This past weekend I was doing open houses at a couple of my listings. I got to talking to one of the couples that attended and realized I have a new service to offer. In this difficult market there are many people that would like to move to a different house but are saddled with a townhouse, condo or singly family home that is underwater. One solution is to rent their current house which will allow them to buy a new home. Many people have never done a rental before and since I have done them it would be valuable to offer home rental assistance and guidance for their current home. The couple I talked to was very interested in the help I could offer since I am already doing real estate investment rentals for myself.
My Rental Property Background
With the glut of bank owned properties on the market I decided late last year that the opportunity for rental real estate was too good to pass up and between December 2010 and February 2011 my wife and I purchased 3 townhouses in Rosemount and Apple Valley. I knew how to find good value in available homes and how to go about fixing homes but had to immerse myself in the other processes needed to be a good investor like protecting yourself legally and all of the steps to find, screen and get tenants under contract.
To date that process has gone great as I quickly found 3 great sets of tenants in my places and am currently in the process of trying to buy a 4th.
The Rental Process
The home rental assistance I would help with would include the following processes that I’ve become very familiar with:
- Property Management – What are the benefits & costs involved with managing properties yourself vs. hiring a company to do it for you? This is really the first question because if you do hire a property management company a lot of the other processes will be done for you. Of course, you pay 8-10% of your income to them but for some homeowners this may be a better option.
- Legal Structures & Professionals – The different options for protecting your assets and the importance of having relationships with a lawyer, insurance agent & accountant
- Paperwork & Process – There are lots of documents I can help direct new landlords to use which include:
- Rental Policies – critical to setting groundwork for getting good tenants
- Application – getting needed information on paper
- Lease – the legal document guiding the landlord/tenant contract
- Background Screening – the systems I use to verify criminal and credit history of all applicants
- Move-in & Move-out paperwork
- Posting requirements
- Pricing & Marketing – Once you have all the processes in place it’s important to understand the free tools you can use to correctly price and market your home. These include resources like Postlets, HotPads & Craigslist
I am not an attorney and don’t provide legal or tax advice. My goal is to avoid situations that would require hiring an attorney and fortunately, I haven’t had to do so yet for something like an eviction. I use pre-approved things like the MN Bar Association lease which have a better chance of surviving a challenge but would advise any potential landlord to think about developing a relationship with an attorney ahead of time.
The End Goal – Buy A New Home
My end goal is to provide my home rental assistance as a free service in order to help a homeowner buy a new home with me. I would benefit by getting a sale when they buy a new home and developing a long-term relationship with another real estate client.
Clients benefit greatly since they don’t have to try and learn this whole process on their own and when buying a home the majority of the cost of hiring me is paid for by the seller.
If you have any questions about this home rental assistance feel free to contact me for a no obligation discussion.
Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul.