Mariia Chernetska on LinkedIn: Ways to Increase Tenant Retention at Your Rental Property (2024)

Investing in Passive Real Estate Opportunities as a Non-Accredited Investor: What You Need to KnowInterested in real estate investment but want to avoid the complexities of being a landlord, securing financing, dealing with renovations, managing tenants, navigating permits, and other hassles that come with hands-on real estate activities?I share the sentiment. While I've owned numerous single-family rental properties in the past, my current focus is on passive real estate investments.Passive real estate investments encompass various options such as notes, funds, real estate syndications, and crowdfunding investments. Each option has its own set of advantages and disadvantages, distinct from active real estate investments.However, there's a catch: Many passive investments are restricted to accredited investors only. The government imposes these restrictions under SEC regulations, barring non-accredited individuals with a net worth under $1 million (excluding primary residence) or incomes under $200,000 per year from certain types of investments classified as 506(c).Some passive investments classified under 506(b) do allow non-accredited investors, but they cannot be publicly advertised.So, how can non-accredited investors find opportunities in passive investments that are typically off-limits?Crowdfunding platforms offer a straightforward starting point. Several platforms permit investments from non-accredited investors, such as Groundfloor, Ark7, and Arrived. These platforms vary in quality, historical returns, and reputation, and I've personally had positive experiences with some of the largest ones.Additionally, some real estate syndicators are exploring alternative SEC filings like Reg-CF, which allow non-accredited investor participation. I've invested in such opportunities and found transparency and trustworthiness to be crucial, such as with Goodegg Investments led by founder Annie Dickerson.Networking with other passive investors is another effective approach. Online forums like those on BiggerPockets or dedicated platforms like Left Field Investors facilitate discussions on reputable sponsors and investment opportunities.Joining a passive real estate investment club can also be beneficial. Clubs like Left Field Investors, SparkRental's Co-Investing Club, or the Alternative Investing Club cater to investors seeking passive real estate opportunities, offering a platform to collectively vet deals and share insights.Listening to real estate podcasts that feature syndicators and industry experts is another valuable resource. Podcasts like those hosted by BiggerPockets, Marco Santarelli, Goodegg, and Left Field Investors often showcase sponsors and their investment strategies.

A Guide to Preparing Your Rental Property for TenantsIf you're like many property owners, you aim to generate rental income from your investment property. However, before achieving that cash flow, you likely need to renovate and ready the property for potential tenants.Renovating a home is different from preparing it for rental purposes. While not all homes require renovations, every rental property must be made ready for prospective tenants.Owning rental property involves understanding your rights and those of your tenants to comply with legal requirements when preparing a home for new occupants.The following guidelines can help you refurbish your rental property as a real estate investor and prepare it for new tenants, allowing you to list it sooner and potentially increase monthly rent.How To Renovate Your Rental PropertyAfter purchasing a rental home, it's essential to make the necessary repairs and updates to ensure it meets safety standards and local rental regulations.Start with a detailed plan, especially when setting a renovation budget. Include all anticipated work and material costs, and if possible, overestimate to cover any unexpected expenses.How To Prepare a Home for RentersOnce the renovation is complete, it's time to prepare the property for renters. This involves beautifying the rental house, such as planting flowers or ensuring the windows are clean.Here are some tasks for each room that can help increase the monthly rent:BedroomsWhen a tenant moves out, you might need to clean the carpets in the bedrooms. Some landlords install hardwood floors to avoid regular carpet cleaning, but these also require cleaning and can get scratched. You may need to touch up paint and fill holes in the walls from hanging pictures.Ensure bedroom windows open and close properly and have screens. Replace window coverings if needed. Touch up moldings and baseboards, and make sure the door functions well and looks good.BathroomsPrepare bathrooms by checking that faucets work and there are no leaks. Ensure the toilet is clean and functional. Replacing broken mirrors or sinks can make a bathroom more appealing.Perform preventative maintenance, such as inspecting pipes under cabinets to ensure sinks drain properly. Check all outlets and switches, and hire a professional for any needed repairs.Living and Family RoomsLiving and family rooms often experience wear and tear. Accidents can happen, so be ready to clean or replace carpets, repaint walls, clean or replace window coverings, and repair doors or windows.Ensure all light bulbs are working.KitchenWhen preparing the kitchen for the next renter, ensure all appliances work, such as the fridge, freezer, oven, and stove burners.Consider landlord insurance or a home warranty to cover the costs of expensive repairs. Check the cabinets and ensure all doors and drawers function properly. Test smoke and carbon monoxide detectors and replace them if needed.

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Master Your Finances: 5 Strategies for Achieving True Financial FreedomIn real estate investing discussions, the term "strategy" often conjures images of specific deal types like BRRRR, house hacking, or flipping. However, for me, strategy encompasses a broader scope beyond individual transactions.While strategy can be defined in various ways, I resonate with the idea that it outlines long-term objectives and the overarching approach to achieve them. It sets the stage for how you intend to pursue your goals, contrasting with tactics which involve the specific actions taken within that strategy.For real estate investors, strategy extends beyond single deals or portfolio decisions. It encompasses significant considerations such as choosing between a 9-5 job or full-time real estate, determining risk tolerance levels, and assessing time commitments to manage portfolios.Decisions about refinancing or short versus medium-term property leasing fall under tactics rather than strategy. It's crucial to prioritize strategic planning before implementing tactical maneuvers.I'll illustrate how my strategic planning has shaped my tactics and contributed significantly to my progress towards financial freedom. My objective is to generate $20,000 per month in post-tax, inflation-adjusted income from real estate within 15 years. While I've been investing for 14 years, the first seven were without a formal plan. It was about seven years ago when I defined this ambitious goal, marking the midpoint of my timeline and surpassing expectations.Here are the five strategic decisions made seven years ago that have been pivotal in exceeding my goals:Pursuing a Lucrative Career:Early in my investing journey, access to capital was limited, necessitating partnerships for initial deals. Recognizing the need to scale, I pursued diverse roles—from waiting tables to tech startups—before committing to a master's in data analytics, a stable and growing field. Though costly, this decision quickly paid off, leveraging a higher income for more significant investments and borrowing capabilities.Emphasizing Equity Over Cash Flow:With a 15-year horizon and a stable career, I prioritized equity accumulation over immediate cash flow. This strategy involved targeting properties with high potential for value appreciation through strategic renovations and investments in high-demand areas, ensuring sustainability and growth.

Important 1031 Exchange Factors That Could Disrupt Your TransactionAfter spending almost a year navigating the 1031 exchange process myself, I can confidently say that I am now well-versed in all aspects of 1031 exchanges, and you can rely on my expertise.Many experienced investors are familiar with the fundamental requirements for a successful 1031 exchange, which, if executed properly, allow you to defer significant capital gains taxes. However, once you delve deeper into the process, you’ll discover there are many nuances that aren't immediately apparent. Here are some commonly overlooked details to consider.What Most People Know About 1031 ExchangesThe new property must be of equal or greater value than the property being sold.You have 45 days to identify a replacement property.You have 180 days to complete the purchase of the new property.Additional Important DetailsInclude Your Mortgage in the Sale Price:This is a detail often overlooked. If you are selling a property for $500,000 but have a $200,000 mortgage on it, you need to exchange it for a property worth at least $500,000. This likely means you will need a mortgage of at least $200,000 on the new property as well.Watch Out for the Boot:If you sell your original property for $500,000 and purchase a new property for $400,000, the $100,000 difference, known as "the boot," will be subject to capital gains tax. Ensure that the new property is equal to or greater in value than the one you're selling.The New Property Must Be in the U.S.:You cannot use a 1031 exchange to purchase a property abroad, such as in the Côte d’Azur.A Third Party Must Hold the Proceeds:All proceeds from the sale must be held in escrow by a third party. If you touch the funds at any point, you will lose all tax benefits.You Can Purchase Multiple Properties:You are allowed to identify up to three replacement properties within 45 days after the sale of your original property. There are two exceptions:You can identify more than three properties if their total value does not exceed 200% of the sales price of your original property.You can identify an unlimited number of properties as long as you eventually acquire at least 95% of their total value. Your intermediary will help you legally document your target properties.Deferred Capital Gains Disappear Upon Death:Although tax gains are deferred, they are eliminated upon your death. Your heirs inherit the property without the deferred capital gains tax obligations.Final ThoughtsUltimately, the 1031 exchange remains an excellent strategy for preserving your equity and deferring taxes. However, it’s crucial to thoroughly understand all the rules and nuances. A single mistake can nullify your tax benefits and cost you your gains.

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New California Legislation Tightens Rules for Property FlipperYou've probably heard the expression "lipstick on a pig." In the realm of house flipping, it refers to superficial improvements that hide underlying issues beneath new paint and Sheetrock.California's new law, Assembly Bill 968 (AB-968), effective July 1, mandates that sellers who flip one-to-four-unit properties within 18 months of purchase must disclose comprehensive details of all repairs and renovations. This requirement aims to protect buyers from undisclosed property conditions.However, compliance with AB-968 involves more than just detailed disclosures. Flippers must now meticulously document all repairs costing over $500, provide copies of related permits, or assist buyers in obtaining them if unavailable from official sources. Additionally, they must disclose the names and contact information of all contractors involved.The impact of this law on residential flippers is significant. While some may continue to handle general contracting themselves, especially for less skilled tasks paid in cash, more regulated work like plumbing and electrical must involve licensed contractors, permits, and inspections. This shift may increase costs and project timelines, challenging the traditional speed-focused approach of flipping.Non-compliance with AB-968 could lead to fines, lawsuits, or even rescission of the sale if undisclosed work is discovered or promised repairs remain incomplete. As a result, legal consultation prior to listing is increasingly advisable for flippers navigating these new regulations.This legislative trend in California, including previous proposals like Assembly Bill 1771 aimed at taxing profits from flipping, reflects broader concerns about housing supply and affordability in the state. Despite support for increased housing construction, skepticism remains regarding its impact on housing costs and community dynamics.In summary, California's tightening regulations underscore the need for thorough disclosure and adherence to legal standards in house flipping, impacting operational costs and market dynamics for investors in the state.

2024's Top Real Estate Challenges: Data-Backed ApproachesThe Housing Market: Current Challenges and Data-Driven SolutionsThe current housing market presents increasing challenges for investors. Rising costs and intense competition for quality investment leads, amid a persistent shortage of homes for sale, are making real estate investment more demanding.However, solutions exist within the realm of precise data collection and analysis.Key Real Estate Challenges in 2024Let's delve into the most pressing issues real estate investors face today and explore how data-driven tools can help them refine their investment strategies.Low InventoryThe issue of low inventory remains critical, with no immediate signs of improvement. The U.S. housing market has been affected by low inventory since interest rates rose from the historic low of 2.65% in 2021 to over 8%, causing a significant decrease in homeowner willingness to sell. This reluctance, known as the lock-in effect, has dramatically slowed home sales since 2022.Homeowners are hesitant to sell and take on new mortgages at higher rates, and although interest rates show signs of stabilizing, it is unlikely that they will reach desirable levels in 2024. According to Rick Sharga, founder, and CEO of CJ Patrick Company, a market intelligence and business advisory firm, a meaningful increase in home supply isn't expected until mortgage rates drop to the low-5% range, which is unlikely in 2024.Despite this, investors can still find opportunities by identifying off-market properties owned by motivated sellers. PropStream's advanced data-filtering tools enable investors to search any U.S. market and locate off-market properties with motivated sellers using over 120 filter options. Understanding the specific motivations of sellers, such as financial distress or the desire to downsize, allows investors to tailor compelling offers, enhancing their lead generation strategy beyond traditional methods like SEO and referrals.High Interest RatesHigh interest rates impact investors as well as regular buyers, leading to higher monthly mortgage payments and the necessity for higher rent charges, which can make tenant acquisition and retention more challenging. For instance, the average monthly mortgage payment in the U.S. reached $2,268 in 2023, a nearly 50% increase from $1,525 just two years prior.To mitigate these costs, investors need access to comprehensive and accurate data to identify better deals. By filtering property searches based on mortgage type, rate, and balance, investors can find opportunities with existing low-rate mortgages that can be transferred or properties with low mortgage balances that can be quickly paid off, improving long-term profitability. PropStream offers deep insights into over 155 million properties nationwide, providing vital mortgage and financial data to inform better investment decisions.

Amazon Boosts Housing Fund by $1.4 Billion, Faces Criticism for PR TacticsOn June 11, Amazon announced an additional $1.4 billion contribution to its Housing Equity Fund. Established in 2021 with an initial $2.2 billion, the fund aimed to create or preserve 20,000 affordable homes in Amazon's home regions of Puget Sound, National Capital, and Nashville. According to Amazon's report, the company surpassed its goal by delivering 21,000 affordable homes, with a focus now shifting to Arlington, Virginia, home of Amazon's HQ2. The new funding pledges to add another 14,000 affordable homes for low-to-middle-income individuals across these regions.Amazon's involvement in affordable housing has sparked both praise and criticism. While some acknowledge Amazon's efforts as a step forward, others argue it serves more as a strategic move to mitigate its impact on local housing markets. Despite these mixed views, Amazon's strategy of preserving existing affordable housing has been highlighted as effective and sustainable. They have committed to keeping 95% of the homes affordable for 99 years, a longer-term approach compared to typical affordable housing timelines.However, critics point out that Amazon's affordable housing initiatives may be overshadowed by the economic benefits it receives from local governments in the form of tax breaks and incentives. They argue that the $2 billion pledged to the Housing Fund could be seen as a public relations move, enhancing Amazon's image while not fully addressing the broader housing affordability crisis. Additionally, concerns remain about the true affordability of these homes, particularly for lower-income individuals who may still find them out of reach.In conclusion, while Amazon's contributions have made notable impacts in local housing markets, the underlying challenges of housing affordability in the U.S. require broader systemic changes beyond corporate philanthropy.

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