| |
| |
|
Leases & Leasing Information |
|
|
|
RBC Life Insurance So You Want to be a Landlord?
The residual income from owning rental properties may bring more money into your life than the fast flip in the long term. If nothing else, the stress is reduced because a well-chosen investment will pay for itself until you the market is ready for you to sell. In order to make this idea work, you must plan carefully. Choose your property, choose your management approach, and choose your tenants carefully to make the most of your investment. Choose your property. Not every house is going to bring in the money you need each month. Some considerations: Will you be financing? How much you finance is going to have to be factored in to how much you need to cover the monthly expenses. Up to four units is considered a residential loan by most banks; beyond that is commercial, which means that the lender may factor in the rent more easily as income, but other, more stringent requirements must be fulfilled to secure a loan. The more equity you have now, the more able you are to weather periods of vacancy. How many units? Not only is the number of units a factor in lending, it's also very important for income. More units means less drain when you have a vacancy (a two-family house loses half the income when one tenant leaves!), it's also just plain easier to get enough rent to at least cover your expenses. What rents can you charge? Find out how much the rents for the current tenants are, if any. If you don't know the rental market well enough, consult with your real estate broker or a professional property manager to determine what fair market rent for each apartment is. The monthly rent should be at least one percent of the value of the building for it to be a profitable investment. Will major work be needed? If you're getting a place cheap, you probably are expecting to do some renovations. This has to be budgeted in, because you're spending money and not getting rent for that period of time. Contractors often break both deadlines and budgets, because hidden problems become apparent as you dig in to the project. Make sure you have a cushion to cover your mortgage, insurance, taxes and other expenses. Choose your management approach. Once you've found a winner of a property, it's possible to just sit back and let the money roll in . . . or you could make a part- or full-time job out of being a landlord. If you're handy, enjoy paperwork, like working with people, and don't mind being available pretty much all the time, you should be a landlord. Many people have left their old jobs behind to manage their own rental properties full-time. If you envisioned real estate as a more passive investment, consider professional management. Many real estate brokers manage properties as a side business, or you could contact a professional association such as the National Association of Residential Property Managers to find a dedicated property manager in your area. Property managers handle all the tasks of being a landlord on your behalf for a portion of rents, usually around ten percent; this does not include costs of advertising and maintaining the building. They often also charge a placement fee of a month's rent when the sign a tenant, although whether this fee is the responsibility of the tenant or owner is negotiable. Their job is to keep the property occupied by reliable tenants and in good repair. Minor maintenance is done automatically, while bigger items (like a new roof) are addressed in consultation with the owner. Choose your tenants. If you are using a manager, once you pick a reputable one, you don't need to worry about this. If you're going it alone, here are some tips: Advertise. Put your place in papers, on bulletin boards, and online. The more visibility you get the more calls you'll get. Background. Take an application from any prospective tenant which includes their current address, phone, social security number, landlord, employer, and personal references. You want to check references, and run credit and criminal checks; this will cost money so don't be shy charging an application fee. Personal. Take a look at the condition of the prospective's car, inside and out. Make it a point to visit them where they live now, to see how they keep it. Meet every person (and animal, if you choose to allow pets) that will be living in your building. Income. You cannot discriminate against someone because of the source of their income. With any applicant you turn down, it's a good idea to send a letter stating the reason for not renting, even if it's as simple as the background check came back faster on someone else. Don't rush. The best way to pick a bad tenant is to rush into it because you're scared of a vacancy. If you choose poorly, you will likely have far worse than a vacancy on your hands. If you don't have the iron constitution for buying properties and flipping them, but agree that real estate is the best investment around, rental properties are likely the way to go. © 2005 Terence P Ward, all rights reserved. Terence P Ward is the President of Landlord for Hirehttp://www.landlordforhire.com, a residential property management service of Green and Clean Corporationhttp://www.Green-n-Clean.biz, based in the Mid-Hudson Valley of New York State. You may find contact information for him on either of his company's web pages.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Basic Things You Should Know About A Lease Purchase Contract What exactly is a contract?By definition, a contract is an agreement between two or more parties to do, or to refrain from doing, a particular thing in exchange for something valuable. The parties can be individuals, businesses, organizations and government agencies. With a Lease, The Devil Is In The Details In the last article we looked at a few of the things you should consider before leasing that first office or storefront for your business. To recap, you should not only consider the old standard "location, location, location," but also consider things like sufficient parking, the number of employees who will be working onsite, and future growth projections. The Leverage of the Lease In today's rapidly changing business environment it makes sense to consider all the options before paying for your business equipment - whether it's a photocopier, computer system, computer hardware or software, telephone system, security equipment, office furniture or anything else. Many business people will give great consideration to the actual purchase, getting quotes from different suppliers and considering different choices. So You Want to be a Landlord? The residual income from owning rental properties may bring more money into your life than the fast flip in the long term. If nothing else, the stress is reduced because a well-chosen investment will pay for itself until you the market is ready for you to sell. Increase Your Business Growth and Cash Flow Through Equipment Leasing "If it can be manufactured, it can be leased." For the past decade or so, this statement has become more and more true to fact. Getting Your Venture Lease Approved Each year venture capitalists fund more than 2,500 start-up companies in the U.S. Ten Ways to Save a Bundle on Your Next Lease According to the Equipment Leasing Association ("ELA"), U.S. What Happens When the Anchor Tenant Moves and You Are On a Ten-year Lease? Recently there was an article in the Houston Business Journal of the anchor store in many shopping centers through out Houston pulling out. Kmart, took out some stores, so did three other big box stores and a few consumer electronics places and larger furniture stores, now Albertson's has left. True Tenant Tales, Volume One Working with tenants can be an amazing experience. (Owners and contractors are equally astounding, but those are subjects for another day. Leases And Tenants - The Spooky Tenant You, Mr. Landlord are pleased to find qualified tenants for your rental house. Explore An Effective Revolutionary Approach To Traditional Business Financing For business owners who need working capital now there is a revolutionary, tax-deductible cash flow solution that frees up capital and gives them the money they need to grow. This diversified cash flow solutions is known as "asset leasing. Lease Contracts - The Meaning of Joint and Several When you see the phrase "joint and several" in a legal document or contract it means that that the parties on one side of the agreement are responsible individually and collectively for the terms of the agreement.Example: In the case of two tenants signing a lease agreement, "joint" means they are jointly responsible for the rent. How Venture Leasing Added Millions To A Startups Equity Value Craig Berman beamed noticeably after completing his board presentation. Berman, CEO of a startup that develops nanotechnology applications for the defense industry, had just closed a $ 20 million equity round. Using Equipment Leasing as a Competitive Weapon Most great generals know how to design winning battle plans. They also know how to use their resources to gain advantages over the enemy. Landlord Tips And Tricks Every real estate investor dealing in rental homes has done his own clean-up and fix-up, at least in the early years. Landlords also become very skilled at managing tenants after being burned a few times. Lease or Buy? That is Always the Question with Car Financing Leasing is a perfectly viable and legitimate way to finance a new car. Although leasing offers attractive benefits, it is somewhat more complex than buying with a loan. The Lease And Purchase Option If you have an investment property, should you rent it or sell it? The answer to that question is that you should do both. If you have lots of time on your hands and are handy with tools, you can choose to rent out your property. Pricing Your Apartments How do you fix a price point for an apartment? Take a guess? Figure it based on your carrying costs? Check comps and do a market analysis? Charge whatever the market will bear? If you're looking to place quality tenants, less is sometimes more.We all want to make money with income property; the more the better! When you're looking for a new tenant, however, don't assume that you're going to make more money by charging more. Ten Ways Start-ups Use Venture Leases And Loans To Generate Millions The rise of venture leasing and lending has created an opportunity for sophisticated entrepreneurs to gain a competitive advantage. Savvy entrepreneurs are using venture leases and loans to generate millions of dollars for shareholders by leveraging existing venture capital. Venture Leasing - A Smarter Way To Build Enterprise Value In 2003, venture capitalists and investors dispensed over $18 billion to promising young U.S.
|
| home | site map |
| © 2006 |