What exactly is a tenant turnover? And how do you keep your expenses low when going through the process? That’s the first question I’m answering on today’s Q&A episode!
On this episode of Investing in Real Estate, I’m taking three of your questions on mitigating tenant turnover expenses, buying real estate in a hot market, and deciding between a HELOC and a cash-out refinance. Please join me for episode 781 to hear my answers to your best investing questions!
On this episode you’ll learn:
- How a tenant turnover works on a rental property.
- What you need to know about buying in a hot market.
- The differences between a HELOC and a cash-out refinance.
How a Tenant Turnover Works on a Rental Property
A tenant turnover is an inevitable and sometimes costly part of being a landlord. When your tenant is ready to move out, you’ll need to prepare the property for the next tenant. This typically includes cleaning, painting, repairs, and replacing carpet.
There are a couple ways to mitigate the costs of a tenant turnover. First, you want to make sure that you’re investing in the right markets. This ensures 1) that your tenants will hopefully stay put for a few years and 2) that you’re getting. a high quality tenant who won’t destroy the property. Other than that, just know that a tenant turnover is part of the business and doing these repairs is keeping your property in good condition and supplying a great home for your next tenant.
What You Need to Know About Buying in a Hot Market
If you’re shopping for a home to live in, I’d suggest staying away from hot markets. Remember, the home that you live in is not a performing asset. And if you overpay for a home, you’re not doing yourself any financial favors. Instead, I’d suggest buying rental properties in the best rental markets. That way you’ve got steady cash flow that can support your lifestyle.
The Differences Between a HELOC and a Cash-Out Refinance
A cash-out refinance is a one-time loan that gives you access to a sum of money. A HELOC is a revolving line of credit that works similarly to a credit card. If you want to invest with your home’s equity, I personally prefer the HELOC. Why? You can use a HELOC repeatedly, it typically has a low interest rate, and it uses simple interest.
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