Frequently Asked Questions

Who is Rental Shop?

Rental Shop is a company set up to help investors find and invest in leased Single and Multi-Family rental homes that generate cash flow day one. Our platforms are designed to help easily facilitate the procedure of real estate investing. Rental Shop provides research, analytics and insights to evaluate and purchase properties. From viewing the homes to securing the property, Rental Shop makes investing in U.S. real estate from anywhere in the world as simple 1,2,3.

Why choose Rental Shop?

As a company with over 20 years of expertise, we’ve created a platform that addresses all of the inefficiencies in the current market, reducing transaction costs and we bring transparency to the investment process. Our platform takes the guesswork out of investing in both commercial & residential rental properties while maximizing the value to investors and increasing earnings.

How can I be sure that the properties are a good investment?

At Rental Shop, we are about transparency. We guarantee first lien position on all investment properties. Unlike the traditional investment process, we make available a lot of information about a property before investors enter into a purchase contract. We stand behind our products and service with our Rental Shop Guarantee.

What is the Rental Shop Guarantee?

Rental Shop provides a 30-day guarantee to Buyers of Property purchased under a Rental Shop LLC Purchase and Sale Agreement via the Services. This guarantee applies if you, as a Buyer, are not satisfied with a Property purchased from a Seller via our Services and you notify Rental Shop in writing of your dissatisfaction within 30 days of the closing. Certain other conditions apply such as there must be no material changes to the condition of the Property since the closing. Only one Property per Buyer is covered under this guarantee and only one guarantee claim may be made by any Buyer during any ninety (90) day period.

How do investors earn returns?

Returns are earned from the rental cash flow on your investment properties and any appreciation in the property value when it’s sold. If you decide not to self manage, a Property Manager can be appointed to collect rents, pay expenses and remit the net income to each investor.

How does Rental Shop estimate the value of a property in the marketplace?

Rental Shop provides a valuation range which represents the highest and lowest adjusted values for comparable. The Comparable Value and the highest and lowest adjusted values used for the range are based upon at least 3 properties sold within the past 12 months and that are the most similar to the property in location, size, condition, age, style, and design.

Where do properties in the Rental Shop marketplace come from?

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Rental Shop and it’s numerous partners across America constantly identify, review and evaluate real estate opportunities daily. We are a single source for investors looking to invest in the real estate market. Our platform and formulas help to make this process smooth and simple. The properties we list are broadly sourced, all the way from small retail sellers to mid and large institutions.

What types of properties are eligible?

The properties that qualify for our platform range from commercial space to single & multi-family units.

If the Seller is a larger institution, why are the homes being sold?

Much like a retail investor, an institutional investor may have many reasons for selling a property. A few examples, but by no means all reasons may be:
• The seller was not able to accumulate enough homes in a specific geography to obtain the economies of scale desired
• The seller is reshaping the broader portfolio to focus on a more specific strategy or type of property
• The investors wish to have capital returned or to redeploy funds into other geographic areas or “fix-up” properties

Is Rental Shop a turn-key solution?

The choice is yours. Rental Shop is a marketplace solution that allows investors to make the best decisions for each investment property and we believe you should make that choice based on an objective analysis. Unlike traditional turn-key operators, we don’t require the use of an affiliated property manager for any of the properties listed through us.

Is the Sales Price negotiable?

Investors can secure all available properties at predetermined list prices, and there are also properties designated by sellers to accept offers from investors. Rental Shop works closely with each seller to establish listing prices, determined by taking into consideration a multitude of factors, including local market conditions, market rent and the condition of the property based on the inspection. Our process helps to avoid the uncertainty and delays commonly encountered in buying investment properties at auction and allows investors to transact efficiently and with certainty of execution.

Who can I contact if I have questions about a property?

We’re here to help. Please contact us by sending an email to contact@rentalshopproperties.com or call us at (973) 856-6788.

Can I use a real estate agent?

Yes, investors can engage with our local market experts or use their own agents. If you have an agent you’re already working with, or you are an agent interested in establishing a commissioned arrangement with Rental Shop, contact us contact@rentalshopproperties.com

Who performs the property inspections? How are the inspections done?

Rental Shop, as part of certifying all properties before they are available on the marketplace, engages experienced third party inspection firms to complete a comprehensive visual inspection of the property, and will make this report available to you. The company or individual performing the inspection will inspect the condition of the property, the major components and indicate items that need repair, if any, in a detailed property report.

What is an Appraisal? What is a BPO?

A Broker Price Opinion (“BPO”) is a valuation analysis performed by a local licensed real estate broker and takes into consideration the condition of the home and the local market activity. BPOs are often used by investors and lenders to value investment properties. A BPO is different from an appraisal which is performed by a local appraiser.

Who manages the property that I purchase through Rental Shop?

At Rental Shop, we believe that you should have choices. You can choose to manage the property yourself, or choose from a list of Certified Third Party Property Managers (“RCPM”) in each market. The RCPMs are experts in their field and have passed a thorough diligence process prior to being certified.

Will the current tenant stay in the home after I purchase the property?

Each home that is occupied by a tenant is subject to a lease. Each property page includes a lease summary listing the most important terms of the lease. In addition, at closing you will receive a copy of the lease for your records. The tenant is obligated under the terms of the lease to make their rental payments and as the new owner you will be purchasing the property subject to the current lease.

Can I re-sell my property through Rental Shop if I decide that I no longer want the property?

Of course! We believe in quality service and building relationships. We would consider it a true honor to continue that relationship in any form.

Can I use leverage (financing) to purchase a property?

Absolutely, and we might be able to help! Rental Shop can refer you to several integrated lending institutions offering investors diverse loan product options. You are also free to engage a lender of your choice, however, please note that there are no financing contingencies in the Purchase and Sale contracts.

What closing costs will be included in the purchase of a property?

Closing costs shall be paid as is customary in local markets, and shall include discounts negotiated by Rental Shop to lower transaction costs for Buyers and Sellers. Closing costs often include transfer taxes, title search and title insurance fees, loan origination fees (if applicable), recording fees, association fees and document preparation/closing fees. A good faith estimate of closing costs is provided for the convenience of Buyers, and actual closing costs will be outlined on the closing statement.

How quickly can I close on my property?

Rental Shop tries to facilitate closings within 14 days of a signed purchase and sale contract. The closing date shall in all events occur within 30 days from the contract date unless otherwise agreed by Buyer and Seller.

How are expected returns (yields) calculated?

Expected returns are calculated based on current rents, purchase price, and by incorporating likely costs associated with operating a single family rental. The likely costs are based on the input of industry experts and include vacancy, property taxes, property management, repair and maintenance, and a number of other contributing factors. While these estimates provide a solid baseline, investors are encouraged to use the financial calculator to test the sensitivity of their investment to these as well as other assumptions influencing the performance of their investment.

Can I invest as a foreign investor?

U.S. and foreign investors can buy properties through Rental Shop. Our marketplace platform is perfectly suited for investors that are not located in the property markets.

Can I invest through a limited liability company, trust or partnership?

Absolutely! You can invest through any vehicle which can hold title to real property. At closing you will have the opportunity to indicate how you would like to hold title.

How do I know whether the tenant will continue making rental payments?

Part of the Rental Shop Certification process is reviewing the payment history and selection criteria for each tenant. While we can’t guarantee that a tenant will never miss a payment, Rental Shop will not list properties where the tenant is delinquent on their rent at the time of the listing is first posted.

When are new properties added to Rental Shop’s inventory?

New properties are being added weekly, so check with us as often as possible.

What is the difference between Gross Yield and Net Yield?

Both Gross and Net Yield are metrics aimed at capturing the return on your investment. The difference being that Gross Yield focuses on the total income generated and does not incorporate expenses, whereas Net Yield accounts for expected operating costs. Gross Yield is calculated as the annual rent / total purchase price and Net Yield is calculated by subtracting estimated annual operating costs and capital expenditures from total annual rent collected / total purchase price.

How is appreciation calculated?

Appreciation is determined as an estimate based on property values and can be influenced by many factors, some specific to the local market and some the broader economy. The appreciation forecasts provided have been produced by well regarded forecasters in the housing markets. Despite the acumen of these forecasters, investors are encouraged to use the financial calculator to test the sensitivity of their investment to all assumptions.

How is the market rent determined?

Rental Shop is about transparency, and we present data from multiple sources to help you evaluate your investment alternatives. For market rents, we present data from third-party data providers which estimate rents, as well as information from local property managers who know the local market. It is important to understand market rents as they could indicate compelling investment opportunities if the current rent is below market.

What are the advantages of selling my investment property through Rental Shop?

The Rental Shop platform is designed to net Sellers more money and simplify the selling process. When investors want to sell investment homes they typically sell them vacant, which involves waiting for the tenant to move out, sprucing up the property to sell, and listing it on the MLS. Between the lost rent, carrying costs and commissions, the true cost of this process is often in the 10-12% range. With Rental Shop, rents are received right up until closing, tenants can stay in the home, and there is no for sale sign in the yard.

Do I have to pay a fee to invest?

The fees associated with the Fund will vary by fund. Please closely review the details of each fund to determine what fees are associated with the investment.

Are these Investments liquid? When will I get my investment back?

Private real estate investments of the type listed are not traded on a public market and involve transferability restrictions. As a result, your shares in these investments cannot be easily traded, sold, or otherwise converted into cash. Each investment has a unique projected “hold period,” which is the approximate period of time that investors can expect to hold the investment prior to any “exit” or maturity date. These hold periods vary by investment, and can vary from 1 year to greater than 5 years; they are also estimates only, and actual hold periods may be longer or shorter than the periods initially projected. Expected hold periods are generally described on the “Overview” tab of any particular investment opportunity. Investors should review such expected hold periods carefully and consider whether such hold periods are suitable for them in view of their own investment objectives.
There are not, of course, any guarantees with respect to any of the investment opportunities listed with Rental Shop, and there can be no assurance that actual return rates will meet those that were projected or even that investors will have all of their investment capital returned to them. Investors should review closely the “Risk Factors” described in the investor package for any particular investment opportunity.

Which bank account are funds transferred into?

Funds relating to investments are deposited into an FDIC-insured (up to $250,000) bank account owned and managed by the Fund. Funds are kept in this account until the amount of funding ultimately agreed upon is reached and the underlying real estate acquisition process begins; sometimes this can be several weeks or more following the fund raise.
If the underlying project does not close or the raised funds are otherwise not accepted, 100% of your funds are returned directly to you.

How do investors earn returns?

The frequency of any investor returns depends on the type of investment. Typically, equity investments have distributions on an annual basis. An investor’s share of any distributions is generally transferred directly into the investor’s bank account.
Payout schedules cannot be guaranteed, of course, nor can there be any guarantee as to return rates or the return of investor capital generally, regardless of the structure of any investment opportunity.

What is the minimum investment amount for a Fund?

The minimum investment amount will vary per Fund offering. Please closely review the details of each fund to determine what fund investment best fits your investing criteria.

Do you allow international investors?

International investors may currently invest through US-based entities. Please contact us via email contact@rentalshopproperties.com or by calling (973) 856-6788 for more information.

Can I invest through my LLC, LP or Trust?

Yes, you can invest through an entity or trust. We will likely need some additional information concerning an investing entity, such as the articles of organization or the governing trust documents. Generally speaking, each owner of an entity, or each beneficiary of a trust, must themselves be an accredited investor, or else the entity must have total assets in excess of $5,000,000. Please contact us if you’d like us to get started on qualifying your investment entity or trust.

What is an accredited investor?

An accredited or sophisticated investor is an investor with a special status under financial regulation laws. The definition of an accredited investor (if any), and the consequences of being classified as such, vary between countries. Generally, accredited investors include high-net-worth individuals, banks, and other large corporations, who have access to complex and higher-risk investments such as venture capital, hedge funds and angel investments.
The ostensible purpose of the status designation is to protect potential investors from risk. The assumption underlying accreditation is that individuals or organizations who qualify will have sufficient financial sophistication to understand and take on the risks associated with certain investment offerings. Laws may require that some types of financial offerings may only be made to accredited investors.

What is the difference between “current” and “total” return?

In many cases, a portion of the return may get paid current (quarterly) and another portion might accrue until the end of the life of the investment, when it is scheduled to be paid out in a lump sum along with the principal. The current return represents the cash distributed to investors throughout the life of the Note, on a quarterly basis.

What is an Earnest Money Deposit?

Earnest Money is a deposit that is made by the buyer as a display of good faith in the transaction. It is held by the Title company, and the funds will be used as part of the buyer’s down payment or closing costs when the transaction is finalized. The deposit may be returned to the buyer, depending on the contingencies in the Purchase and Sale Agreement (PSA); otherwise, it will be remitted to the seller. The terms of the EMD are spelled out in the PSA.