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Property Investments

Finding the Right Manager for Your Out of State Rental Property

Investing in an out of state rental property can be a great way to diversify your portfolio and generate passive income, but since you are not there to supervise it, how do you find the right property manager?

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As an investor, you know how important it is to act on a great investment when you find one. And, sometimes, that investment may not be conveniently located. It may even be in another state where the marketing seems to be showing incredible growth.

So, does that mean you should ditch the great investment because it isn’t local? No. As an investor, you have the world at your fingertips. It is easier now than ever before to expand your investments in property rentals. All you need to do is find the right property manager to handle your out of state rental property. Here’s what you should be looking for.

Full-Service Property Management

If you are investing in out of state rental property, then you also need to invest in a property management team to care for it. It is not feasible to try to be a landlord from a distance — whether that distance is 300 miles or 3,000 miles. You need to have someone available at all times to be able to address the needs of the property, whether it is showing the property to new potential tenants, dealing with a broken air conditioner, collecting rent, etc.

A full-service property manager will be able to handle all aspects of your rental property for you – while you remain in your home state. How do you know if they are a full-service company? Well, think of all the things that come with managing a rental property — and make sure they offer it. For example:

Your property management team should also take advantage of available technology and have a portal that you can log into from wherever you are and see the status of your property and any financial transactions concerning it.

Keep in mind that if you have a specific type of investment, such as multifamily or commercial property, then you will want to make sure the property manager you choose specializes in that type of rental. After all, not all rentals are handled in the same manner.

Knowledge of Laws

Another important aspect of finding the right property manager for your out of state rental property is finding someone who has a deep understanding of local and federal housing laws. You never want to find yourself in hot water due to issues concerning discriminatory practices and such.

Even though you may not be the one doing the lawbreaking, the property management team you hire is representing you and your property — and you don’t need the risk. Not to mention that the legal battles that may ensue can be time-consuming and very costly.

Do your due diligence when hiring a property manager to make sure they have an understanding of the laws and have protections in place to ensure they are being followed at all times. Don’t be shy to ask about this. Those companies who take following the law seriously will have no problem showing you how they do so successfully.

Licenses, Certifications, Insurance, and More

Before you turn the keys to your rental property over to anyone, you want to make sure the property manager you choose has the proper credentials to be in business. These requirements will vary based on the location of your property. Be sure to check for what is needed — and then confirm the property management team has it before you commit.

Thorough and Proven Processes

You need a property management team that has proven success. You want to know that you are hiring someone who will be able to market your property and find high-quality tenants. And when something breaks, you need to feel confident that your manager has a network of repair technicians to take care of it properly. And so on.

Taking care of an out of state rental property doesn’t just involve being reactive, but proactive, too. As you head out on your quest for the right property manager, make sure that the one you choose has a thorough and proven process in place to surpass the needs of your rental property. You should be able to feel confident that it is being cared for just as you would if you were local – or even better.

Effective Communication

Communication is key for nearly everything in life – including your relationship with your property manager. Nobody wants to work with someone who is not responsive – whether the manager or the owner.

The only way to effectively manage a property involves communication. As the property owner, you need to know that when you have a question, someone is going to answer that phone call or email. The job of a property manager can be very busy and tiresome, but there should always be time set aside to communicate openly with property owners about the status of their out of state rental property or to address any concerns.

Discuss this process with your future property manager and lay out any expectations you may have.

A Healthy Reputation

A well-known property manager is going to have a lot of satisfied clients. And that means they should have information online for you to read and put together an image. And what you are looking for is a healthy reputation.

Ask about their experience, their years in business, their specialties, and so forth. Do enough research and you should easily be able to see whether or not you are dealing with a property management team that can truly meet your needs.

The Right Property Manager: Real Property Management Evolve

Sometimes you just find the right property manager and you just know that the relationship will be a success. With over 30 years of experience and thousands of satisfied customers, you know you are getting professional, thorough, and successful Phoenix property management.

Conclusion

Investing in out of state rental property should never be limited by borders. Now that you know what to look for, if you find a great opportunity in another state, rest easy knowing that you can find help through a professional property manager.

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Property Investments

Buying an Investment Property: 7 Things to Consider

Buying an investment property comes with many advantages, here are 7 things to consider to make your investment as successful as possible.

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When it comes to buying an investment property, you may not just want to jump at the first property you see. Rather, you want to have a strategy, making sure that your purchase will bring you a healthy return on your investment. After all, there is a good chance you would like to continue building up your portfolio.

Investing can be very rewarding, but it can be challenging, too. So as you make the move to buy your investment property, here are 7 things you may want to consider.

1. Are You Ready to Be an Investor?

Anyone can be an investor, but there are a couple of characteristics that you should have. For instance, a good investor can be described as someone who is financially stable. First, if you intend to get a traditional mortgage, investment properties usually require around 15% or more for a down payment. Plus there will be inspection costs, routine maintenance, repairs, and so on. Some of these things may even be urgent, such as if a tenant calls to say that the roof is leaking or the air conditioner stopped working. You will need to have the funds in your hands to address these issues.

Next, do you have time to give the proper attention to an investment property? An investment property will require your attention, unless, of course, you have decided to turn it over to a property management team.

2. The Type of Investment Property You Will Focus On

As part of your strategy as an investor, you need to decide what type of investment property you will focus on. For instance, are you interested in single-family residential properties? Or how about investing in multi-family residential properties? Or maybe commercial space is more your cup of tea.

Whatever you take a liking to and that fits your strategy and future goals, that’s what you should focus on. And once you know this, you can narrow down your search and find the best deal — that will lead to the best ROI.

3. The Property Taxes

Depending on where you are, property taxes can vary, but they are based on the value of a piece of property. You may find a great deal on the purchase of a property but the property taxes may be incredibly high. Or, maybe you find a property that is a little more expensive, but of lower value, resulting in the taxes being lower.

As an investor, it is important to keep this in mind as these taxes are something you will be responsible for every single year. And, since property taxes are based on the value of the home. So, even if you get a good deal — those taxes could be high.

4. To Invest Alone or Partner Up?

Sometimes friends or siblings like to go in together on an investment property. And sure, it seems like a great deal when you can put your money together, right? Purchase costs, maintenance and repair costs, taxes, and all can be split which means you only have to carry half the burden in the investment. However, you will also only be getting half the profits, too.

If something goes wrong legally, you will also find yourself dealing with the repercussions, whether you were the one who made the mistake or not because you are both responsible.

5. Where You Will Invest

Before you can invest, you need to consider where you want to invest. Like property taxes, there are a few things that make an area more profitable than others. Dive into the housing market, the rental market, the job market, etc. of the area you would like to invest in. A thriving, growing area is a good sign of future growth. And always keep an ear out for plans within communities that may stimulate growth, such as future entertainment complexes, new locations of major corporations moving to the area, and so on.

6. Avoid Investment Properties Requiring a Lot of Work

If you turn on the TV to a home improvement show any hour of the day, you will likely find someone who is flipping a house. They bought it for a really good price and have decided to add $15k of updates and renovations and then flip it, making tens of thousands or more in profit. The idea of this sounds amazing. The reality, not so much.

Unless you are a contractor and can do renovations at a relatively low cost, you may get yourself in over your head. If you are an investor who is looking for rental property, the last thing you are going to want to have to do is to fix up a property before you can rent it out. Instead, look for a great deal on a future rental that only requires minor repairs to get it tenant-ready.

7. Be a Landlord – Or Hire a Property Management Company?

Finally, consider whether you want to be a landlord or if you would prefer to hire a property management team. The idea of being a landlord always seems like the ideal job – you own rental property, rent it out, and sit back collecting money. Right? Wrong.

There is a lot that goes into managing rental property. And many new landlords tend to get overwhelmed and feel underprepared to handle it. For those who are new to investing and still have a regular full-time job, being a landlord can interfere.

This is why so many investors nurture their relationship with an experienced property management team, such as Real Property Management Evolve. This team of experts will go to work marketing your property, screening tenants, handling lease signings, maintenance and repair, and so much more. And you, as the investor, can continue working on that portfolio of yours – and finding the next great deal.

Congratulations on deciding to buy an investment property. As long as you consider all aspects of the process, you will likely find it to be a very rewarding step for your future.

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Property Investments

Understanding Buy and Hold Real Estate Strategy (and How It Can Benefit You)

When looking to invest in rental properties, there are many strategies to increase passive income. One of these strategies is buy and hold real estate.

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Real estate investing is definitely not a one-size-fits-all sort of deal. There are so many different strategies and avenues to explore. For some, buying and flipping houses works well. For others, taking on the role of a landlord and managing properties works best. It comes down to your preferences, your goals (long-term and short-term), and so on.

A buy and hold real estate investing strategy is one that many investors use as their go-to investment strategy. Here’s why.

 

What is Buy and Hold Real Estate?

Many real estate investors go in with the intention of buying a property and keeping it long-term. It follows that belief that real estate bought today will be worth more years down the road. In other words, the buy and hold real estate strategy gets its name because you buy it and hold onto it in hopes of earning a greater return. It typically follows the following:

  • Find the right property
  • Finance the property
  • Upgrade the property (make it desirable, show value, etc.)
  • Rent it to high-quality tenants
  • Sell when the time is right (i.e. profitable)

That’s what buy and hold real estate investment can look like in a nutshell.

Getting started in building your investment portfolio can be intimidating and tricky. But it is important to remember that the right strategy for you could differ drastically from the strategy that other investors may have found great success with. So, as we move forward to gain an understanding of buy and hold real estate strategy, just know that it is one of many strategies available — and it may or may not be the best choice for you.

 

Why Do So Many Investors Prefer the Buy and Hold Real Estate Strategy? The Benefits

The idea in real estate investing is to make money. And when it comes to a buy and hold real estate investment strategy, you get the piece of real estate and you get to generate cash flow for years to come. Over time, you can pay off the mortgage and still continue to generate income without you having to pay out much. You can focus on other investments while still earning.

Many investors love this strategy thanks to all the tax savings. For example, expenses such as property marketing and advertising costs, maintenance costs, HOA fees, mortgage interest, insurance premium costs, utility costs, and more are all tax-deductible.

When a property is purchased, it is safe to assume it will appreciate over time based on the historical data available. The general theory is that a property you purchase today will be valued at a much higher rate down the road. This appreciation could benefit you if you go to sell the property.

Keep in mind that all of these benefits are only valuable if you do your due diligence when purchasing real estate in the first place.

 

An Investment Strategy’s Shortcomings

There are a lot of great reasons why investors choose buy and hold real estate investment strategy as their go-to, but everything can’t be all good. With all the benefits, there must be a few shortcomings or drawbacks, too. For instance, if you invest in properties and you hold on to them, you are potentially limiting your liquid cash flow. Typically, you can’t just use the cash you have tied up in the asset. While it is not usually a big deal, should you encounter certain emergency situations, this could pose a problem. Especially if refinance is not an option due to high interest rates.

Also, because your money is tied up in real estate, its value will vary based on the health of the market – both for selling and renting. Should the market take a downward turn, you may find the value of your property going with it.

Finally, owning real estate means also having to care for it. So when things go wrong, such as a leaky roof or a leaky toilet, you are going to have to take care of it. Though hiring a property management team to care for and maintain the property regularly may reduce the incidence of expensive repairs.

 

Knowing When to Sell

You may have an entire portfolio full of buy and hold real estate purchases, but that doesn’t mean you can just shove them aside and hold them forever without ever giving a second glance! Hence why it is not dubbed a buy-and-hold-forever investment strategy.  There is a time to sell — and in order to protect yourself, you need to know when that time is.

Selling when the time is right is going to be a personal decision based on your own set of circumstances. However, there are a few factors that may have you considering:

  • The state of the market. Keep an eye on the comps. When you see the sale prices going up you may want to consider letting it go.
  • Do you see an area or market with better opportunities but need the cash? Consider selling and then reinvesting in that area.
  • If property taxes are on the rise, does it make sense to keep the property? Will you still benefit despite the higher taxes?
  • If the rental market is slowing down or rental rates are no longer steadily rising, it may be better to sell and reinvest in another location if you choose.
  • Maybe you have found you are terrible at dealing with tenants and can’t afford to hire a property manager based on the income the property is producing.

Investors are always looking for the next investment option — and monitoring their current investments. Don’t shove these aside and forget them. Monitor them regularly and make the best decisions for your property.

 

How a Property Management Team Can Help

Your mind may be focused on buy and hold investment opportunities – and that is exactly where it should be. See, many investors engage in this investment strategy and then find themselves holding all these properties without knowing where to start.

This is where a property management company like Real Property Management Evolve can step in and take over. You continue looking for investments – or do whatever you wish – and your property manager will get your property advertised and rented to high-quality tenants, handle any maintenance and repair, rent collection, and so much more.

Property managers are experts in managing rental properties. So as you are buying and holding property, you can rest easy knowing that in that holding phase, you are maintaining low vacancy rates and a healthy passive income. It just makes sense for your investment.

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Property Investments

6 Reasons to Invest in Arizona Rental Properties

If you’re looking to diversify your portfolio, you may want to consider investing in Arizona rental properties as there is so much growth potential. Here’s what to know.

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As an investor, you make moves. You strategize, network, inquire, and never cease to find the best investment for your future. When it comes to buying Arizona rental properties, you know that there are certain criteria you look for before you go any further.  For instance, you want to make sure that the market is thriving and that the return on your investment will be worth it.

Thanks to property management companies, you can buy rental property anywhere in the country – and you don’t have to reside nearby. However, if you are looking for one of the hottest places to plant your rental roots, Arizona may be exactly what you need. And we’ve got 6 reasons why.

 

1. Employment Rates Are High in Arizona

The coronavirus pandemic hurt many people due to closed businesses, lack of business, supply chain issues, layoffs, furloughs, and more. The unemployment rate soared nationwide. Some areas have struggled to recover, but Arizona has not. In fact, the employment rate clearly shows that people are getting their jobs back – or finding new ones.

What does that mean for you as an investor? It means business and the economy are both healthy. Employees likely have money to pay you rent. And, those who cannot find work in other areas may find themselves in Arizona to take advantage of the available work.

 

2. Landlord-Tenant Laws in Arizona are Landlord-Friendly

Engaging in fair and appropriate rental practices is necessary to keep yourself out of hot water and ensure the rights of everyone involved are properly met. However, there are some states that make it, well, difficult to be a landlord. For instance, if you have a non-paying tenant, landlords find that evicting that tenant from the property is a hassle and involves jumping through a lot of hoops.

In Arizona? If you have a tenant who has not paid rent or is behind in rent and has defaulted based on the terms of the lease agreement, then you, as the landlord, are entitled to an easy and quick eviction process.

 

3. Arizona is Seeing Incredible Levels of Growth

There are certain cities in Arizona that are seeing an abundance of growth. And, the Phoenix metro area is number 7 on the list of most people moving in from other states. In other words, it is really beginning to make its name known – Phoenix has a lot to offer its residents.

Maricopa County (home to the Phoenix area) is one of the largest counties in the country. Yet, it is still affordable for landlords and tenants. But with so much growth activity, it may not be long until things start getting a little more expensive here. So, getting in now may be a very good idea.

In addition, Phoenix has been dubbed “the new silicon valley“. As tech giants like Facebook, IBM, Intel, and Amazon expand in the valley of the sun, their employees are bringing cash to fund their large real estate purchases. The growth is simply not slowing down ad more and more tech workers call the Sonoran Desert home.

If you are interested in the Phoenix area, investors are encouraged to look at all surrounding cities and suburbs as the metro area here is spreading greater and wider.

 

4. Properties are Still Affordable

It is a lot easier to make a decision on an investment when the risk is minimal, isn’t it? While the home prices will vary based on the area and amenities, compared with other places, the homes in Arizona are affordable. Though, we should note that an investor should never just blindly invest in a rental property just because it is affordable. Combining all the other reasons to invest in Arizona rental properties along with the affordability factor means you may very well have a great investment.

 

5. The Rental Vacancy Rate is Low – Historically Low

When it comes to buying Arizona rental properties, buying something that seems like a great deal won’t do you much good if the rental market has a high vacancy rate.

The vacancy rate tells you just how many rentals are not currently occupied at any given time. The lower the vacancy rate, the better it is for investors. It means that the rental properties that are in Arizona are rented by tenants – and earning money.

We suggest including a 5-10% average vacancy rate in your underwriting. Figure at least one month per year your rental property will be vacant while you place a new tenant. If you have a tenant that stays longer than one year, you just gained a full month of cash flow you didn’t even count on getting! Always hope for the best, but plan for the worst.

 

6. The Best Property Management Services

Investing in rental property is one thing. Managing that property in the role of a landlord is entirely different. Landlords have to deal with a lot. Finding and screening tenants, looking for high-quality individuals only, requires experience. Being available all hours of the day and night for emergency repairs takes time and patience. Being able to handle routine repairs and inspections means having knowledge in various special trades. And then there is rent collection, document management, monthly transaction tax payments, yearly tax preparations, registering with the county, walk-through inspections, showings, and much more.

Being a landlord may sound like a great idea in theory, but, when it comes down to actually doing the work, it is tough. And time-consuming. Which means less time focusing on your investment opportunities.

Property management teams work to care of rental properties throughout the entire process, freeing up the investors time – your time – so that investment portfolios can continue to grow and flourish. And, the best property management team – the one found at Real Property Management Evolve – is located in Arizona. The Phoenix metro area to be more specific.

This is just one more reason why investing in Arizona rental properties just makes sense. The experts are there, so you may as well use them!

 

Investing in Arizona Rental Properties

As an investor, you know that there are many things that you must take into consideration when investing in Arizona rental properties. You know that there is not just one thing that makes or breaks a deal, but rather a number of factors.

As you experiment with what works for you, then you will learn how to tell which properties and which areas make the wisest investments. Currently, though, experienced investors around the world have their eyes on Arizona. Places like Phoenix, Glendale, Mesa, Scottsdale, Queen Creek, Buckeye, San Tan Valley, Peoria, and more are all areas that are seeing a rise in interest and investment activity.

Wherever you choose to invest, just make sure you have access to an experienced property management team to take care of the day-to-day business of your property as you focus on that investment portfolio.

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Property Investments

Phoenix Real Estate Market Trends Every Investor Should Know

As a property investor, it’s essential to understand the latest Phoenix real estate market trends to make better investment decisions. Here’s what to consider.

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Being a real estate investor involves more than just investing money. Well, that is assuming you want to be a successful investor.

Paying attention to the world around you – the bigger picture – gives you a bit more insight when making investments. It means being able to understand the Phoenix real estate market, market trends, future predictions, and so forth. The more you learn about what is going on, you get a greater sense of when you should make an investment and when to walk away.

If you are an investor in the greater Phoenix area, then there are a few Phoenix real estate market trends you should know about.

Local Financial Health is Heading in the Right Direction

As investors, we want to make sure that the area we are investing in is thriving – or has a positive outlook at the very least. And the greater Phoenix area has that. Foreclosure and mortgage delinquency rates are lower than the average nationwide – and so is the unemployment rate. Home prices are going up – and so is the median rent price, coming in at just $1,587. And while this is lower than the national average, it is higher than what it was in Phoenix last year – up by 8.4%.

The Rental Vacancy Rate is Looking Good

Looking at the local renters market – especially the rental vacancy rate – is important. If the vacancy rate is too high, it could signal that the demand just isn’t there. But, currently, in Phoenix, that is not the issue at all. In fact, the rental vacancy rate is currently 3.9% – which is lower than the national average and low for the Phoenix metro area, too.

Do you know what that means? It means that for those choosing to purchase a rental property, there is a good chance that you will have no problem renting out your property to tenants, with very little downtime.

New Construction is a Mixed Bag

With construction costs on the rise and the loss of construction jobs, there is an indication that the construction industry with Phoenix is struggling. It has been reported that costs are up 6.7% and approximately 1,300 jobs were lost.

By looking at the permits, we are able to see that the people of Phoenix want that new construction number to go up. Permits for single-family homes are up immensely. But that’s not all – multi-family properties are on the rise, too. Looks like there could be some positive turnaround for new construction in the near future.

Phoenix Real Estate Neighborhoods to Keep an Eye On

The Phoenix metro area is huge, encompassing some growing areas, too. It is important to take a look around at the areas that appear to be doing well and growing — and find those that are gaining recognition and new residents.

After all, the more growth in a neighborhood, the better chance you may have with your investment. Here are a couple of areas to monitor.

  • East Mesa / Queen Creek / San Tan – It’s no surprise for any resident living in Phoenix to hear the East Valley is growing like crazy. As major tech companies expand into the wide open desert spaces available in the East Valley, new homes are being built and existing home prices are starting to increase. Rental prices in this area are still exceeding mortgages.
  • Buckeye – We can all agree that COVID changed a lot in our country. One of the trends we noticed during this time was a shift in location for new home buyers. We have seen more home buyers looking in cities like Buckeye as they can purchase larger homes with ample land space for the same cost a downtown high rise. In addition, cities like Buckeye are starting to bring in larger companies establishing their manufacturing facilities in this area. More jobs in the area = more profit for investors like you!
  • Happy Valley / Surprise – Another great area with more tech companies, and manufacturing facilities building new spaces. This area is expected to see an increase in new jobs by over 10,000 in the next few  years!

Keep in mind that there are all sorts of neighborhoods throughout Phoenix, as well as in the surrounding areas of Gilbert, Mesa, Peoria, Scottsdale, Tempe and more. You are sure to find what really works well for you, your interests, and your investment style.

The Job Market is Alive and Well

Many major industries like to call Phoenix home. And Fortune 500 companies make up a big part of that. With the unemployment rate down, it seems like things must be moving in the right direction. The economy of the Phoenix metro area is propelled by the following healthcare, finance, tech, and retail companies:

  • Magellan Health and Banner Health employ a large number of residents (over 10,000), as well as Dignity Health, Phoenix Children’s Hospital, and the Mayo Clinic.
  • Three main companies bring the greatest presence in the area, Avnet, Amazon, and Honeywell.
  • This is a busy sector in the Phoenix area. Big corporations such as American Express, JPMorgan Chase, Bank of America, Wells Fargo, and Charles Schwab are all found here.
  • There are a couple of retail giants that have their headquarters in the Phoenix area. They are Petsmart and Sprouts Farmers Market.
  • A lot of jobs – and a lot of students – come from the education sector in Phoenix. And, it includes Arizona State University, the University of Phoenix, Phoenix College, and Grand Canyon University.
  • We can’t talk about jobs without talking about the Tech growth! IBM, Intel, and even Facebook are all establishing operational facilities in the Phoenix metro area. Phoenix has been labeled “the new Silicon Valley” of the southwest.

Is Phoenix Right for Your Investment?

The sign of a good real estate investor is one who looks closely at all the opportunities available and all the data that support those opportunities — and then chooses the best choice. You can go anywhere in the world to invest in real estate, but why would you when the market in and around Phoenix is looking so fantastic right now?

There are a lot of opportunities for growth seen with these Phoenix real estate market trends. Lots of space and signs of new construction, a growing population, a stimulated economy, and more.

The future is looking bright for investing in Phoenix and the surrounding metro areas.  And, if you decide to take that leap, you will feel confident that you will find the best property management company to handle your investment right here in the local area.

At Real Property Management Evolve, we understand the local Phoenix real estate market and follow the trends closely. So, whether you are interested in investing in rental property in Mesa, Glendale, Scottsdale, Tempe, Phoenix, or the surrounding areas, it is probably a wise decision. We know how successful rental properties are doing right now in the area — and are very optimistic about the future.

For a FREE assessment of any rental property you are considering purchasing please contact our team at 602-295-4661.

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Landlord Property Management Tips

Real Estate Investing: 4 Tips for Successful Rental Properties

Before beginning real estate investing, it’s important to consider these four tips for successfully investing and renting rental properties. Here’s what to know.

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Many new investors get carried away with the excitement of real estate investing and the possibility of making passive income. Just the idea of it all can have these newbies making big plans for the future.

 

Important Tips for Real Estate Investing

Ready for some truth?

There is no guarantee in real estate. You may invest in a multi-family rental property and find that you can retire 10 years sooner than you ever thought possible. Or, you may invest everything you have into one bad investment and find it nearly impossible to recover.

There are books out there claiming to tell you everything you need to know about real estate investing. And while there are many pros who have gone before you and have offered up their advice, there is no one guidebook that can tell you everything based on your set of circumstances. Sure, it can absolutely point you in the right direction of building and diversifying your portfolio, but it doesn’t give you step-by-step directions that fit every scenario.

Just as your teachers will teach you concepts and you have to learn the application in life. The best thing you can do is to learn the tips and tricks of the trade — and then learn how to apply them to your personal situation.

 

1. Look for Profitable Rental Properties

Just because a property is on the market for a great price does not mean that it is suitable for real estate investing. Some properties may be listed at such a low cost because they don’t have many profitable qualities. It helps to know what to look for when it comes to purchasing properties that can increase your profits.

Here are a few qualities to keep your eye on:

— The Neighborhood

Look around the neighborhood. Are there a lot of rentals available or a lot of homes for sale? Is there a certain type of most common home in the area? Is there a large homeless population? Is the walkability factor high? Quality tenants are going to look for a rental in a neighborhood that feels like home. Pay attention to the feeling you get while in the area.

— The Schools

Good schools are on the top of nearly every parent’s must-have list. Take a look at the ratings of the schools in the area to determine whether or not they are going to be satisfactory to potential new tenants.

— The Job Market

Having a job market that is thriving without the long commutes is going to be a bonus for every potential rental property investor. It ensures that tenants will have access to employment and will be able to pay their rent. This is the most important factor when considering a purchase of a rental property. You must have the jobs available for people to earn enough income to pay rent!

— The Crime Rate

Unless someone is involved in criminal activity, it is highly unlikely that they’d jump at the opportunity to place themselves in the middle of it in a rental. This may lead to high vacancy rates. In addition, high crime means a high chance of damage or vandalism at your rental property that could end up costing you money. We strongly suggest looking up the crime rate, and sex offender list for the area.

— The Property Taxes

Some areas will have higher property taxes than others. While it should definitely not be an end-all factor in purchasing a rental property, it is something to consider. If your higher taxes are due to an ideal location, those extra dollars are probably worth it. If not, you may want to look a little more closely at your options.

— The Amenities

When looking into real estate investing, consider the surrounding amenities. What are the things in the neighborhood and close surrounding area that will make someone want to live there? Are there local parks? Dog parks? Nearby dining? Grocery stores? Medical facilities? Movie theaters and other methods of entertainment? The more amenities you encounter, the better.

— The Outlook for the Future

Does the area look like one that will see future development? Does it seem like you are coming in at a good time when the market rates may increase and development picks up? Or does the area seem doomed? Are businesses closing? Are there a lot of vacant properties?

— Average Rental Rates and Current Rental Market

One of the most important aspects of real estate investing is understanding the rental market. Gain an understanding of the rental market in the area of the property. Compare it to others to determine the rent level. Is there a demand for rental properties? What does the average vacancy rate look like?

 

2. Consider Single-Family Rental Properties

Single-family properties are one type of rental property that most investors start with. They are always greatly sought options for renters – especially when they come with some of the qualities listed above. For new investors, it allows you to handle one tenant at a time while getting your feet wet.

 

3. Consider Multi-Family Rental Properties

Investing in multi-family rental properties means being able to grow your portfolio in less time. You don’t have to purchase multiple properties,  but rather just one — and then you can have income from multiple tenants. One loan, multiple units. This avoids many frustrations and a boatload of paperwork. Though, it is important to note that for someone who is just starting out, taking on a multifamily property could be overwhelming unless you have help from a multifamily property management company.

 

4. Always Hire a Property Manager

Property managers are great at handling rental properties, whether you have one or a hundred and one in your portfolio. They are able to handle everything from the advertising of the property and tenant screening to rent collection, maintenance and repair, as well as eviction if necessary. This not only reduces the headaches for you but also frees up your time so that you can continue to focus on real estate investing without having to worry about actively managing your rental properties.

When you look for a property manager, be sure that you find someone like Real Property Management Evolve that:

  • Is experienced in both single-family rentals and multi-property rentals (even if you don’t have both now)
  • Has a network of vendors and professionals in the community that can handle any needs of your property.
  • Has a thorough tenant screening process to find only the highest-quality tenants.
  • Knows and practices all the fair housing laws locally and federally.

Regardless of how new you are to real estate investing, following these tips for successfully finding the right rental properties can get you started in the right direction.

Categories
Property Investments

3 Tips to Increase Passive Income on Your Multifamily Property

As an investor, owning and renting multifamily property can be a great way to diversify your portfolio and bring in passive income. Here are three tips to help you succeed.

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Passive income is income that is earned without having to actively work at it. It doesn’t require a lot of your attention or time, yet it is still earned income. Focusing on investments that allow you to continue earning money with passive income can be a fantastic way to earn money now and in the future.

Once such type of investment is multifamily property. Though, your actual passive income will vary based on how much involvement you have in the property.

Looking to increase your passive income on your multifamily property? You need to make it more desirable. Let’s take a look at 3 tips to increase passive income on multifamily real estate.

 

1. Increase the Value of Your Multifamily Property

In order for you to make money on rental property, you need to have renters. And because there are often so many options on the market, showing there is great value in renting your property may entice the potential tenant to lean toward your rental.

It is important to mention that the more value you add, it is easier to keep your rentals priced closer to the higher end of the market range. Renters will be able to justify the extra money each month due to the great value and amenities they are receiving from the property.

So, how can you increase the value of your multifamily property?

— Add Storage Space 

Storage space is something that many people are always looking for. Especially renters. Moving from one location to another – especially smaller apartments – means having stuff that doesn’t necessarily fit. Rather than get rid of it, millions of people throughout the country spend between $50.00 to $150.00 each month for storage.

Does your multifamily property have additional space to build storage? Storage facilities are incredibly cheap to build and can add a lot of value. Plus, not only can you entice renters with convenient on-site storage, but you can charge them a monthly fee for the storage as well. It could be a great investment. And a great way to increase your passive income.

— Add On-Site Laundry Facilities

Many,  but not all, multi-family properties don’t come with a washer or dryer in the unit – or even a hookup. This means having to carry dirty laundry to the nearest laundromat. It can be seen as a great inconvenience. If possible, add an on-site laundry facility. The value of this investment is immediate and can add to your passive income, as well. Instead of your tenants going to other places in the community to do laundry, they can conveniently do it where they live and you can earn the money they paid to wash and dry. In addition, a lot of companies who lease the washer and dryers will give a signing incentive up to $14,000 when you lease their equipment!

— Be Pet Friendly

People love their animals – and they want to be able to take them wherever they move. For many, not allowing pets can be a deal-breaker. If you’d like to increase the value of your property and increase your ability to earn passive income, then deciding to be pet friendly means allowing your tenants to have pets. In addition, building a dog run on your multi family can help contain the pet mess while providing an extra amenity to your tenants. Remember — you can charge pet rent on top of the normal monthly rent.

-It’s a win-win for both parties.

 

2. Add Safety Features to Your Multifamily Property

People want to live somewhere safe. They want to know that when they are home or on the property that they are safe and secure. Taking steps to increase the safety of the property means adding additional value in it — and potential tenants will see it. In addition, you reduce the incidence of any vandalism and theft on the property so that your replacement, repair, and insurance costs remain low. All of this ties into your income – and leaves you with an increased passive income.

Here are a few ideas for increasing the safety features:

  • Make sure you have adequate lighting throughout the property – and add more if necessary.
  • Keep bushes trimmed to minimize hiding spaces for intruders.
  • Consider adding security access points, whether through a gate, a door with a key code, etc. This will depend on the setup of your property.
  • Avoid glass doors. These are easy to break — and costly to replace.
  • Use top-notch locks on doors and windows to make accessing the property harder for criminals.
  • Make use of security cameras on common areas of the property. Put up signs advising of such – and let your residents know, too.

 

3. Hire a Property Management Team

Hiring a property management team to handle your property for you is one of the best steps you can take in increasing your passive income. Why? Well, there is a lot that comes with managing a rental property. When you have a multifamily rental property,  you are multiplying that work times the number of units you have. This can significantly increase the volume of your work. From finding new tenants, rent collection, repairs and maintenance, and so much more — you are actively involved in earning that income. Being a landlord is much like having a job. And with many units, it can be a very demanding job.

The idea with passive income is to earn money without having to put in the effort. This is where a multifamily property management companies come in. See, the property management team will put in the work to get the property rented, maintained, handle repairs, rent collection, all the marketing and paperwork — every aspect of the rental process. While you sit back and earn the income. That is what passive income is all about — and how a property manager can help.

 

Conclusion

Being a landlord can be a lot of work – and surely reduces the amount of passive income you receive. If you are ready to increase this income and be able to focus your attention on other investments rather than managing the day-to-day of your multifamily rental property, then you need to make your property more valuable, keep it safe, and hire a property manager.

And, since we are on the topic – you can’t just hire any property manager. Be sure that it is the best one in your area, such as Real Property Management Evolve in the Phoenix area. This breeds confidence and increased passive income.

Categories
Phoenix Property Management

What to Know About Arizona Lease Renewals to Keep High-Quality Tenants

If you have high-quality tenants in your rental properties, it’s important to keep them there. Here is everything you should know about the lease renewal process in Arizona.

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High-quality tenants are the cream of the crop when it comes to leasing out rental properties. These are the individuals you don’t have to worry about. They pay rent on time, care for the property as if it were their own, and report the need for repairs as they happen.

High-quality tenants are reliable – and you want to keep them. Here’s what you need to know about doing just that when it comes to your Arizona lease renewal.

 

Lease Renewal Process in Phoenix, Arizona

Different states have different laws when it comes to a rental property lease renewal. In Arizona, a lease will automatically renew if proper notice isn’t given by the landlord or the tenant at least 90 days before the end of the lease term.

For those who have tenants that they want to keep, it seems like an effortless way to make it happen. And, for the most part, it is. Though, keep in mind that unless you go through a new lease signing, the terms of the old lease – including the rental amount – will remain the same going into the next year.

A downfall of this law is that you have to stay on top of it – especially if you have bad tenants. If you miss the deadline you could very well be stuck with them for another year unless you have changed your lease to go month to month upon expiration.

To make sure everything runs smoothly so you can keep the high-quality tenants and weed out the bad ones, you need to approach your tenant at least 3 months prior to the end of the lease. Talk to your tenants and see if they would like to renew the lease. It is best to do all of this correspondence in writing. If they agree to stay, you don’t really need to take any other steps as long as you are keeping the lease terms the same. If you are choosing to increase the rent, you will need a new lease agreement with adjusted lease terms.

And, of course, written notice of non-renewal should be provided to the tenants you don’t intend to have stick around.

 

Why the Push to Keep Your Tenants?

You may be thinking – There are many potential tenants out there looking for places to rent. Why not just find another if the tenant doesn’t want to stay? And, well, you could just find someone else. But there are some great benefits to keeping the good tenant you have.

  • There is no need to clean up the property, get it ready for showing, market it, attend showings, go through the tenant screening process again, and so on. Being between tenants can often be stressful for landlords.
  • Vacancy rates are real – and they can hurt your bottom line. There may very well be a lot of people looking for rental properties, but who is to say they are looking for your rental property? The time of year, the rental market, and other factors will also play a role in how fast you will get your vacancy filled.
  • It is not always easy to find great tenants. So when you find them – you want to keep them!

 

Ways to Get Your Tenants to Renew Their Lease

When you have good tenants, you want to entice them to renew their lease. Not only is it a struggle to try to find new tenants – and the whole process that goes along with starting over – but there is also no guarantee that your next tenants will be as great. Therefore, when you do have those high-quality tenants that you’d love to keep, sometimes it pays to give a little extra to encourage them to stay.

To convince your tenants to sign a lease renewal, you could:

  • Offer incentives, such as a discount on monthly rent payments or a discount on the first month’s rent.
  • Throw in a property upgrade or much-needed renovation.
  • Offer a gift card for a local dining spot, grocery store, or home store.

Though just as you enjoy certain tenants, they enjoy having a landlord they can trust and count on. So taking steps to be proactive and responsive with maintenance as well as keeping the lines of communication open are great ways to make tenants want to stay.

 

Lease Renewal Process

As discussed, to renew a lease in Phoenix, Arizona, approach your tenants at least 3 months before the lease is up to see if they want to renew. Make sure this is done using written communication, such as sending an email or letter. This letter should include any proposed changes for the upcoming lease and include new lease dates.

If the tenants agree to the terms and want to renew their lease, draw up the new agreement with the new terms. You can send this to the tenant via email for digital signatures. Or, it can be done in person – whatever your preference. Just note that the easier it is for the tenant to sign the lease and get it back to you, the faster you will have confirmation that the tenant is locked in for another year.

 

How a Property Management Company Can Help!

Property managers can help you keep high-quality when it is time for a lease renewal. Like we said, when you treat your tenants well, they will want to stay. And a good property management team is efficient and effective at increasing rents while incentivizing tenants to stay while also taking care of the property. At Real Property Management Evolve, we offer professional, quality service and prompt communication. It is what makes us the best property management team around.

All of this keeps tenants happy and it keeps renewal rates high.

 

Closing Thoughts

Finding high-quality tenants can be tough. Keeping them after their lease is up can be even tougher. But, taking the right steps – such as managing the property well and hiring a property management company – can make the idea of lease renewals a reality.

If you are getting ready to approach your tenants about a lease renewal, remember to do so in writing and state any additional terms. If accepted, send out the new lease and make it easy for the tenant to get the signed lease back to you.

Or, why not just let a Phoenix property management team handle it all for you?

Categories
Landlord Property Management Tips

What to Do If Your Tenant Is Not Paying Rent (and What Not to Do)

As a landlord or property owner, there may be times when you struggle with rent collection. Here is what to do if your tenant is not paying rent (and what not to do).

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You prefer high-quality tenants that you can count on to pay their rent on time and care for your rental property as if it were their own. What landlord wouldn’t want this ideal situation? Unfortunately, no matter how thoroughly you screen and vet your new tenants, sometimes things just happen.

If you find yourself in a situation where your tenant is not paying rent, you need to know what to do – and what not to do – to protect yourself and your property.

 

Double-Check Your Records

As a landlord, you have a lot of documents to manage. And, if you have more than one property, you have a lot of documents and financial records to manage, as well. While you generally know that your tenant is not paying rent or is behind on payments, you still want to double-check your records before you take any further steps. After all, there are few things worse than erroneously accusing someone of owing you money.

You may want to take a look at the lease your tenant signed. It is common for you to assume you know what the lease says, but just in case it has changed or something was discussed and adjusted at the lease signing, etc., then it is good to confirm the details of grace periods, late fees, and such before you approach your tenants about their outstanding rent.

 

Send a Notice to the Tenant

A late rate notice should be sent out to your tenant, either by mail or by personally delivering it to the residence. Some landlords even choose to tape the notice on the front door so that there is no chance that it will be missed.

This notice is not legally required, but it does serve a purpose on multiple levels. First, it acts as proof that you did give written notice to the tenant of all past-due fees, including a breakdown. This can benefit you should you have to pursue legal action in the future. Keep a record of these notices if your tenants are late more than once.

Next, these notices can also help jog the memory of the tenant. Maybe he or she knows that they are behind in rent and are trying to get their funds together. Or, perhaps they have been dealing with a family emergency of some sort and didn’t even realize it was time for rent. Life can get busy and distracting. It can also send changes when you least expect it. Because you don’t know what your tenant is truly dealing with, providing this late rent notice is a good place to start.

 

Reach Out to Your Tenant

You have confirmed that your tenants are late with their rent – and you have sent them a notice of all amounts that are due. Your next step should be to reach out to the tenant via telephone (though this can absolutely be done before sending the notice). Good landlord tenant relationships are essential, and opening the lines of communication is always important. Reach out and see if you can find out what is going on with the outstanding rent.

Do not call continuously or try to accuse your tenants of withholding their rent. This could be considered harassment. Simply call once to speak to the tenant. If you don’t reach the tenant, leave a general message. If the tenant calls you back, great but if not, let it go. Do not call again.

 

Send a 5-Day Notice

This notice to terminate the lease is generally considered one of the first steps of the eviction process. It lets your tenant know that you are serious about collecting past-due money and you will pursue legal actions to do so.

The laws will vary based on your state, but in Arizona, once the tenant has broken the lease terms, the landlord has the legal authority to move forward with an eviction. This notice serves as your intent to do so. It gives the tenant five days to pay the outstanding amount due in full. On the 6th day, or after, an eviction can be filed with the court. Ensure that you are following proper Arizona eviction laws during this time.

Many times this notice pushes the tenants even harder to gather up that rent and get it to you.

 

File for an Eviction

If you have done all of the above and your tenant has still not come through with the outstanding rent payment, perhaps it is time to file for an eviction.

This is not something anyone ever wants to do – especially because it takes money and time to do. But when a tenant is not paying rent, you need to remind yourself that this is your business – your livelihood – and you need to protect it.

Consider having an inspection at this time so you can document any damage and include it in the fees sought as part of the eviction process.

Remember, this is a legal situation that will take time. Do not try to remove your tenants from the property, change the locks, turn off utilities, or remove their belongings until the eviction process within the court is 100% complete.

 

Tips and Other Important Things to Note if Your Tenant Is Not Paying Rent

When handling your tenants and rent collection, there are a few things you can do that may make life a bit easier when it comes to tenants who don’t pay their rent. Based on experience, we have put together a few things that you ought to consider.

  • Enforce your lease terms consistently and promptly. Dragging your feet to give tenants extra time or letting things slide may cause your tenants to push the limits in the future.
  • Partial rent payments may void any legal actions you have (depending on your laws). Focus on only accepting full rent payments.
  • Follow the laws that govern you. Don’t try to make things up as you go, make assumptions, or ignore certain steps. This could potentially land you in a lot of hot water.
  • All tenants should be listed and addressed on every notice and legal document.
  • Always document if you and your tenant have a discussion about rent, create a payment arrangement, or the like — follow it up in writing and keep record of it.

If all of this sounds to be too much to handle, hire an experienced property manager – such as Real Property Management Evolve. This will save you from all the steps of trying to collect money and place it in the hands of the professionals.

 

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Categories
Property Investments

Passive Income Real Estate: 6 Considerations to Know

Passive income real estate is a great investing strategy that allows you – the investor – to generate revenue without being actively involved. Here are 6 things to consider.

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Investing in real estate doesn’t always lead to a get-rich-quick sort of deal because there are so many variables, including one’s strategy and investment technique. But one thing is for certain – if done right, real estate investments can lead to a great source of passive income.

Passive income refers to earnings received without much, if any, active involvement. Who wouldn’t prefer to have a steady stream of money flowing into their bank account without having to put in a lot of work – if any at all? As with anything, though, it is important to fully understand what’s involved in passive income real estate. After all, there is no such thing as a free lunch.

Let’s take a look at 6 considerations you should know about passive income real estate.

 

1. Choose Your Strategy

The more you practice something, the better you get at it. If you begin investing in real estate or rental property, look at all your options and decide what will work best for your portfolio, your plan, your future, etc. Is it single-family homes? Are you more interested in buying multifamily properties? Maybe even commercial properties?

You cannot successfully reach the finish line if you don’t know where you are going or how you are going to get there. Before you dive in, secure your future passive income by having a strategy to obtain it.

 

2. You Will Still Have to Put in Work

While passive income generally means that no active involvement is required, you will have to put in some work. Issues and repairs will arise, routine maintenance must be tended to, and every time you have a vacant property, you will have to find a new tenant. Does this still make it passive income? Yes.

You will not constantly have to be involved. Owning rental property is not like having a full-time job, per se. Though, truth be told, if you have enough units, it very well could be.

 

3. Create a Well-Rounded Portfolio

Have you ever heard the phrase – Don’t put all your eggs in one basket? If that basket tips or drops, you are sure to lose all your eggs. When investing, it may be a good idea to create a well-rounded portfolio that allows you to keep your eggs spread around a little bit.

This could be about location, type of property, or the means you use to invest in it. Talking to professionals in the industry can help you to see new ways in which you can handle your own investments.

 

4. Approach Passive Income Real Estate Investments with a Business Mindset

You should always approach passive income real estate investments objectively and with a clear mindset. Do your market research, get a clear understanding of how your investment will impact your portfolio – and your future ability to receive passive income. If something doesn’t go through, it wasn’t meant to be. Move on to the next one.

Every investment you make should be with your mind, not your heart — and only after carefully calculated market trends.

 

5. Know How You Will Invest – And Your Timeline

You cannot jump into investing without having a plan – especially since each type of investment is different from the next. So choose your funding source wisely. And, if you are using money that you may need in the future – or are counting to have as part of your retirement, for example, be sure that your timeline fits. In other words, if you need your money back within 10 years, make sure you are making an investment that will allow you to have that money back within the time frame.

Investing doesn’t only involve looking at the current situation, but it absolutely must involve looking at the future. An investment may look great at the moment, but will it have long-term benefits for you? Will you be risking money you shouldn’t to purchase that investment?

There are so many things to consider when it comes to investing. The more careful you are and the more on-point your future predictions become, the greater chance you will set yourself up for success.

 

6. Seek a Professional Property Manager

The idea of passive income real estate can sound wonderful. The more you invest in rental property, the more you are likely to see it is not so passive after all. There is often a lot of work to be done to manage rental property, keeping quality tenants in a healthy rental property takes dedication and work.

When repairs are required, you need to address them. Even if it means calling someone to fix the problem, you are still getting the calls throughout the day. Routine maintenance is important for maintaining the longevity of your property. Finding/keeping tenants – and all that goes along with that process can be time-consuming, as well. And that’s just a few things that will require your attention. Although it is not a regular “job”  it does still require work.

That is, of course, unless you hire a local property manager.

Property managers are professional at handling rental properties – and everything that comes with them. That means property management marketing and advertising, finding and screening new tenants, handling routine maintenance and repairs, rent collection, and more.

What does this mean for you? If you have an experienced property management team – like the one at Real Property Management Evolve – then you can truly feel what it means to earn passive income with real estate. You will not need to do a  thing because your management team will handle it for you. You will simply collect the income from your investment.

 

Is Passive Income Real Estate in Your Future?

If you are looking for ways to set yourself up for a bright future – and maybe even some retirement income – passive income real estate investments may be an option for you. Before you jump in, though, you must consider all of the factors and all of your options.

And, if you choose to move forward with it, make sure you truly keep that income passive with the best property management team in the greater Phoenix area – Real Property Management Evolve.

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