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Hiring a Virtual Assistant to Help Manage Your Rentals

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stopwatch g7bdd4064e 1280 e1642974701668Optimize Your Time by Hiring a Virtual Assistant

 

Are there parts of managing your rental properties that you often avoid or wait to complete until the last minute? Do you value your time and want to focus on the things that bring you the most joy? Hiring a virtual assistant can be a great way to optimize your time. 

 

Things to Consider Before Hiring a Virtual Assistant

 

What’s Your Budget?

 

Before you decide to hire a virtual assistant, you want to make sure you have the money to do so. Look up the range of pay in your area and figure out how many hours you are going to need to make sure that you have enough income to cover the cost of hiring. This will also allow you to be upfront with how much you are willing to pay.

 

Where to Find the Perfect Assistant?

 

Many hiring platforms allow you to look for, and hire, specialists for different aspects of rental management. Do your research on which platforms have the best reviews. There are even platforms that hire assistants from all over the world, allowing you to find the right assistant in your price bracket.

 

Be Clear and Concise in Your Job Description

 

pexels startup stock photos 7103Make your job description as detailed as possible and be upfront and clear about your expectations. This will save you time and money by hiring the right person.  Make it easy for your assistant to work with you by being detailed about what exactly they will be doing on a day-to-day basis. Some assistants will apply to many jobs, without reading the fine print. Filter these applicants by including something in your job description that asks them to complete a certain task, such as asking them to write a certain phrase in their application. This will help you only focus on the applicants who pay attention to details. 

 

Expectations for Behavior, Payments, and Tracking Work

 

Are you looking for a detail-oriented person or someone who responds quickly to tasks? Be clear and upfront about what you are looking for in an assistant and be sure that their skills match the description. Have documentation already in place before you hire. Then they will have something to refer back to when they have questions, and they won’t need to rely on reaching out to you.

 

Who Do You Want to Hire?

 

Figure out which parts of owning a rental property you want to outsource and find someone with those skills. You want to maximize your time doing the things that matter most to you.

 

Hiring Process

 

Find the hiring platform that works for you but also makes sure to take responsibility by interviewing candidates via a phone call or video interview. This will help you start building a solid relationship by setting the tone for how you operate. Have a list of questions prepared ahead of time that not only address specifics of their daily tasks but also include questions that show you are interested in them as a person. People work better when they feel valued.

 

Sample Work 

 

Have them complete a sample work assignment to ensure you are both comfortable with the relationship before moving forward. 

 

Project Management Software to Ensure Streamlined Systems

 

If you don’t already have a project management software system, find one that works for you and make sure they know how to work with this system. This will help you both keep track of work in progress and work that has been completed. 

 

Ongoing Two-Way Feedback

 

Keep your lines of communication open. Your assistant should be comfortable coming to you with any issue, as you should be as well. Be clear ahead of time when you will communicate, especially if you are hiring someone in a different time zone than you. 

 

Tasks to Outsource to Your Assistant

 

pexels ksenia kartasheva 7035855Once hired, they can provide support by reviewing tenant applications and passing on the top choices for you to review. This will save you a ton of time and energy. VPM suggests that VAs contact applicants if any information is missing, as well as have them check references.

Working within your property management system includes tasks that help you improve and streamline your services, many times being able to automate them. There are plenty of options when it comes to property management software. If you hire an assistant in the beginning stages of owning rental property, then you can have them do the work of setting you up within that system.

Virtual rental property assistants can also do the work of scheduling tenant visits and follow-ups. These tasks may seem small, however they often take up a lot of your time and are easily handled by a virtual assistant as they often require a lot of back and forth communication. This will be especially important if you own rental property as supplemental income or own a lot of properties. Having an assistant schedule these meetings will save you a ton of time.

As an owner of rental property, you probably already have a network of individuals that are available for repairs and maintenance. In an ideal situation, these professionals will be ready and available whenever you need them. However, there will be many times when they are not available when you need them. Your assistant can do the research and contact other contractors when yours are not available to ensure your tenants’ needs are met swiftly and effectively. 

Prospective tenants need to know you exist and have properties for rent! If marketing, blogging, and social media updates are not on your list of things that bring you joy, then hiring a virtual assistant to take care of these vital marketing tasks is a must. They can make sure that potential clients have a way to contact you and can access a list of any available properties you may have. 

Ready to invest in additional properties? Rental Choice reminds owners that virtual assistants can even be used to research and discover new rental properties.  

There are many ways to utilize the help of a virtual assistant that will make owning rental properties a breeze!

2022 US Rental Market Outlook

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Navigating the 2022 US rental market landscape requires some foresight and flexible thinking. As the COVID-19 positivity rates around the country seemed to be stabilizing towards the end of 2021, only to skyrocket in December, the pandemic is still drastically fluctuating predictions in many markets.

Experts are still confident that the overall trend will be an increase in the size of the rental market. And that there will be increases in both rental funding and investment opportunities. These forecasts are made based on analyzing components of the larger landscape in the US today. They include an increase in inflation, continued supply chain issues, as well as the decisions employers are making that are affecting families and their housing choices.

How Working from Home Has Impacted the Rental Market

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With more and more employees being moved to remote work, many workers have used this as an opportunity to change their location. Many also choose to rent to ease into a new location. This was also a way to save money as individuals living in the city were able to move to places with cheaper rent.

Working from home allowed many buyers and renters to steer clear of the cities in favor of the suburbs. That said, if companies decide to return employees to the office, it may shift some of the population back to urban areas. This will in turn change the inventory of properties and price dynamics in these areas.

Many individuals in the US have also decided to live with family during the pandemic to receive help with childcare, help ailing parents, or as a way they can save additional money by not paying rent. As businesses are opening back up again, these individuals may need to move out and find a rental place of their own. This will decrease the supply of rentals, which will drive the price of rent, creating more demand for the already limited supply of rental properties.

What This Means for Rent Prices

In 2022, renters should expect to see an increase in their rent bills. Realtor predicts an increase of 7.1% in the next 12 months. This is due to home prices continuing to be on the rise. Interest rates have also increased, leaving more people with the only feasible option to rent.

How the Supply Chain Issues Affect Renters

If you tried to complete a home renovation project during the pandemic, then you know how frustrating it was to get the necessary materials. With wood prices skyrocketing to unaffordable levels and a limited or completely absent supply of materials to choose from, many renters may have felt like they dodged a bullet. However, this supply chain disaster also impacted the construction of new rental homes, keeping the supply of rental properties low. This will continue to impact the price of rent.

What Does This Mean for Investors?

Rising rent prices are expected to cause folks to invest in rental properties. Mortgage rates are increasing, however, with rent prices increasing at a higher rate, many investors are still choosing to invest in rental properties, especially with the supply of options still not quite meeting the demand.

How Inflation Affects Rental Rates

The Federal Reserve has historically increased interest rates when inflation rises. This means higher mortgage rates, causing many potential home buyers to consider (or in some cases, be forced to) rent instead.  ‍

Predictions Aren’t a Guarantee

Because of the risky nature of real estate predictions, especially during unprecedented times, many individuals are feeling that renting is a safer option than buying a home. The lack of houses available for sale and the surge in prices has made this decision even easy for those individuals who were contemplating renting. This will give them a chance to save money until the housing prices decrease.

Lower Inventory

Forbes claims that the number of people filing more than one application to try to find an available apartment was on the rise as well. This highlights how much harder it is becoming to find a rental property, especially in areas like the east coast and in many cities in Florida.

Location, Location, Location

61db0b760b81e681925e281e Untitled design 24Even with the challenges in affordability coming from increased mortgage rates, rising home prices, and increased rents, incomes are projected, according to Forbes, to increase by 3.3%. This means that businesses have found more creative ways to save money and keep employees working from home. This will expand the location searches for renters as well and many suburbs and less expensive urban areas should be viewed as prime renting locations. Investors in the rental market should look to these areas as new potential investments.

Renters Are Looking for Reputable Management Companies

It may become harder to be a landlord with individual properties as with the shaky nature of what’s to come and eviction laws being in flux, many renters are looking to work with reputable property management companies. They may seek to rent soon as a way to ensure they can rent a spot amongst the limited supply. ‍

COVID-19s Impact on the Rental Market

Of course, the landscape of predicting US rental market trends was drastically impacted by the pandemic. We do not have data from recent times that would have been able to predict all that happened in the housing market these past years, so, therefore, predictions will vary depending on what factors experts look at to determine what could happen in 2022. Overall, we should expect the rental market to stabilize in 2022 compared to 2020 and 2021, according to US News.‍

Become Informed and Watch Trends

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Understanding these market factors, which can predict what might happen in the real estate market, will provide you with the knowledge to make an informed decision. Whether you are a renter, landlord, or rental building investor. Each state and neighborhood within the US will also be facing its own unique growth or decline patterns. This is due to local laws and regulations, so learning about your specific area will also help keep you informed.

5 Reasons Why Real Estate Investors Fail

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Running a business—any kind of business—is difficult. Many businesses fail within their first year or two. It’s no different with real estate investment businesses. There are certain types of issues that you will need to address and problems that you need to sidestep if you want to be successful.

If you are only buying one property to use as a rental, the chance of failure tends to be much lower. However, this would mean that you are more of a hobbyist investor than someone who is running a true real estate investment business with multiple properties. Keep in mind that it is possible to fail even if you have just one property. Below are some of the biggest reasons investors have problems.

Reason 1: You Use Emotion When Investing

This is a major problem when it comes to real estate investment properties. The investor finds a property they fall in love with and they want to buy it, believing that it will be a good investment. However, if you aren’t looking at the numbers, this could end up causing some problems.

For example, you might choose a property because it looks nice or because you think it’s a good deal rather than looking at what it can do for your business. Will the property be easy to rent? Will you be able to get enough in rent for the property?

You might also find that you end up spending too much on the property if you have an emotional attachment. If someone bids against you on the property when trying to buy it, you might end up spending more on the property than you should have. Now, it will take even longer for that property to earn out for you.

Reason 2: They Try to Do Everything on Their Own

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The next reason real estate investors often fail is because they fail to get the help they need with their investment. Instead, they try to do everything alone. This often leads to complications.

Consider all there is to do with the investment. You first have to find properties, buy them and potentially fix them up, market the properties, find the right tenants, maintain the property, deal with tenants, and so much more. It can quickly become overwhelming even if you have just one investment. When you have multiple, it can be a nightmare.

You need to have a quality team working with you. This means you’ll need real estate agents that can help you find the right properties, contractors for those properties that need updating, help with marketing and showing the property to tenants, collecting rent, and more.

Often, investors feel that they can cut their costs down when they simply do it all on their own. While it’s possible to handle some of these tasks yourself, you’ll find that it’s often smarter and more cost-effective to have people that you can bring in at different steps. They don’t need to be full-time employees, of course. Simply have good working relationships with agents, contractors, photographers, marketers, etc. for when you need them to do a job.

Reason 3: Underestimating the Costs

Financial troubles hamper many investors. They buy a property without fully understanding how much it will cost them. Even when they get a good deal on an investment home, they may not realize what the repairs will cost or how much it will cost to maintain and market the home.

Real estate investors, no matter the size of their business, must take the time to understand all of the costs that will go into the purchase of the property, getting the property ready, marketing it, and maintaining it for the long haul.

Keep in mind that it’s always better to err on the side of caution when it comes to cost estimates for the business and your properties.

Reason 4: Not Being Able to Keep Tenants

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As a real estate investor, if you want to make steady money, you need to have tenants. This is true for residential properties and commercial properties you are leasing. If you aren’t able to keep tenants happy, they will move to a different property. This means you’ll be spending months without the property producing income, and you will have to continue marketing the property to bring in new tenants.

Unless you hire a property management company, part of the job of being a real estate investor will be handling landlord tasks.

Reason 5: Not Treating Real Estate Investment as a Business

If you want to have a successful real estate business, you need to treat it like an actual business rather than just a hobby. You need to learn how to manage your time and resources well. Approach everything from the standpoint of a businessperson rather than someone who just wants to get an investment property. Learn how to make it work for you.

You have to put in the effort to learn how to operate the business side of things, not just making the investments. You also have to realize that success doesn’t come overnight. It takes time and you need to persevere if you hope to see results. Know the fundamentals, know how to invest in the right properties in the best locations, and get help with anything that you can’t do on your own.

Find Your Success in Real Estate

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These are just some of the top reasons that many real estate investors end up failing today. There are other potential pitfalls, as well. However, by taking the time to learn more about how to properly invest, how to handle tenants, and how to run the business, it can increase your chance of success.

If you want to do well as a real estate investor, you don’t want to make the common types of mistakes discussed above. You should also strive to continue learning and educating yourself on the business. The more you know and learn the better you will do, just like in any other endeavor.

Self-Managing Rentals vs. Hiring a Third-Party Property Manager

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Owning investment properties can be a fantastic way to earn more money and diversify your investment portfolio. However, with rental properties comes some added work.

The home needs to have someone who can take care of the tenants’ various needs, who can collect rent, handle repairs, maintenance, etc. Landlords should also know the local markets including state, federal, and local laws, demographics, typical rents for the area, how to market the property, and more.

You have a couple of options. You could choose to manage the property yourself, or you could opt to hire a property manager to handle it for you. There are pros and cons to both of these options. Let’s get a closer look.

What Is Self-Management?

This simply means that you will be responsible for everything that happens with the property, not just owning the home. You will be required to market the home and screen potential tenants, set the rent and collect it, and handle repairs, maintenance, and other issues that come up with the property. Essentially, this option means that you will handle everything relating to the property.

Doing it on your own will save you from the cost of working with a property management team. It will also provide you with more experience in how this aspect of the business works. Some investors prefer to have this hands-on approach. However, it doesn’t mean that it’s the right solution for everyone.

When to Consider Self-Management

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If you are working as a real estate investor full-time, and you can dedicate yourself to all of the various tasks associated with being a landlord, then it could work for you. However, you will also want to make sure that you are close to the home or homes that you manage.

Ideally, you will be an hour or less away from the properties. This will make it easier for you to handle tours when looking for new clients and to handle any emergencies that crop up. If you have properties across the state or the country, it will be impossible to handle all of the management duties on your own.

Those who have only a small number of properties will find that it’s possible to take care of local rentals on their own. However, if you plan to increase the number of homes you own and rent out, management will soon become a job that you have to be ready for around the clock. The more properties you have, the greater the time and financial commitments.

Some investors might opt to self-manage one or two units for a while to get a better understanding of everything that it entails. However, they may eventually want to hand off the properties to a third party if they find that it’s too much work for them.

If you are going to manage the property on your own, you must look up and understand all of the laws in your area that apply to landlords and tenants. Failure to know and follow the law could end up landing you in legal trouble.

What Is Third-Party Management?

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Third-party management simply means that you hire a professional property management team to handle your properties for you. If you have no interest in working as a landlord and instead simply want to be an investor, you can find a quality property management company that can handle the work for you. There are plenty of good reasons to take this route.

One of the first reasons is cost-efficiency. Working with a property management team is more affordable than many people realize. Consider all of the work they put into the properties that you no longer have to do. You’ll find that even though there’s the cost of hiring them, it could end up helping you save time and money while eliminating the frustration you would feel if you were doing it on your own.

When you choose a great company, they bring a wealth of experience with them. They have seen and handled just about anything you can imagine. Whether it’s certain types of repairs, problem tenants, etc., they have policies and procedures in place on how to deal with them. They will also have preexisting relationships with contractors, repair companies, and more. They can handle the issues that come up faster and more efficiently than you could on your own.

The experience of the property management company also includes knowledge of the landlord and tenant laws in your area. They can advise you on laws and potential liability. Property management companies also carry legal liability insurance if there are issues that occur during things like showings, maintenance, etc.

When you have a great property management company, you’ll also find that it’s easier to scale your investment business. You can invest in more properties without worrying about how you will manage all of them. As long as you have a quality property manager, they will be able to handle new properties.

However, you’ll want to keep in mind that there may be times when you need to have more than one property management company. For example, if you are buying properties that are outside of your city or your state, the company you are currently using might not have agents in those locations that can provide service. In those cases, you might need to have relationships with several different property management teams.

When to Consider Third-Party Property Management

If you have a large number of properties, it’s going to be hard to manage them on your own. If you have another job, or you simply want to relax and focus more on the investment side of things, it’s in your best interest to work with a property management company.

What’s Right for You?

As you can see, there are benefits to both of these options. The one you choose will ultimately be based on how much time and work you want to put into being a landlord and the number of properties you own.

5 Ways to Save for a Big Purchase

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Trying to save enough money for a large purchase can seem overwhelming when you are first getting started. One of the biggest purchases you will have in your life will likely be your house. No matter what type of large purchase you are trying to make, you will need to start saving for it. Below, you’ll find advice on saving.

Tip #1: Start Small If Needed

One of the reasons that many people struggle when trying to save for a large purchase is because it seems so out of reach for them. Whether you are trying to save $40,000, or even just $10,000, for a down payment or any big purchase, it can seem overwhelming when you have nothing saved.

Instead of looking at it as that gigantic number that you are saving toward, you should break it down into smaller, doable chunks. If you need to save $10,000, for example, you could break this down into 10 chunks of $1,000 each. You could even break it down further if you would like. The point is that you set up smaller, attainable goals that can be reached. This will make you feel better when you have your first $100 and then your first $1,000 saved.

You can start as small as you need. If you are at a point where you can only afford to put in $100 a month, then that’s all you can do right now. No matter how much you are putting away, just commit to it. Add more when you can. Always be realistic with your goals and base how much you can save on the amount you make and your current monthly expenses.

Tip #2: Pay More Attention to What You’re Spending Now

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You might find that one of the main reasons you are having trouble saving is that you are spending more money than you realize each month. You might be spending it on things that you don’t truly need. People often make fun when it’s suggested that those who are trying to save or who are short on cash should refrain from eating out and buying coffee out.

However, those types of expenditures make a major difference in the amount of money you have available. Let’s look at some examples. Let’s say that you are only able to put $100 into your savings toward the big purchase each month.

Examine where you are spending your money. Do you go out to eat for lunch or dinner a lot? Even if you are only going out once a week and you are spending $20 each time, this would be $80 a month that you aren’t able to save. Maybe you are spending just $5 on a coffee from a café once a week. That’s another $20.

When you add the $80 and the $20, you get $100… this is the same amount you were saving each month. Without eating out and getting coffee, you could effectively double the amount you were saving.

Keep in mind that these are conservative estimates. Many people are spending far more money than this on things they don’t need. If you are serious about saving, you could cut back on a few things now and then build up the amount that you have saved. It’s simple, but a lot of people aren’t willing to make those sacrifices.

Tip #3: Don’t Take from Your Emergency Fund

Something else you need to be aware of when you are saving is that you shouldn’t dip into your emergency savings fund to make a large purchase. That fund is there for a reason. It’s for a rainy day and to cover you in the event of an emergency.

If you take from it to pay for a down payment for your house or a car, it means that you won’t have that protection in case something happens. Instead, have your savings for your large purchase separate from your emergency funds.

Tip #4: Get Your Money to Grow

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Where are you putting the money that you are trying to save? While you could keep it in a regular savings account, it’s not doing as much as it could there. Instead, you might want to rethink where the money is going. For example, if you aren’t going to need the money for the purchase for a few years, you could contribute the money you are saving now to a mutual fund.

Alternatively, you could add the money to a high-interest savings account that is specifically for your large purchase. This could help you to earn some interest on the money while it’s being saved. You won’t earn a lot, but it’s better to have your money doing something for you rather than just sitting in an account that isn’t earning interest. 

Tip #5: Add a Temporary Income Stream

One of the tried and true methods of saving more money is to find a way to make more of it. Consider finding a part-time job or finding another way that you might be able to add some more income to your life. There are all manner of “side hustles” that could help.

You might want to look at some of the items you have and don’t use. Selling some of your belongings rather than continuing to store them could be a good option to save some money for your purchase.

It may take some extra work and sacrifice to get the money you need, and not everyone will be willing to do that. Those who are, however, will find that it’s often possible to save much faster.

Let It Build

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Saving takes time. It can feel frustrating when you feel as if you aren’t making enough headway toward that down payment on your home. Every time you put money into the accounts for your big purchase, though, you are getting closer and closer.

If you take a bit longer to save up for your down payment for a house or any other larger purchase, that’s okay. Just make good decisions. Work on getting your credit to be as good as it can be and keep pushing forward. You will reach your goals.

Should You Buy or Rent a House?

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Many people have the dream of buying and owning a home. It’s likely the biggest purchase you will make in your life, and you will have to carry a mortgage with you for decades in most cases. Choosing to buy a home is a huge decision, and it’s one that people don’t take lightly. They want to know whether buying is right for them or if they should continue renting.

You’ll find that there are pros and cons to each of these options, and the answer will be different for everyone. Your personal finances will be one of the major elements you will have to consider, but it isn’t the only one.

Buying a Home

If you feel that buying a home might be the right choice, it’s time to look a little deeper into the pros and cons. This can help you make your decision on whether it’s the right time for you to buy or not.

The Pros

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When you buy a property, you have the feeling that your money is going toward something rather than just being given to the landlord. When you pay your mortgage each month, you are one step closer to fully owning the home.

You will also find that homes tend to increase in value over time. Of course, the market and how well you maintain the home will affect its value. Typically, though, investing in a home is a smart move because the home will be worth more in a few years.

Owning a home also provides some tax advantages. Property taxes, for example, are deductible. Mortgage interest will also be deductible when you are filing your tax returns each year.

When you own the home, you can renovate and decorate it how you like. You don’t have to worry about what the landlord will and will not allow. This includes having pets or painting the interior of the house in colors a landlord might not permit.

Typically, you will find that you also have more privacy when you own your home. Owning a home is the dream for many people, and it could be right for you.

The Cons

Of course, this doesn’t mean that it’s all sunshine and roses when you own a property. There are some potential cons to consider, as well.

If you decide that you no longer like living in the neighborhood for one reason or another, or if you have to move for work, it’s not as easy as just finding a new place to rent. You have to sell your house, which can take months or longer.

You’ll also find that you have to handle quite a few more expenses when you own your home. You have to pay for homeowner’s insurance, property taxes, higher utility bills, and HOA fees if your community has a homeowner’s association. There’s also the maintenance of the property to consider. When you own, it’s your responsibility to handle those issues. You can’t simply call the landlord and let them know.

Renting a Home

Maybe you feel that you would rather continue renting. Many people opt for this, but it’s just as important to look at the pros and cons of renting. Let’s get a closer look at what you can expect as a renter.

The Pros

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When you are renting, there are some benefits. You can move far more easily. As soon as your lease is up, you can move out of the home and find a new place to live. This makes it easier for those who like to move around to different cities or who might have to travel because of work.

Additionally, when you rent, you don’t have to worry about paying maintenance. All of the maintenance will be handled by your landlord. This can reduce expenses and ensure that you never have to worry about things that go wrong with the property.

The Cons

Renting brings with it some cons, as well. For example, the rental rates can and do increase over time. This means you’ll be paying more and still won’t own your place. There aren’t typically any financial incentives to renting. You don’t have the freedom to renovate the property, and you are subject to the rules that the landlord puts into place.

Determining What’s Right for You

Are you truly ready to buy? You have quite a few things that you need to think about. While buying means that you will own the home, not everyone is in a financial position where they can purchase a home. Look at your finances and make sure you can pay for the mortgage, maintenance, insurance, etc.

Make sure that you have good credit, so you can get a better interest rate on your house and get approved for a home loan. You don’t want to have a lot of other debt when you try to take on a mortgage.

You also have to think about how long you want to live in the same area. Is the neighborhood where you are considering buying a place that you could see living for at least five years? Do you prefer being able to move when you choose and don’t necessarily want to be tied to a place if you can’t find a buyer for your home?

In some cases, it might be better to continue improving your credit score and saving for a down payment. This is true even if you find the “perfect property”. It will be a better option than getting a home that you can’t fully afford or that you don’t love.

Of course, you might be paying a substantial amount in rent right now and feel frustrated that all of that money is flowing away into the ether. If you can find a quality property that costs less than your current rent, then buying could be the better choice.

Ultimately, it will be up to your needs and your current financial situation. Never rush into any decision whether it’s to rent or to buy.

Should You Pay Off Your Mortgage Early?

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Having a mortgage is a lot of pressure. You have a substantial amount of debt hanging over your head, often for decades. Most people would like to find a way to reduce that debt and even pay off their mortgage early. They decide to use money from an inheritance, selling a vehicle, or from their savings to pay off their debt early, so they can get out from under the mortgage.

However, is this a good idea or not? It’s always a good idea to take some time to determine whether it’s the best financial choice or not. Even though it might seem like a good option, it doesn’t always mean that it’s the soundest financial decision to make.

What Are the Pros?

First, we’ll be looking at some of the biggest benefits that can come from paying your mortgage off early.

Helpful for Those on a Limited Income

The amount of money you are paying each month on your mortgage might be a substantial portion of your income. If you can pay off your mortgage, this could allow you to free up quite a bit of additional money each month that could be used for other expenses, investing, etc.

Save Money on Interest

How much are you spending on interest on your property? Over the course of the loan, you could be spending many thousands of dollars on interest. When you pay off the mortgage early, you will no longer have to worry about the interest. You won’t be able to use the mortgage interest tax deduction, but you could still end up saving a lot more in the long run.

Tap Into Home Equity Later If Needed

When you have a home that you own, you can still tap into your home’s equity later if you need. With a paid-off property, you can use the home equity to pay for improvements to the home, repairs, debt consolidation, and more. You will simply leverage the equity in the home using the same types of options that someone who still has a mortgage would use.

Peace of Mind

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Of course, one of the biggest benefits of paying off the mortgage early is that it can provide you with peace of mind. Owning your home and not having a monthly mortgage can feel like you’ve lifted the weight of the world off your shoulders.

What Are the Cons?

Of course, even though there are plenty of benefits when it comes to paying off your mortgage, there are some potential cons, as well. It’s important to understand those cons before you make your decision.

Reduced Retirement Savings

Sometimes, people opt to pay down their mortgage while ignoring other uses for their money that could be better for them financially. For example, if you aren’t putting enough money into your retirement accounts, you may find that even though you own your home, you don’t have enough saved for retirement.

Low Cash Reserves

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If you are spending all of the money in your savings to pay off your mortgage, what would happen if you suddenly had an emergency? You don’t want to spend everything you have just to pay off the mortgage. Ideally, you will have enough money saved to cover between three and six months’ worth of expenses in case you have an emergency.

You don’t want to get into a situation where you own the home, but you can’t pay for an emergency that crops up. Only pay off your mortgage when you have plenty of money saved.

Higher-Interest Debt Continues to Accrue

Do you have other debt that has a higher interest rate than the rate for your home? This might be credit cards, for example. If you continue to keep a large balance on your credit cards, you are paying substantial interest rates on them. This is interest that you can’t deduct as you can with mortgage interest.

It’s better to pay off your credit card debt and any other high-interest debt you have before thinking about paying off your mortgage.

Prepayment Penalty

In some cases, a mortgage will have a prepayment penalty. This means that you will have to pay an additional fee if you decide you want to pay off your mortgage early. While this might seem strange, you have to remember that the lender wants to get as much interest as they can. If you pay off early, you are eliminating this interest, so these types of fees are charged.

If you are considering paying off early, check to see what type of prepayment penalty might be involved. You may find that it’s cheaper to keep the mortgage and to continue paying.

In Some Cases, Refinancing Might Be a Better Option

You might find that instead of paying off the mortgage, you could refinance it to get a better interest rate. If you can get a good rate, this can lower the amount that you are paying on the property. Just make sure that you do a full analysis to see whether refinancing is a good option for you or not. If you can get a better rate and a better monthly payment, it could be a good alternative to paying off your mortgage early.

Talk with a Financial Advisor

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If you still aren’t sure whether you should pay off your mortgage early, you might want to speak with a financial professional. They can look at your finances and help to determine the best course of action. For example, depending on the rate, you might find that it would be possible to make money by investing what you were going to use to pay down the mortgage.

Many times, it’s better to invest in places other than your mortgage. However, it might be better to pay off the mortgage for some homeowners. Those who have trouble keeping money in the bank might find that it is a better option for them. The home will act as a savings tool. Everyone’s financial situation is different. If you aren’t sure what to do, get some advice from someone in the know.

Building Wealth Through Real Estate Investment

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Amy Collett of bizwell.org

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For first-time real estate investors, vacation rental properties are a popular choice. You typically have the option of renting to tourists on a part-time basis, or to residents during the off-season, for longer durations. You can also enjoy the space on your own when it’s unoccupied. While the approach may seem tempting, you’re wise to do your research before taking the plunge. An app like Foliolens can help you take away some of the guesswork.

 

Do Your Research

 

Before buying any investment property, it’s important to understand the housing market in the vicinity you’re looking to buy. Recognizing vacancy rates and average going rental fees will help you determine what you can afford, based on anticipated return, and what you’ll need to charge in rent to cover your mortgage and your overhead. Buying a rental property is much like a traditional home mortgage, but there are some additional hoops you’ll need to jump through, and you’re likely to incur a higher interest rate for an investment loan. A real estate agent or mortgage lender can help you make informed choices based on your income, credit score, assets, your other credit obligations, and your debt-to-income ratio.

 

Searching for Property

 

You’ll want to take several things into consideration when comparing shopping vacation rental properties. In addition to staying in your price range and sticking to desirable neighborhoods close to popular attractions, HSH recommends looking at the age and condition of the property. Older places may be less expensive, but require a higher degree of upkeep and maintenance than newer pricier spaces; on the other hand, newer properties may allow you to command higher rent, require less upkeep, and be more energy-efficient, which can help you save on heating and cooling costs. Compare homes in areas of interest to get a sense of what amenities are in high demand. Also learn whether there are home owner association restrictions, ample parking, and easy access to transportation -according to Holiday Vacation Rentals, these will be important to your tourist market.

 

Factor in Overhead

 

In addition to paying the mortgage, property taxes, and insurance, investment properties come with additional overhead. You’ll need to budget for repairs, updates, and both routine and emergency maintenance. The property will need to be advertised, potential tenets screened, rental agreements drafted, and rent collected. You may also need to outfit the space with furniture and home goods. If you don’t plan to do these tasks yourself, you’ll need to hire a property manager or management company, which will cut into your profits. If the property is vacant, you’ll still be incurring all of these costs; also keep in mind that tourists in destination cities may not be as gentle with your property as renters in less popular locations. This could lead to additional cleaning and repair costs, as well as the potential for fielding calls from other full-time neighborhood residents about noise and traffic.

 

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Operate Like a Business

 

To protect yourself and your assets from some types of liability and reduce your tax burden and paperwork, you’re wise to establish yourself as a limited liability company, or LLC, as a way to register your rental property as a formal business entity. You can do the legwork yourself, hire a pricey attorney to do the work on your behalf, or your best bet, utilize an online formation company to handle the details. LLC formation laws vary from one state to another, so you’ll want to learn about yours before moving ahead. For example, search, “LLC formation California.” Running your investment property as a business will help you be eligible for various tax write-offs, and you’ll be able to deduct things like the cost of hiring a property manager or maintenance staff.

 

A vacation investment property can help you start building wealth through real estate investment, but it can be a potential money pit if you don’t conduct your due diligence. A real estate professional who specializes in investment properties can help you make educated decisions.

 

Foliolens can help you manage your rental property with ease, with features like a portfolio dashboard, document management system, automated reminders, and tax information. Visit the site today to learn more.

Should You Invest in Real Estate Property Management Software?

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Define Real Estate Property Management Software

Before investing in anything, including software, it’s important to understand the basics. Real estate property management software is a program that handles the daily tasks involved in managing real estate property i.e., handling leases, accounting, managing maintenance, communication between stakeholders (tenants, landlords, maintenance workers), etc. 

While there are different kinds of property management software to choose from, the best programs automate the most tedious and/or routine tasks.

Having understood the definition of property management software, the next step is asking yourself if the investment is worth it. Looking at the before and after scenarios is important before you make a final decision. One of the most notable pros of technology is making life easier and cutting costs. Does property management software offer these benefits and more? What are your current property management issues?

1. Do you have accounting issues?

Can you easily tell when rent is due for every tenant and how much they owe? What about reports on all property management-related expenses? Do you have trouble when preparing tax statements for your properties? If you answer “yes” to these and other accounting-related issues while you manage your property, you need real estate property management software.

The best software can handle all property management accounting matters, from rent payments to accounts payable and the general ledger. The best programs today can also generate letters for tenants behind on rent, populate reports real-time on monthly operations and handle any other accounting-related tasks.

2. Do you have tenant communication issues?

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Can potential tenants be able to see available property pictures, videos, descriptions, and other information with ease? Can they also enquire with ease, review property terms, and receive/send maintenance requests once they become tenants? Can tenants also know the status of their accounts and pay rent with ease?

The best real estate management programs address tenant-landlord communication in every aspect, from advertising to communication issues when one becomes a tenant. It’s also possible to advertise the vacant property.

3. Do you have property manager problems?

Do you overly rely on property managers who end up disappointing you? Do you wish to be more involved in the day-to-day management of your property without being overwhelmed? Landlords who are involved in managing their own property stand to benefit the most from using property management programs.

The software eliminates over-reliance on property managers. It also makes property management tasks incredibly easy to the point that a landlord can manage multiple properties with ease. In fact, you don’t need a property manager when you get the best software in the market.

Should you invest in real estate property management software?

Absolutely! If you are a property owner whose answer is yes to the above questions, you need software to help you out. If you can’t communicate effectively with your tenants and other stakeholders (such as property maintenance workers), have accounting problems, and can’t seem to find a reliable property manager, invest in the best property management software you can find.

The success of your real estate business doesn’t need to be pegged on finding a good property manager. Get Early Access Now!

What is Real Estate Automation Software?

What is Real Estate Automation Software?

As the name suggests, real estate automation software is software that automates real estate processes that range from property management to advertising, bookkeeping, property inspections, etc.

The latest (2020) statistics show that the real estate software industry is currently worth $10.45 billion yearly and is projected to reach $21 billion by 2026.

The real estate industry has accepted technological disruption welcoming automation of every single task capable of being automated. What’s more, no one has been left behind. All stakeholders in the real estate industry are benefiting from this automation, (from property owners and real estate agents to tenants, property buyers, property managers, and property maintenance personnel).

To understand real estate automation in-depth, it’s important to explore where the software is applied.

Automating Real Estate Processes‍

Real estate agents fill and submit real estate documents on a daily basis, they also coordinate showings, meetings with developers, open houses, create operation budgets, maintain client databases, send reminders to clients, etc.

These tasks have been handled manually for decades. Real estate automation software automates such repetitive tasks, freeing real estate agent’s time and resources to other more important tasks.

With good software, all repetitive tasks can be handled remotely with a few clicks. Almost every single repetitive task handled by real estate agents can be automated. The same applies to property owners and other stakeholders like tenants.

The best real estate automation programs out there help property owners track occupancy, maintenance, payments, etc., remotely. Tenants can also get maintenance schedules, pay rent and receive updates via the software.

Marketing Automation

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Marketing is a significant part of real estate. New and existing properties must be marketed constantly. The process is tedious if done manually. The best real estate automation software can collect leads, save that information, segment leads, and create targeted marketing ads that increase conversion.

Instead of calling everyone, the software can do everything automatically and let you know which leads are most likely to buy what property. What’s more, the ads are highly personalized, with automatic reminders sent across the most suitable channels. The software can also automatically maintain and increase interest on the property while freeing up time and resources at the same time.

The best applications can do more i.e., distribute leads automatically to the best suited real estate agent, automate agent notifications, capture all interactions with prospective buyers, and more!

Real Estate Finance & Accounting Automation

Property owners, real estate agents, tenants, among other stakeholders, all have financial tasks. Property owners must handle rent, pay for maintenance, pay their staff, and handle tax matters. Real estate agents need to budget for showings, open houses, commissions, facilitate property purchases/sales, etc.

Tenants also need to deposit, pay rent, utilities, etc. Good real estate automation applications automate all these finance and accounting processes. In fact, there’s no need for any paperwork to record transactions and payments. Everything is fully automated as well as notification on transactions.

While real estate automation software is more than what is discussed above, the information captures the essence of the software. The main purpose of real estate automation programs is to make real estate processes easier and better for all stakeholders (from property owners and real estate agents to tenants, property managers, vendors, etc.).

Automation of real estate tasks done across the industry not only frees time for stakeholders but increases transparency, privacy, accountability, and satisfaction for end customers.

Get the best real estate automation software NOW! Sign-up and get early access today!