Before opening up your rental to multiple renters, here are some important considerations.

Renting Your Single-Family Home to Multiple Residents

While renting a single-family home to multiple residents can increase your rental income, there are several legal considerations, downsides, and additional costs that you should consider. 

How does renting your single-family home to multiple residents work?

When renting a single-family home to multiple residents, each resident has their own private space, and they share access to common areas like the kitchen, bathrooms, and living spaces. When you rent a single-family home to multiple residents, you reduce the costs of rent for each individual resident. Where a single person may not be able to afford a rental home that costs $2,400 each month, they may be able to rent a room in the house for $600/month. Residents may choose to share additional expenses like wifi, and the utilities may be split equally or proportionally between residents. 

Remember that renting a single-family home to multiple residents differs from subletting a property. When you sublet a property, you rent a place you do not own while still being responsible for the rent to the landlord.

How “house-hacking” is related to renting a single-family home to multiple residents

The term “house hacking” refers to renting out a portion of your primary residence to pay the mortgage on a property. It can also refer to purchasing a multi-family property, living in one of the units onsite while renting the other unit(s) to a secondary party. It can also relate to renting out a guest house on your property. If you plan on renting your primary residence to another resident, you may want to consider many of these same benefits and challenges as renting a single family home to multiple residents.  

Legal considerations of renting to multiple residents

While there are clear benefits to renting your single-family home to more than one resident, there are several legal considerations you need to familiarize yourself with before moving forward. You may need special permission to rent a single-family home to multiple residents. You may also need to change the zoning of your rental property from single-family to multi-family to rent your property to several residents. Further, your HOA may prohibit or limit how you can rent homes in the community. In some cities and counties, you will need a special license or permit to rent your single-family home to multiple residents. In other locations, you may need to have your property inspected before renting it to multiple people.

You may be at more risk if you don’t navigate the legal implications of renting your single-family home to multiple residents. Imagine what might happen if a neighbor complains to the HOA and you are not renting the property in a way that is consistent with their regulations. Similarly, consider what might happen if you evict a resident and they file a lawsuit. These types of situations can have significant implications, including financial consequences. 

Finally, as with renting any property, you’ll need to familiarize yourself with Fair Housing Laws to avoid any inadvertent violations. 

Lease agreement for renting your single-family home to multiple residents 

If your residents don’t know one another, they are unlikely to sign a single lease together. In this case, you will need each resident to sign a co-tenancy agreement that includes additional guidelines around their individual financial obligations. It’s also helpful to ensure that the lease agreement contains guidelines for pets and visitors. You may also want to consider adding policies around shared space usage. These policies may prevent potential conflicts. A peaceful, cooperative living environment will help retain residents for extended periods. 

Benefits of renting your single-family home to multiple residents 

If you can control your costs and expenses, renting your multi-family home to multiple residents can increase your rental income. Renting your single family home to more than one residents might be right for you if cash flow and increased rental income is your primary motivation. In that case, you should still carefully calculate any expenses, including the annual costs of maintenance. Your potential rental income will also depend on your location, the size of your rental property, and the number of people you plan on renting the home to. Consider researching rental pricing factors in your area as you determine how much rent to charge.

Renting to multiple residents reduces vacancies

If you rent your single-family home to multiple residents, you may also find that vacancies have less impact on your cash flow. When renting your single-family home to multiple residents, your rental income is split between several residents. If you have a vacancy, you may only lose 25% or 30% of your rental income rather than 100%. When you reduce vacancies, you can maintain a positive cash flow or limit the effect of a cash flow reduction. 

Downsides of renting your single-family home to multiple residents 

While you may be able to avoid 100% vacancies for your single-family home, you may find that you have more vacancies overall. You may find that most people will only rent a room in a single-family home as a temporary arrangement. As such, they may be more likely to stay for only a limited period. When they can rent a home on their own, they likely will. Similarly, their circumstances may be more likely to change. As a result, you may need to list your rental property and screen residents more frequently. 

You’ll need to manage several residents

If you rent your property to more than one resident, you will likely spend more time and energy managing your rental property. Adding additional residents can significantly increase your work if you self-manage your rental property. You will need to collect rent for each resident and create and manage multiple lease agreements. You will also need to establish guidelines for the property unique to cohabitating residents. 

In some states, you cannot charge tenants separately for utilities unless the usage is accurately and individually metered. You’ll need to account for the cost of utilities when you price each room in the multi-family home. Unfortunately, you won’t know exactly how much electricity or water all the residents will use, and any additional costs will be an added expense. Charging a flat rate for utilities will not incentivize residents to conserve water or energy because they know they will not pay those expenses directly. 

Damages, disputes, and potential evictions  

When you rent a home to multiple residents, you will likely receive more complaints from the individuals in your single-family home. Communal living can be very challenging. You may find yourself moderating disputes or needing to regulate or set norms around residents' behavior. If there’s not a strong culture of caring for the rental property, you will likely experience more frequent damages. As a result, the property will also need more regular maintenance. A high resident turnover rate can quickly increase your costs if things need to be replaced with each new resident.

Skip the hassles of renting to multiple residents and consider a strategy that prioritizes positive cash flow 

At Belong, we help you find residents who appreciate your single-family home as much as you do. Our unique proprietary algorithm tells you exactly how much to charge for rent. We use real-time data, expertise, and insights about your unique home to price your rental property so you can maximize the value of your real estate investment.  

Belong markets and show your property to potential residents. When we find a resident who loves your home, we conduct a credit, identity, and criminal background check and personally interview each potential resident. Best of all, we offer Guaranteed Rent, which means you’ll always get paid.

Learn more and see if your single-family home qualifies. 

Is renting a single-family home to multiple residents a good idea? Before opening up your rental to multiple renters, here are some important considerations.

What are the experts saying about rising interest rates and the impact on the housing market for homeowners and real estate investors? Find out in our 2022 chat with Jon Martin and Celeste Löfqvist

Ask The Experts: Let’s Talk Rising Interest Rates & The Housing Market

You asked, we answered. Homeowners have told us the biggest concern on their minds at the moment is rising interest rates and its impact on the American housing market. So in June, Belong launched its first webinar conversation (not financial advice as the classic disclaimer would say!) with experts in real estate to address your burning questions. For anyone who missed it, you can catch up on the recording here or check out the article below for the highlights. 

Jon is a career Asset Manager, based in Los Angeles, who has managed well over a billion dollars in real estate assets on behalf of institutional clients. Partnering with Belong, he has shifted his focus to supporting smaller scale real estate investors in this wild financial climate. 

Celeste works closely with the product team and consultants such as Jon to adapt financial planning and asset management approaches for the everyday rental property investor. She partners 1:1 with Belong Homeowners to help navigate strategic decisions to optimize their investments. Previously, Celeste was a Partner at the Boston Consulting Group in the Bay Area.

Are the recent interest rate rises the end of “cheap debt”?

Interest rates have risen sharply in 2022 after more than a decade of historic lows coming out of the Great Recession. In 2020 and 2021, the 30-year mortgage rate had fallen below 3%. Yet by the end of May 2022, mortgage rates had doubled, reaching well over 5% for the 30-year fixed — coming as a big shock to many who don’t remember the sky-high rates of the 80s. 

“It’s worth grounding ourselves in the fact that historically speaking, rates are still low,” says Celeste. 

“100%,” agrees Jon. “...we’ve gotten very used to cheap debt. But in the 80s, rates briefly spiked over 15% — also when the Fed was battling record inflation. Even more recently than that, rates before the Great Recession were 5-6%, like what we’re seeing already this summer,” explains Jon. “Rates have just come down and down for 20 years now, which has fueled a rise in asset prices and tremendous equity gains for a generation of Americans who have had money in real estate along this journey”, he adds. 

Chart: Interest rates over the past few decades

So what next? With inflation still accelerating and not plateauing, there’s likely to be more rises on the horizon for July and beyond. 

“That being said, everyone is expecting more meaty rate hikes from the Fed at this point – this expectation has already been priced into the mortgage rates we’re seeing,” explains Celeste. “The reason we saw this sharper acceleration in June was because May numbers were worse than expected. Everything in economics is relative to expectations,” she says. 

“The Fed is obviously hell-bent on taking the steam out of pricing pressure. They’re looking to bring inflation back to the 2% steady state range. The next big indicator to watch is the June inflation data, which will be released mid-July. If high inflation persists, there will be more rises to come,” says Celeste. 

Will we see interest rates as dramatic as the 80’s and 90’s? 

Jon doesn’t seem to think so. “As Celeste mentioned, expectations for further hikes through the rest of 2022 are already cautiously priced in, so it’s unlikely…but rates won’t taper off until inflation does. So certainly don’t expect to see 3-4% mortgage rates again anytime soon,” he says. 

What does the current inflation rate mean for the housing market in 2022?

Jon says that on the simplest level, rising interest rates make home purchases more expensive, which reduces consumer buying power. This shrinks demand and pulls down prices. He provided this example:

At 6% interest = ~$3600 per month (Over 40% more expensive!)

“You can potentially refinance later on, but on a monthly basis, those sort of 30-50%+ shocks are just not feasible for pretty much anyone,” explains Jon. 

“It’s paralyzing to potential buyers, and when you layer this on top of the asset price increases we’ve seen over the past year, buying a house this summer could be 60%+ more per month than buying that same house last summer. And that pressures people to trade down what they’re buying, or in many cases, bow out of the housing market entirely,” says Jon. 

Data from Redfin (pictured below) shows the staggering leap on the cost of a mortgage payment on a medium home in 2022. 

The next graph (also from Redfin) shows that the asset prices had already started to diverge from buyer budgets before the rate hikes. This is based on what buyers are searching for on Redfin. “As people qualify for smaller mortgages, you can expect this pattern to continue,” says Celeste. 

Jon says “Right now economists are pretty mixed about how this will all net out for housing prices – that’s the big question. Few believe that a significant crash is on the horizon, but it’s hard to believe a meaningful cool-down isn’t finally seeping in.”

Celeste agrees, “Yes. No one's expecting this to be like 2008 – the market looks meaningfully different. The supply/demand balance looks different, homeowners have more equity built up in their homes, and lower debt service ratios than we’ve had in decades. So we don’t have anywhere near the structural fragility we had 15 years ago,” she says. 

“Exactly. But we’re still early here. Where we’re definitely seeing the impact already is on the volume of listings & sales. After years of record-low supply, the number of listings has been growing over the Spring and into Summer. And by this month, the total number of listings on market is up 15%+ over last year,” adds Jon. “So you see that we’re starting to accumulate some excess supply relative to tightening demand. You have some skittish homeowners that are trying to take advantage of still-high prices, but a gap is starting to emerge between seller expectations and what buyers are able to pay. So consequently, we’ve seen home sales fall for each of the last 6 months. Mortgage applications are down over 15% since last year, and of course, refinancing has basically gone to zero,” says Jon. 

“It makes sense that many folks are retreating to the sidelines to wait this out,” says Celeste. “Jerome Powell basically gave that advice explicitly in his latest press conference, to young folks in particular. There was a great New York Times article essentially saying just this. As interest rates spike, we can expect folks to simply stay put, or even be “underhoused” – to live in less house than they perhaps need or want. In this rate environment, it can make more sense to renovate or expand, rather than move – but whatever you do, don’t give up a low, fixed mortgage.”

What does this mean for the rental market specifically?

Since all of the Belong homeowners hold rental properties, Celeste and Jon discuss what this means for the rental market. 

Jon notes that what is tough news for many Americans grappling with inflation, is actually positive for rental property owners, with the hot rental market likely to intensify further. 

“At higher interest rates, fewer prospective homebuyers will qualify for mortgages (or at a lesser dollar amount) and will instead choose to keep renting. Rising rental demand will further push rents up – we’re actually already seeing that, with median nationwide rent passing $2,000 for the first time ever in May,” explains Jon. 

“From the Homeowners perspective, with lower and typically fixed rate mortgages already locked in, and rents likely to continue rising, yields will improve. It’s a fantastic time to be sitting on rental property,” he notes. 

Is now a good time to be acquiring a rental property?

One final Q&A from our webinar audience was for those who are thinking about acquiring rental property. Is now a good time or should prospective investors hold off?

Jon says now is a good time to keep a watchful eye for opportunities. “After so many years of intense competition, there’s honestly some welcome relief here – with cooling demand and fewer bidding wars, coupled with rising rents, we should see some cap rate expansion in the near future, meaning pricing coming down,” he says. 

“The question comes down to what your overall hurdle rate is given the current market conditions. So while you’ll have to factor in a higher cost of capital when analyzing your next opportunity, the recent upward pressures on rents and the likelihood of locating an attractive single family rental through less competition, and hopefully better pricing are creating a more attractive market for acquisitions.”

“Another point to consider when looking to acquire a rental, for those sitting on cash, is a higher down payment than say the standard 20% to reduce your exposure to higher interest rates. This will only help when running the numbers to see if your rental income will cover your operating expenses and mortgage payments,” he adds. 

“And finally, and this may just serve as a reminder to most of you, are the tax advantages of holding rental property – having the ability to depreciate the physical structure of the home and the cost of any property improvements; along with deducting most expenses related to operating a rental. So all in all, the picture can still look quite good for acquisitions,” says Jon. 

Got more questions for Belong? Contact us 24/7

Whether you prefer email, online chat or a good ol’ fashioned phone call, we’re here to answer any questions you may have. Contact us or learn more about becoming a Belong homeowner here.

What are the experts saying about rising interest rates and the impact on the housing market for homeowners and real estate investors? Find out in our 2022 chat

Are San Diego rental property prices up or down? Forget the news and see what happens when you take a real-world approach to pricing a San Diego rental home.

Forget the News: This is How You Should Price San Diego Rental Homes

San Diego ranks as one of the best places to raise a family, making it a popular rental market for single-family homes. So if you own a home in “America’s Finest City”, how should you expect to price your San Diego rental property? 

If you’ve been following the news, you’re not going to get many helpful clues on how to evaluate your rent. In June 2022 alone, The San Diego Union Tribune reported that rents for single-family rentals increased by 10% this year — while Fox 5 says that rents have cooled and are even falling this month.  

The truth is that all these reports are flawed, because they’re based on a very broad data-set of asking rents for available properties. They also incorporate high-end luxury properties that may not be comparable at all to your single-family home in San Diego. Bottom line: these stats don’t really reflect what is being paid in the market here and now. 

Even the property management approach of looking at homes in your neighborhood may not be the best way to decide what to charge for your home. There’s wild fluctuations in the market, inflation and interest rate changes. Other homes could have rented out a year ago when the market was a different place. 

So what’s the alternative? Belong has found a way to price San Diego rental homes based on real-world demand, not just what’s in the news. 

How to price your San Diego rental property with real-time demand

The best way to stay in step with the market is to price your San Diego home right from the start. When helping owners price homes in San Diego’s rental market, Belong uses technology to blend live market data with an all-important metric: real demand for each home. We determine the right price for your home that will maximize rental income and keep vacancies low, long-term. 

Once your home is on Belong, we get a true measure of the market by looking at impressions, clicks, tour sign-ups and how many people have started applications. With all that data at our fingertips — plus real estate benchmarks for the San Diego region — we can work with homeowners to react quickly and maximize rental value, while minimizing vacancy. 

And because we have ditched the property management model to create a residential network that is inclusive of residents, we attract the best of the best to place in your home. 

As a result, we trump the property management industry with 66% less vacancy. And our residents want to stay, with 71% renewing their 1-year lease (and unlike property management companies, this is done at no cost to homeowners). 

If you’re looking for a guide that covers the ins and outs of how to price a rental, we’ve covered 12 of those common pricing factors here. Or you can see if your property is eligible for Belong. 

With a unique approach and live insights from the San Diego rental market, Belong addresses the complexities and shifts in the rental market to determine exactly what high-quality, long-term residents are looking for and what they are ready to pay, right now. 

The result is fewer vacancies, great people caring for your home, profitable rental income, and no tricks or compromises that could devalue your home as a rental investment. 

Find out how Belong would value your SD rental at https://belonghome.com/homeowners/san-diego 

Many Americans are resigned to a lifetime of renting. Learn how Belong is using innovation to change this paradigm, and transform renters into owners.

How Belong is Breaking the Perpetual Rental Cycle and Turning Residents into Homeowners

Right now, in America, yet another generation is finding itself resigned to a lifetime of renting their homes. This blog discusses how Belong is using innovation to change this paradigm, and transform renters into owners.

On one hand, when you look at Belong, you’ll find two distinct sets of people: landlords – or as we call them homeowners; and tenants (ugh) – or as we call them, residents.  

But as different as these groups seem on the surface, the interesting thing about the people on our platform is that, in actuality, there isn’t that much of a difference between them. They both love the house that, on an emotional level, they share, and they both care about the neighborhood and community that surrounds the house.

At Belong we see the dichotomy between homeowners and residents as artificial and outdated; in today’s world, people should be able to move fluidly from renting to owning. 

That’s why we’re working so hard to accelerate the ramp to ownership – to shorten the rental period and extend the ownership one.

That data shows that the American Dream of homeownership isn’t going anywhere. In fact, 89% of Millennials – and this was before the pandemic – want to own a home.

But it’s harder than ever to achieve that dream. Housing prices have increased over the last decade-plus, while supply has slowed to a trickle. What’s more, cash-rich, opportunistic investors have moved into the market, sucking up supply. That’s why economists predict that even with rising interest rates, housing prices will not fall significantly.

As our founders observed in a recent blog post announcing our Series C raise, “The last ten years saw a significant concentration in ownership of the housing supply. As a result, individual homeowners and renters now compete with prominent hedge funds to access homes to live in and build long-term wealth.”

So what’s the solution? To create new opportunities for renters to become owners – and for owners to enable that transfer.

Belong is proud to be helping to break the perpetual rental cycle by innovating the Karma Wallet. Here’s how it works. Every time a resident on our Belong platform pays their rent on time, a portion of that money is stashed away in the wallet, for residents to apply to a future home purchase. 

When the resident decides to buy the property, and has reached an agreement with the homeowner, Belong provides residents with a Home Purchase Specialist who will guide them through the process. 

Of course, it might be a while before residents reach the point of being ready to buy a home, which is why we allow them to apply their Karma to the rental process as well: once you’ve built up enough Karma they’re given priority access to rental properties on the platform. 

Think of it as a twist on the classic “Rent-to-Buy” concept: residents are effectively building up equity in homes they want to call their own, while homeowners have built-in, on-demand buyers they know and trust.

We believe this is what residents want, to have the flexibility to buy with a helpful Belong boost.  And we believe that our homeowners want to see the houses they hold so dear end up with someone who will have the same kind of relationship. 

But we also know that all homeowners are different. Some may want to work through Belong and sell their home, others may choose to sell the home directly, or with a broker of their choosing.

That’s cool with us. Unlike property managers who have strict lock-in contracts, we give our homeowners the ability to sell their homes in any way they choose.

It is ideas like these that will help shift homeownership back into the hands of people, instead of hedge funds — and that will help working Americans “break the perpetual renting cycle,” to borrow a phrase — plus some inspiration — from our founders.

We know that just about all of the homeowners on our platform aren’t professional investors.  Many have moved out of their home but aren’t ready to sell it. Others are what we call “accidental homeowners,” people who’ve unexpectedly inherited a property and aren’t exactly sure what they want to do with it

These homeowners can provide the on-ramp to a generation of renters who want to become owners themselves. Being able to participate in the evolution is something that makes us happy every day.

Want to learn more about what Belong is doing for homeowners? Click here. Or if you’re a potential resident and want to learn how we’re helping people like you, click here. 

How Belong is Breaking the Perpetual Rental Cycle

Discover the best places to invest in Washington real estate with our picks for the most walkable neighborhoods in Seattle

Most Walkable Neighborhoods in Seattle

Seattle offers a mix of homes, townhouses, and condos in distinctive, engaging, and walkable neighborhoods. The city offers residents the opportunity to join vibrant communities and a thriving job market. While each area offers unique benefits, you can find hip coffee shops, restaurants, and bars throughout Seattle. These Seattle neighborhoods have plenty of parks, water, and outdoor activities to enjoy. If you’re looking for good places to invest in real estate, explore our picks for the most walkable neighborhoods in Seattle. 

The Queen Anne neighborhood is one of Seattle's most widely recognized areas. This neighborhood is home to the iconic Space Needle and features some of the most spectacular views in the city. The Space Needle is part of the Seattle Center, which also includes the Pacific Science Center, Chihuly Garden & Glass, and the Museum of Pop Culture. 

The western border of Queen Anne meets Lake Union, which is popular for several watersports and boating. This area can be split into Upper and Lower Queen Anne, both known for their many hills. The northern part of Queen Anne features historic bungalows and craftsman-style homes. The southern part of Queen Anne is more of an urban center. 

If exploring the neighborhood doesn’t offer enough walking opportunities, there are several trails in the community. Once you’ve grown tired of exploring Queen Anne, consider hopping on the monorail, which will take you to downtown Seattle. 

Fremont is a one-of-a-kind neighborhood located northeast of Queen Anne. Step out in Fremont and experience everything quintessential about Seattle, including quirky shops, decadent dining opportunities, and entertaining attractions. The Fremont neighborhood is home to both Adobe and Google offices. The Brewery District allows residents to stroll from one brewery to another--be sure you stop off at Fremont Brewing. 

The Fremont Sunday Market, which runs year-round, allows you to purchase locally made and grown goods in your community. Opportunities to explore the outdoors are plentiful in Fremont. Explore the Fremont Trail, Gas Works Parks, the Burke-Gilman Trail, or Golden Gardens Park. 

Pioneer Square is one of the most historically significant neighborhoods in Seattle. A tour through the neighborhood known as the birthplace of Seattle features cobblestone streets and red-brick buildings. Stop off at the city’s oldest bar, Central Saloon, which welcomes patrons into a little slice of Seattle's history. Pioneer Square’s First Thursday Art Walk offers residents the chance to meander through the neighborhood and soak up the vibrant arts scene. 

Pioneer Square was originally one to two stories below the current neighborhood. After the Great Seattle Fire in 1889, the streets were raised to their present elevation, leaving parts of the original city below. Bill Speidel’s Underground Tour allows you to walk some of Pioneer Square’s original streets.  

The Chinatown International District or C-ID neighborhood is the vibrant epicenter of Asian-American Seattle. This multi-ethnic community stretches from 4th Avenue to Rainer and is bordered by Pioneer Square and SoDo. C-ID consists of three smaller districts: Chinatown, Japantown, and Little Saigon. The Chinatown International District hosts some of the most loved Seattle festivals, including the Annual Night Market, Moon Festival, and Lunar New Year Festival. 

The neighborhood is a short walk from both T-Mobile Park and Lumen Field. Long-standing businesses offer residents and visitors everything they need within walking distance. C-ID is also home to the Seattle Pinball and Wing Luke Museums. 

Belltown is beautifully located on the waterfront and conveniently close to Downtown Seattle. The beloved neighborhood is consistently ranked as one of the most walkable areas of Seattle and boasts an extensive music and arts scene. Most real estate along the waterfront comes in the form of high-rises with apartments and condos and is one of the more densely populated areas of the city.

Belltown is known for both Olympic Sculpture Park and Myrtle Edwards Park. Residents and visitors can also explore the Elliot Bay Trail. The neighborhood is also home to many bars, restaurants, and coffee shops. The community is named for an Illinois farmer, William Nathaniel Bell, who moved west in 1851. Stroll along Virginia or Olive Street, both named for William Bell’s daughters,

South Lake Union is home to one of the most iconic destinations in Seattle, Pike Place Market, but it has infinitely more to offer both residents and visitors alike. Located on the southern tip of Lake Union, this popular neighborhood is sometimes called SLU. 

South Lake Union’s proximity to the water makes it ideal for paddle boarding, kayaking, and boating. SLU is also Seattle's tech center-- Amazon, Facebook, and Google all call South Lake Union home. The neighborhood was once a highly industrial area but has been transformed into a destination for drinking, outdoor activities, and culture. You’ll also find the only downtown Whole Food, a welcome amenity for any resident. 

Ballard, once its own independent city, is located in the northwestern part of Seattle. The neighborhood’s Scandinavian history colors much of the current culture. Visitors can explore the National Nordic Museum and the Ballard Locks, which connect Union Lake and the Puget Sound. 

Real estate Ballad includes something at every price point and is not nearly as expensive as neighborhoods like Queen Anne. You’ll find Craftsman, Tudor, and rambler-style homes in addition to newly-constructed condos and luxury apartments. Almost anyone would enjoy living in this walkable community thanks to its enchanting culture, many amenities, and location. 

It’s hard to find someone who doesn’t enjoy the long-standing cultural charm of Capitol Hill. This Seattle neighborhood has become the epicenter of the city’s LGBTQ+ community. Some might remember that the neighborhood was closely associated with the 90s grunge scene. In Capitol Hill, you’ll find a mix of apartment complexes and large houses along 44th Ave, also called Millionaire’s Row. 

Capitol Hill is easily the most progressive, creative, and popular area in Seattle, with extensive dining and nightlife opportunities. Don’t miss the chance to stroll through the 44 acres of Volunteer Park. Just be sure to stop and admire the breathtaking glass, Victorian-style conservatory. With so much to offer, Capitol Hill rental properties are in high demand. 

Discover why Seattle homeowners love Belong 

Once you’ve found the perfect property in Seattle, Belong can help you find residents who love your home as much as you do. We take the guesswork out of pricing by combining current market data with live, real-time demand from the local rental market. That data allows you to maximize rental income and attract the best residents. You’ll experience fewer vacancies, residents who care for your home, and profitable rental income. 

Discover the best places to invest in Washington real estate with our picks for the most walkable neighborhoods in Seattle - popular with tenants and residents

Looking for an investment property is different from a home you’ll live in. Know what to look for

Buying an investment property? Here’s what to look for

Looking for an investment property is fundamentally different from seeking out a home you’ll live in yourself. 

When you’re looking for your own home, your personal preferences come first. But a good investment property should be as appealing as possible to its future residents.

Risk is a natural part of making any type of investment. You can’t totally eliminate that risk, but you can greatly reduce it by considering your options carefully. 

Shopping for an investment property is all about understanding the area, the local market, and the home itself. Here’s what you need to know to get started. 

Remember, a home itself can always be updated. But you can never change the location! 

Before you start considering actual investment properties, take your time to figure out which city, area, or neighborhood is right for you. That means analyzing both the market realities of the area, how livable it will be for future residents. 

Start by assessing how strong the rental and retail market is in your desired location. What are homes selling for? Is there a high vacancy rate? 

You’ll also want to understand property tax in the area. Different cities, regions, and municipalities all charge different property tax rates. 

Next, it’s time to learn about what makes the area a great place to live. 

What kind of amenities, like parks, schools, and gyms, are nearby the homes you’re looking at? Is there a healthy job market in the area? And don’t forget about the crime rate. Is this a neighborhood where residents will feel safe? 

Some of these criteria will depend on the type of home, and what kind of residents you’re looking for. For example, schools are much more important near a single-family home than a one-bedroom condo. 

Doing this preliminary research is a great way to get started. But once you’re ready to move forward, you’ll want to connect with a real estate agent who knows the area well. 

A condominium or a single-family home is usually the best way to get started with real estate investment. 

Commercial and multi-family buildings can be very lucrative investment properties. But you shouldn’t try to jump in with a property like that your first time. These buildings are incredibly expensive, and managing them is much more complex. 

Whether a condo or single family home is better for you depends on your budget and financial needs. 

Because they are smaller, condos will typically be much cheaper than a detached home. There’s also less labor involved in upkeep and maintenance, because external work on the building is handled by the strata association, paid for by owners’ fees. 

However, you can generally expect faster resident turnover at these homes. Often, though not always, these renters aren’t yet ready to settle down long-term. 

Single family homes are much more expensive, but can also command higher prices in rent. Plus, residents are more likely to be looking for a stable, long-term home to raise their families in. 

If you can afford the higher purchase price and can budget for more maintenance and repairs, single family homes can be an ideal investment. 

Ideally, an investment property will continue to rise in value long after you purchase it. 

There’s no way to guarantee that a home will appreciate. But there are a few attributes you can look for, to assess a home’s appreciation potential. 

First of all, some housing markets are just stronger than others, and consistently appreciate in value over time. In other markets, homes may fluctuate in value, stay static, or even decline. A common example would be that housing markets in urban centers are usually stronger than those in rural, sparsely populated regions. 

Some types of property, such as waterfront property, can be more likely to appreciate, too. 

Also, if your home needs some affordable, minor improvements, you may be able to boost its value by updating. But beware fixer-uppers and home-flipping! These risky ventures are often much more costly than expected, and don’t deliver the same profits as they do on TV.

The most important piece of budget advice is to never buy a home you can’t afford, no matter how much you think it may appreciate in value. 

There is more risk involved in real estate investment than when buying a principal residence. You need to make sure that you have the financial cushion to weather unexpected costs like a vacancy, or eviction, or decline in value. 

A good rule of thumb is to pay no more than 12x annual rent for an investment property. You should also plan to pay more for the down payment. Expect to put 20% down, if not more, on a rental property, compared to as little as 5% for a primary residence. 

Choosing the right rent means you’ll find residents more quickly — and not just any residents, but people who will love your home for years to come. 

Don’t just choose a number that works for you out of thin air. Research average rents in your area, then tweak them based on factors like your home’s size, age, and nearby amenities. 

Rent needs to cover your annual mortgage, property value, and insurance costs, plus a generous margin for maintenance and repairs. Having the ability to handle some repairs yourself, or building relationships with reliable, well-priced professionals, is an important way to keep costs down.

A good rule of thumb is to charge 1% of the purchase price in monthly rent. While you may not be able to follow this guideline precisely, it is a good way to ensure that the rental property is profitable. 

If you want to provide your residents with a welcoming home they can love for years, you need to stay on top of maintenance and be responsive to their needs. To deliver the level of service your residents deserve, approach renting out your home as a part-time job, not a passive income stream.

If you don’t have time to devote hours every month to managing your investment property, consider working with a rental partner like Belong. 

We are a modern, people-focused alternative to the inefficient, low-tech property management companies of yesterday. Not only do we help owners with the time commitment and costs of maintenance, but we help you set the best possible rent, and find residents who love your home as if it was their own. 

Get in touch and find out if your home qualifies today.

Buying an investment property? Looking for an investment property is different from a home you’ll live in. Know what to look for when buying an investment home.

Buying An Investment Property? Here’s What To Look For

Inherited a property? Whatever you decide next, this guide explains your options after inheriting property, and the key factors you’ll need to consider. 

Inherited a Property? Here Are Your Options

Inheriting a home can be as exciting as it is emotional. 

Often, owners inherit property after the passing away of a loved one. Suddenly, they’re navigating the world of homeownership while trying to process a tragic event. 

If this is your experience, it’s normal to feel frustrated and overwhelmed. You — and anyone else who’s co-inherited the home — need to decide whether to sell, rent it out, or move in. But how can you make a smart financial decision during such a challenging time? 

Only you can decide how best to move forward. 

But if you approach this decision with patience and care, you might find owning property to be incredible for your financial health and goals, no matter why you inherited it.

Today, we’re here to explain what your options are after inheriting property, and what key factors you’ll need to consider. 

First things first — is the home paid off, or is there an outstanding mortgage? 

This is the biggest variable that determines how you’ll proceed. The first thing you should do after inheriting a home, if its mortgaged, is get in touch with the loan provider. 

Here are a few immediate questions to ask: 

Does the mortgage have a co-signer? If so, they will be required to keep making the mortgage payments.

Does a surviving spouse live in the property? If so, they can typically keep making payments, whether or not they were on the original loan.

Will the lender allow you to take over the mortgage? Some loans allow the transfer of monthly payments, known as an assumable mortgage. Others will require it to be paid off in a lump sum. 

If there’s no co-signer or surviving spouse, you’ll need to assess whether you can pay it off yourself. 

If you can afford to pay off the outstanding balance at once, doing so is the best choice — and depending on your lender, may be the only option. 

Assess whether the homeowner took out any life insurance or mortgage protection insurance policies. If they did, you may be entitled to a payout that could cover the remaining cost. 

If the home’s mortgage is assumable, you may be able to take over monthly mortgage payments. You’ll need to discuss the details of the loan with the provider, to figure out if this is an option for you. 

Be sure to take the mortgage into account when you’re assessing whether to sell, rent out, or move into the home. If you can’t cover the assumed payments, or the lender won’t let you take them over, selling the home may be your only option. 

When you inherit a house, it adds to your wealth! That’s a good thing — but it does mean paying some additional taxes. 

Generally, you’ll want to consider capital gains and estate taxes when you’re inheriting a home. But the good news is that there are exemptions from both taxes that can greatly reduce, or even eliminate, the costs you need to pay. 

In the United States, only estates worth over $11.7M are subject to federal estate taxes. State estate tax thresholds vary, but they’re typically high as well. 

So, if you need to pay estate taxes, consider yourself lucky. You’ve inherited a very valuable property! 

There are also strategies to reduce what you owe in estate taxes, such as establishing a trust. If the estate is inherited by a surviving spouse, they are generally exempt, too. 

You’ll only need to pay capital gains tax once you sell the property you inherited. Capital gains is charged on the rise in value (the capital gains) between when you acquired the home, and when you sold. 

There are some exemptions to know here, as well. But importantly, they typically apply only if the home is your primary residence. If you’ve inherited the property, that is less likely to be the case. 

Typically, your first $250,000 of capital gains are tax-exempt, or $500,000 for a married couple. But again, that only applies if the home is your primary residence — meaning you’ve lived there for two of the last five years. Gains above this threshold will be taxed like income, dependent on your income tax bracket. 

It’s safest to assume that unless you move into the inherited home and live there for multiple years, you will not be eligible for a capital gains exemption when you sell.

After assessing the mortgage and tax situation, it’s time to consider how you’ll move forward. After inheriting a home, you have three options — sell the property, rent it out to new residents, or move into it yourself!

If you need housing, or you’re looking to improve your housing, this can be an ideal option. It’s tempting to see an inherited home as “free housing.” But homeownership is never free, even if the home is completely paid off. 

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