Web Sites Offer Rental Tips

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Do bank failures, corporate bailouts and home foreclosures make you nervous? Does it make you wonder if there are any worthy investments out there?

Last week I spoke with a Rim Country entrepreneur who has consistently invested in income-producing real estate over the years, and is doing fine.

Every investor has ups and downs, but investor creativity, the knack of seeking opportunity, and weighing risk and reward seems to work out over the long haul for real estate investors who do their due diligence.

This particular investor found a niche in the Valley market that enables her to get a far greater return on condominium investments than the average owner. What’s her secret?

The information on the Internet. Sites like www.vrbo.com, www.cyberrentals.com and www.homeaway.com unlock information about the viability of the daily, weekly and monthly rental market for furnished properties in the Valley areas. With patience and a little research, these sites delineate rental and occupancy rates. For example, an unfurnished, one bedroom condominium in the North Scottsdale area may lease for a one-year period at $900 a month. (This would probably not cover the cost of the mortgage or HOA fees.)

However, doing a bit of research shows that a furnished one bedroom condominium in the same area, may rent for $500 to $800 a week or $2,500 for a month. In the low season, they may rent for $1,200 a month. If the investor has a successful marketing program for their units, the condominiums have potential to show a positive cash flow earlier than an unfurnished month-to-month lease.

Be aware that this type of investment will cause the investor to be an active participant. A definitive rental agreement should be developed with the help of an attorney.

One of the many challenges that occur is that a renter does not move out on time and the next renter is banging on the door. With a more transient occupancy, there may also be more wear and tear on the unit. In addition, services to clean the unit will have to be arranged. Proper diligence can assure that this can be a rewarding business and investment, however, no investment is without risk.

Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.

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