In the classroom today, Kevin Ortner talks about being successful with Rent Estate, including what needs to be outsourced and building the right team.
Kevin Ortner elaborates on the importance of finding the right tenant, determining what to charge on rent, and protecting yourself against unexpected issues that might arise.
Announcer: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investment industry teach you quick lessons to take your business to the next level. And now let’s meet today’s expert host.
Kevin: Hi, I’m Kevin Ortner, CEO of Renters Warehouse, and I’ll be your host today on REI Classroom. In the past we’ve talked a bit about rent estate and what it is. Today, I want to talk about how to win in rent estate.
Announcer: This REI Classroom real estate lesson is sponsored by VirtualStaffNow.com.
Kevin: How do you build your rent estate portfolio to really work for you, and what are some of the maybe the mistakes to avoid or things to do? Really, it starts with being prepared and organized, really having a plan. Of course the best way to success in anything is to have that plan, but also asking for help from those who may be a little more experienced. Understanding what types of rent estate you want to go after, how you’re going to build your portfolio, and how are you are going to finance those properties. But also talking with local realtors, property managers, about what the best type of property is to buy.
Save time and money and outsource some of the tasks that you’re going to have on your portfolio, from finding tenants, collecting rent, equipment maintenance repairs, as well as, again, teaming up with a real great real estate investment expert to help you find the appropriate property.
I always tell folks, that you should look to see what you want to outsource. Most rent estate investors or ordinary real estate investors often have their own full-time jobs or full-time carriers. I’m sure that you do as well. So sometimes it’s best to outsource those tasks that really are going to bog you down and not be the best use of your time.
There’s really four top things we recommend folks outsource when it comes to their rent estate portfolio. The first one is going to be correctly pricing your property for the market. How much I’m I going to rent my home for? Just simply looking at some of the comparables in the area or going off what your mortgage payment is really isn’t going to be enough, so you should really connect with a professional landlord or property manager or rent estate expert and look into how much are you can charge for rent.
It’s really going to depend based on your neighborhood and the amenities at home and all those kinds of things, and obviously pricing your property appropriately is going to be a huge key to being successful in owning rent estate. If you price it too high, it’s going to sit on the market and you’re going to lose several months worth of income, which is a lot of your profit over the course of the year. But if you price it too low, simply put, you’re going to miss out on some of the upside you can have on your cash flow.
Second is making sure you find the right tenant and that you keep them. It’s more than just how you manage that tenant after they’re in the home, but really it comes down to the background checks and the screening you do additionally.
Owning rent estate can be very easy and hassle-free, and frankly worry-free if you have the right tenant in place. It all starts with finding that right tenant, making sure that you do the proper background checks, the proper research, the proper paper work, and then signing them in to the proper lease that’s going to protect you, as the landlord.
The third would be your day to day property management tasks. Many of us don’t have to worry about those 2 a.m. or 3 a.m. phone calls or maintenance or plumbing repairs, things like that, collecting rent, doing the accounting. These are all things that a lot of professionals probably in your local area that can handle it for you for a reasonable price, and generally your return on investment on that is going to be huge.
The fourth and the final is really going to be protect yourself against unexpected issues. There are lots of different insurance policies that you can get to ensure loss or rent loss or damage, things like that, just also counting on your property manager or local professional landlord to manage those types from legal issues to property repairs, tenant damages and make sure those are handled in the proper way where if you do have some sort of issue, it’s held quickly and so you can avoid long term loss.
Again, the secret to success in real estate and how to win is really make sure you build the right team, have a plan and outsource things that maybe you’re not best at.
That’s all we have today for how to win in rent estate and look forward to seeing you again soon on REI Classroom.
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