Have you thought about ways to generate extra income? As businesses shut down and people lost jobs, many people considered new methods to generate revenue. If you have the time and the resources, real estate investing can be a good way to generate a second source of income.
One of the simplest ways to do this is to purchase a home and rent it out.
There are a lot of things to consider when you do this. One of the most important considerations in property management is rent collection. You need to find a method that works for both you and your tenants.
Here are some real estate tips when it comes to rent collection from Denver tenants.
Real Estate Tips About Finding the Right Rent Price
This is the first thing you should consider when thinking about rent. Find a balance between a price that gives you a return on your investment and is attractive to potential tenants. The key is to consider the value of your home and the state of the rental market.
A good place to start is the U.S. Department of Housing and Urban Development's annual fair market rent report.
Next, you should also look at rental properties that are comparable to yours. Keep in mind that rent prices can change based on location, amenities, the number of bedrooms/bathrooms, whether it's furnished or not, and much more.
Property Management and Section 8 Tenants
You have probably heard of Section 8 Housing, but what does that mean? Under HUD Section 8, people with low incomes can apply for housing subsidies. Those who are eligible receive vouchers that pay for between 40 and 70 percent of their rent.
The main benefits of being a Section 8 landlord are that payments will be on time, vacancy rates will be lower, and you may have to opportunity to charge higher rent prices.
There are some disadvantages as well. When you own Section 8 housing, the government likes to involve itself, and you will be subject to more inspections. Section 8 housing also tends to attract tenants whose income is less stable.
Finally, if you want to evict someone on Section 8, it can be a difficult process.
Set a Due Date for Rent
Your purpose when you rent out a property is to have a second income. This means that you want to receive your payment as quickly as possible. A due date can facilitate how tenants know when to pay you.
Most landlords set their due date as the start date of the tenant's lease, which is usually the first of a month. Make sure to state this in the lease so there is no confusion or misunderstandings.
Real Estate Investing Tips About Security Deposits
Security deposits ensure that property owners don't suffer financially due to a tenant's negligence. Security deposits are legal in all states and need to be handled properly. This may entail keeping security deposits in a separate bank account.
It is important to remember that a security deposit is the tenant's property and should be returned to them once they move out. This is on the condition that your house did not suffer any damage.
There are several circumstances when you can keep a security deposit: renters who break the lease, nonpayment of rent, nonpayment of utilities, and damage to the property.
If you decide to keep part or all of the security deposit, you have to send the tenant an itemized bill.
Your Property Management Resource for Denver Tenants
Property management can be a daunting task, whether you have been at it a while or you're just starting. One of the key aspects of renting a property is the rent.
At Investor's Realty, we provide renters and tenants with resources to make the most out of their renting experience. We provide listings for Denver tenants and can help property owners rent out their properties and provide property management services.
If you would like to get started, contact us today.