6 Key Things to Research Before Becoming a Landlord
There are many reasons a homeowner may want to rent their current home rather than putting it up for sale. For one, many sellers may not want to risk having to pay for an extra mortgage while their home is on the market. A rental property can also be a pretty reliable source of extra income. No matter the reasons for renting, becoming a landlord can be more complicated than many people realize. Which is why it’s crucial to research these essentials.
Ready to purchase an investment property in Cody? Skilled and experienced real estate professional Theresa Donley can find you the perfect home! 307-899-5393
Local Home Trends
Converting your home into a rental can be a major undertaking. Before you make any moves, take a look at local housing prices and sales trends to see if this is your best option. Pay special attention to how long homes are listed before they sell since this will clue you into how hot the market is in your area. If you plan on staging your rental for listing photos you can also look at currently sold listings to see what sort of setup might attract potential renters to your home. You may also want to consult with local real estate professional Theresa Donley before you make a final decision.
Local Rental Statistics
Looking into alternate market reports can give you a better idea of whether rental properties are in demand in your area. For example, the Atlanta area has a disproportionate percentage of renters when compared to homebuyers. So, if you are considering converting a property in this area, you should have a stable flow of potential tenants to help drive up your profits. You can perform a quick online search to find similar statistics for your particular area
Laws Governing Rentals
If you are considering becoming a landlord, your next stop should be to seek legal counsel. Failing to speak with an attorney could put you at risk for violating a code or law, which could result in fines or even jail time. During your session, your attorney will discuss any requirements you must uphold as well as anything required of your tenants. You may also want to ask how the pandemic could impact you as a new landlord. Many states and cities have put rent and eviction freezes in place so it’s crucial to be aware of these rules.
Additionally, you may need to look into the rules and regulations surrounding registering your business with the state. You can find instructions for Wyoming LLC registration online, for example, and formation services can help ensure you’ve completed all the necessary paperwork.
Professional Cleaning Services
Before you list your rental property, you are going to want to get it in shape to impress potential tenants. This means deep cleaning the home from top to bottom, including your floors. If the home is carpeted, you may need to hire professional services to come in and steam clean to get rid of odors and stains. In fact, it may be a good idea to hire professionals to help with other required tasks to meet your landlord obligations.
Handling Payroll
If you need to take on employees to scale your rental business, you’ll need to make sure you’re paying them promptly and accurately. Learn about the payroll process and payroll related terms. You can streamline paying your employees by investing in payroll software, which is often cheaper than hiring an accountant. Look for software that automates recordkeeping, wage calculations, and tax deductions.
Property Management Services
Even with proper research and planning, there’s a lot that goes into setting up and managing a rental property. If you already have a full-time job and other responsibilities, you may want to save yourself some stress by hiring a capable property manager who can help you get your rental property off to a successful start by marketing your home to potential tenants and screening those renters to make sure they will be a good fit. That last part can be especially important for novice landlords, to avoid violating any fair housing laws in your area. You can also ask your attorney to provide additional information on legally screening potential tenants.
Transforming your home into a long-term residential rental property can be a complex process, but it doesn’t have to be overly complicated. You really just need to have the advice and expertise of a few key professionals, including an experienced attorney and a property manager. Otherwise, you could end up with more stress and headache than you bargained for.
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Starting Your Own House Flipping Business as a Senior
Retirement isn’t for everyone, but neither is working the same demanding job for the rest of your life. As you enter your golden years, you’ll likely want to try new things — things that are more fulfilling and exciting. So why not get into house flipping? When done right, house flipping can not only turn a profit, but it gives you the chance to give back to your community by creating beautiful homes for families.
Of course, house-flipping can be risky, which is why it’s important to understand how it works before you try it out. Follow these tips from Theresa Donley of the Donley Team/Western Real Estate to ensure that you’re on the right track for house flipping success.
Know What a Good Investment Is When You See it
The most important aspect of house flipping is understanding the housing market and how to find the best locations. The ideal house for flipping is typically located in a neighborhood that’s on the up and up, such as one that’s beginning to attract young families and professionals. The neighborhood itself should be centrally located so it’s close to important things like public transportation and nice schools, as well as far from crime.
According to HGTV, a house with the best potential will have several very specific qualities. For example, it’ll have what is referred to as “good bones” and an attractive layout, needing minimal renovations. Essentially, you don’t want to choose a house that’s going to require extreme renovations because every month that you spend working at that house is time and money you’ll be losing.
Secure the Funding
There are two things you can’t flip a house without: money and good credit. It’s best to already have the cash to purchase the home you intend to flip as it’ll save you more money in interest and loan fees and PMI insurance, but if that’s not feasible, having excellent credit to take out a mortgage loan is your next best bet.
Aside from buying the house, you also have to consider any home improvements and renovations. It'll need to be flipped and ready for the market. You can expect the total cost of flipping a house to come to roughly 10% of its purchase price. So whatever house you’re looking to flip, you can calculate the estimated cost by the purchase price plus 10% of that purchase price to get an idea of what you’ll be investing in.
It’s also a good idea to use accounting software for your business to help you keep track of your house flipping budget. For example, QuickBooks Online Advanced is an excellent budget-tracking tool that’s preferred by many growing businesses, and it offers you the opportunity to customize the features in your accounting software. Not only does it allow you to generate financial reports in real-time so you can stay within your budget and identify your biggest expenses and best income sources, but the platform also offers comprehensive training and dedicated support.
Create a Network of Contractors
You’ll need to treat each home you flip as if it were your own. That means hiring a team of trusted contractors, subcontractors, electricians, inspection agents, landscapers, painters, etc. to get the job done.
Once you find people you can trust to do an excellent job, you’ll want to continue working with them for each new house flip project. Continuously employing these people will mean two things: You may be able to work out a discounted rate and you’ll need to cut them a check as if they were your employees.
House flipping isn’t for everyone, but if you’re passionate about home renovation projects, it’s a side business that you can get into at any age — as long as you know what you’re getting into and what to expect!
Interested in purchasing your first house to flip? Contact Theresa Donley of the Donley Team/Western Real Estate to get started.
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Top Reasons that People Buy Homes to Rent Out to Others
When people think of opportunities in Wyoming, they probably imagine wide open spaces and cattle ranching. Fewer people understand that there is much potential in the local real estate markets around the state. For someone looking to generate passive streams of income, Wyoming might be a great market to purchase property in. Whether you are considering buying residential units in an urban area or large ranches to rent out to farmers, there are several good reasons why people invest in rental properties.
Renting Property Is a Stable Source of Income
No matter what else happens with the economy and how things change, people will always need houses. That means that investing in properties that you intend to let out to other people is often a smart business decision. The most important considerations are ensuring that the amount of rent you can charge offsets your monthly expenses in owning and maintaining the property and that you don't buy a house with an inflated price. Single unit houses and multifamily dwellings are both solid investments, as our rental farm properties. Depending on what kind of work you want to do and where you live, the possibilities are practically endless. While the prices and demand may change from year to year, the overall need for rental housing will not go away.
The More Work You Do Yourself, the More Profit You Can Make
With many jobs, doing extra work doesn't mean you make more money. Thankfully, working as a landlord is not one of those jobs. One of the best ways to quickly turn a profit by purchasing properties to rent is to buy a distressed property and fix it up. Most people don't want to live in a slum, but many people will apply for a newly renovated apartment. More importantly, by making repairs, you increase the overall property value of your rental, which could mean that you may sell it for a profit in the future.
Handling applications and dealing with tenant issues may be stressful, but managing all of those aspects of your rental business on your own means that you don't have to pay a superintendent or property manager to handle it for you. If you have the skills required to make basic repairs when something goes wrong, that can save you even more money.
Over time, your tenants will help you pay off the mortgage on your rental properties. They will also provide you with an ongoing stream of income that requires minimal effort on your part. You can reinvest that profit and purchase more properties or use it to fund your lifestyle. Since renting has become increasingly popular, working as a landlord is increasingly attractive to modern professionals. There are many reasons why, but the freedom and potential profit that come from being your own boss are certainly high on the list!
