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.
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.
If you own Denver or Aurora residential investment property, then you know how much work it takes to keep up with things.
Leasing paperwork, collecting rent, and dealing with maintenance issues are just a few of the time-consuming tasks, and if you’re like most owners, you may wonder if it might be better to hire someone else to carry some of the load. As an investor, the question that probably comes to mind is “How much do property management companies charge?” There are two different approaches to this, and it’s important to know what you’re getting before signing on with any property management company.
Property management costs vary depending on the market you’re in and how the business is organized. Some companies charge a flat fee each month for management. In several major metropolitan cities, the average seems to be about $80.
Other companies price property management services on a percentage of the rent. On average, companies usually ask for about 10% of the rent collected.
covers services such as collecting rent, working with vendors to coordinate maintenance needs, conducting property reviews, and keeping track of financial records. Sometimes there is an additional leasing fee, other times that cost is included in the property management services.
In addition, most property management companies offer additional services. Tenant placement services include thorough checks and investigation to make sure you’re getting a quality, responsible renter and is usually a one-time fee. Some companies charge as little as 50% of the monthly rental amount, all the way up to 2 times the rental amount.
While the fees can be confusing, there are two questions owners must ask. First, is the company you’re considering capable and trustworthy? Second, how does hiring a property manager change the situation?
To find a reliable company, find out if they are a member of NARPM, the National Association of Residential Property Managers. This ensures they are ethical, professional, and at the top of their field, knowing the ins and outs of their local market.
A quality property management company will change the situation for the better. First, they take over much of the responsibility, freeing up your time. Second, as experts in the field, they have knowledge that will save you money in the long run. Maybe they discover your property could go for a higher monthly rent, or they have contacts with local vendors who do better quality work for less. That, in addition to the fact that property management fees are typically tax deductible, means the monthly fees are well worth it in the long run.
In the Denver, Aurora, and Parker Colorado area, Legacy Properties-PM is an experienced property management company that is associated with NARPM. Our management fees are 10% of the monthly rent, as well as a leasing fee of 35% of the first month’s rent. If you wish to take advantage of tenant placement services, they cost 50% of one month’s rent. For more information on our services and fees, please call 720.989.1996 or contact us.
There are ups and downs with any real estate investment experience, but the eviction process is probably the hardest thing to deal with.
Landlords who have gone through this know that having a property management company on board from the beginning makes the eviction process much easier.
The biggest reason for evictions is a tenant who is late paying the rent. A property owner has to know the terms of the lease, which states exactly when rent is due, and if there is any grace period.
There are specific guidelines for the eviction process including:
Serving the tenant with a 3-day notice to “Pay or Quit”
How to serve the notice (whether it requires hand-delivery or via certified mail)
How to count the three days (the delivery day does not count, nor do weekends or holidays).
The eviction process requirements vary by state.
If the tenant will not leave, then you must go to your local court to start legal proceedings. You will be given a court date and will need to have the tenant summoned. When going to court bring any and all documentation to support your claim, including communication between you and the tenants, receipts, bounced checks, a copy of the lease, and proof of the 3-day notice. It may seem like an easy case, but this is where it gets complicated.
In Colorado, courts will decide in favor of the tenant
Since many tenants can’t deny they failed to pay the rent, they try to get out on a technicality. If you failed to complete any part of the eviction process or forgot to “dot an I or cross a T,” the court will decide in favor of the tenant. Then you have to start the process over.
The eviction process is complicated, time-consuming, and extremely stressful. The best thing you can do is partner with a property management company from the start, so there’s no need to panic when it gets to this point. They take care of all the legalities, including signing the lease and collecting the rent. If there is a problem, they know the eviction process and have the proof to go to court and win the eviction.
If you own investment property in the Denver area, contact us or call 720.989.1996 to take advantage of property management services. Legacy Properties-PM has the experience to find quality tenants so you probably won’t have to deal with an eviction in the first place, but if it comes to that, we know exactly how to handle it.