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Property Management Tips

Property Management Tips : How to Start Investing in Real Estate

The latest property management tips from Housing Helpers of Colorado.   While some people think that investing in real estate is easy, it is important to realize just how much work goes into it. That being said, it can be a great way to make some extra money.

Here are some tips from the property manager if you want to start investing in real estate.

Make sure that your credit is really good. If your credit is not very high, you are going to end up paying more money each month than you would like. Work on improving your credit score and try again in a few months or a year. It will be worth it because you will be able to buy a much better property for a lower price!   And of course the goal should be that your expected rental income will cover your carrying costs for the property.   Get with your property management company if you need help figuring this out.  

Study the rental market – Do your research. You need to study the rental marketplace and see if people are renting homes in the area. It is also important to find out what they are paying in rent. If they can get a home for much less than you would have to charge in order to make a profit, you are going to struggle to find someone to rent to.

Put together a budget.   A great rental property investment often starts with an analysis of money-in versus money-out.   Create a simple spreadsheet.  On the top of the spreadsheet you will list all revenues ; rent, ancillary income such as pet rent, parking rent, fees etc.   Then below you will list all of the expenses of owning the property.  Don’t forget to account for vacancy loss, leasing costs, property management fees, repairs & maintenance, taxes and insurance, and mortgage costs.

Choose your tenants carefully. Good tenants make the job of property management so much easier. They pay on time and rarely call with unreasonable requests. Even better, some of them will continue to renew their lease, staying for years at a time. This is great because you won’t have to do so much upkeep, as well as marketing the property for new tenants.

Holding real estate for the long term can be a great investment, though it is just like everything else. You have to learn what you are doing so you don’t make so many mistakes. The first thing that you must do is make sure that your credit is good. If it is not, you won’t be able to buy the perfect property.    The second thing is to call a reliable property management company to help you with the rest!   Call the professional property managers at Housing Helpers to get started today!  303-545-6000

Know someone looking for top notch property management company in Boulder?     Refer your friends and clients to Housing Helpers of Colorado and when they sign up for our property management services we’ll send you a $100 gift card to say thanks!

 

 

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Mistakes Newbies Make with Real Estate Investing

When investing in Colorado real estate, avoid the stock market mentality. Buying a Colorado home to turn into a rental property isn’t a get-rich-quick strategy, but a long-term approach for building wealth and passive income.

With real estate investing fever and a hot rental market in Colorado, it’s easy to get carried away. Just as the stock market doesn’t behave the same way over the decades, the housing market is also unpredictable. By working with a solid property manager and choosing the right Colorado home that draws a reasonable market rent off the bat, you avoid some of the real estate investing nightmares.

Buying a home you hate

Don’t buy an investment property if it’s a home you would not personally want to live in for at least two years. Oftentimes, investors save on capital gains taxes by moving into their rental homes for at least two years before selling. On other hand, the home has to appeal to renters. The goal is to avoid high tenant turnover with an attractive property that can produce passive income for 5 to 10 years or longer.

Going into it without cash reserves

Another common mistake is to take out money from retirement accounts to put the 20 percent typical down payment on an investment property. Oftentimes, investors don’t keep enough cash reserves. Make sure you have enough money for basic costs such as property management, maintenance and a few large expenditures such as A/C replacement.

Forgetting it’s a business

Owning a rental property in Colorado is a business. Even if you don’t want to play the “bad guy” when collecting rent or enforcing a lease, treat your Colorado real estate as though it’s your business. A good property management company helps you stay on track. After buying your first rental property, consider investing in more. Give yourself at last a year or two to make sure your real estate investing plans are successful.

According to a piece by forbes.com, investors often make renovations that don’t pay off in the long-term. Avoid the urge to constantly upgrade. Consider hiring a professional interior designer before selling or renting out your home. As an investor, rely on other people to help you reach your goals.

If you are interested in learning more about purchasing investment property in Colorado contact the experienced real estate agents at Housing Helpers of Colorado to learn more.  303-545-6000

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