnest can usually answer your question much more quickly than a government agency.
Tip 5: Where to Advertise Your Rental
Now that you know how to advertise a rental property, you need to decide where to advertise it. You have a lot of options, but not all of them work as well as others.
A lot of people still use Craigslist to find rental properties. Unfortunately, spammers also use the site to collect contact information that helps them target individuals and businesses. You might find a great tenant on Craigslist, but posting an ad there could also generate a lot of unwanted emails and phone calls.
Apartments.com has rental pages for most cities, including Salt Lake. However, the website focuses so much on meeting the needs of renters and landlords across the U.S. that it frequently fails to meet the needs of people advertising local rental properties. Don’t expect the website to understand anything about reaching your audience in Utah.
Wolfnest, a property management company located in Sandy, Utah, does much more than give you a place to advertise your rental properties. The Wolfnest website connects potential renters to applications that they can fill out and send to you.
The site has an established list of Utah rental application criteria that helps eliminate unacceptable tenants. The process includes:
Collecting a $39 application fee.
Collecting an application deposit that gets refunded when applicants are not approved.
Confirming the applicant’s identification.
Verifying the applicant’s income and employment requirements.
Reviewing the applicant’s criminal, credit, and rental histories.
Ensuring that all applicants know the maximum occupancy law of your rental property’s town.
With Wolfnest, you get to focus on applicants you can trust without wasting a lot of time checking the information people submit.
Contact Wolfnest for Reliable Property Management Services
Wolfnest offers diverse services for property owners and renters. You never get forced into an agreement that you don’t want. Instead, you get a customized approach to property management that matches your financial and portfolio needs.
Contact Wolfnest to learn more about the benefits of professional property management. Whether you own one house or an apartment complex, Wolfnest can help you generate income from your property without making you spend a lot of time on advertising, managing tenants, and maintaining properties.
So you have decided that you are going to rent out your home, the next logical question you will probably ask is: How do I find a qualified tenant? There will always be quality people that are looking for a Utah rental property, but you will need to actively seek them out. Here are some tips that will help you find the right tenant and start covering your mortgage each month:
Put a Sign in the Front Yard – This might seem like the most obvious marketing tip in the world, but it always amazes me how many owners don’t do this. By putting a sign in the yard, it will not advertise to potential tenants that drive, but it will also let your neighbors know that the property is for rent. If your neighbors really like the area, they will let their friends and family know about any available properties. It really is amazing how many rentals are filled this way, and how inexpensive this advertising is.
Make Sure your Property can be Found Online – Oh, how the times have changed! In today’s market, more than 80% of prospective tenants begin their search online for a Utah rental property. There are so many free classified ad websites on the Internet, as well as many inexpensive sources that specifically target renters. This makes it easy to market your home to a wide range of people. If done correctly, your property may only remain vacant for a few days!
Tell the World About your Property – You should never be ashamed to pitch your rental property to family, friends, and related professionals. Maybe your brother has a friend that is looking for a home to rent or your friend has a co-worker that needs to lease a place. In addition to these people, your real estate agent and mortgage broker are great resources for finding interested tenants. They are constantly working with individuals that would like to purchase a home, but can’t for a variety of reasons. This word of mouth advertising does not cost you anything and can be very effective.
There is no shortage of things that you can do to get your Utah rental property filled with quality tenants. They do exist, but you really do have to be proactive in finding them. If you have any questions about how to market your rental home for prospective tenants or if you are considering hiring a property management company, please contact us at FRE Property Management. We are the premier property management company in Utah and will provide you with the peace of mind knowing that your investment is being taken care of. Contact us today at 801-673-5692.
Why Investment Property Owners in Utah should consider refinancing through HARP?
Why Investment Property Owners in Utah should consider refinancing through HARP?
As most lenders continue to tighten mortgage requirements for investment properties, it has made it impossible for many owners to take advantage of historically low interest rates. As an investor myself, it pained me to continue to pay the mortgage on my rental property each month at a 6.5% interest rate knowing that interest rates were currently being offered for 4%. I don’t know any investor that couldn’t benefit from the increased cash flow by reducing the interest rate on his/her property by 1.5%. I continually tried to refinance, but due to the fact that I had purchased this property in 2007 and was underwater, no lender would even entertain refinancing my mortgage. Lucky for me a colleague of mine mentioned the possibility of refinancing through HARP.
As a property owner in Utah, you may be eligible for HARP, or the Home Affordable Refinance Plan. This was enacted in 2009 by the US government in order to allow home owners to refinance his/her rate in order to continue paying the mortgage each month and avoiding foreclosure. This was the perfect option for me, as it does not require the home to be owner-occupied and does not require an appraisal. Earlier this month, I was able to refinance my rental property from a 6.5% interest rate to 4% with closing costs totaling $500. In turn, the cash flow on my rental property went from break-even each month to $250 positive cash flow.
So what is required to qualify for HARP? First of all, your current loan must be backed by either Fannie Mae or Freddie Mac. Second of all, your current mortgage must have a securitization date prior to June 1, 2009. If these two criteria are met, you may be eligible to refinance your current mortgage through the HARP plan. Unfortunately, if your current mortgage is FHA or a jumbo loan, you will not be eligible for HARP.
So I am eligible for HAP, what do I do now? The first thing I would do is reach out to your current mortgage servicer and inquire as to the interest rate you would be eligible for with this program and the procedure to initiating this refinance. I would also reach to a few local mortgage brokers in order to determine if the interest rates they can secure are lower than the rate offered by my current mortgage servicer. It is also wise to determine the closing costs offered by each in order to determine your break-even point. Once you decide, be prepared for the process to take a significant amount of time. Lenders are receiving as many as 1,000 application per month with prospective owners wanting to participate in this program. From the time your application is submitted, the process may take 3-6 months. I will tell you though, that the savings can be well worth the wait.
If you would like more information regarding the HARP program or would like to have your rental property managed, please consider hiring FRE Property Management. We are the premier property management company in Utah and will provide you the peace of mind knowing that your investment will be taken care of. Contact us today at 673-5692.