It’s certainly possible to make money in real estate, but there’s more to it than buying the first beautiful house you see. Home rental management involves purchasing a house, finding tenants, and maintaining the home while collecting rent and paying property taxes. Thus, buying a place to rent out differs from buying a place to live in with some unique things to look out for in your search. Cobalt Creek Property Management in Denver, CO is here to assist you!
- Type Of Property You Want To Rent Out
- Condition Of The House
- Beware Large Maintenance Costs
- The Denver Rental Market
- Property Management
Type Of Property You Want To Rent Out
Different types of rental property come with different management responsibilities. A downtown apartment will require less landscaping and groundskeeping than a suburban house.
You should also beware of sellers trying to pass a property off as something it’s not. For instance, you may find a large, single-family home listed as a duplex even though it hasn’t been legally split into two units. A true duplex needs two separate HVAC systems, thermostats, and addresses.
When you find a house you like, take time to research local amenities and crime statistics. If you want to attract families, you should also look into the school district the home is located in. The more popular and appealing the neighborhood is, the better your chances of renting out your property.
Always consider property taxes when choosing your investment property. If you’re looking at a rental home in a desirable neighborhood, make sure you can afford the taxes and adjust your rent accordingly. Some areas expect investors to pay more taxes than owner-occupants, so it’s worth talking with a local tax expert before running your final calculations.
Condition Of The House
Just like when you’re looking for a place to live, you need to consider the condition of your rental property before investing in it. It’s your legal responsibility to provide a safe, secure, and healthy home for your tenants. Inspect the house thoroughly when you visit and hire a professional home inspector to examine any issues you find. Issues may include:
- No Permits For Work Done
- Beware Of Room Fresheners That Can Cover Up A Lingering Smell
- Areas The Seller Won’t Let You See
- Look For Water Damage Concealed By Paint
- Uneven Or Bouncy Floors
- Ownership History
- Exterior Tilts & Cracks
- Seller Incentives To Waive Inspection
- Spray Painted Hedges & Other Curb Appeal Shortcuts
- Beware Music Playing In Each Room As It May Cover Up Noises That Raise Alarm Bells
Beware Of Large Maintenance Costs
The last thing you want to do is spend a lot of money on the house only to have to pay even more months later to cover some unexpected maintenance. Savvy investors don’t just budget for the property’s listed price but also for the cost of replacing major components, such as the roof, plumbing, and HVAC system. It’d also be wise to add in a cushion of at least 1% of the property value in case your estimates are low.
The Denver Rental Market
When you’ve compiled your shortlist, examine the neighborhoods’ rental statistics. Both vacancies and rent will directly impact your bottom line. Look for low vacancy rates to maximize your returns and use the current rental rates as a guide to setting yours.
Many prospective landlords hire a property management company to take care of everything. Others choose to save money and become their own property managers. How to handle rental property management is a personal decision, but it’s one you should consider carefully while house hunting.
Talk With A Denver Property Manager Today
Every house hunter (investors included) should take time to inspect a home before buying it. Once you’ve purchased your new investment property, a Denver rental management company can help you find and manage tenants. Call Cobalt Creek Property Management today to get started.