Tucson Realtor®: Crystal Harris ABR, GRI 

Owning Rental Properties

Generally, investors who are interested in renting out their property, will do their research to ensure their investment will be a success.

Rental property owners should  know what rents are going for in the area and make all necessary repairs before a tenant moves in. The property owner should also screen potential tenants by checking: (employment, rental and credit histories), carry liability and property insurance, posess a comprehensive landlord-tenant agreement (contract) and be willing to collect late fees, security deposit and pet deposit (if applicable).

The property owner has the responsibility to keep records and collect rents. You will probably want to be working closely with a Certified Public Accountant (CPA) to guide you in your record keeping for itemized deductions and to answer all of your tax questions.

Lease-option deals are popular with rental property owners. The investor will rent out the property at above-market rent to the tenant, giving the tenant the option of purchasing the home at the end of the lease period. There is also an added expense included in the rent, which goes towards the down payment.

Example: A regular tenant is charged $900/mo. for rent. Under a lease-option, the tenant might be charged $1,100/mo. plus $300/mo. that goes toward a down payment. After a one year lease period, the investor made an additional $2,400 and sells the house, if the tenant chooses to purchase the home ($1,100/mo. - $900/mo. =  $200/mo. (x) 12 months = $2,400 + the downpayment). If the tenant chooses not to purchase the home, then the investor returns the down payment and still makes $2,400 more than without the lease-option and can start the process all over again.

Many potential rental property owners seek out multifamily-units, such as duplexes to purchase. This allows the investor to live in one of the units and have the rental payment/s from the other unit/s cover the investor's mortgage payment. Being in close proximity to the tenants, allows the investor to save on expenses: (repair, maintenance and travel).

Rental income is a great way to generate the cash flow needed to pay the mortgage and hold onto a property.

Contact me, when you're ready to buy your next investment property.

I look forward to helping you with all of your real estate needs!