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How to Rent Out Your GO Zone Property

INTRODUCTIONOne of the most often overlooked parts of real estate investing (especially when investing in the Gulf Opportunity Zone, a.k.a. GO Zone), is putting your new investment property into service. In other words, get a tenant in there as soon as possible and start getting the benefits of the rental income. In addition to the cash flow side of things, “putting the property in service” is an important part of getting your GO Zone benefits (up to 50% Bonus Depreciation on the property). Hopefully, you have given the topic much thought before you purchased.MANAGEMENT OPTIONS The good thing is that you have many options available to you from the GO Zone property rental side:1. You can manage the property completely yourself;2. You can get assistance leasing up the property and then manage yourself;3. You can have someone lease the property up and also manage the property for you; and4. Plus other options and combinations (including getting a rent-to-own or Lease Option tenant in your property).There is another option that is available to you IF you can find the perfect opportunity; and5. Find the perfect situation where you not only have a desirable property, but can also get a lease back direct with the builder on your property. We will go into some details on the last option in a bit, but let me first go over some basics first.BASICS OF RENTING YOUR GO ZONE PROPERTYThere are 2 separate parts of renting out your GO Zone property; leasing and property management. While these are related to one another and can be performed by the same individual, knowing what is involved for each will help you make the decision on which path to proceed down.Property Leasing.This step should be performed as soon as possible after closing on your property. Some people/groups even get started on this right before closing (as long as they note such in all their ads and marketing). This involves advertising and marketing your property to potential renters, showing the property as necessary, taking rental applications, performing your due diligence on the renter (anywhere from calling references to full background and credit checks). In addition, you have the task of getting the lease agreement in place, and getting a property condition report signed by both parties as to what the property condition was like before the tenant moves in. This can save a lot of headaches down the road when (not if) the tenant does move out.If done effectively and correctly the first time, you will enjoy rental income soon after closing. Rent-up times (the time it takes to get a renter in place) greatly depends on the property, location, rental rates, and the effectiveness and experience of the person performing these tasks.Property Management.Ok, so now that you have a tenant in place and received that initial deposit and the first month’s rent, now the real work begins. Management of your property involves collecting your monthly rent, making sure that your tenant is adhering to the terms of the lease, answering any questions from your tenant, getting funds to the property owner (if managed by someone other than the owner), fielding requests for repairs, arranging for repairs, evicting the tenant (if necessary), and arrange for the clean up of the property prior to getting a new tenant in place.SUMMARYAs you can see, there is a lot involved with marketing your property for rent, getting a tenant into your property, and keeping that tenant as long as possible so that you can continue getting the desired cash flow for the property. As mentioned above, there is another option to this process and that would be to get a property where the GO Zone Builder is offering a leaseback.A WORD OF CAUTION: The property has to make sense even before considering the leaseback offer. In short, single family homes with a 12-month leaseback should be considered. Personally, I would stay away from, as an example, a condo or multi-family (i.e. duplexes) with a multi-year leaseback. Why? Exit strategy for multi-family is hard (especially in the GO Zone) and condos without the leaseback (and any other short term rental property) are VERY hard to rent out given the competition in the GO Zone.