Frequently Asked Questions
Do clients have to work with and be in contact with their properties’ tenants?
- No, clients will not have to deal with their properties’ tenants. The property management company will be the tenants’ only contact.
How are tenants screened by property management companies?
- All of our properties’ current and potential tenants are thoroughly assessed before they are allowed to occupy a property. First, tenants are subjected to a background and credit check to make sure they have no felonies, misdemeanors, violent crimes, or are sex offenders. Second, tenants’ monthly income must be 3 times the monthly rent. Third, tenants must provide references from 2 prior landlords.
Are tenants required to have renters insurance?
- The requirement for tenants to obtain renters insurance varies by the property management company. It ultimately depends on the location and if other properties in the region require it or not. To ensure properties remain competitive in their local rental market, the property management company will require similar conditions as competing vacant rental properties. However, most of our property management companies are starting to require tenants to have renters insurance and personal property insurance in case something happens. It is important to note that many renters insurance policies cover both the property and tenants’ personal property.
Do properties have tenants in place at the time of purchase?
- The majority of our listed properties already have tenants and monthly rental income. If a client purchases a property that is currently vacant, it is our goal for the property management company to find tenants during the first month of ownership.
How long are tenants allowed to live in a property?
- Tenants can live in a property for the stated duration of their lease agreement. Our residential lease agreements typically range from one to two years.
What happens if tenants leave a property before the lease agreement concludes?
- It depends on what is stated in the lease agreement. For example, some lease agreements give tenants the option to terminate early. Although, the early termination requires tenants to pay a fee and or lose their security deposit.
What happens if tenants refuse to leave?
- If tenants refuse to leave, the actions taken by the property management company vary by state. Basically, once tenants are notified that they must vacate a property, your property management company will file a report with local authorities. Tenants may have up to one month to leave before local authorities physically remove them.
What happens when tenants do not pay their monthly rent on time.
- If tenants do not pay their rent for the current month, the property management company will send contact and send them a notice. If tenants do not pay within three days or submit a quit notice. Then the property management company will start the eviction process.
What is the process to evict tenants?
- Tenants are warned that they are in violation of their lease agreement. If the violation is from failing to pay rent, tenants will typically have to pay within three days or submit a quit notice. The property management company will negotiate and deal with these instances.
How long does it take to evict tenants?
- The process can typically take up to 30 days from the date tenants are notified of their lease violation.
How much does it cost to evict a tenant?
- Usually, there is no cost for evicting tenants, since most evictions are due to not paying rent. There is a possibility of lost rental income, maintenance costs to refresh the property for new tenants, and the tenant placement fee by the property management company. But, clients will be able to keep their tenants’ security deposit fully to help with these costs.
What happens when a property’s tenants are evicted?
- The property’s property management company will promptly find a new tenant to fill the vacancy. The company will handle all the marketing, tenant screening, and lease agreement.
Will the property management company charge a fee for evicting tenants?
- No, the property management company will not charge our clients to start or manage the tenant removal process. But, clients will still be charged for finding a new tenant and getting them moved in.
Property Management Questions
Do the property management companies ever hold onto any amount of money?
- Yes, the property management companies will hold onto some of our clients’ cash to create a petty cash fund for small maintenance issues that may occur when a property is rented out to tenants. Each property will have its own separate petty cash fund.
Will clients be charged by the property management company for their services?
- Yes, property management companies typically charge a fee between 8-12% of a property’s monthly rent value. Furthermore, our company can help you negotiate for a lower fee rate if multiple properties are purchased.
Are tenants required to have security deposits?
- Yes, all properties require tenants to provide a security deposit, and the amount varies per property. Though, it is usually one to two months’ rent. The security deposit is used if tenants leave the property severely unclean, damaged, or before the lease agreement ends.
What happens if maintenance is needed on the property?
- All rental properties will require maintenance at some point. It is our clients’ financial responsibility to pay for them. Maintenance may be needed to repair broken appliances, fix wear and tear issues, or weather damage.
When new tenants are found to fill a vacancy by the property management company, are there any additional fees?
- Yes, the amount varies per property and property management company. The fee for finding a new tenant is typically around 75% one month’s rent. Additionally, the cost for the first tenant is usually waived.
Who is responsible for paying taxes, homeowners insurance, and HOA fees?
- It is our clients’ responsibility to cover these expenses as they are the homeowners. The property management company will have monthly check-ins with our clients to help them complete all required documents and tasks for their properties.
How do clients receive their properties’ rental income?
- The property management company will collect monthly rent from tenants and subtract their fees. They will send you the remaining amount by check or wire.
What are the different property management options clients can choose from for their properties?
- Reputable property management companies fully manage all listed properties. Our clients can choose to continue using the current property management company in place, use a different property management company, or manage their properties themselves.
What are the advantages of using a professional property management company?
- Property management companies have local market knowledge, which is beneficial to our clients who are investing in properties that are out-of-state. These companies are also skilled in operating investment properties in particular. Clients need to learn the specific responsibilities of their properties’ property management company. Some of the duties these companies have are the following: tenant relations, repairs, leasing, bookkeeping, maintenance, and tax reporting.
What happens if clients receive notices from the government for problems with their property?
- Both the owner and property management company will receive a copy of the notice. Clients should still contact their property management company to let them know about any notice they receive. Therefore, they will work with the prior owner to take care of the issue that is on the notice. It is important to note that this does not happen often.
What happens if a property’s tenants receive a noise complaint or the police are called to a property?
- The property management company will always be alerted and follow up with the tenants and government agencies involved.
What happens if there is a homicide or suicide at a client’s property?
- If there is a homicide or suicide at a client’s property, the lease might be terminated. The termination might depend on who was killed and how long the investigation takes to clear the scene. Typically, there are insurance factors that can be relied upon for reimbursement and improvements to the property. Additionally, there may be clauses that allow for rent disbursement while the property is under investigation. We recommend our clients thoroughly review their insurance policies because they may differ by state and insurance company.
What happens if a drive-by shooting damages a client’s property?
- If there is a drive-by shooting that damages a client’s property, the lease might be terminated. The termination might depend on who was killed and how long the investigation takes to clear the scene. Typically, there are insurance factors that can be relied upon for reimbursement and improvements to the property. Additionally, there may be clauses that allow for rent disbursement while the property is under investigation. We recommend our clients thoroughly review their insurance policies because they may differ by state and insurance company.
Do clients have to sign a long term contract with a property management company?
- No, clients just have to give their property management company one month notice to end their services.
Do clients still have to pay the monthly property management fee if the property management company fails to find new tenants for one or multiple months?
- No, the property management company only gets paid once they find new tenants, and when they are managing the tenants on the property.
What should clients do if their property management company fails to find their property new tenants for a few months?
- If this unfortunate scenario happens and clients want to change property management companies, The Investing Edge can assist in recommending a new company. It is important to note that many factors can make it more challenging to fill a vacant property. Clients should first discuss with their property management company, why their property is still vacant, before switching.
What are the main advantages of purchasing a property through The Investing Edge instead of finding and purchasing a turnkey property from the developer directly?
- All turnkey developers’ goal is to quickly sell and then manage investment properties they find and renovate. They do not work and strategize with clients on how to best invest their money. We provide our clients with turnkey properties from all over the United States and put together a current and long term expansion plan for their investment property portfolio. Additionally, we help our clients find mortgage brokers and, if necessary, assist them with third party investors or partners that they may have chosen. Throughout this entire closing process, we compile all documents related to the property and make sure they are accessible digitally.
Are turnkey investment properties risky?
- There are always risks involved in every type of investment. For example, if clients invest their money in stocks, their investment will increase and decrease throughout a single trading day. This daily change in value makes the stock market have more volatility than investing in the real estate market. The main risks involved with investment properties are extended vacancies, high maintenance costs, and if a client needs to sell a property when the real estate market is down.
- We only offer turnkey properties to our clients to help mitigate these risks. Our listed properties are located in growing and stable markets. This helps ensure a consistent supply of tenants looking for a place to live, minimizing the risk of having an extended vacancy. Also, all properties have local property management companies in place that understand how to find tenants in their area.
- Next, the primary value of purchasing turnkey investment properties is the benefit of low future maintenance costs. All our listed turnkey properties are extensively renovated from the ground-up. Our properties’ developers do not only replace appliances and paint. They replace piping, wiring, HVAC systems, flooring, and more.
- Lastly, if clients need to sell their properties when the real estate market is down, it might take longer. Additionally, clients might have to forgo some of their properties’ appreciated value that may have decreased due to the market. But, once the properties are sold, clients can receive their increased equity that has been building while they owned their properties.
How long should clients invest in a turnkey property?
- Clients want to look at all types of investment property as long term investments. The longer a client holds onto their property, the higher return they will receive. It is also important to note that it takes longer to sell a property than it does for a stock or bond.
Do clients have to purchase all their properties from a single state?
- No, clients do not have to purchase all their properties from a single state, but some clients like to. We represent and offer properties all over the United States that meet our listing requirements.
Should clients order a home inspection?
- It is good to have a property inspected before purchasing it, though it is not required. If clients want to have a home inspection conducted on one of our properties, we can help them find a reputable local home inspector. Additionally, some of our properties already have inspection reports for you to review.
How quickly can clients close on properties?
- It usually takes between 2 to 4 weeks to close on a property.
Can clients purchase properties through a self-directed IRA or solo 401K plan?
- Yes, our clients can purchase properties through a self-directed IRA or solo 401K plan.
Can clients purchase properties through a limited-liability company, trust, or partnership?
- Yes, our clients can purchase properties through a limited-liability company, trust, or partnership.
Do clients need to research their prospective properties even if they are investing in a turnkey property?
- Our goal is to find properties in the best markets with the highest potential cash flow and return for our clients. We provide our clients with all the information they need to be knowledgeable real estate investors. We assess clients to see if rental investment properties are the right fit for their finances and provide different strategies to purchase them effectively.
Should potential clients speak with a financial advisor ahead of time?
- We are more than happy to take a look at our clients’ financials and advise them if investment properties are suitable for them. We recommend our clients speak to a fiduciary financial advisor, instead of consulting their stockbroker, banker, or a money manager. These advisors do not want their clients to purchase properties because they do not understand the real estate market, are not licensed, and do not make money managing property portfolios. They work for different financial sectors.
Do we have preferred lenders and are clients required to use them?
- We do have preferred lenders that work with us directly, which enables our clients to receive lower rates and faster closings. However, clients can choose to use their preferred lenders.
Do clients visit their prospective property before they buy?
- We would be happy to set up an in-person showing of any property for our clients. Our properties are strictly built and renovated to be investment properties that produce consistent cash flow and are meant to last. Clients take this into account and do not usually visit their properties before they buy because they are out-of-state. Visiting requires extra time and money, but we can set up a live video chat or pre-record video tour.
Does purchasing a “turnkey” property mean that clients will be paying more than the appraised value?
- No, we advise our clients not to purchase a property that is above its appraised value. No one should buy an investment property for more than it is appraised for unless it still produces a suitable return for our clients.
Does purchasing a “turnkey” property mean that clients will be paying more for a property than it would be to flip the property themselves?
- This can be a complicated question. The overall cost to buy one of our “turnkey” properties could potentially be higher than it would be for a client to flip the property themselves. Still, it could also be more expensive. If potential clients want to flip a property themselves, they will have to hire a contractor and a property management company after the renovation. If a client flips a house themselves, they take on an abundance of risk because renovations can become more expensive as problems are found during them. They can also take much longer than the contractor estimates. Both of these risks are widespread when renovating older properties, resulting in higher costs, lower returns, and delayed cash flow from potential tenants.
Do clients need to hire a real estate agent to purchase properties?
- No, there is no need for clients to work with a real estate agent. Our company handles everything.
Do you offer a home warranty for the purchased property?
- Some properties do come with home warranties. It depends on the level of renovation and the laws that need to be followed in different states. All the properties we list are entirely renovated and inspected. Therefore, no issues with the property should take place in the near future.
When clients purchase properties through The Investing Edge, will we be holding or handling any of their money at any point in the transaction?
- Never, we always strive to be transparent and work with our clients to make sure they can maximize their investment.
Will clients’ money ever be pooled, combined, or co-mingled with other investors?
- Never, we only complete straightforward transactions with one client at a time.
Are clients better off owning one property free and clear or owning more using mortgages?
- It depends on each client’s financial situation. We offer to assess all our clients’ financials to provide them with the best possible investment solution. Clients have the option to purchase just one property. Though, we will provide our clients with different strategies to purchase more properties at present and in the future. We make sure our recommendations do not over-leverage our clients financially. Our strategies allow our clients to buy, leverage, and enjoy passive income while continuing to build wealth through expanding their investment property portfolio.
Do clients have the option for front-end deals?
- Yes, when front-end deal options become available, they are great options for clients to lower their overall purchase price for a property. In this type of deal, our client omits the developer’s need to purchase and renovate a property with financing from a bank or hard money lender. Therefore, the costs associated with the loan the developer would have needed are not factored into their listing price. Please inquire about available financing opportunities and how we create the best strategies to acquire properties for less money.
What are the closing costs when a property is purchased?
- The closing costs are a compiled list of closing fees. The fees’ amounts depend on the mortgage lender, state, and loan type. Ultimately, the closing costs can vary from 2% to 5% of the property’s purchase price.
Why do your listed properties go through a higher level of renovation than most rental property?
- We make sure our listed properties go through a higher level of renovation than most rental properties to protect our clients’ consistent monthly income. This also makes the properties ready to sell at present, as opposed to completing a minimal renovation to make the properties just up to code and provide a lower standard of living to tenants. Completing a sale ready renovation produces lower future maintenance costs, higher rents, and a cheaper exit strategy when clients want to sell their properties.
- We want to make sure our clients do not work with dishonest companies or those new to the business, who cut corners to swiftly sell a property. The developers we work with renovate and manage the properties we list. It is in their best interest to make sure the properties are correctly renovated because they ultimately are going to handle all the potential complaints and problems that arise. When a higher quality renovation is completed on properties, it produces happier tenants, higher income, and fewer issues because less maintenance is needed throughout the properties’ lifecycle.
Do clients have to renovate the property after closing on them?
- No, our properties are pre-renovated, so they have maximum income protection. However, over time different items, utilities, or structures will break. This cycle is part of property ownership and it is our clients’ responsibility to repair and maintain them. If our clients would like to complete additional renovations and updates for their properties, we can help them negotiate with our trusted contractors too.
How much money is spent on property renovations, and what is included?
- Renovation costs can range between $25,000 and $80,000. It just depends on the properties’ pre-renovation condition and age. Renovations can include, but are not limited to the following: replacing pipes, wiring, flooring, windows, appliances, ceiling fans, HVAC systems, garbage disposal, and roof.
Are all appliances included in each property?
- Yes, most of our properties come with appliances that are assessed and replaced as needed. But, some properties may require the tenants to provide some of the appliances.
How long do properties stay vacant after tenants leave?
- The amount of time properties stay vacant after tenants leave can vary. Typically, it usually ranges from two to four weeks. The amount of time depends on the properties’ location, local economy, and how much maintenance is needed after the current tenants move out.
What happens after the current tenants of a property move out at the end of their lease.
- The property management company will arrange for the property to be thoroughly inspected. Once the property is assessed, it will be determined if the flooring needs to be replaced or cleaned, where to paint, and other essential maintenance. However, if the property has been rented for a long time, it is an excellent opportunity to complete a small renovation or update. This can increase the property’s value, monthly rent, and long term durability.
What happens when clients want to sell their properties?
- Clients can sell their properties themselves, hire a realtor, or work with our company to quickly find someone else to purchase their property. Our company has a consistent flow of clients looking to buy our listed turnkey properties.
What types of clients are NOT a good fit for The Investing Edge?
- Clients who have less than $20,000 to invest, bad credit, or are looking for a short term investment are not good fits for The Investing Edge.
What type of clients ARE a good fit for The Investing Edge?
- Clients who understand the risks of investing in rental properties and have at least $20,000 or more to utilize fully are a good fit for The Investing Edge. Clients can benefit from including investment properties in their long term financial strategy because they yield better cash flow than stocks, bonds, and other types of investments.
If a potential client is ready to buy properties today, how does the process work?
- We introduce our client to their team
- Find properties that fit our client’s investment goals and needs
- Build a financial plan on how they can reach their investment goal over time with investment properties
- Introduce our client to lenders and mortgage bankers if necessary
- Acquire the all necessary documentation
- Help our clients close on their properties and acquire passive income
How does The Investing Edge make money?
- Our relationship with the development companies is that we act on their behalf to complete the transaction process and make sure it is done correctly. Therefore, we work similarly to a title and escrow company. We get paid in the closing costs, but it does not come from our clients’ side of the transaction.
Are there properties that are still being built or renovated available?
- Yes, we offer properties that are still being built or renovated. If our clients choose to purchase one of these properties, they will remain vacant until the renovations are complete.
Are there multi-family properties available?
- Yes, we provide our clients with a mix of different property types. Please review all our currently available properties that may include the following properties types: multi-family, single-family, condos, and commercial.
What are the main advantages of working with The Investing Edge instead of finding a local real estate agent?
- All of the properties our company lists are already found, renovated, and ready for investing. Realtors completely overcharge their clients with outrageously high commissions. They primarily specialize in assisting the primary homeowner, but not a real estate investor. Their main goal is to sell any local property under a traditional real estate model. As technology advances, Realtors become less of a necessity. This is true when purchasing investment turnkey properties, we list. Ultimately, Our company allows our clients to bypass the need for hiring a Realtor.
Can The Invest Edge help our clients get financing for their investment property purchase?
- Yes, we can help our clients find and acquire financing. We have relationships with banks and other financial institutions. Furthermore, we are here to provide our clients with our knowledge and networked connections.
Can The Investing Edge help clients set up a self-directed IRA or 401K to buy investment properties from their retirement plan?
- Yes, our team has expertise in how to invest money in properties. If clients have an IRA or 401K, we can help them identify the best solution for utilizing their money and spend the least amount of money in fees. Also, we can show our clients how to leverage their self-directed IRA to make tax-free money.
What kind of neighborhoods are the properties in?
- We have renovated high cash flow properties in different types of neighborhoods throughout the United States. Contact us to discuss the benefits of owning investment properties in various types of regions.
What makes The Investing Edge different from other turnkey providers?
- We have our clients’ best interests at heart because we make sure our clients do not over leverage themselves by having a diverse investment portfolio. Furthermore, we put together strategies to safely accommodate their financial situations. The safer our clients feel investing with us, the more referrals and business they will provide. We only offer our clients turnkey investment properties, which are safer and reliable than most other investments.
How does The Investing Edge help clients feel safe and secure in purchasing an investment property out-of-state?
- We list turnkey investment properties in all different states throughout the United States. We provide our clients with all the required services to finance, own, and operate their investment properties to acquire passive income. To make our clients feel safe purchasing homes out-of-state, we first encourage our clients to meet with their team in person or remotely through video chat online. Second, we recommend that our clients order a home inspection of the properties they are considering if we do not already have one to provide. Third, some of our clients will purchase their investment properties using traditional mortgage financing. This type of financing usually requires a third-party appraiser to assess the property value before the mortgage is approved. Lastly, our property management companies will provide all material receipts, vendor invoices, before and after pictures of required maintenance and repairs, and monthly reports. We want to provide our clients with hassle-free investment property ownership and establish a long term relationship with them.
Does The Investing Edge own its listed properties?
- We do not own the properties we list. We find and compile a list of the best high return turnkey investment properties. Then we assist clients in purchasing our properties and provide them with strategies for the potential future expansion of their investment property portfolio.
Is there a program where clients can get paid for referring people to buy real estate through The Investing Edge?
- Yes, we do pay our clients a commission for referrals. The amount is based on the quantity of time we spend developing the relationship and how many properties are purchased.
Will The Investing Edge work with active Realtors?
- Yes, but we will require a commission that does not commensurate with a typical real estate transaction. Our required commission will typically be $1,000 or less.
What is the process to get turnkey investment properties listed on The Investing Edge?
- If individual developers or development companies want to list their properties on The Investing Edge, please contact us. We need to review the properties, renovations completed, and properties’ financial projections to see if they fit our listing criteria for our clients.