Deciding to become a Northern Virginia rental property owner is a decision you shouldn’t take lightly. While owning investment properties can be lucrative, they also come with their fair share of responsibility—and work!
With this in mind—and likely based on your own research—you probably have a lot of questions to ask. You might be wondering what to expect, and how to improve your chances of success in the Northern Virginia rental market. As your seasoned NoVA property management team, Renters Warehouse can offer investors some insight and resources to help you make those decisions.
The following are some of the most frequently asked questions we hear from property owners who are new to Rent Estate™ in the Northern Virginia area.
A word of caution: This blog post does not act as a substitute for legal counsel. When in doubt, consult with your trusted attorney or Renters Warehouse for real-time assistance!
‘How Much Should I Have in Savings?’
As with any investment, it’s essential to have enough funds put aside to cover both expected and unexpected costs for both single-family homes and multi-family units in Northern Virginia.
Even if you know how much rental income to expect, it’s best to tuck away at least two to three months’ worth of expenses. This should cover crucial costs like your mortgage, maintenance and repairs, and property taxes. Another way to look at it is to have between 30 to 35 percent of your intended purchase price put aside when you are ready to buy your next piece of real estate.
‘Should I Buy a Home Warranty?’
A home warranty can provide support in the event of some pretty big claims, but they aren’t ideal for investors. They do not cover as much as most think they will, which eliminates the benefit of purchasing them. If they do cover a repair, it can take a long time to schedule and complete those repairs. In the meantime, your renters can quickly become upset with the snail’s pace at which maintenance issues are resolved. Ultimately, that interferes with your business.
However, they can be a good purchase for homeowners if you plan to live on the premises as well. In most other cases, though, the costs and limited coverage may leave a Northern Virginia property owner without the fast, affordable solutions they need to address maintenance requests.
A NOVA property management company that has dedicated maintenance connections is usually a better alternative. With the ability to find affordable repairs from a list of vetted vendors (or their own slew of in-house maintenance staff), full-service property management gets the job done right—and fast!
‘How Much Does a Property Turn Typically Cost?’
‘Property turn’ is a term used to describe the process of repairing and upgrading the property between renters. When one renter leaves, there is often a need to upgrade, clean, and repair rental homes to ensure they’re ready for your next great renter.
It’s hard to put a dollar amount on the costs of turnover because they can vary wildly from one renter to the next. Typically, these costs are higher than the routine maintenance costs because they embody a whole-house refresh. Costs may include:
- Professional cleaning services
- Marketing and showing property costs
- Maintenance and repair expenses
- Necessary upgrades (depending on the condition)
- Lost income while there is no renter during the rental turn.
Putting aside money to cover the costs of these repairs is necessary. Even good renters will still require some upgrades when they move on simply due to wear and tear in your rental property.
‘How Often Should I Raise Rent?’
Rental rate increases are a common part of owning and managing investment properties successfully. These increases should reflect the competitive Northern Virginia rental market as well as changes in your operating costs.
- A survey from Zillow found in 2019 that 78 percent of renters experienced an increase in their rent. Of those, 55 percent stated their decision to move was related to those increases.
- That’s a key part of the process of raising rents: balancing between keeping your investment properties affordable for your reliable renters while also meeting your profit expectations.
- It’s important to balance numerous factors when considering rental rate increases. This includes changes to your expenses, increases to property taxes, and the going rental rate of the competition.
All this to say, it’s a bit more work than just assigning an arbitrary number to the process.
One of the benefits of working with an experienced NoVA property management company like Renters Warehouse is that you have a professional to handle your rate increase. Hiring a property management team allows you to gain access to facts and figures—not just with your rental property, but also those related to the market as a whole. This can make it easier for you to make solid decisions about the profitability of your rental moving forward.
Of course, with full-service property management at your disposal, that’s not the only benefit you’ll experience from working with an experienced property manager in the Northern Virginia area.
‘How Do I Know Who to Rent To?’
Making selections when it comes to tenant placement and tenant screening is one of the most crucial decisions you will make as a rental property owner.
- You want someone who is going to make rent collection a breeze with on-time payments and take care of your investment property. You need to trust your future renter!
- While you may have questions to ask, property owners must abide by local and federal laws that govern rental properties. That means making decisions without prejudice or discrimination of any type.
- This focus on the law also means gathering carefully-defined information to make those decisions. Even the language used in your marketing materials must be carefully considered.
As complex as this process is, most rental property owners will be able to make wise decisions simply by turning to a NoVA property management company for help. Our team at renters Warehouse DC/NOVA can provide you with guidance on how to screen potential renters and how to navigate the complex laws related to renting in this area.
Alternatively, we can take on the entire process for you—from start to finish! It’s all part of our full-service property management approach to the customer service we offer to property owners in the Northern Virginia area. As Rent Estate™ Advisors, our team is more than happy to help you with all of your investor questions and needs. It’s why we offer an extensive library of free resources!
A great place to get started is with our free Rental Price Analysis! Let us help you run the numbers on your rental property to ensure you’re earning all you should be from your investment.