As a landlord or property management company in Aurora or the greater Denver area, you need to be aware of renter’s rights, fair housing laws and other regulations and ordinances that govern how you operate your property and treat your tenants. Many landlords get into trouble without even realizing they are violating laws or discriminating against potential tenants. Make sure you understand what is acceptable and what is not. (more…)
One of your responsibilities as a rental property owner is to provide your tenants with a safe and habitable property. Installing and checking smoke detectors will help you stay in compliance with the law and ensure your tenants that you are taking their well-being seriously. If you’re not sure what kind of smoke detectors to use or how to test them, contact a professional Aurora property manager who can help you. (more…)
Everyone has a different definition of clean, and when tenants move out of your property, you want to make sure that the home is clean before you begin marketing it to new tenants. There are a few areas that people tend to ignore, whether they are tenants or landlords. When you’re checking for cleanliness, take a look at what professional Denver property management companies scrutinize. (more…)
“Housing costs are affordable, home-ownership rates are high, cost-of-living is comfortable, education and health care are sound and quality of life ranks high.” Denver Business Journal
Littleton Colorado has a rich history, and a doomed factory
Littleton Colorado was incorporated in March 1890 with a population of 245. Franklin Gilmore was elected as mayor the following month and the city’s first church, St. Mary’s Catholic Church, was built on Prince Street in 1901. The county courthouse was completed in 1908 and the first Littleton library was opened in 1917, designed by JB Benedict.
In 1920, the first High School was built as was the Holmes Motor Company. In 1955, the precursor to Lockheed-Martin, the Glenn L. Martin Company was being developed and offered thousands of jobs to local residents. Through the 60’s and 70’s Littleton continued to grow and the Arapahoe Community College was formed, the Chatfield Dam began to be filled with water and the Littleton Historical Museum opened, which is home to Littleton’s first log school.
The Rough and Ready Flour Mill, built in 1867 provided some of the first jobs for the gold prospectors and families during the gold rush. It burned down three times before finally closing in 1959.
Some features of Littleton Colorado you may not know about
Hudson Gardens is a 30 acre non-profit botanical gardens which was started in 1941 by Colonel King C. and Evelyn Leigh Hudson. It became a public garden 1996 and features musical guests throughout the year and makes for a beautiful wedding and event venue.
Littleton World War II Memorial was dedicated on Veteran’s Day in 2000. It is located at 6000 S. Gallup St. Littleton, Colorado in the Ketring Park.
Wondering what to do with your Denver house when you move out of the area?
The changing housing market is scary for some and seen as a cash cow for others. The options you have as a homeowner to leverage one of your largest assets is not a small feat. If you are moving out of town and have a home in Aurora, it is important to decide whether selling or renting it is the better solution for you.
What are your goals?
This is always the first question because it determines your next course of action. Are you wanting the investment of an income property that can send you ongoing income each month? Are you needing a lump sum of income or are you able to allow value to build in the property?
What’s my Denver home worth?
You will need to look at the sale value of your home. From that, you will see what the bottom line is from the sale. Subtract any costs associated with the sale such as Realtor fees and the mortgage and capital gains tax burden.
Contact us to get a property rental analysis to determine what rental rates your home could earn. Subtract any costs associated with the rental such as expected repairs and property manager fees. Also consider the additional tax benefits, and the effect on your wealth portfolio.
What is your strategy?
Once you understand and know your goals, you can make better decisions about how to achieve those goals. Knowing the value of your home- not based on emotion but instead on a market professional’s opinion, you can now see the potential return on your investment. From there, you will need a strategy to use the home as a vehicle to your goal.
If you use a home sale to reach your goal, you are looking at a single transaction and can start the home buying process again. If you use a home rental to reach your goal, you will be wanting to interview and work with a property manager.
As an out-of-area landlord, it is critical you have someone local to manage the property. Why?
Someone needs to be reviewing the property at least once a month.
It is important to stay on top of tenant issues and changes. A vacant property can easily be taken over by squatters. A tenant may attempt to make unauthorized changes or begin bad habit such as allowing the grass and weeds to become overgrown. These can create legal issues and being on top of changes will help nip any problems while they are small.
Someone needs to meet the potential tenants face to face.
Meeting the tenants, including doing a complete background check, reference check and income verification is critical. You want a high quality tenant and a legally binding lease to protect your investment. You also want to protect your property by having an agent you have designated be responsible for showing the property and following a code of ethics. Never give a lock box code to someone claiming to be an agent without proof.
Someone needs to manage your home rental investment.
Property management can be a full time job, and we are guessing you aren’t putting your house for rent because you have nothing better to do with your time. In addition to saving you time, they will be watching your investments value. For example they will be asking, “Is the rent comparable to others in the area? Which vendors do we need right now vs. what can wait?”
If you have defined your goals, or aren’t sure where to start or what is possible with using your home as a rental, contact us. If you have defined that and are needing a home value analysis, call 720 989 1996 and contact us today.
We get this question frequently: What can I expect to earn in Denver real estate income from my home rental property in the long run?
When people are considering investing in real estate, especially when considering if they should sell or rent their property, the main thing they need to be considering is cash flow. Below is the process we do, but simplified.
Selling the Denver property questions:
What is the mortgage payoff?
What will the home sell for?
What is the difference?
Renting the Denver Home property questions:
What is the appropriate amount of rent for a Colorado home?
The appropriate amount is not a number you want, but rather what the market can actually bear. A professional property manager should be able to give you this number.
What is the home mortgage amount due?
This number should include principal, interest, insurance and taxes.
What is the HOA cost? Will this number be included in the rent or not?
What other utility costs are there and will they be included in the rent?
Consider: Sewer, Water, Electricity, Gas, Snow Removal, Lawn Maintenance, Trash removal and any others that apply. This is an important number to know because they will be your responsibility if the unit isn’t occupied.
What do you need for a savings reserve? In this number, take into consideration:
Maintenance fees. This number should be between 5-25% depending on the age of the house and its condition, including if remodeling has been done or not. Homes under 10 years old will be 5-15% and homes over 50 years of age will be closer to the 15-25% range.
Transition savings. This number will be the expected money that will be banked for the time between tenants. A property manager can give you a good sense of your market and how much should be put aside.
Property Management fees. These fees are worth their weight in gold. A good property management company will pay for itself in reduced legal issues, better tenants, better maintenance and more.
An example for Denver and Aurora rental home owners
Let’s take a hypothetical example. Of course, this is a simplified example for illustration only and is not advice. For professional support on your unique situation, contact us, a financial professional, and a tax professional.
John and Lisa Jones own a home and are moving out of state and are considering selling vs. renting out the property to a tenant.
Jones hypothetical selling the Colorado property questions:
What is the mortgage payoff? $212,000
What will the home sell for? $300,000
What is the difference? 88,000
This is a one time chunk of money that they will paycapital gains on unless they purchase a new property. Talk to a CPA about how this works.
Jones hypothetical renting the property questions:
What is the appropriate amount of rent? $2200/mo.
What is the mortgage amount due? $1235/mo.
What is the HOA cost? NONE
What do you need for a savings reserve?
oMaintenance fees. 10%: $220/mo.
oTransition savings. 5%: $110/mo.
oProperty Management fees. 12%: $264/mo.
Projected Income: $2200/mo.
Projected Expense: $1829/mo.
Difference: $371/mo.
In this scenario, the $88,000 would be returned in under 20 years, and the property will have grown in value. This also assumes the rent NEVER went up in 20 years. So at the end of thirty years the Jones would have:
A sold house that allowed them to get another house that has increased in value OR
A home they are living in that has increased in value AND a rental home that is free and clear of a mortgage payment. Their potential income then increases from $371/mo. to $1606/mo. and this can continue into retirement as a residual income.
There are additional tax benefits and consequences as a real estate investor that you should be aware of that apply in each scenario. They include what deductions are allowing whether you are living in the house or not.
This illustration is for educational purposes only and does not serve as legal or investment advice. Please contact a professional to discuss your specific situation as the numbers could be very different.
Call 720 989 1996 and let us show you how renting a home in Denver and Aurora Colorado pays!
