If you are contemplating buying rental houses in Sedona, AZ- there are some “do’s” and “don’ts” you need to be aware of in order to help you yield good results.
This will protect your investment and give you peace of mind. In fact, most experts will suggest that you require that your tenants have renter’s insurance as well. This is because your insurance will not include the tenant’s possessions, which could become a problem for you if the worst happens. To protect yourself against paying for damage done by the renter, insist on an adequate security deposit and ensure that you have documented proof of the property’s condition when the tenant moves in. This should contain photos and be signed by the renter.
The Cost Of Rent Needs To Reflect The Local Market
Research the average rent paid in the area for similar properties. The rent you charge should be in this range to make your property competitive and should cover your mortgage payment, taxes, maintenance and repairs, and other expenses with a little left over as profit. Your budget for maintenance and repairs should take into account all labor and material costs.
Location is Key
The desirability of the neighborhood will determine both the tenant you attract and how often your property sits vacant. Research factors such as crime, employment opportunities; and proximity to schools as these will all impact your rental property.
Screening Tenants Is Not to Be Taken Lightly
Ask for references from the two most recent landlords. Double check all documents, such as credit reports to photo identification. There are many businesses that provide services to check credit and background information. You will need (signed) permission from the renter.
Keep on Top of Your Finances
Establish a separate bank account for the property. If you have several properties, each should have its own account. This way you can easily analyze the finances of each investment separately. Also, keep your tax records straight. Remember that property taxes are not standard and there may be variations depending on the area each property is in.
Maintaining Your Property
If you purchase an older property watch out for problems like lead paint, asbestos and mold. These may prove costly to correct and you may be sued by an affected tenant. For general repairs, you may consider doing the work yourself. You may want to hire a property manager to handle the day-to-day concerns. Property managers typically charge a percentage of the rent. Usually this proves to be money well spent.