MartelTurnkey

July 15, 2024July 30, 2024

Benefits of Being a Section 8 Landlord

Section 8, a government housing assistance program, provides rental subsidies to eligible low-income individuals or families, offering stability for both tenants and landlords. If you’ve considered becoming a Section 8 landlord, or are on the fence about it, read on to learn all about the many benefits.

Reliable Rental Income

As a landlord, you’re banking on getting that rent check from your tenant in your account so you can use it toward your mortgage payment. With a reliable tenant you can relax a little bit, but let’s face it; there’s always a chance the tenant will be late.

As a Section 8 landlord, a large chunk of your rental income comes from the U.S. Government. And no one pays rent on time like Uncle Sam. The best part is, Uncle Sam’s portion goes straight into your account via direct deposit. The tenant never has a chance to take the subsidy and use it for something else.

Guaranteed Section 8 Rent Each Month

In a similar vein, Section 8 landlords are guaranteed to receive the government subsidized portion of the rent each month. Regardless of the tenant’s financial situation, you can rest easy knowing that most of your turnkey rental property’s rent is going to be there each and every month.

Potential For Long-term Lease Agreements

Section 8 housing requirements don’t dictate how long a lease must be, beyond one year. But because the application and approval process for the tenant is so involved, most Section 8 tenants tend to ask for multiple year leases. Knowing that they have their housing needs met is important for them, and they don’t want to risk you finding some other tenant after one year. This is beneficial for you, since you won’t have as much tenant turnover, and you can be guaranteed that subsidized rent for a year or longer.

Reduced Vacancy Rates

Because Section 8 tenants know they have a good situation for themselves and their families, they’re much less inclined to look elsewhere for housing. The other facet to this is a little bit sad, but Section 8 tenants simply don’t have the financial resources to buy their own home. So, unlike a lot of tenants who may pick up stakes after a few years to buy a home of their own, you can pretty much be assured that your Section 8 tenants will stick around.

Property Maintenance Assistance

Many Section 8 programs offer incentives or assistance for property maintenance and upgrades. Landlords may qualify for grants or low-interest loans to improve their properties, enhancing their value and appeal to prospective tenants. Additionally, regular property inspections conducted by housing authorities help ensure that rental units meet quality standards, fostering safer and healthier living environments for tenants.

Diverse Tenant Pool

On the side of doing good for the world, Section 8 programs promote diversity and inclusion by offering housing assistance to individuals from various socio-economic backgrounds. As a Section 8 landlord, you have the opportunity to contribute to social equity by providing affordable housing options to low-income individuals and families. Embracing diversity is believed to enrich the community fabric, fostering tolerance, empathy, and cultural exchange.

On the subject of goodwill, you’ll also be providing housing for a family that has likely been kicked around in life a little bit, providing a chance for them to bring up their children in a safe and loving home.

Wouldn’t you love the chance to safeguard your real estate income while putting a little bit of goodness into the world at the same time?

Look for the red balloons depicting Section 8 properties on Martelturnkey.com For a current list, please reach out to sales@martelturnkey.com

December 5, 2023December 4, 2023

Building Tomorrow: Millennial Real Estate Legacy Strategies

MartelTurnkey attracts individuals from diverse backgrounds seeking cash-flowing assets poised for appreciation. One notable demographic displaying a growing interest in turnkey real estate investment is the Millennial generation. These individuals, aged 26 to 41, have emerged as strategic builders of financial legacies, carving a distinct path amid societal changes.

Contrary to certain stereotypes, many Millennials, whether employed, freelancers or small business owners, possess impressive amounts of disposable income. And many view turnkey rental real estate as a more accessible and secure investment compared to the stock market investments that their parents favored, yet sharing a common focus on leaving a lasting legacy. With familial responsibilities in mind, they contemplate the impact of their digital and economic presence, recognizing life’s finite nature.

In 2022, 54% of purchase mortgage applications came from Millennials, according to CoreLogic. Millennials incorporate turnkey real estate into their legacies in several ways:

Self-Expression

Millennials often leverage property ownership as a means of self-expression, naming properties after family members or adopting creative titles. One fun example is a MartelTurnkey client who named his two houses, “Thing One” and “Thing Two” for his future children. Others choose to express their individualism by imprinting their family name on the buildings themselves, ensuring a lasting historical record.

Financial Legacy

Having witnessed unprecedented economic fluctuations, such as the epic rise and fall of Bitcoin, many Millennials prioritize real estate over volatile markets. They understand that, unlike stock ownership, real estate allows them to influence critical choices, such as location and tenant selection. They may envision accumulating a rental property portfolio, offering their children and loved ones diverse financial options for the future, transcending traditional notions of home ownership. It’s their version of building for tomorrow.

For the Children

Beyond naming and financial considerations, turnkey rentals provide Millennials with a valuable platform for imparting hands-on financial education. Recognizing the shortcomings of modern formal education, they value the opportunity to cultivate financially literate descendants, laying the foundation for a generation on the path to financial freedom.

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If you share a similar focus on legacy, consider reaching out to MartelTurnkey for a conversation. Discover how we simplify the process of buying and owning turnkey rentals, making it approachable for you to construct a real estate empire that not only secures financial freedom but also leaves an enduring mark on posterity.

September 13, 2022December 12, 2022

House-Hacking vs. Turnkey Rentals — Which is Better?

When it comes to beginner-friendly real estate investing strategies, you have a few popular choices. There’s house-hacking, BRRRR, and our bread-and-butter — turnkey rentals. In this article I will compare these two strategies to determine once and for all which is better House-Hacking vs. Turnkey Rentals?

We have written several articles comparing BRRRR to turnkey rentals (here’s the most recent one). Surprise surprise … a company called MartelTurnkey came down on the side of turnkey rentals. But we stand by that judgment even more thoroughly in this time of higher interest rates and inflated costs of materials and labor.

But what about house hacking? How does this popular beginner-friendly real estate strategy compare to turnkey rentals?

What Is “House-Hacking?”

“House-hacking” essentially means living in part of a property and renting out the other part of it.

This might be as simple as buying a 3bed/2bath house, living in the master bedroom, and renting out the other two bedrooms to “roommates.” It also might include buying a duplex, triplex, fourplex, or house with an ADU (accessory dwelling unit — a back-house, garage apartment, or granny flat). You live in one unit, your tenants live in the other unit(s).

What’s the “hack?” The fact that your tenants basically pay your mortgage with their rent (or at least part of it) while all the while you’re building equity and growing your net worth as the property owner.

Pros of House-Hacking over Turnkey Rentals

Lower Down Payment

As an owner-occupied property, this kind of deal qualifies for conforming homeownership loans — Fannie Mae, Freddie Mac, even FHA and VA loans (the latter for military personnel or their family members).

These loans allow you to put 10% down or less. For FHA loans, it’s as little as 3.5% down. VA loans — 0% down. That’s a low barrier of entry. Compare that with a conventional investment property loan — you usually have to put 20% down at minimum.

Easy to Self-Manage

Because you live on the property, it’s easy to meet and screen tenants, respond to maintenance requests, collect rent, serve notices, and otherwise manage the property yourself. I.e. no property management expense.

The Homestead Tax Exemption

If you live in your property for at least two out of the last five years and sell it for a profit, up to $500,000 of that profit can be exempted from capital gains taxes under the Federal Homestead Exemption. That’s a lot of money you can potentially shield from taxation.

Cons of House-Hacking over Turnkey Rentals

Private Mortgage Insurance

Yes, you don’t have to save as much money to buy an owner-occupied home … but if you put less than 20% down, you are on the hook for an extra expense called private mortgage insurance (PMI).

This payment doesn’t contribute to the equity paydown of the loan. It’s basically money down the toilet, same as mortgage interest or rent. If you put 20% down on a turnkey rental, you don’t owe PMI.

Limited to Your City

Of course, if you’re going to live in your rental property, you’re limited to the city you live in (or want to live in). By contrast, turnkey rentals open your deal pool to the entire country — including booming markets with excellent property prices and rent-to-value ratios.

Fewer Tax Advantages

While the homestead exemption can be a big windfall when you sell a personal residence, turnkey landlords get a ton of tax advantages. You can read all about those tax advantages here.

No homestead exemption, but you can even defer those capital gains taxes with a 1031 exchange. Not quite as good as an exemption, but fantastic for building wealth long-term.

Less Passive

Self-managing may save you some money, but even if you live on the property, self-management is work. If you want a hands-off, passive investment that produces cash flow like clockwork and contributes to a life of financial freedom … turnkey rentals are the way to go.