INCOME PROPERTIES: To Rent or Not to Rent

INCOME PROPERTIES:

To Rent or Not to Rent

 

Have you ever thought about renting your home or property?  You would be a landlord.  You would call the shots.  You could be a business owner without quitting your day job nor would a real estate license be required.  Starting a business, making the rules, and being your own boss can be exciting, empowering and ultimately rewarding.  That is if you’re one of the 50% still standing after the first 5 years in business according to the SBA (Small Business Association).  However, simply being in business after 5 years doesn’t guarantee success.  As a business owner, consultant and real estate agent, I know first-hand the challenges involved in establishing and maintaining a new or existing business – property management being no different.

I’m not here to talk about the success of being a landlord but rather the challenges and hardships of taking on such an endeavor.  In no way is my intent to discourage those contemplating renting their home or property, in fact, if you are considering creating an income property, I can help.  I’ve partnered with a team of property management companies who, depending on the needs and desires of the property owner, can help take the guesswork out of property management.  Don’t hesitate to reach out for a few recommendations.

Notice I recommend using a property management company.  I don’t recommend managing your affairs solo but not because you’re not capable.  There are many moving parts to managing a property.  Vetting prospective tenants, understanding the laws surrounding property management, and don’t forget calls to fix an appliance or fixture are not always received during opportune timing.  This is the normal day to day one should expect when managing their own rental property.  The responsibilities don’t stop there.  After a few years, large components of the property will most likely require maintenance or repair.  Expect to shell out big bucks for the roof, hot water heater, AC unit and other property essentials over time.  Regardless the reasons why you decide to self-manage your property, having an exit strategy (or the lack thereof) can make or break or next move.

Most who know me, know that I’m also a licensed real estate agent in the sunny state of Arizona.  In Arizona, there is a huge market for new home builds and flips.   More than 122,000 people moved to Arizona between July 1, 2017 and July 1, 2018 and is projected to add 165,000 new jobs by 2020 according to azgovernor.gov.  Simply put, there is a lot of movement in Arizona which directly relates to the real estate market in all facets.  When I moved to Michigan my biggest realization, when comparing the two markets, was the noticeable difference in volume, both sellers and buyers or should I say, the lack thereof.  What I did notice a lot of here are rentals and the casual, hobby landlords as I call them – both struggling and successful. 

Since I’ve been in Michigan, I’ve received more calls from property owning landlords, trying to get out from under their rentals, than I have from my usual home buying customers.  For some, I’ve been asked to evaluate a blunder or mishap in the initial acquisition of the rental property.  For others, long-term landlords are simply done and over managing their properties.  Regardless which end of the spectrum you may fall, consider selling your home to an investor for a fast, seamless sale without having to do any repairs or deep cleaning.  In some cases, you may have no other choice.  

Regarding those towards the unsuccessful end of the rental spectrum:  I met with a customer attempting to flip and rent an acquired property.  I’m sure the theoretical profit margin was initially attractive, assuming the house would be ready to rent within their plan’s proposed timeframe.  To get this property up to speed to rent or even for a conventional sale, the roof needed repaired, the electrical needed to be completely redone, the kitchen and bath and various rooms all needed to be extensively overhauled not to mention, the home wasn’t in the most desirable location.  Originally, the home was purchased by my customer without much guidance and paid relatively more than what they should have.  This project was intended to take a year maybe two.  After three years, the home was maybe halfway to completion but by this time, the homeowner’s funds had run dry.  Many fail to factor in excessive costs to acquire a property paired with the time and effort needed, when flipping solo, to complete a job of this scope.  What wasn’t initially anticipated was the building inspector’s meticulous oversite which essentially added more work to be done thus demanding additional repair costs.  The challenge I faced, was my customer’s reluctance to give up this dying endeavor.  Sometimes reality can be a slap in the face but a slap in the face is a lot better than a baseball bat to the skull.  My point, get out when the getting is good or at least not as bad as it has the potential to become.  Sell to an investor before another dollar (or thousand) is lost.

 The opposite end of the spectrum, the relatively successful landlord:  I’ve met with now several customers who’ve had rentals in some cases upwards of 30 years.  For the most part, these landlords have been able to find and keep good tenants, maintain the properties and have ultimately made a pretty good income over time.  What most of these landlords have in common is they haven’t established an exit strategy.  By this point, the allure to being a business owner and landlord is over.  They know that in time, they’re going to sell and sooner the better.  Fixing up the rental, cycling through another tenant and keeping up with the day to day is now becoming a chore and a nuisance.  To add to the disdain, now the roof needs to be repaired, the hot water heater needs to be replaced and the plumbing has a leak.  When meeting with these prospective home selling clients, it always surprises me just how adamant they are in getting top dollar for what now is an investment that’s paid for itself 10x over.  What I end up being pitched by the homeowner, regarding the purchase of their property, is the success of their investment while simultaneously failing to recognize the extent of the repairs needed to keep up their investment.  What I tell these successful landlords; if you are truly sick and tired of the day to day, or maybe you’re on the verge of retirement, or maybe you’re just done having to spend another second thinking about what has become a pain to manage and you’re considering selling, consider selling to an investor.  Better yet, sell to me.

I’m certain there are those who would value a home buying service such as ours and now is your chance.  To learn more about how to receive a NO COMMITMENT, FAIR CASH OFFER for your house or property FAST, with NO HASSLES, FEES or COMMISSIONS - call the number below, LIKE and DM our Facebook page Saint Joseph Living or email me personally at nick.christe@betterchoicehomes.com.

Nick Christe

269-248-5199

Better Choice Homes

www.EazyHomeSale.com

Nick Christe is a self-made entrepreneur investor, business consultant and licensed real estate agent. His career began within the fitness industry where he learned the basics of business, winning several Chamber of Commerce “Platinum Stake” awards. Nick was a regular contributor on 3TV’s Your Life A-Z Show in Arizona. He earned the title amateur Mr. Arizona in 2010 and Nick was the former health and wellness coordinator and head boot camp instructor for the Arizona Diamondbacks executive staff. He attended Lake Michigan College where he earned a full-ride scholarship for Music; vocal performance. Nick is a United States Navy Veteran, following in his parent’s footsteps – his father being one of the first Navy SEALs. Nick lives in southwest Michigan with his fiancé Frankie, their first child Aden and the “family’s” best friend – Fitter.




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