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Your Basic Guide to Managing an Investment Property

Managing an Investment Property

As a property investor, buying an investment property is just the first step. Its management is next. As a rental property owner, there are certain investors’ property management requirements you’ll have to keep in mind. Here are a few tips to make your investment a success.

Keep Up With Maintenance

Keeping up with property maintenance is the most important thing to do with your investment property for two main reasons. First, you’re legally responsible for the upkeep of the property so it meets specific health and safety standards under landlord-tenant law. This comprises keeping the common areas in good condition and ensuring that the tenants have a proper place to dispose of their garbage. Second, if your property isn’t maintained, you’ll have difficulty keeping and even finding tenants. Understand that people don’t want to live in a rat-infested rental with unending plumbing issues.

Avoid Tenant Turnover

Keeping your tenants happy is the next important way to manage your rental property successfully. This will want them to stay where there are, and keep renting from you. You can take certain steps to keep tenants happy, such as making an effort to place other good tenants in the property and responding swiftly to repair requests. One of the main reasons tenants move is because they’re not happy with their neighbors. If you want to weed out the good from the bad, having strict tenant screening procedures will assist you tremendously.

Follow Landlord-Tenant Law

Following and understanding US landlord-tenant law will assist you in managing your tenants and your rental property. Guidelines stem from it that you can take into consideration, allowing you to make fewer mistakes, and streamline the investors’ property management process.

For instance, you’ll learn the rules regarding how much you can take as security deposit, reasons a tenant may legally withhold rent, the process of evicting a tenant, reasons you can evict a tenant in your state, and when you must return a tenant’s security deposit. It’s important to  understand every statewide landlord-tenant law and keep within legal boundaries. It’s a good idea to also check with your local authorities on whether more laws are applicable.

Appoint a Property Manager

Managing a rental property can be both time-consuming and overwhelming. For certain property investors, appointing a property manager is the right way to eliminate this problem.

You can appoint a property manager to do as little or as much you want. Certain landlords only want them to gather the monthly rent, while others want investors’ property management firms to do everything from handling repairs to filling vacancies.

Appointing a property manager isn’t cheap and is undoubtedly a big decision. You need to weigh the financial benefits and drawbacks to identify if it might be the correct choice for you. Remember that there are a ton of bad property managers out there who can ruin your rental property and its reputation. It’s important that you thoroughly screen property managers, just as you would potential tenants.

Pay Your Taxes

Finally, if you want to make some decent bucks as a property investor, ensure you’re properly managing your financial obligations. Having to pay taxes is one of the most important financial obligations to which all investors must accede.

It may be confusing to pay taxes as a rental property owner. Since it’s a business, you can usually deduct home office expenses, and since it’s property, you can claim numerous deductions involve depreciation, as well. It’s often in your best interest to appoint an accountant who is skilled in investment property tax law. They can help you understand the deductions you’re permitted to take, along with the deductions that may raise a red flag with the IRS.

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Your Basic Guide to Investing in Real Estate

Investing in Real Estate

Ever had a landlord? Not everyone dreams of becoming one. Fielding calls regarding overflowing toilets and oversized bugs doesn’t seem like the most glamorous of jobs. However, if done right, investing in real estate can be quite lucrative, if not flashy. It can help diversify your current investment portfolio and simultaneously be an extra income stream.

Many of the best real estate investors are not at their tenants’ every beck and call (they have supers for that). The difficulty is that many new investors don’t know how or where to invest in real estate. Here are a few ways you can make a significant amount of money in real estate, ranging from low to high maintenance.

Purchase Real Estate Investment Trusts (REITs)

REITs permit you to invest in real estate without the physical real estate. Unlike mutual funds, REITs own commercial real estates like hotels, apartments, retail spaces, and office buildings and tend to pay good dividends making them a typical investment for retirement. Investors who don’t want or need regular income can automatically reinvest those dividends to grow their investment further.

But should you invest in REITs? They’re a good investmen, but can also be complex and varied. Certain trade on an exchange, while others are not publicly traded. The type of REIT you buy can be a huge factor in the degree of risk you’re taking on, as REITs that are not traded don’t sell easily and may be difficult to value. New investors should generally stick to publicly traded REITs that can be bought through top real estate investment firms. For this, you require a brokerage account. If you don’t have one already, opening one doesn’t take more than a few minutes, and a lot of companies don’t require initial investment (though the REIT itself will likely have an investment minimum).

Use an Online Real Estate Investing Platform

If you’re familiar with top real estate investment firms that connect investors and borrowers willing to lend them money for a variety of personal needs, like a home renovation or a wedding  you understand online real estate investing.

Platforms like these connect investors and real estate developers who want financing for their projects, either through debt or equity. Investors hope to receive quarterly or monthly distributions in exchange for taking on a substantial amount of risk and paying a fee to the platform. Similar to many real estate investments, these are illiquid and speculative – you can’t unload them easily the way you can trade a stock. The catch is that you require money to make money.

Think about investing in rental properties

You can purchase or rent out all of the investment property. Search for someone that offers combined expenses lower than the amount you can charge in rent. And if you’re unwilling to be the individual who comes with a tool belt to fix a leak – or even the one who calls the repairman – you also need to hire a property manager.

Rent out a room

Lastly, you can also rent a portion of your home through a site like Airbnb. It is house-hacking for the commitment-phobic. Airbnb at least somewhat prescreens potential renters, and you don’t have to take on a long-term tenant. The company also guarantees protection against damages, up to a limited amount.

Compared to the fancy concept of real estate investing, renting out a room feels a lot more accessible. You can rent it if you’ve got a spare room.

Similar to every investment decision, the best real estate investments are those that serve you best – the investor. Think about how much capital you’re willing to invest, how much time you have, and whether you want to be the one who deals with household issues when they inevitably surface. If you don’t have do-it-yourself skills, consider investing in real estate through a REIT or a crowd-funding platform instead of directly in a property.

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Why Investing in Airbnb Properties Is Worth It?

Investing in Airbnb Properties

Airbnb is an online platform for individuals interested in renting out their homes. This platform connects them with tourists and travellers who are searching for accommodation in the homeowners’ area.

Well, Airbnb real estate investing is undoubtedly a great way for investors to earn money from their investment property. Basically, it’s a strategy in which a real estate investor purchases a rental property, listing either the individual rooms on Airbnb or the entire house. Usually, a real estate investor does not live in the Airbnb investment property.

Since the platform was launched more than a decade ago, it has attained tremendous growth. If you’re interested in becoming an Airbnb host, you may be wondering whether it’ll be a profitable real estate investment. Well, generally, Airbnb real estate investment is perceived as one of the best real estate investments to make now, thanks to the plethora of opportunities it presents for investors.

However, the Airbnb rental strategy does not come without its pitfalls. How successful you’ll be in this business will depend on a number of factors. Before taking the dive, consider the benefits and drawbacks of Airbnb. This blog will help you get a better idea of whether Airbnb real estate investing will be a good fit for you. Here’s a list of the benefits that Airbnb offers:

Free Listings

You don’t need to pay expensive sign-up fees to list your rental property on Airbnb. What you need to do is create your profile with good paragraphs and a decent written description. This allows prospective guests to understand what you’re offering.

High Potential Returns

If your Airbnb property is located in a favorite tourist destination, is furnished well, properly listed, and offers top-notch customer service, you can net a high return on investment by attracting a steady stream of guests. It can even bring in more revenue than it would if you were the landlord of a long term rental.

You Can Set Your Own Price

As a host, Airbnb real estate investing gives you the flexibility to decide how to charge guests: monthly, weekly, or even per night. As an Airbnb real estate host or investor, you can also increase the rental price since it is fixed just for the term of the leases. Just make sure you add the change in your listing.

Host Protection

There are several risks associated with Airbnb hosting. However, in certain countries, the Airbnb Host Guarantee program protects hosts for up to $1,000 if a guest damages the rental property. Keep in mind that this doesn’t replace renters or homeowners insurance.

Cultural Experiences

Besides the money, Airbnb real estate investing often brings about cultural exchanges. This is because many travelers from across the planet and from every walk of life now use the platform. If  learning about new cultures is something that fascinates you, you can get a fair dose of it from the various travelers.

More Flexibility

Owning an Airbnb investment also offers flexibility. For example, if your property isn’t available on a certain date, you can choose to block off that particular date. This way, it won’t allow guests to book for the dates your property won’t be available. If you plan on being out of town or need to do a major repair, you can block this date off. However, no such option is granted to a typical landlord.

Control the Upkeep of Your Rental Property

After a landlord signs a lease with long-term tenants, it practically belongs to the tenants even though it’s the landlord that has to maintain the property. Usually, the landlord loses a fair bit of control over their property; sometimes, this leads to substantial damages to the home, repairing of which may be costly. However, with short-term rentals, you get to check the property regularly. You’ll be doing maintenance and cleaning it more often.

The Bottom Line Airbnb real estate investing can be quite lucrative. So, is investing in Airbnb an option you should be taking seriously? Well, that depends on you and your particular situation. Before deciding on becoming an Airbnb host, it’s a good idea to go through all the benefits we’ve discussed above. If you choose to invest in Airbnb properties, you can turn to the Republic Investment Group to find and analyze a profitable Airbnb investment property in the US.