HOW TO FIND THE BEST TENANTS FOR YOUR RENTAL PROPERTY
Finding reliable tenants is important for any landlord who wants to maintain a profitable and trouble -free award. The right tenants will pay the rent on time, take care of the property and follow the terms of the lease. However, choosing tenants without proper screening can lead to late payment, damage to property or even expulsion. We’re here to help you make your money work for you. MY SMART COUSIN specializes in providing tailored solutions that will suit any aspect of owning investment property, from buying a house for the price of a car, something that is still entirely within the realm of the possible, to managing these properties once you own them. As an experienced Real Estate Investment Coach, we help you develop and implement a real estate investment strategy. We work with all clients and focus particularly on Black and Brown folks and women, providing advice that helps you build generational wealth This guide offers a detailed strategy to help you attract and secure the best tenants for your rental housing. 1. Prepare Your Property for Prospective Tenants Before looking for tenants, make sure your rental home is in an excellent position. A well -maintained house attracts responsible tenants and determines the standard how you expect it to be treated. Increase the curb: Keep the outer clean, mow the lawn, and place fresh paint on the door or fence when needed. Interior Acapping: Make sure the walls are fresh, blankets are clean and all equipment is in order. Safety measures: Install smoke detectors, safe locks and good lights that work in common areas to ensure the tenant’s safety. Compliance with local rules: Make sure your rental housing meets all local housing codes and safety rules. 2. Advertise Your Rental Effectively The way you market your property will determine the quality of the tenants who are attracted to you. Use multiple platforms to reach the wide audience and increase the opportunity to find the best tenant. Online listing: Post the rent on platforms such as zillow, apartment.com, craigslist and local Real Estate sites with high quality images and a detailed description. Social media: Share your entry on Facebook Marketplace, LinkedIn and community groups to reach potential tenants. Traditional advertising: Hint “for the rent” in front of the property, advertises in local newspapers and uses message boards in community centers. Mouth words: Inform the current tenants, friends and family that you are looking for a new tenant; The reference can be a great way to find reliable tenants. 3. Set Clear Tenant Criteria Establishing a clear screening criteria helps you attract tenants who meet your expectations. Explain your needs in your listing to filter unqualified applicants. Income requirements: Ideally, tenants should have a monthly income of at least three times on rent to ensure strength. Credit points: A credit score of 650 or more is usually a good indicator of financial responsibility. Rental history: Applicants should be given preference with timely payment and history with positive landlord references. Employment verification: Make sure the tenant has a steady source of a stable job or income. 4. Conduct Thorough Tenant Screenings A proper screening process is necessary to avoid tenants who can cause financial or legal issues. Lease applications: Future tenants are required to fill a broad rental application that includes work history, income certificate and personal references. Credit and background checks: Use rental services for tenants such as TransUnion, SmartMove or RentPrep to check credit points, criminal mail and expulsion history. Review of social media: Review of an online appearance of an applicant can sometimes provide further insight into your lifestyle and responsibility. Tenant interview: Determine face to face or virtual interview time to measure the applicant’s personality and expectations. 5. Verify References and Employment Many landlords leave reference checks, but they are important to confirm the reliability of the tenant. Employer verification: Contact your employer to confirm job position and income level. Previous Landlords: To check former landlords, say if the tenant has paid the rent on time, maintains the property and has followed the terms of the lease. Personal reference: Although it is not always necessary, references to former roommates or colleagues can help paint a complete picture of a tenant. 6. Draft a Comprehensive Lease Agreement A well -written lease ensures that both you and the tenant understand and follow the rental terms Rental amount and fixed date: Explain rent, due date and late payment penalties. Safety deposits: Specify the conditions for the amount, cut and return the timeline. Responsibility and Maintenance of properties: Framework responsible for repair and maintenance. Rules and limitations include smoking, pets, noise levels and sub -level policies. Legal compliance: Make sure that the lease follows the local and state tenant laws. 7. Maintain open communication with tenants Creating a good relationship with tenants encourages them to take better care of the property and renew the lease. Stay available: Provide tenants to reach you for maintenance requests or other concerns. Regular check -in: Periodic inspection to maintain real estate well (with appropriate notice) plan. Create a tenant portal: Consider using the Property Administration software to provide rent, maintenance requests and renewal of the lease. 8. Offer Incentives for Long-Term Tenants High tenant sales can be expensive. Encouraging the renewal of a lease saves time and money. Renewable benefits: Offer small price discounts, free carpet or less Real Estate upgrading for renewable tenants. Faith Award: Give encouragement to tenants who are constantly paying price. Terms of flexible lease: Consider offering multi-year leases to secure long-term tenants. 9. Collaborate with a Property Management Professional If managing the property becomes heavy, consider hiring a property manager. Specialization: They handle the tenant’s screening, rent collections and maintenance effectively. Timely work: Free your time by securing professional Real Estate management. Legal knowledge: Property managers stay up to date with changing landlord-tenant laws and regulations. 10. Stay Informed About Landlord-Tenant Laws Local laws ensure that you are obedient and avoid possible legal disputes. Regular updates: Be informed of fair
RENTAL PROPERTY CASH RESERVES: HOW MUCH IS ENOUGH?
Investing in rental property can be an incredibly profitable venture, but the road to success isn’t always smooth. One of the key elements of having a successful rental property is having the right amount of cash reserves to weather any storm that comes your way. Too many real estate investors and home buyers jump into their investments without taking Reserve Cash into account and end up stuck between a rock and hard place when unexpected costs arise. At MY SMART COUSIN, we understand the challenges of finding a house for you and your family or purchasing a long-distance rental property. As a Real Estate Investment coach we can help make that process less stressful and more efficient. We specialize in helping new and aspiring real estate investors, with a particular focus on Black and Brown folks and women, buy and manage their first property, and buy a house for the price of a car. So how much should you reserve for contingencies? It’s time to break down all topics related to Reserves Cash, so you’ll know exactly how much you need every step of the way! WHY IS IT IMPORTANT TO HAVE CASH RESERVES FOR RENTAL PROPERTIES? Having a cash reserve set aside for your rental property is crucial for a number of reasons: · Unexpected expenses: No matter how well you maintain your property, unexpected expenses are always a possibility. This can include things like emergency repairs, legal fees, or other unexpected costs. Having a cash reserve can help you cover these expenses without having to dip into your personal savings or take on additional debt. · Financial stability: A cash reserve can also help ensure the financial stability of your rental property. For example, if you experience a period of vacancy, having a cash reserve can help you cover expenses until you’re able to find new tenants. · Investment opportunities: A cash reserve can also provide flexibility and allow you to take advantage of investment opportunities as they arise. For example, if you come across a good deal on a rental property, having a cash reserve can help you make the purchase without having to liquidate other assets or take on additional debt. HOW MUCH CASH RESERVE IS ENOUGH? The amount of cash reserve you need for your rental property will depend on a variety of factors, including: · Property type: The type of property you own can impact the amount of cash reserve you need. A single-family home, for instance, may require a smaller cash reserve compared to a larger multifamily property with multiple units. · Property location: The location of the property can also affect the amount of cash reserve you need. Properties in areas with higher costs of living or higher risks of natural disasters may require a larger cash reserve. · Rental income: The amount of rental income you receive can also impact the amount of cash reserve you need. If you have a higher rental income, you may be able to set aside a larger cash reserve. · Expenses: The expenses associated with your rental property will also impact the amount of cash reserve you need. This can include things like mortgage payments, insurance, taxes, and maintenance costs. · Personal financial situation: Your personal financial situation should also be taken into account when determining the right amount of cash reserve for your rental property. If you have other sources of income or savings, you may be able to set aside a smaller cash reserve. In general, it’s recommended to have a cash reserve equal to at least three to six months of expenses for your rental property. This will give you a cushion to cover unexpected expenses and maintain the financial stability of your investment. HOW TO BUILD A CASH RESERVE FOR YOUR RENTAL PROPERTY? There are several ways to build a cash reserve for your rental property, including: · Set aside a portion of your rental income: One of the easiest ways to build a cash reserve is to set aside a portion of your rental income each month. This can help you gradually build up your cash reserve over time. · Cut expenses: Review your expenses and see if there are any areas where you can cut costs. This can include things like negotiating lower rates with vendors or suppliers or finding ways to reduce energy costs. · Increase rental income: Another way to build a cash reserve is to increase your rental income. This could involve raising rental rates, finding ways to add value to your property, or finding new tenants to fill any vacancies. FINAL THOUGHTS Mulling over potential investments, it’s important to keep in mind that your rental property cash reserves are a key factor in weathering any bumps along the way. By having a solid understanding of both your monthly expenses and vacancy rates, you can ensure that you’ll have enough money set aside to cover these essential costs. With this peace of mind, you can then focus on creating a rental portfolio that generates positive cash flow and builds long-term wealth. Tell us about your journey starting and maintaining a cash reserve for your rental property! YOU CAN ALSO READ: LEARNING TO MANAGE THE CLOSING PROCESS FOR FLIPPING HOUSES SUCCESS FOLLOW US: @MYSMARTCOUSIN
HOW TO ESTIMATE YOUR RENTAL PROPERTY EXPENSES
Breaking into the world of real estate investment can seem daunting, but it doesn’t have to be. By estimating your expenses, you’ll have a better idea of what you’re getting into and whether the investment is worth your time and money. MY SMART COUSIN is here to help you realize your real estate investment goals. As a Real Estate Investment Coache, we have the skills and expertise that can position almost anyone for success in this competitive market. We help aspiring investors and homeowners, particularly, Black and Brown folks and women, develop and execute a customized, step-by-step plan to scale their finances and move from idea to action. With planning and persistence coupled with guidance from us, we will help you develop a portfolio and break into the most elusive of all real estate channels— buying a house for the price of a car. When structuring your first rental property acquisition, it’s important to estimate your expenses ahead of time. This will help you determine if the property is worth your investment, and whether you can afford it. There are a few different factors you’ll need to consider when projecting your expenses, so keep reading for more information. WHAT ARE THE MOST COMMON TYPES OF EXPENSES FOR A RENTAL PROPERTY? There are several different expenses that you may incur when you own a rental property. · Acquisition expenses are those expenses associated with the initial purchase of the property. These include fees charged by the mortgage lender, legal fees, and municipal or county fees associated with recording the deed. Importantly, the real estate commission will not be paid by you as the buyer— the seller pays the real estate commission, and that commission is split between the buyer’s real estate agent and the seller’s real estate agent. For instance, if the property you purchase costs $50,000 and the real estate commission rate is 6%, the resulting $3,000 commission will be paid by the seller and split 50/50 by the seller’s agent and buyer’s agent. · Rental leasing expenses are those expenses associated with finding and signing a renter, such as advertising and background checks. If you are managing the property yourself, then you will incur these costs, both in money and time. If you hire a property manager, then the property manager will charge you the first month’s rent (or a higher or lower amount, depending on the property management company), and that fee will be used to pay for the advertising, screening, and other renter-onboarding expenses. As an example, if your rental property is listed for a rent of $1,000 per month, then the first month’s rent will be paid directly to the property manager as their fee for finding and placing a tenant. Each time a new tenant is placed in the unit, the one-month fee will be charged. · Operating expenses are those expenses associated with the day-to-day operations of the property, such as maintenance materials, repair costs charged by handymen or contractors, and property insurance. As with the rental leasing expenses, if you hire a property manager, the property manager will charge a fee, ranging from a low of 5% to a high of 15%, depending on the market and the services provided. That fee will pay for the manager to communicate with the tenant on any issues with the property. · Finally, owner expenses are those expenses associated with your involvement in the property, such as travel costs to visit the property. By understanding all of these expense types, you can be better prepared for the financial commitment of owning a rental property. HOW TO ESTIMATE YOUR RENTAL PROPERTY EXPENSES If you’re considering acquiring and renting out a property, it’s important to have a clear understanding of all the associated costs. · CALCULATE THE MONTHLY MORTGAGE PAYMENT One of the biggest expenses you’ll need to account for is your mortgage payment, which comprises principal and interest. To calculate the principal, simply take the total amount you borrowed and divide it by your loan term. For example, if you owe $100,000 on your mortgage and have 20 years, or 240 months, mortgage, the principal portion of your monthly mortgage is $416. Your mortgage interest expense will equal the interest rate on your loan times your loan amount. · ADD IN THE QUARTERLY PROPERTY TAXES In addition to your mortgage payment, you’ll also need to factor in property taxes. These are typically paid every quarter, so you’ll need to divide the annual amount by four. For instance, if your annual property tax bill is $2,000, your quarterly property tax expense would be $500. . ESTIMATE MONTHLY HOMEOWNER’S INSURANCE PREMIUM To estimate your monthly homeowner insurance premiums, start by looking at the average cost of premiums in your area. Insurance rates and provisions vary by the insurer so be sure to get quotes from at least three companies. · INCLUDE ESTIMATED MONTHLY MAINTENANCE AND REPAIR COSTS Next, you’ll need to calculate an estimated monthly maintenance cost. This can be done by taking into account the age of your rental property and the expected wear and tear that it will experience over time. If you think your rental property will need major repairs or renovations in the near future, be sure to factor that into your estimate. By taking the time to calculate these monthly expenses, you can get a good idea of what it will cost to rent out your property each month. This information can help you make informed decisions about the appropriate rental rate to charge. · FACTOR IN ANY APPLICABLE VACANCY RATES OR LEASING FEES You’ll also need to factor in any applicable leasing fees. These can vary depending on the type of property and the location, but they’re typically a percentage of the total rent amount. · SUBTRACT POTENTIAL RENTAL INCOME TO GET YOUR NET OPERATING INCOME (NOI) To calculate your net operating income, take your potential rental income and subtract any vacancy loss,
REFINANCING RENTAL PROPERTY IN 2022: A REAL ESTATE INVESTOR’S GUIDE
Have you been thinking about refinancing your rental property? If so, you’re not alone. Refinancing continues to remain popular with homeowners and real estate investors as a vehicle for locking in interest rates rather than chancing escalating rates under a variable mortgage, or unlocking the appreciated value of a property through a so-called cash re-fi structure. At MY SMART COUSIN, we help homeowners and investors, and especially Black and Brown folks and women, optimize their real estate investment, management, and ownership strategy. As your Real Estate Investment Coach, we’ll help you evaluate the residential property market in terms of the many opportunities that continue to be available, even in today’s high-priced market, and step you through our proven roadmap to buy a house for the price of a car! Whether you are a current or aspiring real estate investor, chances are high that one of the criteria you use to evaluate opportunities is ROI or return on investment. One way to increase the ROI of a real estate investment is to refinance the property at a lower interest rate, at a higher leverage rate, or both. This guide will get you thinking through the questions and answers needed to make the best decision for your portfolio. Let’s read on to learn more! WHAT DOES IT MEAN TO REFINANCE A RENTAL PROPERTY, AND WHY SHOULD YOU CONSIDER DOING IT NOW? Refinancing a rental property refers to taking out a new loan to replace an existing loan. There are many reasons why you might want to refinance your rental property, but some common reasons include: · To obtain a lower interest rate and thereby save money on your monthly mortgage payments. · To tap into the equity you’ve built up in the property by obtaining a mortgage that reflects the higher value of the property. · To switch from an adjustable-rate mortgage to a fixed-rate mortgage. · To shorten the loan term and build equity more quickly. In general, it’s a good idea to refinance if you can get a lower interest rate and/or reduce your monthly payments. Tapping into the equity value of the property through a cash re-fi can also be a great way to put the stored value of these funds to use. As for why you would specifically pursue refinancing in 2022, there are a few reasons: · Even with 30-year mortgage rates currently sitting at a relatively lofty 5.75% – 6% rate, a nearly three-point jump from July 2021’s rate of 2.8%, mortgage rates are forecasted to trend even higher in the next few years. As such, trading in a variable rate mortgage now for a fixed rate loan allows you to avoid the risk and cost of continued inflation and higher rates. · The housing market is expected to cool off in the next few years, so refinancing now could help you tap into equity while today’s housing prices, while they’re still high. · The government is expected to implement changes to the tax code that could make refinancing less beneficial. Refinancing before those changes go into effect may help you save money. Refinancing can be a complex process. When considering strategies that could impact your taxes, meet with your accountant first. Likewise, be sure to speak with your financial advisor to ensure that your specific financial position is considered in your strategy. THE BENEFITS OF REFINANCING A RENTAL PROPERTY There are several benefits to refinancing a rental property. · Perhaps the most obvious is that it can help to lower your mortgage payments. If you have been searching for ways to lower expenses, refinancing may give you the financial breathing room you need. · If a cash re-if is done, the funds obtained from the refinancing can be used to increase the value of your property. By taking out the proceeds from the loan and making improvements to your rental property, you can make the property more attractive to potential tenants, increasing retention and the rental amount. · Finally, refinancing can allow you to tap into the equity you’ve built up. This can be helpful in finding a growth strategy. In short, there are several advantages that accrue from refinancing a rental property. IMPORTANT CONSIDERATIONS TO BEAR IN MIND WHEN REFINANCING YOUR RENTAL PROPERTY Before taking the plunge into the refinancing market, there are a few things to keep in mind to get you started on your journey: · First, make sure you compare rates from multiple lenders to get the best deal. · Second, beware of prepayment penalties, which can cost you hundreds or even thousands of dollars if you try to refinance before your loan term is up. · Finally, remember that closing costs can add up, so be sure to factor them into your refinancing decision. If you keep these things in mind, refinancing your property can be a great way to save money and make improvements. THE PROCESS OF REFINANCING A RENTAL PROPERTY The refinancing process can be a bit complicated, but it essentially boils down to these steps: · Shop around for the best rates and terms. · Gather all the necessary documentation. · Apply for the new loan · Wait for approval and close on the loan. · Use the funds from the new loan to pay off the old one. HOW TO FIND THE BEST REFINANCING DEALS No one likes overpaying for anything, least of all when it comes to making expenditures on an investment that is meant to pay you money. If you’re looking to refinance your rental property, there are a few things you can do to make sure you get the best possible deal: · First, talk to multiple lenders and compare their offers. Pay attention to both the interest rate and any fees or points so that you can do an item-by-item comparison across lenders. · Second, don’t be afraid to negotiate. Let each lender