Questions.....???
General
What do you mean by 'Affordable Rental Property?'
Just because you can afford to buy a rental property in your market place doesn't make it 'affordable rental property!' If the property costs you money every month; it is NOT affordable. More importantly, we consider negative cash flow a liability as opposed to an asset! All of our rental properties are affordable because the rental income covers the expenses - and leaves you plenty left over!!
Do I need to know a lot about real estate investing in order to be able to own rental property?
NO! All of our transactions are designed so the process is extremely simple. Not just simple to understand, but simple to do. We are with you every step of the way to insure all your questions are answered. We put everything in place so you do not have to be an expert in real estate in order to be able to own rental property.
Why should I invest in an area away from the city I live?
Many cities across the US have property values that are so high, they prohibit the rental income to cover the expenses - therefore investors LOSE $$ every month! In order to build longterm wealth and financial freedom, investors are looking to purchase rental properties that cash flow every month in markets with affordable and appreciating property values.
Do I have to see the property before I close on it?
Most of our clients do not see the rental property they are buying. Due to the fact that all the information provided on our web site is validated through 3rd party professionals, there is not much the property will tell you that you cannot discover from the comfort of your own town. However, we always welcome our investors to come and view their rental property as well as a few of the local highlights.
Is Retire On Rentals, LLC a Realtor or Broker?
No, we are not a brokerage company. We are the principals/owners in ALL of our houses available for sale through our website. This benefits our clients by avoiding realtor commissions. One of our owners is a NC licensed real estate broker for the sole purpose of our aquisitions and affiliated property management business.
I'm not familiar with the Charlotte, NC area or it's neighborhoods - How do I know it is a good area?
Since Retire On Rentals is the owner of each property that we sell to our investors, we have a vested interested in buying in safe, secure, rentable neighborhoods. We only buy properties that we can rent to residents that want to move in and take care of the property. We NEVER sell vacant property, so the quality of the tenant is KEY to our success! As a general rule, our properties are in established working-class neighborhoods ('Core' neighborhoods). Occasionally, we buy in transitional neighborhoods when we have insight into the changes occurring in that particular area ('Explore' neighborhoods).
Why are you selling if these are such great rentals?
Our business is specializing in buying, renovating, and renting property. We have developed many relatioships and sources of new deals and we are not able to keep them all. We use the following protocol on every transaction:
- Initially we market a property for 60 days. If the property does not sell in that first 60 days we keep the property for our own private portfolio of rentals. This keeps our portfolio growing, but also allows us to pass on our deals to fellow investors working towards the same goals of reitring on rentals - earning positive cash flow on affordable rental units!
Why are the prices of real estate so low?
We work very hard to get the prices where they are to make the rental property affordable and to make financial sense. We also find that in a lot of these markets they have not yet experienced the real growth a larger city like Atlanta or Phoenix has. So we are buying at today’s prices and likely expecting tomorrow’s appreciation.
Property Management
Is there property management lined up for these properties?
Yes!! Always!! On every single rental house you can buy from Retire On Rentals. There is a property manager managing that property with a tenant in place. This makes for a very smooth transition. If you choose to continue using the same property manager the resident never knows the property has transferred owners because they are still sending their rent check to the same place.
What is the Property Management fee every month?
The management company charges a standard 10% of the gross collected rent every month. It is automatically deducted from the rental income and reported each month on your statement.
Property Management is KEY to a successful out-of-state rental property portfolio - How is your management company better than the rest?
Retire on Rentals prouds itself on the success of their management company - HomeTown Management! The ONLY thing that is in common with other management companies is the 10% standard fee - everything else is so much better! Below are the differences between HomeTown Management and other local managementcompanies:
- 100-1 property manager ratio - average for other management compies is 250-1
- NO property management fee charge when property is vacant
- NO 'lease renewal fee' when current tenants renew lease - average for other management companies is 50% or rent
- Only 1/2 month's rent collected as rental fee - others charge full month's rent
- Average vacancy rate with HomeTown Management - 45 days - other management companies - 90 days!
So you find the tenants - do they sign a lease?
YES! Always! All of our tenants sign a minimum 1 year (12 month) lease.
Q) What are the approximate closing costs?
A) We have listed all the closing costs typically associated with purchasing property on the for sale page.
Q) Does Retire On Rentals LLC ever sell property on owner financing?
A) Occasionally we will have a property come available that we are able to sell on owner financing. Meaning we would be your bank. When that happens you will simply pay a down payment and make your monthly payments directly to us. This is great because it avoids so many of the typical loan costs incurred when getting loans through banks.
Q) How do I know that the appraisal you get is not an inflated appraisal?
A) Once you review our appraisals, you will find out very quickly that only the truest comparables were used by our affiliates. We also encourage all of our clients to call the appraiser of that particular property with questions once you have a purchase and sale agreement on the property. In addition, our investors are always welcome to order their own appraisals to verify the values of our properties. If the value of your appraisal is more then 3% different we will pay for your appraisal, release you from the contract, and refund your earnest money in full!
Q) Why doesn’t Retire On Rentals LLC have “higher end” looking rental properties?
A) All of our properties are structurally and cosmetically sound. We don’t believe in buying trophy properties that rarely make numbers sense from an investment standpoint. We believe in buying properties that make financial sense; simply meaning that the income covers the expenses and in most cases provides cash flow on a monthly basis. Most importantly Retire On Rentals LLC takes pride in making sure that the properties are nice for the residents living in them.
Q) Can I finance rental property with my retirement account?
A) Absolutely. We are happy to point you in the right direction. As with most retirement programs, there are a lot of choices for you to choose from. The following company is merely a suggestion, and we encourage you to research your own options. www.trustetc.com or 440-323-5491. Equity Trust company is a company we have seen some of our clients use. Any company of this type can assist you in investing using your 401k, IRA, Roth IRA, or Pension Plan. .
Q) How does closing work in North Carolina?
A) In North Carolina most closings take place with licensed real estate attorneys. They handle everything from acquiring title insurance, and working with lenders to coordinating closing. There is no difference from closing with a title company and closing with an attorney except you get a little more personal attention.
What are my Financing Options
We would suggest you start by talking with one of the lenders listed on our affiliates page. They have all helped numerous clients of Retire On Rentals get the 1st, 2nd, or 9th investment property loan. Talk to them you will find them helpful. http://www.retireonrentals.com/property_lenders.php
Going to the bank for loan…
Investor Loans Traditional Financing: There are hundreds of investor loan programs out there for buying rental property. Down Payments range from 10% down to 30% down, and interest rates range from 5%- 9%. With some of the programs you do not have to prove your employment or income, and they are strictly credit score driven. Other programs meet the needs of the credit challenged investors with concessions like larger down payments or higher interest rates. For those of you looking for conventional financing, we encourage you to talk to your bank as well as a few loan officers in order to find out what kind of loans they can offer you as you search for the best way to acquire you rental properties.
Selling your current Investment Property…
1031 Tax Free Exchange: A tax free exchange will allow you to sell an investment property and not pay taxes on the profit. Since we are not experts in this area, we suggest you elect a qualified 1031 coordinator prior to selling your property. The proceeds from the sale will go into an account set up by your coordinator. You then have 45 days to identify the property to exchange your money into and you have six months to close on that property. If you do not identify a property in the 45 days after you sell your property you will be forced to pay taxes on those proceeds. If you do identify a property in those 45 days and close on it you can avoid all tax consequences and have your money working for you again.
I’m Paying CASH…
No loan costs involved for you. This could mean you plan to purchase with cash, or a line of credit that is secured by another asset, but you are not utilizing the power of leverage.
Proceeds from you Primary Residence Sale: You can sell your primary residence and under the rules of IRS Section 121 as long as you have lived in the property for two out of five years any profit made on your residence is tax free. You can use that tax free money and invest in real estate which could provide you in other tax write offs for the income you are taxed on currently.
Working your Retirement Plan…
Using your 401k/Pension Plan/ IRA/ Roth IRA: This is a very specialized area and we have had our experience rolling 401k into a Self Directed Roth IRA and then purchasing rental property with it. However with each plan and your own personal set up you may be responsible for fees or penalties associated with that retirement plan. For that reason we recommend you call a professional. Equity Trust Company is one of the leaders in the industry for assisting people in using leveraging their retirement plan into real estate. http://www.trustetc.com or 440-323-5491.
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