Tips for New Rental Property Owners – Part 1

Tips for New Rental Property Owners – Part 1

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Tips for New Rental Property Owners – Part 1

 

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.

 

Tips for Marketing Your Vacancies on the Web

Tips for Marketing Your Vacancies on the Web

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Tips for Marketing Your Vacancies on the Web

 

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?

How should I choose between multiple qualified applicants?

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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

Multi-Family Real Estate Investing — Why You Should Invest

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It seems like everyone in Utah is investing in multi-family homes right now — the authorities issued 465,000 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.

 

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Single-family Homes vs. Multi-family home

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:

  • Apartment buildings
  • Student apartment buildings
  • Duplexes
  • Town-homes 

 

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.”

 

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The benefits of multi-family properties in Utah

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.

Recommended reading: Landlord Insurance Tips That Can Save You Money on Your Rental Property

There’s less risk

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.

 

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Cheaper maintenance costs

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. 

Final word

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. 

As one of the best property management companies in Utah, we take care of all the tasks associated with multi-family homes, such as marketing, tenant screening, rent collection, maintenance, inspections, and much more. We provide you with peace of mind. 

Call us today or learn more about property management for multi-family real estate investing

Rental Advertising Tips for your Utah Rental

Rental Advertising Tips for your Utah Rental

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Rental Advertising Tips for your Utah Rental

 

Nothing puts a landlord on edge quite like a vacant unit. With no one to pay rent and expenses piling up, most want nothing more than a phone call from a qualified prospect to put their mind at ease. Sometimes renting your property is as simple as combining well written ad copy and strong sales skills. Use these tips when marketing your vacant properties.

 

Start with the basics – Good copywriting is certainly an acquired skill, but you’d be surprised how often even basic information is missing from Utah rental property listings. Always include the rental amount, property address, and property specifics like bed/bath and square footage.

 

Highlight features and benefits – Even the least desirable unit has some benefits and it’s your job to discover and highlight these. Top floor units typically have views, ground floor units are easily accessible without stairs, and homes on a busy street are closer to bus lines and freeway entrances. Every property has something that makes it unique and attractive.

 

Provide lots of information – The more details you provide, the more a prospect knows if your unit is the right fit for them. Items you should provide include detailed photos, lease terms and deposits, application process details, etc. Being this specific may limit your total number of showings, but you’ll find that the prospects who do contact you are much more qualified.

 

Sell to your audience – When showing your vacancies, try to point out features that will be important to each individual prospect. If you are showing the home to parents with young children, point out safety features like a fenced in yard. If your prospect is a student, highlight how close the unit is to public transportation that goes by the university. By tailoring your presentation to each individual tenant, you will be much more likely to fill your vacant unit.

 

Having unoccupied rental units can be very stressful for landlords, but there are some simple things you can do to help fill them quickly. Follow these tips next time you post your vacancy and watch how quickly it gets filled.

 

How to Market my Utah Rental Property?

How to Market my Utah Rental Property?

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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?

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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.