REAL Income Property™ Standards
Available properties are low in supply across the nation and sell very quickly. If you hope to acquire rentals you need to be able to move quickly. That said, it’s important to not make any mistakes in your haste. We created our REAL Income Property™ Standards to help you with this process.
Here’s what the REAL in REAL Income Property™ stands for:
R – Renovated or built (to REAL Income Property™ Standards)
E – Examined (through inspections) and due diligence
A – Appraised (purchase price at or below market value)
L – Licensed property management
R – Renovated or Built
|Roof||Replace if less than 5 Years remaining life, approved per either Home Inspection or 4 Point Inspection.|
|Furnace||Replaced with new or serviced with one year home warranty*.|
|Boiler||Replaced with new or serviced with one year home warranty*.|
|A/C||Replaced with new or serviced with one year home warranty*.|
|Plumbing||Home Inspection accepted by the buyer and updated Finish Plumbing.|
|Hot Water Tank||Replaced with new or serviced with one year home warranty*.|
|Foundation||Home Inspection accepted by the buyer.|
|Electric||Home Inspection accepted by the buyer.|
|Flooring||Updated or functional; Approved through Home Inspection.|
|Kitchen||Updated or functional; Approved through Home Inspection.|
|Bathroom||Updated or functional; Approved through Home Inspection. property teams agree to ensure Bathroom/Flooring and Kitchen is at or above Neighborhood and Tenant Standard.|
|Interior Paint||Freshly painted.|
|Exterior Paint||Home Inspection accepted by the buyer. Additional cost if repainted requested.|
|Appliances||Market Specific. Refer to your provider.|
*Note: Check with the Property Team about who is responsible for purchasing the 1-year home warranty.
National Industry Standard for Property Management Fees:
- Monthly Management Fee 8% to 12%
- Tenant Placement 50% to 100% of Monthly Rent
- Lease renewal = 25% to 50% of Monthly Rent.
- Some property managers add a 5% to 15% upcharge to repairs and maintenance items
Note: Please verify with each Property Team as they may have different fee structures.
E – Examined through Inspections & Due Diligence
Before purchasing a property, it’s essential to have an independent inspection completed. Property Teams will provide you with 3-5 licensed, local inspectors who understand rental property. The expectation should verify that the property meets or exceeds our REAL Standards.
Recommended inspections include: Home, sewer/septic, well if applicable, new construction phase inspection, others as recommended in the home inspection (pest, structural, mold, etc). Recommended to have safety items cleared. Confirm whether or not property is located in a flood zone and the risks & requirements if so.
A – Appraised At or Above Market Value
If you are getting traditional financing, you will receive a bank appraisal. If you are paying cash, we will recommend you get a third-party home appraisal. If the property appraises low, contact the property team to see what options are available.
L – Licensed Property Management
As we all know, property management is the most important ingredient for success in long-term real estate investing.
Property managers within our Referral network are required to be properly insured and licensed according to their state laws. It’s also recommended that they have at least 2 years’ experience with a great track record, and use professional management software.