Rental properties for investment purposes usually comprise of commercial spaces, office buildings, and residential housing properties. The key to choosing a rental property that will generate profits is to make the right choice based on careful assessment and knowledge about rules and regulations pertaining to real estate. It is advisable to consult a real estate professional before investing in order to make informed decisions and minimize financial risks.
Important things that every investor should know before investing in a rental property are:
- Understand The Market: Start with exploring the rental market of the area you are interested in by consulting different real estate agents and locals. Information about property values, average rents, suburb reports, and demographics will provide an insight into the current market conditions.
- Property Tax and Laws: Knowledge about property tax and laws helps to gain an understanding of their impact on profits earned from an investment property. Consult a real estate agent to gain insight into the laws of your state.
- The Right Mortgage: Consider different financing options and compare interests (fixed and variable), tax benefits, accounting costs, etc. A financial advisor’s advice regarding the best mortgage for the purchase is invaluable as he will help to structure the loan in a way that reduces costs and maximizes benefits.
- Budgeting For Maintenance: A budget for regular maintenance should be drafted in order to cater to unexpected repairs and expenses and to keep the property in its appropriate condition. Look for a licensed property manager to manage the property and for meaningful advice on your responsibilities, rights, and property law.
- Secure Down Payment: A large down payment is usually required for approval when purchasing investment properties. An investor should be ready to pay at least 20 percent of the property’s value as a down payment.
- Increase Its Appeal: For high-quality tenants, it is important to make a rental investment attractive. A separate budget should be drafted for improving the curb appeal of the property by painting, pressure washing, upgrading lights, interior decoration, etc.
- The Right Property At The Right Price: When choosing a property, determine the amount of capital growth (increase in value) expected from it. Some tips for choosing the right property in this context are to opt for a property in familiar locations, calculate its real value, tax deductions and expected cash flow, consider the demographic of renters, class of residential property (houses, home units and land) and the age and condition of the rental property.
Lone Star Realty & Property Management, Inc. offers a wide range of properties for investment. The agents assist the customers in finding suitable investment properties. For more details on things to know about rental property investment, visit 1020 West Jasper Drive, Killeen, TX – 76542. You can also call at (254) 699 – 7003.
An apartment lease is a legal contract that outlines various rules agreed upon by the parties involved i.e. the property owner and the tenant. A lease agreement states the duration of renting the apartment, amount of rent to be paid on a monthly basis, security deposits, pet policies, parking lot access, pool privileges and other details of the rental apartment.
Essential things that every prospective renter should know about an apartment lease before signing it are:
- Termination And Renewal: An apartment lease agreement is usually for a 12-month period but may vary at the behest of the property owner and tenant. For renewal, it is usually required that the tenant should provide the property owner a 30 to 90-day prior notice for the same.
- Fixtures Provided: Check the lease agreement for fixtures that will be provided in the apartment. Permanent kitchen appliances like a dishwasher, oven, and stove are usually provided in apartments but you may need permission for removable fixtures like pool equipment, window shades, furniture on rent, appliances left behind by previous tenants, etc.
- Security Deposit: The amount of security deposit to be paid may vary depending upon state law. Also, check the lease for information on when you will get your security deposit back; usually within 30 to 60 days of vacating an apartment.
- Grace Period: This refers to the amount of time a tenant is granted to pay rent after the due date without any penalty; it varies from state to state. Failure to pay rent after the grace period entitles a property owner to charge a late fee or terminate the lease.
- Guest Policy: Lease agreements include conditions on the number of guests allowed to sleep in an apartment and the maximum number of occupants allowed to stay in it. Some lease agreements even pose restrictions on the number of days that guests can stay in an apartment.
- Pet Policy: For those with pets, look for restrictions on breeds, sizes, types of animals allowed and the monthly fee required in addition to rent.
- Tenant Insurance: Check whether the lease agreement requires you to get renters insurance. However, it is recommended to get insurance even if not required by the property owner.
Lone Star Realty & Property Management, Inc. offers a variety of apartments on rent. The agents assist the tenants in understanding the terms of the apartment lease. For further details on an apartment lease, visit 1020 West Jasper Drive, Killeen, TX – 76542. You can also call at (254) 699 - 7003.
Tenant verification is important for every property owner in order to determine if the prospective tenant will make timely payments, take care of the property, be considerate of the neighbors etc. In addition to this, tenant verification helps to ascertain the identity of the tenant. Tenant verification can be done by conducting a background check, phone verification, etc.
Let us take a look at some reasons for which it is important for property owners to screen tenants prior to signing a lease contract:
- Protect Your Property: Tenant screening is an important step that every property owner should take to protect his property from dropping its value. The choice of tenants will determine the way the property will be treated and the amount you will have to spend on repairs and maintenance.
- Safeguard Yourself: Before entrusting your rental property to a tenant, you should conduct a screening process to determine whether you can trust him and stay away from any lawsuits.
- Know The Tenant’s Financial Situation: An essential part of tenant screening is reviewing a tenant’s credit report to gauge his credit score and determine the debt-to-income-ratio.
- Avoid Liabilities: Thorough screening reduces the property owner’s expenses due to sudden evictions, the default of agreement, and expenses arising due to lack of responsibility by a tenant.
- Full Criminal, Credit And Eviction Reports: Tenant screening helps a property owner get a potential tenant’s full criminal history, credit history, and eviction reports. These results are vital for determining whether a tenant is worth considering or not.
- Know The Applicant’s Payment History: Information about an applicant’s payment history can be gathered from previous employment and landlord references. Landlord references let you know about the applicant’s track record of paying rent whereas, reviewing the employment history confirms whether the applicant earns enough to afford rent every month.
- Prevent Future Evictions: Eviction processes can be quite lengthy and expensive, so it is suggested to avoid them by conducting a screening process that involves learning about an applicant’s eviction history, if any. This can be done by studying credit reports or an actual eviction report that includes the exact reasons for eviction.
- Peace Of Mind: If you want your rental property to be rented to a tenant who will pay rent on time, handle your property carefully, demonstrate responsibility and be kind to neighbors, you should be consistent with a thorough screening process. This will ensure you a quality tenant resulting in peace of mind as the owner of the property.
Lone Star Realty & Property Management, Inc. offers property management services to its customers. The property managers provide services such as thorough tenant screening, property maintenance, etc. To know more about why every tenant should be verified by the property owner, visit 1020 West Jasper Drive, Killeen, TX – 76542. You can also call at (254) 699 – 7003.