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Why Should I Purchase a Rental Property in Colorado Springs, CO
If you are considering purchasing rental property in Colorado Springs, CO, what are some of the determining factors you should be looking at? Let’s look at some important information about the city and how a property manager can help determine if this market is right for your investment strategy.
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Are you looking for property management?
Yes, how long a tenant can stay after a lease expires is up to you. In Colorado, a renter who is doing a month-to-month lease is required to be given 21 days notice to move out before the eviction process can begin.
From Loveland to Fort Collins and from Colorado Springs to the Denver metro area, Mynd has reasonably priced packages in Colorado starting at $79 per month, which gets you the following services (in general, you should expect to pay eight to 12% of collected rent as a property management fee).
- 24/7 Emergency Support
- Potential tenant screening
- Dedicated portfolio manager
- Digital leasing
- Interact with your homeowner association if there is one
- Electronic security deposit and rent collection
- Financial reporting
- Property inspections
- Legal and compliance
- Online portal
- Qualified Tenant placement
- Prospective tenant screening
- Handling repairs, inspections, and every maintenance request
- And more
In Colorado, a professional property manager must obtain a real estate license because their activities are considered real estate activities according to the Colorado Real Estate Commission’s (CREC). The one exception is that you don't need a real estate broker's license if you're a property manager that lives on-site in a condominium or apartment building, are salaried employees, and don't negotiate lease terms. Although, such property managers can still do a lot of what we associate with real estate activity, like processing rental applications and showing units.
Mynd believes that we’re the best Colorado property management company, but don’t take our word for it! Due diligence is necessary to find the best property management services.
- Ask for references.
- Consult the Department of Consumer Affairs
- Have in-depth talks with prospective residential property managers.
- Check out online reviews from multiple sources.
- Request internal client satisfaction scores.
- The property management company manages tour rental units.
If a property management company has complaints against it that the company resolves, then that’s a sign of humility and a commitment to professionalism. Nobody’s perfect, and that includes property management companies.
The Colorado Department of Housing and Urban Development suggests getting new carpet every 5 to 7 years, although carpet can last 15 to 20 years given normal wear and tear.
However, carpets can be expensive and time-consuming to clean, so one trick to speedy rental property turnover is replacing your carpet with another type of flooring, like laminate or wood.
Yes, if the pests become a threat to the health and well-being of tenants, it becomes the responsibility of the investment property owner to deal with them. Bedbugs are a surprising landlord liability because the landlord may be responsible for removing them all.
Absolutely. Here are just a few of the tasks Mynd takes care of for you.
- Encourage renters to renew their lease
- Fall maintenance
- Write great rental property listings
- Help you run a rental property remotely
- Increase rental property cash flow
- Facilitate self-showings
- Help you scale your real estate investment portfolio
- Writing a lease agreement (without commonly made mistakes)
If the tenant has failed to pay rent or broken one of the lease agreement clauses, the tenant must be given ten days' notice to quit by the landlord. If the tenant fails to remedy the situation, the landlord can terminate the lease before the lease term and start the eviction.
More serious violations, like committing a crime in the rental unit, require a three-day notice to quit and don’t have to provide an opportunity to remedy the situation, also known as an unconditional quit notice. If the tenant doesn't leave, then the eviction may begin.
If the tenant is living month to month, the landlord must give 21 days' notice for the tenant to move out. All of these cases of early lease termination may be preventable, allowing you to hold onto an otherwise quality tenant.
There are several ways to estimate how much you should set aside for property maintenance.
- 50% Rule: 50% of your monthly rental income should be saved for maintenance, taxes, insurance, etc. So, if you make $1,200 per month, save $600 for operating costs.
- 1% Rule: You should set aside 1% of your home’s value at the time of purchase for annual maintenance. So, a $500,000 home would require setting aside $5,000.
- Square Footage Formula: Every square foot of property is equal to a dollar you set aside for maintenance. So a 2,500 square foot rental requires $2,500 in maintenance.
- 5x Rule: This rule assumes that the cost of maintenance is 1.5 times the monthly rent. So, if rent is $1,000, you should save at least $1,500 on annual maintenance.
- CapEx: Capital expenditures (CapEx) are big-ticket items like HVACs, roofs, etc. These items are easier to save because you know their useful life and how much they cost before they need to be replaced.
It may cost six to 12% of the collected monthly rent to hire a property manager. That price includes the savings you get from tax deductions and economies of scale, which allows residential property management services to reduce the costs of labor and materials because they’re able to leverage the scope of their projects during negotiations.
Before you make your home rental property, you’ll have to know what a full-service property manager does because you’ll be doing those things yourself. Are you ready to take on responsibilities like maintenance and repair, prospective tenant screening, bookkeeping, maximizing tax deductions, emergencies, evictions, etc.?
Next, you have to check your mortgage to make sure you’re allowed to rent it out, get landlord insurance, decide on whether or not you want a legal entity, and, if so, what kind. After that, you need to figure out what to charge for rent, make an operating budget, make the place attractive to qualified renters, master the law, write up a lease agreement, screening qualified renters.