Rents are up, and property values are down, making Las Vegas a great place to get established as a property owner. Of course, buying a rental home and actual getting it occupied and generating income are separated by a few crucial steps. All told, however, it’s easier than you think to start earning rental income.
Research and Buy Strategically
If you’re buying a rental property, you’ll need to lead with your head, not your heart. Start with the numbers, not the upgrades. You’ll need to get a solid idea of how much properties are renting for in various areas of Las Vegas. Then, you’ll want to get an idea of how much you can expect to pay on a mortgage in a particular price range. Start your search where the line between rent and mortgage cross.
If you buy too much property you won’t see a profit from the rental income, since it’s generally capped by the rental market of an area. If you buy a property that is ideally suited for an area and happens to be selling for far less than you can earn in rent, you’ll have a much higher profit margin. These numbers can be hard to find, but working with an experienced realtor or property manager can give you insight into the various neighborhoods and rent amounts to expect.
Ideally, the home you buy should be ready for tenants immediately after signing the mortgage paperwork, but this is rarely the case, especially when buying foreclosures and bank owned properties. Have a contractor on hand immediately after closing and a list ready to go from the inspection you had during the buying process. The faster you get the home ready to rent, the more quickly you can expect to see a profit.
If a home will take massive amounts of work to make ready, it will take a long time to recoup the costs of the repairs and renovations – this is something to keep in mind during the buying process. A rental home in the average market doesn’t need many bells and whistles. A clean, fresh home with functioning appliances is your goal with the make ready, not a beautiful home to entice a reluctant buyer.
An empty rental home diminishes income rapidly. Your property manager who helped you locate the home can also help you rent in. The manager will handle the screening of tenants as well as showing the property to those interested in renting. He’ll do the necessary interviews, handle deposits and payments and forward you the rental income once the renters are established.
While it’s important to have a nice property to keep your renters comfortable and content paying you monthly for the privilege of living in your property, you also need an outstanding property management company.
Your tenants should have their concerns addressed quickly and any issues with the home or rent payments need to be handled professionally and promptly. A poor choice in management for your properties can run your tenants out, resulting in lost income while you find new tenants at the end of each lease agreement. Learn more about what Shelter Realty can do to help you manage your properties by giving us a call at 702.376.7379 or visit the property management section on our website.