Blog – Page 14

Decisions Owners Renting Their Homes Need to Make

June 30, 2015 By Chris

Renting a house seems fairly straight forward, right? Create an ad, find a tenant, collect the rent. It’s not quite that simple though. There are a myriad of things you should consider before renting your home and once you do decide on renting you need to make decisions before you place that “for rent” sign on the front lawn.

Representation

With websites like CraigsList, it’s easy to put together your own ad for the house you’d like to rent but what is going to set your listing apart from the thousands of others that are added every day? A Realtor can not only create an appealing listing but also market it as they would a property that was for sale. The listing created by a Realtor will also be available through the Multiple Listing Service (MLS) and be seen by other Realtors assisting potential tenants in the search for a home.

Price Point

Deciding how much to list your property for rent is probably the most obvious decision you’ll need to make. If you’re seeking the assistance of a Realtor, make him or her aware of how much your monthly mortgage payment is and any other expenses, such as an HOA payment, you expect the tenant to cover. A Realtor will be able to evaluate the area market and set a price that will maximize your income but also make the property appealing to a tenant. You should also decide if you will be willing and able to negotiate on a rental price.

Security Deposit

Local custom or law will most likely determine how much money you’ll require from the tenant to be held as a security deposit. In Florida, there is no law limiting the amount of money a landlord can request from a tenant to be held as a security deposit. Typically landlords ask for a deposit equal to one to two months’ rent. The higher the the security deposit is though, the smaller your tenant pool will be.

Rules & Regulations

As a landlord, you’ll want to make sure both you and your tenants are observant of local laws and community regulations. Make your tenants aware of the community quiet hours, trash & recycling practices, and parking requirements. You’ll also need to know what the tenancy capacity laws are and make sure your tenants adhere to the laws.

Pets

As the landlord, it’s completely your prerogative whether your tenant can house a pet in your property. If you prohibit animals, you may be, again, limiting your tenant pool. If you do allow animals, you can require a non-refundable pet deposit, usually $150-300, to cover the cost of hair removal, stain clean up, and damage not caused by normal wear and tear.

Making these decision prior to placing your home for rent, will allow you to make the most of your marketing efforts and find the tenant most suited to your property.

What To Look For During a Walk Through

June 23, 2015 By Chris

Looking at houses that could potentially be your next home can be a lot of fun. It’s almost voyeuristic…you get full access to a stranger’s home. You can get lots of decorating ideas or peak into the owner’s lives through pictures and other items around the house. But you’re viewing these houses for a reason…to find one to call your own. Use our checklist for what to look for during a walk through.

Tip: assign a point value to each item depending on your priorities and the condition of the item, add the score up at the end of each walkthrough and use the score to help you decide which house meets your needs and wants.

Exterior

Roof
Siding/brick/stucco
Windows
Doors
Landscaping
Fencing
Sidewalks/driveway
Deck/patio
Pool
Garage/shed

Living Areas

Carpet/hardwood/tile
Windows
Doors
Walls
Molding and baseboards
Lighting (natural & electric)
Climate systems (heat & AC)
Closets & storage
Electrical outlets

Kitchen

Appliances
Fixtures
Cabinets
Pantry
Countertops
Flooring
Eat-in
Layout
Plumbing
Electrical outlets
Electric or gas hookups

Bedrooms

Number
Carpet/hardwood
Windows
Doors
Windows
Molding and baseboards
Lighting (natural & electric)
Closets
Electrical outlets
Size

Bathrooms

Number
Flooring
Window(s)
Door
Fixtures
Tub
Toilet
Mirror
Countertops
Storage
Shower stall
Lighting (electric & natural)
Electrical outlets

Miscellaneous

Privacy
Accessibility to transportation
Crime rate
School rating
Traffic
Parking
Neighborhood offerings (parks, playgrounds, rec centers)
Neighborhood condition (well maintained homes, low vacancy)

Flip it or Rent It?

June 16, 2015 By Chris

If you’re attempting to build your investment portfolio with a foundation in real estate the most common question many investors have is: should I flip it or rent it? Before investors attempt to answer that question they should heed the advice of “buy cheap”. Purchasing a property at a significant discount will prove to be easier to profit from regardless of which avenue investors follow.

Flip It

Flipping a house allows an investor to get in and get out without much time invested. Flipping may be a more appealing option to investors if the market prices tend to be higher than average. The profit margin will depend on how much work needs to be done to the house after purchase and how quickly it can be sold after the repairs and updates are made. Investors also need to consider the costs associated with selling a property including realtor commissions, closing fees & taxes, and any buyer assistance than may be negotiated. Flipping properties reduces the investor’s liability considerably since the home will be vacant.

Rent It

Renting a house is more appealing when the property purchase price isn’t as deeply discounted than the average market prices or the average market prices don’t allow for a reasonable profit of at least 10% of the initial purchase price after closing costs. Renting allows for the investor have a steady stream of income and a source of equity to draw on should the need arise. Holding on to a house for several years also for the property appreciate in value and possibly earn a larger profit.

Both options have the potential for making solid profits for an investor. If considering renting a house, investors should evaluate their readiness and ability to be a landlord. Investors should also research the nuances of a specific market and have a well outlined plan for rehab if considering a buy and flip.

What Is Radon? And Should I Be Worried?

June 2, 2015 By Chris

Over the course of buying or a selling a home, you may hear about radon. Many people may ask “What is radon?” and “What’s the concern?” Radon is a radioactive gas that is virtually undetectable by our five senses. It’s the by-product of radioactive decaying uranium found naturally in rock, soil, and water. As the uranium breaks down it releases radon gas which rises through the ground into the air. It can also be dissolved into water.

Should I be concerned?

According to the Surgeon General, radon is the second leading cause of lung cancer among Americans, just behind smoking. Breathing radon gas and in some cases drinking radon in water over an extended period of time increases a person’s risk for health complications. The EPA has stated that any exposure over 4pCi/L is considered high and should be avoided. Uranium can be found in the ground in all fifty states and therefore so can radon. The EPA has classified the country into three zones depending on the levels of radon found in the area. Florida is classified mostly in zone 2 with a few counties listed in the higher zone 3. Radon gas can enter a home through cracks in the foundation, windows, utility fittings, and sump pumps.

What should homeowners do?

Homeowners and buyers should both educate themselves on radon. If a homeowner is considering selling their home, they can have the home tested prior to listing. Sellers should be aware that any radon testing and their results need to be disclosed at the time of listing. If a person is considering purchasing a home, a radon test can be requested as part of the home inspection. If the results come back 4 pCi/L or higher the EPA recommends that a plan to mitigate the radon be agreed upon. There are systems that can be installed and/or repairs made to the home to reduce the amount of radon entering a home.

While the EPA and Surgeon General have acknowledged radon is a serious issue, it doesn’t spell disaster for a home’s sale. Radon can be found in all types of homes, old and new. Mitigation systems and home repairs and modifications can reduce the levels in a home making it safe for occupation and an attractive property to market.

Prepare Your Home For Vacation

May 26, 2015 By Chris

Summer is almost here and for many Americans, it’s prime time for vacation. vacation should be a relaxing, stress-free time not one spent worrying about your home. Follow our tips to prepare your home for vacation and one you’re at your destination sit back and relax.

Keep up appearances.

Make it appear as if someone is frequenting the house at different hours of the day. Stop mail and newspaper deliveries for the duration of your trip and set timers on your lights to go on and off. Mow the grass and clean up the yard; if you’ll be gone for longer than a week consider having someone maintain the grass for you. Park your car in the garage, if possible, to deter thieves or damage. Ask a trusted neighbor to stop in your home once or twice during your time away to check on things, pick up any packages that may be delivered by overnight carrier, and make sure doors and windows are still locked.

Prepare your home.

Before leaving, unplug all appliances that won’t be in use during your trip. Set your thermostat to a temperature that will reduce the use of air conditioning. Most hot water heaters have a setting for vacation or non-regular use. Turn off the water valves directly under sinks, the dishwasher, and washing machine. If you have a pool, check the water levels before you leave and treat as necessary. Make sure your filter runs at least 8 hours a day while you’re gone; for this a filter time is an inexpensive investment. Clean out your refrigerator of any food that many spoil while you’re gone and take all trash out before you leave to prevent unpleasant smells from developing or attracting pests.

Prepare Your Home For Vacation

Notify someone.

Let a trust neighbor or a nearby relative know of your vacation plans and an alternate way to contact you in case of an emergency. Notify your home security system company of your plans as well of anyone who has been given access to your home in your absence. Some local police departments will have a patrol officer drive by your home during your vacation to make sure things don’t look out of place, others will simply take note of your contact information in case there is an emergency while you’re gone.

A few small but proactive steps will go a long way to ensure you have an enjoyable summer vacation.

Ready to Own a Rental Property?

May 19, 2015 By Chris

You’ll hear the same advice from multiple professionals, if you want an asset that will continually appreciate over time real estate is the way to go. It’s true that real estate is a solid investment. Real estate investing isn’t fool proof though so, how do you know when you’re ready to own a rental property?

Finances

You shouldn’t go into a rental property without a solid financial footing. The same closing costs you encountered during your primary residence closing will be due when you close on an investment property. You’ll also need to be able to make any necessary improvements to make your property attractive to potential tenants as well as meet the monthly mortgage obligations until a tenant moves in.

Many investors use the equity in a property they already own to purchase another property. If you’re able and willing to use the equity in your primary residence you’ll possibly be able to pay cash or pay a sizable down payment to reduce the amount of money you’ll need to finance.

Business

Real estate investing is a multi-faceted business and you should approach it as such. Define your goals for real estate investing. Are you looking to make a quick profit or are you in it for the long term? If you’re in it for the long term you need to develop a budget for upkeep, marketing, general overhead, and unexpected issues. You’ll also need to determine how you’ll meet these costs, how you intend to handle emergencies and disputes with tenants.

Research

Purchasing a property that will costs a lot of money to repair isn’t necessarily worth the discount you many get on the price. The same goes for an immaculate home that will only rent for enough to simply cover the mortgage. You will need to research potential areas for not only home prices but also rental prices. Potential investors should also research the local laws related to rental laws to be fully aware of what is expected not only of the landlord but of the tenant as well.

Logistics

Finally, as an investor, you’ll need to determine how you’ll handle the logistics of being a landlord. You’ll need to collect rent, manage accounts, and maintain the property. If you don’t want or are unable to handle these issues you can hire a management company but be prepared to account for this expenditure in determining your profits.

Successful investing can be measured in many different ways. Defining your goals and assessing if you can reach these goals with the resources available to you will determine your ability to become a successful real estate investor.

New Construction or Existing Home?

May 12, 2015 By Chris

When you’re looking for a new place to call home, you usually have an ideal in your mind. The idea of the perfect home is extremely subjective. An older home full of charm may be perfect for one person while a brand new condo may be perfect for another person. One size definitely does not fit all when it comes to home buying. While you may have your mind made up, it’s still a good idea to be informed about all your purchasing options and their pros and cons.

Existing

Pros

Older homes tend to have more character and individual looks than the newer cookie-cutter mass produced homes.
Existing homes are more readily available than new construction.
Buyers are better able to negotiate the price on existing homes.
With an existing home, the neighborhood is already established so you are aware of traffic, location of shopping and schools, etc.

Cons

Existing homes will likely require more maintenance and possibly be less energy efficient.
Floor plans are difficult to change.
Decor and appliances may be dated.

New Construction

Pros

Everything is brand new!
New construction allows you to choose or design a floor plan that suits your needs and wants.
All appliances and utility systems meet the latest standards of energy efficiency.
New construction comes with a builder’s warranty.

Cons

Unless you hire an independent builder and purchase land outside a planned community, new construction homes will be limited in their variety.
Construction takes time, anywhere from 3-6 months.
Many new planned communities have homeowner associations.
Builders are less willing to negotiate price breaks with buyers.

Just like your ideal home style, buying a new construction or existing home will come down to personal style, needs, wants, and time.

Hurricane Preparedness Guide

May 5, 2015 By Chris

Hurricane season doesn’t officially begin until June 1 but you should be well prepared for it before then. There’s more to being prepared than simply having a flashlight and some batteries. Hurricanes are a major safety concern and each storm is unique. Follow our hurricane preparedness tips to get prepared and stay safe should a storm set its sights on Florida this year.

Hurricane Preparedness

Supply kit. Your supply kit should include first aid supplies, enough drinking water and non-perishable food for each person for three days, a battery-operated radio, flashlight, batteries, baby formula and diapers (if applicable), three days’ supply of any necessary medication (if applicable), a map of the area, wet wipes or baby wipes, and garbage bags. The supplies should be kept in a waterproof container that’s easy to move and readily accessible to you; plastic storage totes work well. Should you need to leave your home you should also bring identification for all family members as well as credit cards and cash.
Develop an emergency plan. Know how to exit your home safely through multiple exits. Assign meeting areas immediately outside your home and also at a separate location should your family be separated. Determine if you live in a hurricane evacuation area and learn how to get to the evacuation route as quickly as possible. Identify a safe place to evacuate to or locate several shelters outside the evacuation zone.
Insure your home. It’s best to reevaluate your home owner’s insurance policy once a year to assess if your coverage will meet your needs. Even if you don’t live a flood zone you may want to consider flood insurance. You may also want to inquire about additional coverage should you be unable to return to your home in the event of severe damage. It’s also best to keep a photographic inventory of your possessions and store the photos in a fire box, safety deposit box, or other secure location to help make filing a claim easier.
Stay informed. Should a storm threaten your area monitor the weather reports and announcements from officials. Be aware if evacuation orders are voluntary or mandatory. If you do not evacuate under mandatory orders you may not receive help during the storm should you need it.

We hope it’s a safe and sunny summer for you!

Pros and Cons of Living in a HOA

April 28, 2015 By Chris

The perfect home or neighborhood is such a subjective topic. One person’s urban oasis could be another person’s over-developed nightmare. The topic of a home owner’s association (HOA) isn’t exempt from opinions either. So what should you consider when deciding whether or not to live in a home owner’s association controlled community?

The Pros

Maintenance. Many HOAs handle the maintenance of lawns, planters, and common areas. Trash removal may also be a responsibility of the HOA. In colder climates, snow removal is also often handled by the HOA. This amenity can appeal to older, physically limited, or time-crunched residents.
Appearance. The HOA will have regulations for how the homes in the neighborhood should appear. The extent of the regulations can range from simply keeping the outside areas of homes free from clutter and in good condition to extreme rules related to approved paint color palettes and approval from the HOA before making any changes to your home.
Management. All HOAs have either a board or a management company, sometimes both, that are tasked with enforcing the rules of the association. If you have a conflict with a neighbor, the HOA may be able to mediate the issue without confronting your neighbor directly. The management will also organize votes over proposed changes to the neighborhood and handle any third party contractors (trash, landscapers, etc.).
Amenities. Some communities have a common building that can be reserved for entertaining, a gym, a pool, playgrounds, tennis courts, and/or sports fields.

The Cons

Fees. HOAs require each property owner to pay dues to cover the costs of running the HOA and maintaining the neighborhood. These dues could be paid monthly, quarterly, or yearly. The dues can be raised at any time and a larger payment, called a special assessment, can be assessed if a large improvement, such as a roof, needs to be made. The HOA fees are also not tax deductible.
Regulations. HOAs can be strict when it comes to the by-laws they have. Some HOAs can require approval before you can rent out your home. If you violate the by-laws, you can be fined, possibly multiple times until you remedy the issue.
Foreclosure. If you fall behind on your dues, the HOA can foreclosure on your home, although this is usually a last resort but still not an option you don’t want to risk.

4 Tips for Buying a Foreclosed Property

April 21, 2015 By Chris

Since the financial crisis of 2008, foreclosures have become a staple of the real estate market. Bank owned properties have been advertised as a steal for home buyers and then can be there are things to consider when purchasing a foreclosed home.

Find out what you’re buying. Foreclosed homes are “as-is” properties. Banks are unable to give a disclosure on homes that are being sold to remedy a foreclosure so it’s imperative that you obtain a comprehensive property inspection and a mold inspection. Be aware that most banks have very little, if any, room to negotiate when it comes to repairs so know what you’re willing to accept and what you’re not. Investigate the area as well. If the neighborhood is flooded with foreclosed or vacant homes, values may continue to fall and hurt your long-term investment.
Put your best foot forward. Again when it comes to negotiating many banks are limited so it’s best to make your strongest offer immediately. Like most sellers, the bank will want to see a pre-approval letter from a mortgage company for any offer that needs to be financed. You should also be prepared to close as soon as possible with ready access closing funds and a clean credit history.
Time may not be on your side. Getting an offer approved on a bank owned home is a notoriously slow process. There is usually an asset manager at the bank responsible for all the properties in a certain area and they need to review and approve or deny all of the offers received. It can be weeks before the bank responds to the offer. Once the offer is approved though the bank will want to move fast to close the deal so they can end their liabilities on the property.
Don’t skimp. Bank owned properties can be rife with issues ranging from clouds on title to unseen physical damages. Purchasing title insurance and hiring certified, experienced inspectors will help protect you from unexpected issues that can arise.

If you’re considering purchasing a foreclosed property, working with a Realtor experienced in bank owned properties will make the process easier for all parties involved. Our team is ready to assist you contact us today at (727) 642-9107.

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