Aurora, Denver, Property Management, Real Estate Investing
Should you take the plunge?
Rents continue to go up and interest rates are at an all-time low! Homeownership rates fell throughout the recession, and are currently around 66 percent, compared with almost 70 percent in 2004, according to the Census Bureau.
The great American dream of owning a home appears to have made a comeback. Real estate company Trulia reports that “in many parts of the country, rents are rising while housing prices are falling, making buying a home more affordable.”
If you’re struggling with whether to buy or rent, consider these 7 reasons to take the plunge into homeownership:
Reason 1: You can take advantage of currently low interest rates and prices.
Interest rates remain at historical lows, and at the same time, home prices in many areas remain soft. Trulia points out that deals are especially appealing in suburban areas, compared with the more expensive cities. Overall, Trulia says, asking prices on homes went down 0.7 percent over the last year, while rents went up by 5 percent.
Reason 2: Unlike rent, a fixed mortgage can’t go up (even if inflation does).
Fixed mortgage rates do not go up, even when the cost of everything else does. To protect yourself, Jack Otter, author of Worth It… Not Worth It? suggests making a 20 percent down payment and taking out a 30-year fixed mortgage to lock in today’s low interest rates. “Mortgage rates haven’t been this low since GIs were heading home from France. Lock in a low monthly payment, and you’ve just taken a huge step in protecting your family against inflation,” he writes.
Reason 3: Homeowners can take tax deductions.
The main tax benefit of homeownership is the ability to deduct your mortgage interest payments, but the bonuses don’t stop there. As a homeowner, you can also deduct eligible expenses (certain energy-efficient improvements) and in some cases can avoid federal taxes on earnings from the sale of a home.
Reason 4: No landlord can kick you out.
Renters can face an unexpected eviction notice if their landlord suddenly decides to sell the home, rent to someone else, or otherwise end the lease. Homeowners do not have to worry about this EVER.
Reason 5: You don’t even have to speak to a landlord, ever again.
Landlords can take forever to fix a broken washer or dryer, they usually let the air vents fill with dust and dirt, or they leave you messages about repairs that aren’t even necessary. BUT, if you’re the homeowner, then you’re in charge. This means you have to be home when the plumber calls or comes, but the plumber reports to you.
Reason 6: Owning a home forces you to save money and more.
Since homeowners have to pay their mortgage every month, they are routinely putting money away or paying for repairs and maintenance, instead of squandering it on new shoes or fancy meals. Then, if you eventually sell your home after the mortgage is paid off, there’s a good chance that you’ll actually make money off the sale.
Reason 7: You can customize your space.
Owning the space you live in means you have the freedom to do what you need and/or want done, without worrying about permission from the landlord or losing your security deposit. Whether you want to paint a wall, make a larger bathroom or redo the bedroom to reflect you, you CAN.
Renting can be ideal if you aren’t sure of your job circumstances or if you plan to move soon, so buying isn’t for everyone. So, if you’re looking to rent or want the best property manager to manage your rental home in Denver, Aurora, or Centennial, call Legacy Properties-PM at 720.989.1996 or contact us.
Denver, Property Management, Real Estate Investing
When you own a residential investment property, a good tenant makes life a lot easier. Someone that pays the rent on time, respects the terms of the lease, and takes care of the property are a landlord’s dream, but unfortunately such a person is not easy to find. If you’re tired of getting stuck with sub-par renters, use these 3 steps to find the best tenants.
- Advertise the vacancy. A sign in the yard or an ad in the paper is no longer the best way to market your property. Get on popular websites such as Craigslist, Zillow, or Apartments.com and put as much information as possible into a listing. Also, include flattering pictures of your property. You want to generate a lot of interest so that you have your pick from several prospective tenants.
- Thoroughly screen applicants. Don’t be afraid to ask questions such as their financial and employment situation. Ask for references from past landlords, and conduct background and credit checks. Yes, it’s a lot of work but it pays off in the long run.
- Team up with a property management company. While finding a quality renter is a challenge for you, they can find one easily using their experience and skills. Not only will you end up with the best renter available, but you will save yourself a lot of time and stress.
If you’re in the Denver, Aurora, Centennial or Parker area and need help finding a responsible tenant, call 720 989 1996 or contact us at Legacy Properties-PM. We have spent years building our own legacy through investment properties, and now use our experience to help others striving to do the same. Placing tenants, collecting rent, handling maintenance issues, and even evictions are all part of our property management services so you can enjoy the benefits of your investment without it adding to your stress level or taking up your free time.
Property Management, Real Estate Investing
#1 - Thinking that ALL investments are comparable-
For example, stocks and bonds are not going to bring in the same return as real estate. People often say they want to buy real estate to get better returns than their stock, bond or bank account can provide. Real estate is an asset that can come with many stresses, such as, challenging tenants, annoying/opinionated neighbors, broken pipes, clogged toilets and much more.
An asset, like rental property does not allow you to just look at a statement of your account once a month, as with a stock or bond. Owning rental properties is a business, it can be time consuming and stressful. Make sure you think before you invest in a rental property.
#2 - Having the idea or belief that “flipping” properties is investing
Most real estate buyers see “flipping” homes as a constant speculation. In other words, they never know what will happen next when fixing and updating the property. Unfortunately, most of these buyers lose money. Sure, it looks easy on TV with reality shows or do-it-yourself shows, the internet makes everything look easy and profitable; but none of that media is realistic. The truth is, that not everything you see on TV or on the Internet is true!
#3 - Having the belief that real estate investing is low risk
Oh Boy! Buying, owning and maintaining real estate has many risks. Risks, such as, drop in real estate market or home values, having serious home improvement that may not have been foreseen, or ever rising interest rates with mortgages and insurance.
There are few smart and experienced investors that can maneuver their way through these risks. Most investors do not, leaving them exposed to countless items and issues that can and sometimes do become financially painful.
#4 - Believing it’s a “turn-key” real estate deal
Which means to earn money with almost no work on the you, the investor’s, part? As they say, LOL, or to be put more simply, not going to happen! If you believe getting into a real estate property as an investment is going to be easy then you need to re-think.
These are just a few of the many mistakes that investors can make when it comes to investing in real estate. Experience will teach you the most during your real estate investing time. Just try to avoid the big expensive mistakes that could beat you in the end and put a halt to your real estate investing all together. Be careful, do your own homework, but verify your own conclusions.
If you’re already a investment property owner and in need of the best Property Management Company in Denver, Aurora & surrounding areas, look no further than Legacy Properties-PM. Make sure your investment brings a less stressful return. We have helped hundreds of rental owners to ease the involvement of the investment. Call 720.989.1996 or contact us.
Real Estate Investing
Working to get your rental property “rent ready” doesn’t have to cost a ton of money. For less than $1,000, you can make high-impact home improvements that will please renters in the Denver area. Whether you already own a rental or like the idea of real estate investing in Littleton, Aurora, Lakewood, Centennial Parker, Highlands Ranch or Cherry Creek, certain cosmetic upgrades are universally appealing to renters. Don’t forget to also give your rental property a thorough cleaning and to hire an established property management company to market your listing, perform background checks on tenants and enforce the lease. Many real estate investors are good at finding profitable rental homes, but don’t like being the “tough guys” when it comes to enforcing a lease and evicting tenants. One of the fun parts of real estate investing is getting to fix up a home so it’s attractive to renters. According to a recent piece by time.com, you can do a lot with a budget of just $1,000.
Giving the kitchen a makeover
While $1,000 won’t allow you to put in custom cabinets and exotic solid hardwood floors, it will pay for an upgraded stainless steel refrigerator or new tile backsplash. Inexpensive improvements include painting, changing old electrical outlets and putting in new baseboards.
Freshening up the powder room
For a renter, the perfect bathroom is spotless. If you are renting out a home that you used to live in, don’t leave the old shower curtains or lighting fixtures. Your property management company will let the prospective renters know the shower curtains or any other accessory you have left new. Unless the toilet is spotless, consider replacing the bathroom bowl.
Upgrading the lighting
Many rental properties have old and outdated lighting. Your rental property will stand out if you put modern decorative lights in the entryway and pendant lighting in the eat-in kitchen area or above a kitchen island. You can find hip and modern decorative lighting for less than $1,000 as well as a few upgraded ceiling fans.
After you spend money with your real estate investment, make sure you protect your investment. A good property manager will find you good tenants who pay their rent on time and don’t damage your rental home. At Legacy Properties-PM, are members of the National Association of Residential Property Managers (NARPM). For more information on real estate investing in the booming Denver rental market, please call 720.989.1996 or contact us.
Real Estate Investing
If you have never rented out a home before, you likely have worries shared by many first-time landlords. With the help of a Denver property management company, you can enjoy the benefits of real estate investing without the drawbacks. With soaring rental prices in Denver, Aurora, Parker, and more cities, it makes sense to keep your residence instead of selling it. People who are new to real estate investing often have questions about how the change will affect their financial situation.
Will it stop me from getting another mortgage?
Because lending requirements aren’t as strict as they once were, you will likely qualify for a mortgage on a second home in your new location. Some lenders ask for evidence to show you intend to rent out or sell your current residence before they will give you a loan at a lower interest rate for your new residence. As long as you will occupy the new residence, you are eligible for easier lending terms such as a 5 percent down payment instead of the 20 percent for investors. Your lender won’t place any restrictions on what you do with your former residence, but you typically require that you not rent out your new (owner-occupied) residence for at least one year.
Do I have to stay on call?
Another concern new landlords have is that they will have to do all the repairs themselves or hire different contractors. By working with an experienced Denver property management company, it’s a burden off your shoulders. A property manager enforces the lease, finds qualified tenants and maintains your rental property. If you relocate to another part of the country, you won’t have to fly out to check on your rental home every few weeks. You won’t receive any urgent phone calls in the middle of the night, although your property manager might.
Can I sell when the market goes up?
Some people become reluctant landlords because they owe more money on their home than they can get by selling the home. Other people feel excited about real estate investing because they know rents are strong. According to an article by the Christian Science Monitor, Denver experienced the biggest rent hike this year. Even though rent has skyrocketed in the Mile High City, you may offer residents a reasonable rent. If you are making a profit and your tenants are happy, keep a competitive edge. When you are ready, you are free to stop using a property manager and list your rental home for sale. Many investors get so accustomed to the tax breaks and easy cash flow that they decide to expand their real estate investing portfolio instead of reducing it.
Even if you never thought you’d own a rental property before, we can help you manage all the details. At Legacy Properties-PM, we work with people who own only one rental home in Denver as well as experienced investors with several lofts, condos or homes in Denver’s hip neighborhoods. We are proud members of NARPM, the National Association of Residential Property Managers. For more information on real estate investing in Denver and surrounding areas, please call 720.989.1996 or contact us.
Property Management, Real Estate Investing
For many retirees, rental properties in Denver provide much-needed income to supplement withdrawals from a retirement account and Social Security. Real estate investing can help you now as well as help your descendents through an inheritance. You can educate your children and grandchildren about the Denver rental market so they can have financial security even after you have passed away. If your children aren’t handy, they can rely on the expertise of professional landlords or property managers. When your children inherit your Denver rental properties, they will have something more tangible and meaningful than money.
- Understanding tax ramifications
According to an article by The Nest, your benefactors will be eligible for depreciation of the property to offset the rental income and decrease taxes owed on the rental income. A tax advisor will help your beneficiary figure out all the tax ramifications as well as the cost basis. The value of the rental home is the fair market value when you died minus the land value.
- Lining up a property manager
Even if you prefer being a DIY landlord, you can help your beneficiary by having a reputable Denver property manager take over your responsibilities. Once you are free of having to chase down the rent payment every month, you will have more time to enjoy retirement. Your children won’t have to worry about how to market the property, get market rent, screen prospective tenants or respond to maintenance requests. Also, if a bad apple ever gets in the mix, they won’t have to worry about the legal hassles of evicting a tenant.
Your financial planner can help you figure out the best way to go about buying more rental properties in Denver if you want to expand your real estate portfolio. Some people like to use a self-directed IRA to buy real estate, while others buy with cash with the future generations in mind. With rent costs escalating, it’s a good time to own rental properties. Your children can use the rental income to pay their own mortgages or help them run a business. At Legacy Properties-PM, we believe in treating our clients like family. We are proud members of the NARPM, the National Association of Residential Property Managers. For more information on leaving an estate with savvy real estate investing in Aurora, Denver, Highlands Ranch and more, please call 720 989 1996 or contact us.
