Tips for Selecting Your First Rental Property

By GoldenWest Management

Are you planning on buying your first rental property?

Now is a great time to buy a rental property thanks to low mortgage interest rates and demand for rental properties especially in cities like San Diego, Phoenix, and Las Vegas.

Since more people are investing in rental properties for the first time this article, we will share with you several tips you can use to successfully purchase your first rental property.

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Make Sure Your Ready to Invest in Rental Properties

Although your family members, co-workers, and accountant may be advising you to invest in rental properties you have to make sure that you’re really ready to invest in rentals.

Owning Real Estate means that you will be responsible for paying landlord insurance and property taxes and unless you hire a property management company you will be responsible for things like tenant selection/placement, rent collection and more.

 

Yes, owning rental property is a smart investment thanks to benefits like current income, appreciation, equity and tax right offs but if you’re not ready for the responsibilities which come with being an owner you should be ready to hire a property management company after purchasing a rental or hold off on buying a rental property for a few years.

If you’re ready to invest in rental properties but aren’t sure if you’re sure investing in a property out of state is a smart move, you should stick with investing in a rental in your area because you know what’s happening economically, who’s hiring and the advantages of living there compared to purchasing property that’s out of state.

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Determine the Specifics

Before choosing a rental property it’s important to first determine the specifics of what you’re searching for in a rental property including the location that you want to own a rental, because in most cities rental properties that are located close to downtown or close to colleges will rent for more money than rentals in suburban areas.

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Investigate the Area Where the Rental Is Located

You should also verify if the area where you plan on buying a rental property has many rentals or not because if a neighborhood is primarily owner occupied this could mean that it might be more difficult to have a rental property there versus owning a home in an area that’s primarily renter occupied.

If you’re not familiar with the neighborhood or area, take the time to drive there to meet with homeowners, landlords (if possible) and people who live in the area to determine what it will be like for renters if you were to purchase a rental property there.

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Get Your Budget Ready

Since prices for Real Estate in many cities have reached all-time highs you should set your budget before you start searching for rentals because in this real estate climate it’s very easy for any buyer or first-time investor to overspend.

It’s also important to save at least 20% or more for a down payment because lender requirements are much more stringent with rental properties and the investment rate on a rental property will be higher so you will have to think about that as well.

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Avoid Fixer Upper Properties

Yes, most people are talking about investing in fixer-upper properties these days the reality is that fixer upper properties can be costly (unless you know what you’re doing) so it’s best to avoid them and purchase rental properties that are in as close to the move-in condition as possible.

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Create A List of Properties

Once you know the specifics of the property you’re searching for, and you’ve set your budget, you should next create a list of properties that match your criteria because this will help you to simplify your search especially when you use online tools to find suitable rental properties.

Some criteria that you should consider applying to your search for rental properties include:

Bedrooms – The single-family home, condo, or duplex should have at least 3 bedrooms.

Bathrooms – 2 bathrooms are recommended.

Square Feet – Home should have no less than 1200 square feet.

Age – The property shouldn’t be older than 25 years old since renovation or demo may be required to remove potentially hazardous materials like Radon, Asbestos or Lead Paint that may be on the property.

Rent – Search online or speak with a property manager to determine the market rent for the area where you are buying a rental property.

Cap Rate – We recommend looking for rentals that offer a 4% cap rate or better (cap rates and gross multipliers are important).

HOA – Check the HOA rules and regulations for the community where you plan on buying a rental property because some communities are very strict and will even go as far as placing you on a waiting list until you can rent your home.

Garage – In today’s rental market it doesn’t matter if a property has a garage or not.

Renovation – Know how much it’s going to cost to make renovations in the property, especially in the kitchen or bathroom, because you may be able to rent a property for $80 to $90 more per month if it has recently remodeled kitchen or bathroom.

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Be Ready for Screening Tenants

Once you’ve purchased your first rental property the real work has only just begun since you have to be ready to screen tenants and this should include reviewing their credit score, work history, criminal history and financial history.

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Save Time and Money with Property Management

Buying a rental property in Las Vegas, Phoenix or San Diego?

Each city has major differences in terms of average rents and requirements for owning rental property.

Once you find the right rental property don’t attempt to manage it yourself, save the time, money and hassle of managing rental properties by hiring our experienced and professional property management team.

Contact GoldenWest Management today by calling us at (866) 545-5303 or click here to connect with us online.

What is involved in screening and approving a Tenant?

Do you own rental properties or are planning on investing in rentals for the first time?

One of the most complicated aspects of owning rental properties is screening and approving tenants because tenants are the “life blood” of every rental property since if the wrong tenants are chosen they can bring major headaches for the owner.

When the right tenants are chosen the owner can often expect 12 months or more of effortless renting to a tenant who pays their rent on time, abides by the rules, and maintains the rental property.

If you’ve been thinking about hiring a property management company to manage your rental properties here is the screening and approval process that we follow at GoldenWest Management.

Determining an Acceptable Credit Score

Did you know that nearly one in two landlords said the results of a credit check were among the top three factors that they used when deciding whether to accept a tenant’s lease application or not?

At GoldenWest Management we determine an applicant’s credit score or (scoring rubric) from data we receive from the National Association of Credit Reporting.

How much in verified income do we need to approve? How do we prove income?

2.5x – 3x rent, this information can be verified by viewing an applicant’s paystubs.

If an applicant doesn’t have pay stubs we will ask for their recent tax returns or bank statements.

Once the tenant has proven their income they must also show that they have at least six months of reserves (rent x 6 months), after accounting for security deposit and first month’s rent.

Rental history

Although having good credit is still important, at GoldenWest Management we also request a tenant’s rental history because, like a credit report, rental history also shows a tenant’s rental behavior including if they have a history of paying their bills on time.

What if the tenant owns a home? As with running a credit check and inquiring about a tenant’s rental history, we will also want to know if that tenant (homeowner) has a current mortgage as well since this is also a sign of financial stability.

Criminal History

With new HUD laws outlawing or simply refusing people due to their criminal records we must know specific and relevant information about their criminal history including if they are: still on probation, a sex offender, or if they are a violent offender since this information may affect the safety and security of other tenants in the building and neighbors in the area.

Get Professional Property Management Here

For professional property management contact GoldenWest Management today by calling us at (866) 545-5303 or click here to connect with us online.

More Renters Want to Be Energy Efficient

By GoldenWest Management

In today’s rental market with rising rents in cities like San Diego, Phoenix and Las Vegas more renters want to live in rental properties that are also energy efficient because they cannot afford to pay higher rents and high energy costs at the same time.

If you’re concerned that your rental property might not be energy efficient you can give yourself the advantage over other owners in your area by following these tips for making your rental energy efficient.

Tip #1 – Reduce Drafts

You can reduce drafts coming into your rental property and also the loss of heat or cool air from your A/C by using solutions like foam tape, door sweeps, and draft stoppers to seal doors and windows. These solutions are affordable, can be purchased at any convenience store and will save your tenants hundreds of dollars per year in energy costs.

Tip #2 – Install Energy Efficient Light Bulbs

Take energy efficiency to the next level in your rental property by installing energy efficient light bulbs.

These bulbs are important because they have been proven to last up to 15,000 hours and energy efficient light bulbs are a sign to any tenant that you care about the environment and want to create the best possible environment for them to live in.

Tip #3 – Invest in One BIG Energy Efficient Upgrade

Another great way to make your rental property more energy efficient is to invest in one big energy efficient upgrade like a new washer, dryer, air conditioner or air purifier.

Investing in one new appliance now can easily save your renter up to $100/year in energy costs and also save you the time, money, and hassle of having to repair older appliances later on.

What to Do When You’ve Made Energy Efficient Upgrades

Once you’ve made energy efficient upgrades don’t forget to market your rental property as being “energy efficient”sustainable” or “eco-friendly” especially if you’ve made upgrades that are known to help the environment.

Get Property Management Here

For professional property management, contact the team of experienced property managers at GoldenWest Management at (866) 545-5303 or click here to connect with us online.

 

What Are the Benefits of San Diego Property Management?

By GoldenWest Management

SAN DIEGO, CA. – Have you been managing your rental properties yourself and have been thinking about hiring a San Diego Property Management company?

Regardless if you own one or more rentals, hiring a property management company is important because it will free up your time so you will no longer have to manage those rentals yourself and you will also enjoy the following benefits:

Benefit #1 – Easy Rent Payment

Since most property management companies offer their tenants the ability to pay rent online you can expect easy rent payment from your tenants and you will no longer have to concern yourself with rent collection when your tenants fall behind on their rent.

Benefit #2 – Repairs & Maintenance

When it comes time for repairs or maintenance at your Rental Property you won’t have to plan for making those repairs or driving out to the rental to perform maintenance yourself, you can count on your property management company to handle those repairs or maintenance for you.

Benefit #3 – Thorough Inspection

Another benefit of hiring a San Diego Property Management company is a thorough inspection of your rental each time new tenants move in or move out. This will ensure that your rental property continues to be maintained to the highest possible standards and is in the best condition possible.

Benefit #4 – Tenant Selection

Last of all, but most important, another great reason to hire a property management company is tenant selection. We make screening and finding new tenants hassle free so you don’t have to worry about doing any of that work yourself.

Contact GoldenWest Management

To get started with speaking with the experienced team of San Diego Property Management professionals at GoldenWest Management contact us today by calling (858) 779-0577 or click here to connect with us online.

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