October 19th, 2020

Real estate is a great investment, especially in our Bozeman, MT market. If you’re thinking about becoming a rental property owner or are already one, here are some tips and things to keep in mind while owning a rental.


First, weigh your risks and rewards:

Investopia.com lists some risks and rewards to help determine if an investment property is right for you:


  • Although rental income is passive, tenants can be a pain to deal with unless you use a property management company.
  • If your adjusted gross income(AGI) is more than $200,000 (single) or $250,000 (married filing jointly), then you may be subject to a 3.8% surtax on net investment income, including rental income.
  • If your adjusted gross income(AGI) is more than $200,000 (single) or $250,000 (married filing jointly), then you may be subject to a 3.8% surtax on net investment income, including rental income.
  • Rental income may not cover your total mortgage payment.
  • Unlike stocks, you can’t instantly sell real estate if the markets go sour or you need cash.
  • Entry and exit costs can be high.
  • If you don’t have a tenant, you still need to pay all the expenses.


  • Because your income is passive, notwithstandng the initial investment and upkeep costs, you can earn money while putting most of your time and energy into your regular job.
  • If real estate values increase, your investment also will rise in value.
  • You can put real estate into a self-directed IRA (SDIRA) .
  • Rental income is not included as part of your income that’s subject to Social Security tax.
  • The interest you pay on an investment property loan is tax-deductible.
  • Short of another crisis, real estate values are generally more stable than the stock market.
  • Unlike investing in stocks or other financial products that you cannot see or touch, real estate is a tangble physical asset.

Your rental investment is a business

Your rental property will be a source of extra income and treating it like a business is imperative.

  • You’ll want to be familiar with federal, state and local laws concerning rental properties to avoid potential legal problems.
  • Keep your finances organized and thoroughly screen possible tenants with applications and credit checks.
  • Protect yourself from possible liability claims by getting landlord insurance.
  • Make sure your rental unit is safe and up to code by installing and checking smoke and carbon monoxide detectors.
  • Take preventative measures to keep everything in working order
  • Always have a plumber, electrician, handy man and locksmith on hand to address any issues that arise while a tenant is living there.

Should you Hire a Property Manager?

Having a property manager might be a worthwhile investment if you want to have a more hands off approach in real estate investment. Hiring a property management company will alleviate the headache of marketing your property, finding and qualifying renters and dealing with tenant issues. This might also be great option if you don’t live near the property. If you can afford the expense of hiring out the management of your rental, it will save you time and the day to day hassle of managing a property. You’ll want to interview multiple management companies and check out reviews before hiring one on.

Require Renters to Have Rental Insurance

Requiring renters to have rental insurance will help you avoid legal hassles should your renter’s belongings get damaged.  It’s generally low in cost so most tenants can easily take it on.

Note: it’s important to consult a legal professional before adding a clause to your rental agreement about mandatory renters insurance. Laws regarding this issue differ state to state.

Have a Written Rental Agreement

Protect yourself and communicate clear expectations with written rental agreements. In some instances, oral agreements may be legal, but the best way to protect your property and yourself is to put it in writing! State your property rules and communicate clearly the terms of your agreement – deposits, repairs, pet allowances, late fees and term lengths are some of the things that should be included. Check out these lawyer-reviewed, state specific rental agreements.

Be Prepared for Seasonal and Regular Property Maintenance

You can take it on yourself or hire out property maintenance like mowing, landscaping, snow removal and leaf removal. There are lots of local Bozeman area landscape and snow removal companies that will clear your property’s driveway and sidewalk each time it snows. Be sure to also keep up with things like siding, windows and appliance maintenance to prevent long lasting damage.

Keep Photos and a Condition Checklist

Take a lot of photos before you rent your property out in case there is any damage from the renter. Having photographic evidence of your home “before” will help when you go for the final walk through to check for damage. You should get new photos in between each tenant. It’s also a good idea to do a “walk through” with your tenants with a condition checklist when they first move in and again when they move out so everyone is aware of the condition before and after.


What our clients are saying:

Jody Savage is knowledgeable, trustworthy and tireless. I purchased a property this spring (2017) near Bozeman; Jody represented me as well as the seller in the transaction. Jody led me through the entire process because this was the first property I had ever purchased. HOA complications and other details made the purchase more difficult. Jody undertook a boat-load of legwork to make the transaction go smoothly. I hope to work with Jody again.


My wife and I used Jody Savage for the sale of our home in Gallatin Gateway, MT. Jody was exceptional in all phases of our sale. We had multiple offers over asking price and sold our home in two days! Jody uses up to date modern marketing, was extremely professional and knowledgeable regarding our market and addressing our needs. She was great to work with and very responsive to any questions we had. Jody is the best in the business and we highly recommend her services!


Jody was awesome to work with. We were new to the area and she was helpful and knowledgeable about not only the housing market, but schools, and lenders. She worked with my work schedule for showings. Jody also stayed late to write an offer to meet our schedule. I would recommend Jody to anyone needing a realtor.


Jody is FANTASTIC!! We were first time home buyers and she was with us ever step of the way! She never made us feel silly for being new to the process. She definitely knows the area, always kept us up to date on new listings and was just a delight to work with. I would have absolutely zero hesitation recommending her to anyone. Thanks for all the hard-work Jody! We love our house!


Jody is amazing. She knows the market and was able to advise us on all our many concerns. We so appreciated how responsive she was; within minutes of submitting an online request for realtor contact on a house, she had called us. All our communications with her were like that; we never had to wait long to hear back from her. She was patient and always willing to sit down and meet with us. When we found the house we wanted, she worked tirelessly to secure it for us, and she was extremely patient with us. She was easy to communicate with, understand, and a pleasure to work with – I highly recommend Jody!