5 Tips To Maximize Your Encinitas Investment Rental Property
Investing in property is no doubt a lucrative venture. Statistics show that, on average, landlords earn $97,000 annually. This is $35,000 more than the standard median income. That is a pretty good deal, considering it’s a passive income source.
However, this doesn’t necessarily mean the journey is a bed of roses. The truth is, this income can fluctuate quite a bit with tenants constantly moving in and out. And that’s where a rent guarantee comes in handy.
Simply put, this is an assured sum of money paid to landlords/investors by the property management firm, regardless of the occupancy rate. Read on to learn more about rent guarantees and why they’re important.
What Is Rent Guarantee?
It’s an arrangement where your property management company promises to pay rental income on time, irrespective of the tenancy status.
It’s a peculiar insurance-like feature, guaranteeing a continuous income stream from your property. Essentially, you'll get your monthly rent whether the tenant(s) pays on time or fails to pay altogether because they lost their job, fell ill, or incurred financial burden.
So, what’s the catch? The downside is that you will earn slightly less than your property’s worth in the current market. In other words, there’ll be a slight difference between the amount charged to the renter and the amount paid to the landlord.
That said, this is such a small price for the peace of mind and steady income flow you will receive each month. At Solio, we offer several forms of rent guarantee, allowing you to enjoy the financial perks of your investment property without worry.
Why Property Owners Should Consider Rent Guarantee
Still hesitant to get a rental guarantee from your property manager? Here are a few reasons why you should prioritize it:
Stable Rental Income
As stated earlier, this contract ensures you’ll get your rent on time, regardless of your property’s occupancy status. Having such a predictable source of income means you can plan your finances better. This way, you’ll never have to worry about delayed mortgage payments, unfiled taxes, or neglected property repairs.
Attract High-Quality Tenants
A secondary benefit of having a rent guarantee is that it helps you attract quality tenants. It signals your commitment to maintaining a high standard for your property. This, in turn, makes your rental property more attractive to reliable renters.
Enjoy Legal Protection
Having to evict a tenant is never pleasant. It’s a complicated process requiring you to invest time and money. It could be several months before you can regain possession of your property. Working with a professional Encinitas, CA Property Management company like Solio Property Management can make this process much easier. However, it still doesn’t cover the hefty legal costs incurred.
Some rent guarantees include a clause for such evictions. This means the management company volunteers legal support if an eviction is needed. Depending on the firm you’re working with, they may cover a portion of the legal fees or the entire amount.
Less Hassle Finding Tenants
Finding suitable tenants is one of the greatest challenges of owning a rental property. This process is time-consuming and expensive, from writing compelling listings to advertising and tenant screening. It can be particularly taxing if you own several properties.
However, if the property manager offers a rent guarantee, you’ll never have to worry about this process. This is because the agency will handle the entire tenant search process.
They have to pay you whether your property is fully occupied or not. This means they’ll go to great lengths to ensure a 100% occupation rate.
Conclusion
There are several reasons to consider a rental property management that offers a rent guarantee. For instance, you’re sure of getting a stable income stream each month/year. Depending on the details of the contract, you may also receive legal support.
But the icing on the cake is that you’ll never have to worry about tenant searches. The agency will do everything possible to ensure your property is fully occupied.
