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.
Do you own and rent out a rental property?
Owning, renting and maintaining properties in the Denver Metro area, or anywhere for that matter, can be a time-consuming, difficult task. Background screening potential renters. Collecting rent payments. Following up on maintenance and repairs. It all takes a lot of energy. The best way to avoid the work and stress involved is to hire a property management company.
Here are five of the best reasons to do so:
You own more than one rental property.
Keeping up with just one rental property is difficult, and the more rentals you own, the worse the problem gets. Running around from property to property, handling all the small things is daunting, at best. If you own multiple properties that contain several units, you may well benefit from hiring a management company.
You live out-of-town.
If you don’t live near your rental property, it is difficult to travel to and from the property to keep things running smoothly. It can also be extremely expensive, especially if you have to make a trip for a small problem. Hiring a property management company assures that the day-to-day issues are dealt with quickly and effectively.
Property management isn’t your thing.
Some people like the idea of owning a rental property, but don’t want the responsibilities of day-to-day management. Dealing with tenant complaints, collecting rent and managing maintenance is stressful, to say the least. If you are more of a hands-off property owner, a property management company will help relieve the pressure on you.
You just don’t have the time.
If you have a day job and you own one rental property, it may not be too much more work. However, if you’ve got multiple properties, it can take as much time to manage as your job does. Perhaps you just want to invest more of your time growing your rental property business. Either way, a property management company can help. You can leave the time-consuming tasks to someone else so you can focus on what’s really important to you.
You don’t want to be an employer.
At some point, you may need to hire a manager and, perhaps, other employees to help. That means you’ll have to deal with payroll, taxes and potential legal issues. You must realize that the actions of your employees can, and will, have an impact on you and your livelihood. A property management company avoids these problems and protects your interests.
Denver, Centennial, Aurora and other city rental property owners are not always the best at managing their properties. At times, it is difficult and downright stressful to deal with all the demands. When you hire a property management company, you not only relieve the stress, but you also open up more time to focus on other things.
If you are a rental property owner looking for a reliable, experienced property management company, pick up the phone and call Legacy Properties-PM at 720.989.1996 or contact us.
Legacy Properties-PM CAN get you the most rent for your investment home by careful research and comparisons of the most recent rent prices in your area. I am Devin Bewley, CEO of Legacy Properties-PM, and I use only the best software programs to help me compare rent prices around your neighborhood, and I have special access to data that the public does not.
The average property management company may use a basic free program to compare rental prices in their client’s area. When looking at this comparison, the rent prices range over a year period and a much larger demographic area than is really necessary to get an accurate’ comparison. With the information below a 2 bedroom home going for $800.00 a month is considered “reasonable” in the area around the specified address. This means only a B+ grade versus the A++ grade Legacy Properties-PM gets.
Why does our property management company deserve a superior grade when it comes to our rental comparison? Because we spend the extra time and effort to research the rent in your area much more accurately. We do this by lessening the demographic area near your rental home from 1 or more miles to a .3 mile area instead. As well as, shortening the time of recent rent rates in that area, for example comparing the last 3 months versus the last year (See below).
When we take the time and effort to get accurate rental comparisons for your Aurora or Denver rental home, you can be assured you are getting the best rent for your home. Legacy Properties-PM is here to help you with your rental investment today. Call us at 720.989.1996 or contact us.
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.