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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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Property Manager

Five benefits of hiring a property manager for real estate investors

People looking to invest in rental properties as a means of diversifying their asset portfolio will usually find themselves asking the following question: should I use a property manager or manage the property myself?

The answer is an unequivocal: it depends. Property managers are known to take between 7% and 20% of the gross rent. This means, simply put, that a property manager is an expense to owning the property, in addition to maintenance, taxes, insurance, and a variety of other expenses associated with real estate investment.

That said, there can be inherent advantages to hiring a good property manager.  Here are a few of them.

1. A good property manager can add value to the property.  This is one often overlooked value of using the services of a property manager. If the owner ever wants to sell the property, one excellent selling point in any advertisement is a line like this: “Property management already in place.” This makes it easy for new (and even existing) real estate investors who are looking to enhance their portfolios with good properties that already have sound management.

2. A good property manager gives the owner more free time. Time is money. If the owner has more free time that is not consumed by answering midnight calls about toilets that won’t flush or examining the property for obvious problems on a periodic basis, then that owner is free to do other things, such as look for other real estate investments.

3. Good property managers can shorten vacancies. A property manager has a full time job that includes, among other things, showing the property. The property owner may not, and probably does not, have the kind of time necessary to devote to showing the property. This means that, not infrequently, accomodations have to be made for scheduling conflicts between the owner and the prospective tenant. This would usually increase the vacancy time for the open unit. Vacancy time, of course, means that the owner is not receiving rent for that unit.

4. Property managers take care of a lot of administrative work. This is not only a time-saver, but is also a nuisance-saver. Property managers will keep track of expenses, will handle receipts, and provide monthly, itemized accounting information to property owners. This saves a lot of hassle when it comes time to file taxes.

5. Good property managers stay up to date on local and federal rental housing laws.  There are federal rental housing laws such as the Fair Housing Act.  And there are state and local laws that vary based on location.   Some cities, like Boulder Colorado, require rental properties to be licensed under City law.  In Boulder rental properties must pass a detailed property inspection and pay an administrative licensing fee.   If a real estate investor is not current on local and federal rental housing laws it could end up costing them a lot more than the cost of rental license fee.

While property managers certainly cost money, the benefit gained from investing in their services is a sound return on investment. Real estate investors who don’t want to have their time monopolized by adminstrative tasks and management hassles would do well to use the services of a good property management company.

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