Property Management
Real estate can be a very lucrative investment to make. It can be hard to get into, but once you break through, you can make a large amount of money. In fact, there are a number of different ways to make money on real estate property, and many of them can occur at the same time. Let’s look at a few different sources of income that might come with a real estate investment.
Appreciation in Real Estate
Appreciation is probably the form of income that is most commonly considered. Appreciation is a concept that says a piece of real estate property will gain value over time. A house that you purchase today for $100,000 might sell for $120,000 in 15 years, assuming you do nothing but take care of it. This is the easiest source of income, because all you have to do is maintain the property, however, it certainly isn’t the most lucrative source.
Rent from Home Rental Real Estate
Rent can be a very large source of income if you don’t live in the property yourself. Rent income can often solely, or at least mostly, be enough to cover mortgage payments. Once the mortgage is paid off, this can be a lot of cash in your pocket every month, and the best part is that you can collect rent while the property continues to appreciate.
Fix-up your Real Estate
Every house has a number of improvements that could be made, and many of them are surprisingly simple to do. Improving a home, of course, raises the value of the house, usually by more than the improvements cost, especially if you do the labor yourself. For example, if you spend $10,000 on improvements to a $100,000 house, it might be worth $125,000 after you’re finished. But there’s a hidden benefit to this. In addition to adding value to the house, you can also charge more for rent after making improvements, which increases that income as well.
Tax Breaks from your Real Estate Investment
This isn’t technically a source of income, but in many ways, paying out less is the same as bringing in more. You can get a tax break on expenses on a rental property. This adds even more benefit to the fix-up strategy, because this means it costs even less. You can also get a tax break for something called depreciation, which doesn’t cost you anything. That’s a pretty good way to put cash back in your pocket.
Interested in creating income with real estate but not sure where to start? Call 720.989.1996 or Contact us! Legacy Properties-PM can help you get started and be there for you, every step of the way.
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Property Management
Finding a tenant for a vacant residential property isn’t rocket science. You advertise the property, take phone calls, set up appointments to show the house or condo, and then fill out paperwork. A general application should get you the information you need, and that’s all there is to it, right? Why hire a property management company when anyone can do that much?
Quite honestly, it’s the experience that makes the difference. At Legacy Properties-PM, we’ve been placing tenants for decades, and you learn a thing or two in that time. Applicants can look relatively equal on paper, so you have to know what to look for.
For instance, sometimes we have several applicants for a vacancy, and they all appear to be responsible people with verified employment and money for a security deposit and first month’s lease. But maybe we happened to take a peek in the car of one of the applicants when they came out to see the property. Clothes, fast food wrappers, and other garbage covered the floor. How a person takes care of their own property is an indicator of how well they will take care of yours.
Another person showed up late to the appointment, and didn’t really give an explanation or apology. That shows a disregard for other people’s time. And yet another spoke rather rudely, and informed us that they would be signing the lease and moving in the next day. It’s never easy to manage a person that doesn’t recognize who is the person in authority in the situation.
None of these criteria are on paper, but experience and a watchful eye provides us information we can use to choose the best tenant for your property. This information, combined with the application, credit report, and background check provides an assurance that your tenant will take care of your property, pay the rent on time, and abide by the terms of the lease.
If you own investment property in the Denver area and would like to know how Legacy Properties-PM’s experienced property management team can help you find the best tenants, call 720.989.1996 or contact us.
Property Management
Buying a rental property in a hip neighborhood in the Denver area makes total sense with today’s hot rental market. But Colorado savvy investors often wonder how they should pay or finance the deal. You could pay with cash, take out a mortgage or do something a little more daring with your retirement money. By rolling over money from a traditional 401(k) or other retirement account into a self-directed IRA in Colorado, you open up a new world.
According to a piece by Forbes, one of the main benefits of a self-directed IRA is the fact that it’s a tax deferred account. If you buy the real estate with a self-directed IRA in Colorado, you can later sell at a profit without owing taxes. You also don’t owe money on any rental income profits.
- A safe haven for your asset
Then there is the asset protection side. Your rental home is an important asset whether you keep it to rent out for decades or sell it. Most experts say real estate is a much safer investment compared to stocks and alternative investments such as gold coins, unregistered securities or business partnerships. By hiring a property management company to oversee your Denver rental property, you protect your rental home. Your property manager will thoroughly screen prospective tenants and enforce the lease for your protection.
- A set it up and forget it approach
Another advantage of using a self-directed IRA to buy real estate is the fact that it takes the burden off of you to manage your property. The IRS has very specific “self-dealing” restrictions that don’t allow you to live in or manage a property bought through a self-directed IRA. Once you set up your self-directed IRA with a third-party administrator and hire your property manager, you no longer have worries. You don’t have to chase down rent, mow the lawn or handle disputes with neighbors.
According to an article by the Colorado Association of Realtors, other advantage of a self-directed IRA in Colorado is diversification for retirement. The Colorado Association of Realtors emphasizes that disqualified people (the IRA holder and his/her lineal ascendants and descendants) can not make repairs to the property.
Legacy Properties-PM provides top-notch property management services in the Denver area. We are longtime members of the NARPM, the National Association of Residential Property Managers. For more information on the benefits of a self-directed IRA in Colorado, please call 720.989.1996 or contact us.
Property Management
Choosing the best tenant for your investment property can be the difference between loss or profit. As a landlord you want tenants that treat your property like their own. So where do you begin?
Advertise Your Property Wisely
You may not realize it, but advertising is the first step to screening potential tenants. Today landlords have many different ways to get the word out about their property. While putting a rental sign in your window, listing with a realtor, and adding the vacancy to sites like Zillow and Craigslist might be the first thing that comes to mind, don’t overlook the value of social media.
Sites like Twitter and Facebook are a great way to advertise to potential tenants. There’s probably a page on Facebook for landlords in your area to advertise their rentals. Also, don’t overlook the obvious. Word of mouth, print ads, and advertising on bulletin boards have filled rentals. But remember to choose wisely where you advertise. A bulletin board in a coffee shop near a college will attract a different tenant than one in a community center in a stable neighborhood.
Screen Your Tenants Carefully
So your advertising produced a list of prospects. Now it’s time to screen your potential tenants. Many landlords don’t want to offend by asking personal questions, but this isn’t about discrimination. Since you must adhere to the Federal Fair Housing Rules, it’s about protecting your investment. Don’t be afraid to ask hard questions when interviewing. In the very least, conduct a criminal background check verifying the prospect’s name and date of birth with a valid i.d. In addition, run a credit check and verify their income. By taking care of these issues up front, you’ll be able to quickly disqualify the more irresponsible tenants from the more trustworthy ones.
Having to evict a tenant can be aggravating and costly, but with carefully planned advertising and screening it can be prevented. Taking the time to do things properly yourself or by hiring a property management company will get you one step closer to finding the best tenant for your investment property. Call Legacy Properties-PM @ 720.989.1996 or please contact us.
Property Management
Spotting a good deal is paramount for real estate investors in Aurora. Whether you buy a banked-owned foreclosure online or work with a Realtor to find traditional sales, look for value when hunting for your first rental. House hunting for a property you will use as a rental is a little different from hunting for a home you will occupy. When you buy a home for yourself, you follow a different timeline for making improvements. With real estate investing, you want to get your property rent ready in as short of an amount of time as possible. By hiring a residential property management company, you receive the guidance needed to generate income from your rental home. According to an article by Investopedia, there are several features to look for when trying to identify a profitable rental home.
Renters pay more for homes in better neighborhoods because they feel motivated by highly ranked schools and their perceptions of better safety and prestige. In Colorado, some of the best areas to find rentals include Aurora, Denver, Highlands Ranch, Littleton, Lakewood, Parker, Cherry Creek and Centennial. According to Investopedia, where you buy will attract different kinds of renters. For example, if you buy a rental near a college campus, you’ll likely attract students and instructors.
- Checking out the property taxes
Before choosing a rental, check out the property taxes. Your property manager will give you an idea of the market rent for the specific home you plan to buy so you know whether the market rent will easily cover higher property taxes as well as home owner association fees.
When you tour a home, pay attention to whether the necessary improvements are costly or fairly cosmetic and easy. Only an inspector and building contractor can give you a complete estimate of cost and issues. However, you can determine whether a home has potential as a rental. Can you change out a few lighting fixtures, paint and buy upgraded cabinets or appliances?
Your property manager will market your rental home to draw qualified tenants. If you own a rental that’s less than 20 years old, in a good neighborhood, close to amenities and has at least three bedrooms and two bathrooms, you’ll attract a higher rent. Instead of trying to guess the going rent in a neighborhood and what renters want, talk to experts. If possible, buy a rental home that will appeal to millennials since experts believe they will continue to delay home ownership.
At Legacy Properties-PM, we give all of our clients our undivided attention. We are a stellar property management service company in the Aurora area and proud members of the NARPM, the National Association of Residential Property Managers. For more information on real estate investing in Aurora, call 720.989.1996 or please contact us.
Property Management
When you decide to purchase an investment property, there are some things you know you will have to deal with, both positive and negative. You hope that you will see some return on your investment, but also know that it will require some time put into maintenance, collecting rent, and other responsibilities. Because you never know when something will come up that needs attention, many landlords find themselves surprised with how tied down they feel with their rental properties.
Everyone needs to get away once in awhile. Family vacations and weekend trips are essential to finding balance in your life. But many property owners literally feel like a slave to their properties. What if something comes up while you are out of town? What would happen if there was a major plumbing leak, or the heat stops working in the middle of winter? How would you make sure the rent was collected or who would mow the grass? All these “What if’s” add up to property owners who never want to leave town, and families who are frustrated.
A property management company can take the responsibilities off your shoulders so it’s easy to get away. Finding great tenants, depositing rent, evaluating maintenance needs, and even making periodic reviews of the property will be taken care of, so you no longer need to be in town to take care of the day-to-day details of owning an income property.
The benefits don’t stop when you get back into town, though. Property management services continue around the clock, 24 hours a day, 7 days a week, so even when you’re home, you can focus on other things such as your family, hobbies, or job without the constant thought in the back of your mind that something in the investment property needs your attention.
If you own investment property in the Denver area, Legacy Properties-PM is a family-oriented company that wants you and your family to have time together, whether it’s taking a day trip to hike through the Garden of the Gods in Colorado Springs, a week in Hawaii, or a month-long cross-country adventure. Owning investment properties doesn’t need to tie you down, so call 720.989.1996 or contact us for more information.
