Buying new single-family rental properties in Chicago is a great plan, but there are both pros and cons to choosing a newly built home. While more modern properties offer benefits like more customization, higher energy efficiency, and not as much maintenance will be needed in the first few years, all of these things may cost you more up front. This is often true not only because upgrades aren’t cheap, but because most of the times, there is usually very little room to negotiate on price. No matter which property you decide to get, it’s crucial to weigh all of the pros and cons carefully to warrant that you’re getting a good return on your investment.
First and foremost, buying a new home to use as a rental property can be a good investment. From a cost standpoint, new construction offers investors the chance to buy and immediately rent out a clean, attractive rental home with a range of attractive upgrades. Since the upgrades are already incorporated in the purchase price, there will be little possibility that you will incur any out-of-pocket repair and improvement costs to get the property ready for your first tenant.
If the new home is all ready to move in, rental income can start straight away. Included in the price of a new home are also an array of upgrades that can help investors customize the rental home to appeal to a particular renter demographic. For example, a new home that has been upgraded with smart technologies will likely entice more to a Millennial renter than one that has not.
Tenant appeal is a vital aspect in any successful rental property, and new homes offer renters something older properties cannot: the chance to be the first and only tenant who has occupied the home. A new property also allows renters significant utility savings, and this is because fresher homes are normally prone to have higher energy efficiency throughout. Renters looking to stay long-term may be largely fascinated by these features, and by the idea of appreciating a modern, low-maintenance, energy-efficient home for many years to come.
Though these are all compelling reasons to invest in a new home for your succeeding rental property, there are several downsides to reflect on top of every advantage. For example, it’s imperative that you don’t forget that not all builders are equal and that some may take advantage of cheap materials or try to cut corners to save money.
Purchasing shoddy construction can end up in endless haggling with the builder to try and get things done correctly, as well as higher repair and maintenance costs if you can’t get them to do the work the right way. One more item on the con side of things is the often-limited number of options available. Although customization is conceivable to a degree, it is more often a matter of choosing between a very limited set of wall colors, countertop styles, and so on, or risk driving the purchase price up even higher.
Eventually, if you are an investor who fancies a good bargain, buying a new home may not be the appropriate choice for you, for the reason that the price of new construction isn’t always dictated by the market or a previous owner, often leaving room for negotiation.
When you’re buying from a builder, they may not be as open to negotiation because lowering the base prices on their homes alters the data on comparable properties in the neighborhood and encouraging future buyers to try and talk them down as well. Of course, this circumstance may change contingent on the incidents, and it’s always a good idea to ask for any available discounts or other financial incentives. It is important to weigh all the pros and cons before choosing to buy a new home to use as a rental property in Chicago. But with so much to consider, it can be hard to know whether a new property is a right investment for your market and demographics.
You need comprehensive market information, like the kind offered to all property owners working with Real Property Management Chicago Edge. We perform market assessments for all potential rental properties, ensuring that owners who partner with us have the tools and information they need to make the best possible investment decisions. For more information, contact us online or give us a call at 773-904-7700.
Flipping houses can be an excellent alternative to generate income; however, one of the certainties is that the income earned from house flipping is erratic at best. Flipping houses is a high-risk investment strategy with real potential but several inherent pitfalls. Investors could wait for a long time some even lasting years before they begin to see a profit from a particular flip. To alleviate these risks and deliver a more consistent income stream, why not add one or more rental homes to your flips? Rental properties are one of the most stable investment breaks possible, providing investors with long-term growth rarely matched by stocks or other retirement products.
The popularity of reality television about house flipping has conceived something of an unrealistic perspective on precisely what flipping houses necessitates. While it is feasible to purchase, remodel, and re-sell a residential property quickly and profitably, often there are complications or unanticipated impediments that must be overcome along the way.
For instance, houses that are under construction are prone to crimes because they are regularly targeted by thieves and vandals more as compared to other properties, therefore resulting in unwanted expenses. Bad weather, burst pipes, and any number of other unforeseen events could end in costly repairs that were not covered in the original budget. For this reason, house flippers need to be ready not only for when things work out fine but for the substantial likelihood that something will go wrong.
When it comes to flipping houses, despite a best-case scenario flip, it would still take several months of effort. The time dedicated to flipping a house can be thorough, from locating a property to arranging financing, closing, remodeling, and finally listing the property for sale. Throughout this whole period – however long it may take – the property is not generating an income because the only profit an investor realizes from a flip comes after the property has sold. Some investors can manage multiple house flips in a single year, wishing to generate more frequency and consistency of income. But more often, houses are flipped one at a time, making it tricky to predict when that investment will ultimately pay off.
For this reason, house flippers will greatly benefit from having more than one revenue stream. There are many opportunities in the real estate industry, but the one that contributes the most steady income opportunities are residential rental properties. Buying and renovating rental homes is a process very comparable to flipping houses, but there are several specific benefits. When buying a home to use as a rental, investors can enlist the help of a quality property management company to do a lot of the heavy lifting for them.
When property owners engage the services of the professionals at Real Property Management Chicago Edge, in turn, they get expert market assessments on all prospective and current rental properties, ensuring that investors have the right information on rental rates, market value, and so on. We also give access to dependable home remodeling and repair experts, ensuring that any work done on the property is done accordingly and correctly the first time. Finally, we market the property and lease it to quality tenants, providing investors with consistent rental income while they pursue other real estate activities.
When all of these advantages are added together, it is clear that hiring a property management company is not so much of an added expense as it is a valuable asset on your real estate team. The professionals at Real Property Management Chicago Edge can make owning Evanston rental properties one of the most straightforward real estate investments you’ve ever made, freeing up your time to pursue other aspects of your real estate business. For more information, contact us online or call us at 773-904-7700.
It’s not simple being a rental property investor; you need to teach yourself on what it takes to make that first single-family rental home a success. By taking the time to understand the fundamentals of rental property investing before taking a chance out into the Evanston market, an investor can give themselves a real headstart. By learning about the five key things that rental property investors need to know, you can quickly get yourself on the path to property investing success.
1. Plan Ahead
Investing in Evanston rental properties entails a lot of up-front planning. Diving headfirst into the real estate market without a clear understanding of what your main goals are and which steps you need to accomplish to get there can leave you unproductive and overwhelmed. Strategize your goals by writing down your objectives, which should include a long-term investment plan.
For example, you could list down questions such as: Are you more concerned about long-term appreciation or cash flow? Are you planning to occupy the property at any point, or is it purely an investment? If your goal is to generate $5,000 a month in retirement income, you’ll need a clear strategy and a multi-year plan to get you there.
You could likewise make good use of a distinct layout about where to get the funding you need for ongoing expenses. Beyond the down payment and closing costs, there are operating expenses, property taxes, insurance, and other costs that must be paid each month.
Even though the theory is to prepare your rental property so that your rental income covers both your mortgage payment and these costs, that may not always be the case. Certain months may see a negative cash flow due to vacancy, large repairs, or other unexpected expenses. An alternative way to get ready for whatever may come is to set aside a percentage of each month’s rental income into a separate “contingency fund” account. That way, you’ll never be caught off guard and without funding in a crucial moment.
2. Understand Risk vs Return
In the rental real estate market, there is a symbiotic relationship between risk and return. Investing in real estate is a relatively low-risk option for investors. But of course, there will always be risks associated with it; usually, the highest returns are the result of the ones that have the highest risk too. Most of the time, rental homes in less expensive neighborhoods offer the highest potential yield but are also riskier because of the inherent volatility of such areas. More expensive neighborhoods, on the other hand, may not have that volatile nature but will be a much higher up-front investment and will cater to a much smaller percentage of renters. Determining where your investment comfort zone is in advance can help make your property searches much faster and more efficient.
3. Know Your Renter Demographic
With property type, you’ll need to choose in advance about who your target renter is. It is common sense that not all rental homes will appeal to all renters. For example, Millennials and young professionals have a tendency to have different priorities and morals from what other categories of renters have. Try to look at prospective rental properties through a renter’s eyes and see whether you can discover to which set of tenants it might appeal to most. Once you know who the renters are in your market, you can shop for a property with their needs in mind.
4. Organize Your Business
Investing in rental properties is a business. Separating your investing from your personal life is an integral aspect of guaranteeing you have the systems you need in position for long-term success. For example, at a minimum, investors should have a separate bank account for their rental property business, along with a money management app or software to help them keep track of it.
Make sure to categorize your expenses, particularly if you have plenty of rental homes: you’ll need individual income and expense numbers ready for each property once tax time rolls around. Documents, invoices, and other paperwork should be organized into folders, either digital or on hard copy. This can make scouring for information much less of a headache.
When setting up your business, remember that you are the CEO. That means that you’ll need to have a system in place to delegate time-consuming tasks to a team of trusted professionals. A property manager, real estate agent, and a lender are essential. Most investors also have a lawyer and a trusted contractor or two on their team as well.
5. Adjust Your Outlook
Possibly the most significant thing to learn about real estate investing is that it is a marathon, not a short-term spring to the finish. The profits will come, but only if you remain diligent in the long run. Not every month will feel like a victory; however, armed with determination, information, and a solid strategy, you can overcome any market fluctuations and come out victorious in the end.
While nothing can help a rental property investor more than experience and information, having the right support could be a game-changer from day one. At Real Property Management Chicago Edge, we help investors negotiate the challenging terrain of Evanston property management. Our systems and innovative approach to property management ensure that once an investor has taken the first steps into rental property investing, the many years of ownership to come are as smooth and profitable as possible. Contact us or call us at 773-904-7700 for more information.
As a responsible landlord, it is you who is responsible for maintenance on your property. When you have renters in your investment property, nonetheless, you, for the most part, owe your renters advanced notice before anybody else goes to the property. Your property converts into the renter’s home once you turn over the keys. In other words, just because you own a rental property in Berwyn doesn’t mean you can intrude on the lives of your residents without proper notification. Regardless of whether you intend to change a furnace filter, any unannounced entry could result in your resident levying charges of criminal trespassing.
Definitions of “reasonable notice” vary with state law, so look over the legality of your entry as a landlord. Outline the terms for notice to be given before entry in the lease, so you don’t violate your renter’s privacy. For example, twenty-four hours is the most typical notice requirement for someone who is not the tenant or their guests to enter the property, whether the resident is home or not. A couple of different locations further restrict entry to times of the day and days of the week, so guarantee you recognize and follow the laws in your area in such a way. It may give off an impression of being a little recognition; but considering the alternative, it’s well worth the wait.
Exceptions to this may take in emergency repairs or safety issues, such as faulty wiring that poses a fire hazard, burst pipes leaking into another unit, or broken windows and doors that could alter the temperature or invite criminal activity. As a landlord, you ought to keep the residence “habitable,” so your legal obligation may trump the obligation to notify residents of entry. In fact, failure to conduct emergency repairs within the time frame determined by your state law could constitute neglect.
You and your tenants must also keep your property up to the local building or housing codes. If a lack of maintenance or a renter’s extended absence is affecting heat or ventilation, or broken fixtures are preventing the adequate provision of water or electricity, then as the landlord, you could face penalties for violating standards of living. If your tenants are not upholding the sanitation and structure of your property, seek legal counsel as to whether you have a reasonable right to enter the premises to conduct repairs.
Another exception to criminal trespassing is implied permission. This would comprise whether your renter requested repairs or maintenance, which would demonstrate that they expected and therefore gave approval to your entry of the premises. Unless it is explicitly stated in the lease that notice should be provided for all repairs, you may be covered from a liability standpoint. Keep documentation of all maintenance requests to avoid the risk of a lawsuit.
In the end, you must respect your renter’s possessory rights. It may be your house, but it’s their home. Your property ownership does not give you the authorization to drop by without notice. You must submit proper notification of future entry. Illegal entry can result in fines up to several hundred dollars, or even jail time, depending on your state.
Real Property Management Chicago Edge not only provides for proper notice and communication with the tenants for routine maintenance, repairs, and property evaluations, we likewise keep you up to date in regards to all highlights of your investment property. For more information on how we can make your life easier, contact us or call us at 773-904-7700.
At this point, everybody knows that the secret to short vacancies is knowing your target demographic. There are remarkable contrasts among generations on account of the differences of the eras as well. To be successful in drawing and retaining long-term renters in Chicago, it is significant to become acquainted with what these differences are.
The generation that comprises nearly 1 out of 3 renter households is Generation X. Generation X, or “Gen X,” is the demographic following the “Baby Boomer” generation. Currently, in their late 30s, 40s, and 50s, Gen X renters are often characterized as active, entrepreneurial, and focused on achieving a work-life balance. Individuals in this generation regularly want to rent since they are trying to save their money for different purposes or they are trying to improve their accounts to purchase their own homes. At the same time, Gen X renters are more likely to stay in a rental home for longer periods.
To capitalize on this tendency, there are a few methodologies that property owners in Chicago can practice to attract Gen X renters to single-family rental homes and urge them to stay for an extended period. For instance, Gen X individuals were some of the ones that were hit the hardest when the Great Recession occurred. Many individuals in this generation experienced the loss of their homes, jobs, and high credit scores. Property owners who are okay with looking past a credit score and consider references from employers, friends, and former landlords are more likely to attract Gen X renters.
A few strategies property owners can practice to draw in and retain Gen X renters incorporate giving them a bit of room as their life circumstance change and advertising in the right areas too. While some Gen X renters will eventually buy their very own homes later on, still, a great number will continue renting for a considerable length of time from a property owner who is willing to update their rental homes consistently and are happy to take the necessary steps to make sure the tenants are satisfied thereby reassuring them to stay longer.
To attract Gen X renters, it’s essential to showcase in the right areas. Despite the fact that Gen Xers are regularly used to hunting down available rental homes via social media and sites like Zillow, they will likewise check for listings on property management websites, community bulletin boards, and classified ad sites like Craigslist. While Gen X renters are typically more willing as compared to the younger folks to exploit more traditional modes of communication – by calling a property manager as opposed to looking through their site, for instance – they are also comfortable with and will benefit from a range of marketing platforms.
By utilizing the right strategies, Gen X tenants can be within reach for any property owner. At Real Property Management Chicago Edge, we help owners market to quality renters who are looking for a long-term commitment. We are experts at tenant satisfaction and can help property owners plan ahead to keep their tenants happy and to renew their leases for many years to come. To learn more, contact us or by phone at 773-904-7700 today!
Lessening energy costs is a top priority for countless single-family Lincoln Park rental homeowners in. Energy-conscious renters are searching for rental homes that can help them manage their utility expenses while keeping them comfortable year-round. To attract quality tenants and keep them happy, it is worth the few extra steps it takes to achieve ideal energy efficiency.
According to the US Department of Energy (USDE), an energy-efficient house starts with proper weatherizing. Weatherizing a rental home consists of addressing four main areas: air sealing, insulation, moisture control, and ventilation.
If you’ve ever felt a draft while sitting in your living room, you have experienced air leakage. When uncontrolled air leaves and enters a home, it can cause higher utility costs, poor indoor air quality, and moisture problems. Sealing cracks and gaps with caulk or weather-stripping can greatly improve the energy efficiency of a home, as well as prevent many other air quality issues.
Along with air leakage, a lack of insulation can create climate control problems and high energy bills. A house that is properly insulated will stay warm in winter and cool in summer. There are many different types of insulation, from fiberglass rolls that work best in attics to blown-in insulation for existing walls. Adding insulation in key areas is a big step toward better energy efficiency.
Moisture control is another key element. Uncontrolled moisture can lead to a host of problems, from mold to foundation leaks. To control moisture, it’s important to use quality materials, seal up air leaks, and to ensure that your property has proper drainage. The USDE has more specific information and suggestions at energy.gov.
After all of this, it might seem like an airtight home is the ideal. In reality, however, homes need proper ventilation to keep air quality high. In highly efficient homes, ventilation is often combined with the heating and cooling system for an effective, whole-house solution.
Ultimately, these weatherizing steps can significantly reduce energy costs and improve the comfort and air quality in your rental homes, keeping your tenants happy. Weatherizing is only a part of what Real Property Management Chicago Edge offers our property owners in Lincoln Park. We perform thorough evaluations of rental homes and make recommendations for both short-term and long-term energy efficiency upgrades. Our approach to property management is designed to keep your renters happy and your rental homes ready for whatever may come. If you are interested in learning more, please contact us online or by phone at 773-904-7700 today.
There’s not a lot of topics that can captivate an audience but recently, there is a buzz regarding the aging of the generation born after World War II or the “Baby Boomers.” These group of individuals comprises a larger than usual section of the population, prompting a surprising level of influence on American culture. As the Baby Boomer generation reaches retirement age and beyond, they have also become one of the fastest-growing groups of renters. In the Evanston home market and beyond, they are a force to be reckoned with.
Drawing in and retaining Baby Boomer renters requires a decent comprehension of their needs and inclination, as well as the characteristics that depict this generation. For example, Baby Boomers are one of the most affluent generations to date, indulging in post-war abundance and an affinity for leisure activities. For property owners, these attributes offer a look at the best procedures for advertising a property, appealing to retiree renters, and encouraging social activity.
Advertising to the Baby Boomer generation needs a combination approach. Many Baby Boomers like using online resources to search for rental homes, pay rent, and utilize smart home features. They will also frequently use the internet and sites like Zillow to find rental properties. At the same time, however, Baby Boomers are more likely than other generational groups to use offline methods for finding a rental home. “’ For Rent” signs, local bulletin boards, and recommendations from friends are all a common means of gathering information for this demographic. For this reason, attracting Baby Boomer renters must be done with both online and offline methods.
One of the reasons industry experts think Baby Boomers are renting at increasing rates is based on the notion that they don’t desire to pay a mortgage or deal with the weight of home maintenance once they retire. For Evanston property owners, this means that a good strategy to attract and retain Baby Boomer renters is to offer more services, such as yard maintenance or house cleaning. Many renters in this demographic are higher to pay a higher rent if it incorporates some of the more labor-intensive home maintenance tasks.
When renting homes long-term to an aging demographic, it is also imperative to foresee demands for reasonable revisions. Property owners can be proactive by making accessible doorways, ramps, and grab bars. While some adjustments will be tenant-specific, many aging renters will benefit from a higher level of accessibility in a rental home and will value an owner’s attempt to anticipate their current or future needs.
Property owners can correspondingly attract and retain Baby Boomer renters by having gathering spaces on or near their rental home. Social activity is vital to renters of any age, but retirees often prefer those that will give them the ability to gather with family and friends. A beautiful kitchen, updated patio, or other gathering space can go a long way toward keeping a long-term tenant satisfied.
When Baby Boomers rent a home, they are often looking for a place they could imagine themselves staying in for many years to come. Evanston property owners can optimize their rental homes by offering amenities and services that appeal to this demographic and making their continuing satisfaction a priority. At Real Property Management Chicago Edge, we understand how important tenant retention is, and how to attract to the owner’s desired demographic effectively. We can help property owners keep their vacancies low and their tenants pleased with the level of service and care they receive. To learn how we can help, or if you have additional questions, contact us online or by phone at 773-904-7700 today.
There is a decent number of renters who are pleased with their Berwyn rental homes that they need to ensure that it is kept in excellent condition and looking appealing too. For the property owner, tenants like these are the most searched for as they are the ones who are willing to work to make sure the property is kept looking nice.
Most renters are content with a fundamental or a basic yard, one that they can without much of a stretch keep up. If the landscaping isn’t confusing, property owners can surely anticipate that their tenants ought to put in efforts to ensure it is kept in a good condition. Owners should clearly explain their expectations about keeping up the yard, and who is responsible for mowing lawns, weeding flower beds or gravel areas, and so on.
Finding a tenant who is keen on doing all these tasks is excellent. In any case, should a situation happen wherein a tenant would want to make adjustments that go past basic maintenance, especially those that would require permanent changes in the elements of the garden and landscaping what happens? Tenants with a green thumb may want to make certain changes, such as adding, moving, or cutting down trees or other plantings, planting a vegetable garden, or even installing a fence, walkway, or patio.
Expecting a tenant to maintain a tidy yard is one thing; making major changes without permission, however beautiful or professionally done, is another. Alterations of this sort are in direct violation of most leases. In fact, if a tenant does alter the landscaping, it is their responsibility to put it back to its original condition upon moving out. If they can’t (or won’t), they may be subject to penalties or even eviction proceedings.
As hard as it may be to acknowledge what is obvious, tenants of Berwyn rental homes potentially won’t accept that going beyond their contractual landscaping maintenance responsibilities may violate the terms of their lease. They may even think that they are doing the property owner a favor by creating something beautiful in the yard. That is the reason why property owners must be vigilant and to really make the distinction between maintenance and major alterations clear and to fully explain any possible legal action that may result.
At Real Property Management Chicago Edge, we include clear statements about yard maintenance and alterations in all of our leases, removing the guesswork out of the equation. We also perform regular property evaluations for all of our clients, and can take appropriate action to have trees and bushes trimmed, lawns edged, or intervene in a resident’s unsanctioned yard improvement plans, if needed. If you would like to learn more about our property management services in Berwyn, please contact us online or call 773-904-7700 for details.
When maintaining a Chicago rental property, it’s genuinely essential not to disregard what it looks like on the exterior. How a rental home looks like on the outside can have a bearing on its property values, just the same with the home’s curb appeal. It is favorable to be mindful on the exterior elements of your rental home and to anticipate that your tenants should help protect its appearance.
At the point when your impression of a “nice” exterior differs from what your tenant wants, issues can emerge. A few renters aren’t content with just keeping their yard clean – they may feel the need to adjust or add to the rental home’s exterior features too. With do-it-yourself home improvements becoming such a furor these days, the odds are that the increasing number of tenants will attempt to make “improvements” with or without your approval to do so.
For instance, your tenant may opt to have a pergola, but what you have in the home installed is a patio umbrella. Even though it may seem like building one in the backyard is simple enough to let them do it in the backyard, this is a hotbed for permit violations, damage to the property, and even personal injuries. (If somebody was hurt you may have a lawsuit brewing, on top of everything else.) Broken sprinkler or gas lines, damaged siding, and poor workmanship can all create costly fixes and unsafe conditions in the yard.
The same goes for other popular home improvements, such as painting, replacing the garage door or adding a deck or porch. Unique personal preferences and/or low-quality remodeling lower property values, make it harder to rent it out. In a nutshell, it just isn’t a good idea to have tenants making changes by themselves.
The best strategy is to stop home “improvement” projects before they start. Create clear language within the lease to explain that tenants are not permitted to roll out permanent changes to your Chicago rental property. It is also important to keep an eye on your property regularly, ensuring that a sneaky tenant hasn’t brought matters into their own hands. Of course, this removes time from doing different things.
That’s when you should pick up the phone and give Real Property Management Chicago Edge a call. We perform regular property evaluations designed to stop unauthorized tenant improvements in their tracks. If you are interested in learning more, please contact us online or by phone at 773-904-7700.
As a newbie to the rental property business, you may be nervous about making that first purchase of your investment property home. Do you know what things to consider to attract renters? If you have ever rented a home yourself, then you have experience in what home renters are looking for. Most homes are renting to families who are happy with the less burdened renter lifestyle, or who are new to an area and checking out that area before they buy a home. As in every part of the Chicago property management process, your Chicago property management team can help answer any questions you may have during the purchasing phase. Here are few suggestions from the pros:
1) Look for homes no older than 15 years. This will help keep down maintenance costs and save you money long term.
2) Look for homes that are not located on busy streets, and have fenced yards as they are generally more attractive to renters.
3) Rental properties should have at least 3 bedrooms and 2 bathrooms, and be located in neighborhoods where home values are appreciating. This allows you as the owner to charge a higher rent.
4) Consider the proximity of the property to things people need and/or want: Schools, public transportation, shopping and dining.
5) If the home is in a HOA, there may be fees for violations and signage and parking rules. Be sure to identify what the HOA codes are and how you will enforce them with your tenants.
Remember that the decisions you are making in the purchasing process are ones that will affect you long term. The property type you choose will affect what type of potential tenants you attract, and how long the home stays vacant. These are all things to consider as you begin your journey into the rental property industry. By making smart decisions today, you and your Chicago property management team will be pleased with your future results.