As more people look for a safe place to put their money, the housing market is becoming an increasingly viable option. This is due to the fact that real estate generally increases in value over time, so people can trust that they’ll make a good return on investment. However, before you join the flock of people eager to become property owners, here are a few things you should consider.
1. Income stability
Investing in real estate is a huge financial commitment and it can take some time before you start earning returns. For these reasons, a stable income is a necessity when venturing into real estate. Before purchasing a property, you’ll want to assess your finances. Are you currently operating with surplus funds? How stable is your income? What are the chances that your income will remain the same or grow within the next six months? These are all questions that will help you determine if you can afford to become a property owner. This will also help you determine whether or not you can survive the sometimes-challenging period between the purchase and the sale/lease of your property. If you’re in good financial standing and have a secure source of income, you may be ready to start investing in real estate.
2. Your credit score
It’s common knowledge that most people will need to secure a mortgage to become property owners. However, before you apply for a mortgage, you’ll want to make sure you have a favourable credit score – a minimum of 640. Your credit score determines the type of mortgage you’ll be approved for and the amount of interest you’ll be required to pay. A few points up or down on your credit score can make thousands of dollars of difference in your yearly interest payment.
3. The state of the real estate market
Before investing in real estate, you’ve got to do your research! Track the housing prices in your city/area of interest. Are they going up or down? If real estate prices are on the decline and there is a surplus of properties, that means a buyer’s market and a great time to make a purchase. On the other hand, if prices are on the rise and there are more potential buyers than property on the market, then it may not be the best time to invest. Knowing the current and forecasted state of the real estate market will help you invest at the right time, thus increasing your chances of success.
4. Types of property
Just as there are different sectors of the real estate industry, there are different types of real estate property. You can invest in everything from residential to retail and commercial real estate, and each come with their pros and cons. For example, owning residential property is the safest bet when it comes to real estate investing. Since shelter is a basic need, you’re more likely to find tenants for your property – allowing you to generate rental income. Before venturing into real estate, you should have an understanding of the types of property available, as well as their benefits and drawbacks. This way you’ll know what you’re in for when you choose to invest.
Real estate investing can be a rewarding venture, and that’s especially true when you take these four key points into consideration before making a purchase.
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Investing in real estate can be a tricky venture, especially when you don’t know what anyone is talking about. When you’re new to real estate investing, it seems like everyone in the industry is speaking an entirely different language, and this can be quite an intimidating experience. So, to help you feel more confident about your venture into property investing, we’ve broken down the most common real-estate investment terms in our beginner-friendly glossary.
- Appreciation: An increase in the value of an investment property over time. Appreciation can be caused by a number of different factors including a decrease in supply, an increase in demand and even inflation.
- Buyer’s market: This is a situation in the real estate market where the demand for investment properties is lower than the supply. Here, buyers can benefit from low property prices.
- Capital expenditure: Capital expenditures refer to the purchases, improvements and renovations that extend the life of an investment property. These include renovating the kitchen, finishing the basement etc.
- Capitalization rate: Capitalization rate, or cap rate, is a formula used to determine the value of a rental property. It is found by dividing the net operating income by the current value of the investment property.
- Cash flow: This refers to the amount of money a property owner earns from an investment property at the end of each month. It’s the rental income generated versus the monthly maintenance expenses.
- Cash on cash return: This is the ratio of the annual cash flow generated by your investment property to the amount of cash invested in it. Cash on cash return is expressed as a percentage and allows investors to assess the cash flow from their income-generating rental properties.
- Equity: Equity is the difference between the current market value of a rental/investment property and the amount an owner owes on the property’s mortgage. As the property owner pays the mortgage off over time, their equity stake in the rental property grows.
- Leasing fee: This is the money paid to a property manager when they sign a lease with a new tenant.
- Long-term rental: Also known as a traditional rental, these are properties bought with the intention of renting them out to tenants for long periods of time.
- Net operating income (NOI): Net operating income is the income generated from an investment property after deducting property expenses. These expenses include property taxes, utilities etc.
- Rental property: This is a property that is given to occupants/tenants for use in exchange for a monthly payment (rent) to the property owner.
- Rental income: Rental income is the money paid by tenants to the property owner for periodic use of their property.
- Seller’s market: A seller’s market is one where the demand for investment property exceeds the supply. In this case, properties on the market have higher price tags which benefit sellers.
- Short-term rental: Short term rentals are properties that are rented out for a short period of time. These can also be referred to as vacation rentals.
- Turnkey property: A turnkey property is a home or apartment that has been purchased, renovated and is now ready to be rented out or sold to another investor.
Real-estate investing is significantly easier when you know what everyone is talking about, and these 15 terms are a great place to start when familiarizing yourself with the real estate industry.
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Some landlords often struggle to decide whether or not they should hire someone to manage their rental property. After all, who will look after your investment better than you can? Although the search for a good property manager may be tedious, it’s one that is well worth it once you find the right fit. Getting someone to look after your rental property means you won’t have to deal with the stress of tenant screening, maintenance and much more. So, for landlords on the hunt for the perfect property manager for their rental, here are seven essential qualities to look for.
1. Excellent communication skills
It goes without saying that the person or team you choose to manage your rental property must be excellent communicators, both oral and written. Your property manager will represent you and will be in constant communication with everyone from tenants and real estate agents, to contractors and possibly other property owners. This means that their ability to communicate effectively will affect the service you get from contractors, the quality of tenants attracted to your property, how fast your property is rented and everything in between. So, when looking for the right property manager, be sure to assess their communication skills.
Property management can be stressful at times. From unruly tenants to contractors running behind schedule, there are lots of trying situations that property managers encounter on a regular basis, and it’s essential to be able to handle them with grace. When interviewing potential property managers, try to gauge their listening skills and assess how well they’ll be able to deal with complaints and stressful situations.
Professionalism is another important quality to look for when on the hunt for the right person to handle your rental. Needless to say, your property manager will be conducting a lot of business on your behalf, and they’ll need to be kind yet assertive in these settings. Look for someone who is respectful, knowledgeable, well put together and has excellent customer service skills.
4. Tech Savviness
Anyone who is active in the real-estate world knows that the industry is quickly becoming digital. New technologies are being introduced, companies are focused on digital marketing, and rental ads are now posted on platforms like Hamilton Homes for Rent, rather than in newspapers. Having someone who is familiar with common technology used in the industry will ensure that you’re able to provide a service comparable to other property owners in the market.
The work of a property manager often has them dealing with a lot of different situations simultaneously. They could be renewing a lease, renovating a rental unit, overseeing eviction proceedings, and scheduling viewings of a recently vacated home all at the same time. Property managers have to be incredibly organized in order to stay on top of all the demands that come along with the job.
6. An investor’s mindset
When searching for a property manager, you want to choose someone who is going to care for your investment as if it were their own. The best way for property managers to do this is to approach property management like they are real estate investors. This will help them see the “bigger picture” and guide the business decisions they make on your behalf. When a property manager has an investor’s mindset, they’ll know what to spend money on to make your rental stand out in the market, when to offer rent concessions, how to get a good return on investment etc.
7. Basic marketing skills
Marketing your rental property to potential tenants is one of the biggest responsibilities of a property manager. They should be able to write about your property, select appropriate photos and point out its selling points in such a way that that your rental appeals to renters. A good property manager should also know about the community your rental is located in as this will help them market its most attractive amenities.
Looking for the perfect property managers for your rental? Get in touch with us today!
Whether you like it or not, your rental property has a lifespan. It’s only a matter of time until the plumbing needs to be fixed or doorknobs need to be replaced. As a landlord, handling repairs is a big part of your job. The landlord-tenant law requires all property owners to maintain their rentals, ensuring the space is livable. Luckily, when you work with a property manager these are fixes that we can deal with instead. For landlords and property managers ready to roll up their sleeves and get their hands dirty, here are five common repairs all property owners will encounter.
Plumbing is one of the most common fixes landlords have to deal with, and it’s one we suggest you tend to quickly. A seemingly small leak under the kitchen sink could end up dramatically increasing your next water bill. Depending on the cause of the leak, this is a repair you can possibly take on yourself. However, if you don’t know your way around those pipes, you might want to get a plumber to take on this project.
2. Clogged toilets
While fixing a clogged toilet isn’t always your job as a property manager, it is a situation that comes up quite often. When the toilet in your rental property is clogged, you have to first figure out the cause. If your tenant clogs the toilet themselves, they’re responsible for getting it fixed. However, not all clogs are the tenant’s fault. Sometimes it’s a symptom of a larger issue with the main plumbing line or your drainpipe. If this is the case, then it’s something a landlord has to handle. And, with problems this big, we suggest calling a pro.
3. Leaky ceilings
A leaky ceiling is arguably one of the worst things that could happen to a home. If left unchecked, it could destroy everything from drywall and hardwood to flooring. Leaky ceilings, if left unchecked, also lead to mold which could make your rental inhabitable, and would cost a fortune to get under control. So, when your tenant calls you about a leak from the roof, put it at the top of your priority list.
4. Furnace repairs
Furnaces play an important role in regulating the temperature in your rental. So, furnace repairs should be another fix at the top of your priority list. To prevent the furnace in your rental from breaking down, you should get it serviced yearly and your tenants should replace the furnace filter every three months. However, if problems still arise despite regular maintenance, property managers should have a furnace specialist ready to help when needed.
5. Rundown appliances
Appliances in every home are used quite often, so it’s no surprise if they break down every now and then. Luckily, most of these issues can be easily fixed. New heating elements can be easily installed, and old dishwashers and stoves can be replaced. If the appliances in your rental property need replacing, we suggest visiting a used appliance store first. These stores have a great selection of stoves, dishwashers etc. that are almost as good as new.
Being a landlord or property manager comes with a lot of responsibilities and handling maintenance and repairs for rental properties is one of them. Luckily, with the right skills and resources handling these emergencies for your tenants should be no problem.
Need help maintaining your rental property? Get in touch with us today!
Creating a rental listing that attracts great tenants is simple, though it does require some thought and creativity! The headline, description, and photos should all be clear, concise, and compelling. Here are some ways you can create a rental listing that will attract great renters.
Write an Attention-Grabbing Headline
A well-written headline will make people want to click on the description to find out more. If your headline doesn’t immediately grab the attention of a prospective tenant, you may be losing out on valuable leads. If you put yourself in the tenant’s shoes, what would you be looking for if you’re scanning rental listings?
Most renters know the number of bedrooms, bathrooms, and price range they want and will click on listings that match their criteria. They’ll also want to know the location and a unique feature to your listing. An example headline would be “$1800/month – newly renovated 2 bed/1 baths in trendy Stoney Creek neighbourhood”. Make the headline direct with a differentiating descriptor and you’ll get noticed.
Include all details, big and small
When you provide as much information as possible, you’ll weed out anyone that isn’t a good match and find those who are. Here are some of the vital pieces of information renters are looking for:
- Location – the neighbourhood your rental is located in and a description of the neighbourhood (is it quiet? Central? Family-oriented?)
- Amenities – access to public transportation; walking distances to groceries, shopping, restaurants; nearby schools; access to highways
- Pets – include any details regarding pets, and if allowed, which kinds are permitted
- Length of lease
- Move-in date
- Square footage
Take high-quality photos
Give prospective tenants a clear feel for the property before they even contact you by taking beautiful photos. It’s best to hire a photographer who specializes in real estate photography. However, if you are taking the photos yourself, here are a few tips to show off your property:
- Get a wide-angle lens to capture the entire room in one shot. There are lens attachments for smartphones that you can find online or at any electronics store.
- Take plenty of pictures from different angles to capture flattering lighting and unique aspects of the room.
- Be sure to stay away from mirrors – seeing someone’s reflection in photographs can appear unprofessional.
- Make sure you use plenty of light – take advantage of the daylight, but also strategically light dark areas and corners with lamps if needed.
If possible, it can be beneficial to show your rental unit furnished to give renters a good idea of not only how large the space is, but also how they can envision themselves living there.
Highlight the differentiators
To ensure that your property is a ‘can’t miss’ opportunity, highlight what makes your unit special. Talk about those features in as much detail as possible to give renters a reason to take notice. Here are just a few features you may want to mention:
- City, park, or lake views
- Large windows that let in plenty of natural light
- A space that’s great for entertaining
- Recently renovated, freshly painted, new flooring, etc.
- Walk-in closet, additional storage, or any other extra space
- Higher-end finishes like granite countertops and hardwood floors
- Parking available for tenants and guests
- A gym, party room, pool, etc.
Be upfront about extra costs
The monthly rent of an apartment may be within a tenant’s budget, however, extras may push a unit out of their range. To ensure your prospective renter knows what they would be signing up for before they even schedule a viewing, include any extra costs that a renter would be responsible for.
- Parking – mention if it’s included or not, the number of stalls, or if it’s underground
- Utilities – explicitly state which utilities are included and those that the tenant is responsible for
- Deposits – mention the damage deposit and pet deposit if applicable
Once the rental listing is written and beautiful photos are taken, give it a final proofread (or two) and post on http://hamiltonhomesforrent.com/ for a wide exposure to prospective tenants in Hamilton.
A lease agreement is the most important document between landlords and tenants. However, not all leases are created equal. A good lease needs to be detailed, clear and contain a few fundamental elements in order for it to be binding and enforceable by law. Since the lease between you and your tenant provides guidelines for their tenancy in your property, you’ll want to make sure you draft a good lease on the first go. Here are seven fundamental clauses to include in your lease agreement.
1. Identify all parties
Every good lease agreement must identify all parties involved in the contract. If you’re leasing a rental property, you should identify all tenants over the age of 18, as well as the landlord or the landlord’s agent. The address of each party should also be included as part of the lease. Identifying the parties involved in a contract is the first step to creating a binding agreement.
2. Property description
Since the property being rented is the focal point of a lease agreement, providing an adequate description of it is important. Your lease should include the property’s address, unit/apartment number, the province and town it is located in as well as its postal code. You can also include any features or details you think makes the property unique from others.
3. Rental term
Another important clause to include in your lease is the rental term. This is the amount of time the lease is valid for. Here, you want to avoid general terms. Don’t state that the lease is valid for six months or a year. Instead, mention the exact dates that the agreement begins and ends. This ensures that the tenant knows exactly when to move in and out of the property.
4. Terms of rent
This section should provide the tenant with all the necessary information regarding their rent. Here, you should state the amount of rent to be paid and when its due. It’s also important to state where the rent should be sent and how it will be accepted – by cheque, direct deposit etc. Terms governing late rent should also be laid out in this section.
5. Security deposit
Most landlords require a security deposit before tenants move in, so, providing a security deposit clause is crucial. This should include the amount of security deposit required, how and when it should be paid, as well as the terms surrounding its return. You should also provide the tenant with reasons why deductions can be taken from their deposit. This is helpful in the case that he/she does not receive their full deposit back at the end of their lease.
6. Tenant responsibilities
Just as landlords have a responsibility to their tenants to provide a liveable space and fix problems around the home, tenants have the responsibility of taking care of the rental while they live there. They must follow all building and housing codes and must not cause excessive damage to the property. In addition to these, this section of your lease agreement should also include the specific tenant responsibilities outlined in your state’s landlord/tenant laws.
7. Renewal and termination
Finally, renewal and termination clauses. If you give your tenant the option of renewing the lease agreement, it should be stated clearly in the document. This also goes for lease termination. You should provide details about how and when both the tenant and landlord can terminate the lease.
A good lease agreement is the foundation of every landlord-tenant relationship. It helps each party know what they can expect from one another for the period of the agreement. With these seven fundamentals, you’re sure to draft the perfect lease for your next tenant.
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Renovating a rental property can be tricky. With different leasing terms and landlord demands, the extent to which you can add your personal flair to a rental property varies from one rental agreement to another. However, there are some simple renovations that can up the style factor and increase the functionality of your rental home. And the best part about it is that most landlords wouldn’t mind if you take on these projects as they can be easily undone when you decide to move out. Also, some of these remodels can increase the home’s appeal to future renters – so that’s an added bonus. Without further ado, here’s a list of some of our favourite rental-friendly renovations.
1. Create statement walls
Painting walls is one of our favourite go-to renovations. It’s DIY friendly, inexpensive and adds a ton of personality, design and dimension to any space. Painting the walls in your rental home should be fine, so long as you remember to repaint the walls back to their original colour when it’s time to move out. When you’re embarking on your paint job, it’s important that you consider how easy the treatment will be to cover up. Avoid paint jobs and designs that are difficult to undo. Also, to make this renovation even more successful, ask your landlord for the paint colour and brand beforehand. This will ensure that you have the right shade when it’s time to repaint!
If painting isn’t your thing, then you can always use wallpaper. If you opt to go this route instead of painting, we recommend that you use wallpaper that’s easily removed. More brands are coming out with wallpaper options which don’t leave any adhesive residue – making them the perfect options for rental homes.
2. Install extra shelving
Not only does shelving help with organization, they can also add a ton of interest to your home. Depending on the unit your pick, installing shelves can be pretty easy. All you need are a few simple tools like a drill or maybe some wood adhesive. Since extra storage is always a draw for new tenants, your landlord may not require that these be taken down when it’s time to move out. However, if that’s not the case, just spackle and repaint that section of the wall, and it’ll be good as new. If you’re thinking of hanging a few shelves yourself, here’s a great how-to to get you started.
3. Replace your bathroom mirror
This remodeling project has the ability to breathe life into your bathroom. Replacing a boring bathroom mirror with one that’s more statement-making can completely transform the look and feel of your space. A quick trip to Ikea and a collection of easy-to-use tools, and you’re all ready to take on this simple renovation. Here’s a great step-by-step guide to help you replace your outdated bathroom mirror.
4. Plant a home garden
Last but certainly not least, planting a home garden. This is an easy addition that can really change the mood and look of a room. Your home garden can help you spruce up your space with vibrant colours and relaxing scents. The best part of this renovation is that with a small investment in basic gardening tools, a little TLC and some patience, you’re sure to end up with a flourishing home garden. Also, don’t forget to pick the perfect spot with just enough sunlight to let your seeds sprout.
Thinking of renovating your home? Get in touch with us today!
Renters can be quite picky when on the market for a new home. As they’re coughing up their hard earned money and getting into a long or short term agreement, it’s no surprise that they’ll be looking for a space that’s worth their dollars. While there’s tons of competition in the rental market, there’s features you can incorporate into your rental to help it stand out from the crowd. To help get your property off the market and new tenants moved in, we’ve come up with a list of features renters look for in a newly renovated home.
1. Open floor plan
Renters love an open floor plan. It gives the space a 21st century feel, creates a seamless flow and helps put every square foot of the home to good use. Not to mention, an open floor plan can make a small home seem much larger than it is. It might be worth getting rid of some non-load bearing walls to create a more open space in your rental. Most importantly, you’ll want to get rid of any barriers between the kitchen and the living room. Instead of having a wall to differentiate these two areas, you can make them distinct with the type of flooring you choose. For example, you can install tile flooring in the kitchen and carpet or hardwood floors everywhere else. This will create a better space for entertaining guests and will allow easier movement throughout the home – all of which renters love! But make sure you don’t embark on these renovations yourself. Making big changes like these require the help of a professional!
2. Natural light
When it comes to the home, lighting is everything. If your rental property doesn’t have enough natural light, it might be a turn off for potential renters. So, it’s probably not a bad idea to call your contractor and look into getting a few more windows installed. An abundance of natural light will help your property look warm and more inviting. It’s also proven that sunshine is a great mood booster, so you’re sure to have a happy tenant.
3. Stainless steel appliances
Who doesn’t love shiny new things? New appliances, and better yet, stainless steel appliances are a great draw to potential renters. This gives them assurance that everything in their new home is in tip-top shape and is functioning properly. If you can’t afford stainless steel appliances, you can always opt for stainless look appliances – these are much more affordable and still have a polished look. The next important factor here is making sure your appliances match. With today’s picky renters, a blue dishwasher paired with a black stove simply won’t cut it. Matching the appliances makes your space much more visually appealing.
4. Lots of storage space
Renters usually have a lot of stuff. So, they appreciate homes with tons of space to store everything they’ve collected over the years. Thankfully, if your rental property doesn’t have enough storage, this can be fixed quite easily. You can install new shelving units in the kitchen, bathroom and living room. If you’d like to go a step further, you can look into adding new closet space or possibly expanding an already existing one.
5. A fresh coat of paint
There’s nothing worse than moving into a new rental and seeing traces of the tenants who lived there before you. Whether its stunning wall art or scuffed up cabinets – as a landlord, you’ll want to get rid of it! Repaint the walls and cabinets, if need be, with a neutral colour. Neutral tones tend to appeal to most people as they’re easy to work with when it comes to interior design. The simpler the colour scheme, the wider the appeal.
The competition on the rental market is fierce, and it all boils down to how well you meet your potential tenants’ needs. When you incorporate these features into your property, you’re sure to be earning rental income in no-time!
Want to renovate your rental property? Get in touch with us today!