Posts Tagged ‘Pitfall’

In most instances, when the decision to sell the house has been finally made up, most owners want it done fast; I mean really fast! Whatever the reason is for selling, fast disposal of the house seems to be the most important thing.

Your actions and decisions related to selling of the house are influenced by your reasons of selling. You may have been pressed by the rate of your adjustable mortgage, or maybe you have gotten a job in another state or city. Times like this when the real estate market is depressed may not be the best time to sell your house. However, if it is done right, it is possible to get the right deal.

Selling in Fast Track Mode

o Set the stage for selling of the house before putting up the “For Sale” sign

You have to do the essential preliminary task of preparing the house before shifting to selling mode. This entails some low cost cosmetic jobs to add value to the property and highlight the strong points. The basic rule of the job is to project a property that is clean, tidy and well-maintained. This may involve simple tasks like cutting the grass, or repainting a dull wall panel and fixing the door hinges of your cabinet. You may also have to do garage sale to rid of the clutter which potential buyers might find annoying when inspecting your house for the first time.

o Establish the right price and sell the house fast

Determine the real value of your property and compare this with the other properties within the locality. Your price tag must reflect prevailing trends in the market. If you are in doubt about the real value of your house, it would be wise to hire a real estate appraiser to do the job for you.

o Sell The House through Effective Advertising

A common pitfall of most owners selling their homes is they fail to maximize the use of this most important tool in selling. Advertising, whether in traditional print media or on-line, is your single most effective link to your buyers. The advertisement material should be able to strike at a familiar need of your potential buyers. You must remember that effective advertising is all about giving answers for the needs of your target buyer. If your buyers do not see anything in your house that satisfies their needs, then they won’t budge to look at house even by a bit.

o Start with a Bang, Start with an open house

Make a grand announcement of the sale of the house. Invite your friends and neighbors to come and see your house by organizing a grand open house. Highlight during the activity the strong points of the property and the price at which you are selling the house. You may not know it but the word-of-mouth can be just what you need to get the good deal fast.

o Be an astute negotiator

Start off with the negotiation with a potential buyer immediately. Make the counter offer as soon as the buyer makes known his price offer. You may make some accommodation and meet in the middle ground. This may involve some non-monetary accommodations to settle issues on price variations. For instance, you may settle for a price offer a bit lower to your initial price in exchange for the buyer accepting the property without the minor repairs.

o Close the Deal

Once you agree with the terms, you have to close the deal by signing the contract. The seller should start-off immediately and finish the required documentation to finalize the transfer. The deal will only be consummated when you finally receive the net proceeds of the sale.

Learn more about the Anchorage Real Estate market or search the Anchorage Alaska Real Estate MLS on Ryan Tollefsen’s Alaska Real Estate web site.

Author: Ryan Tollefsen
Article Source: EzineArticles.com
Pressure cooker

For property investors, particularly first time property investors there a huge number of potential investment pitfalls that might befall the unwary investor. Property Hawk has therefore highlighted some of the most common pitfalls for property investors to avoid. This along with the property investor’s checklist will hopefully help guide new and existing landlords in making what are often very complicated and difficult investment decisions:

1. One classic investment pitfall is for a fledgling investor to buy a property because it appears to be a bargain. Having acquired the property, they then start thinking about who they could rent it to only then to discover that the type of tenant they were after doesn’t want their investment property because it is in the wrong area or is the wrong type of property. This property may be difficult if not impossible to let.

2. Landlords need to watch out for excessive service charges on apartments and ensure that they factor these into their calculation of their potential investment returns Service charges particularly on new apartments can be significant and frequently account for 15%+ of the gross rent.

3. New landlords who are investing for the first time should remember that they are buying an investment not a home! Landlords should avoid over personalising any fit out of the interior of the property as this is likely to restrict its appeal within the lettings market. Also if a landlord is refurbishing the property prior to renting it out, don’t overspend; particularly on bathrooms or kitchens. A shrewd landlord will never spend more than a couple of grand on fitting out a bathroom or kitchen. Draw up a tight budget and stick to it!

4. When selecting a potential investment, landlords should avoid being dazzled by expensive fittings. Even the nicest designer taps can be bought for a couple of hundred pounds, they’re not worth an extra £10k on the properties asking price. Remember one of the most important but often least considered factors about an investment property is the space a landlord gets for their money. Avoid going for an investment property just because of the design. Landlords should make sure that they work out the amount of space offered by the property and how this compares with alternatives before they invest.

5. Landlords should watch out for areas in the flood zone and check out the environment agencies web site to see if the property is at a high risk of flooding before considering buying. Inclusion in the flood zone is not a reason not to invest in a property. However a landlord should factor this consideration into their own investment appraisal. With global warming there is a chance that investment properties in areas susceptible to flooding will be more difficult and more expensive to insure.

6. Landlords should avoid a ‘money pit’ – in other words they should avoid over paying for a refurbishment project, particularly if it’s their first. Remember that property developments rarely come in on budget and on schedule. This is particularly likely if it is a property investor’s first development. Therefore, landlords need to allow a buffer for cost overruns. Professional property developers refer to this as a contingency. Landlords managing a property refurbishment or development should expect the odd delay in between phases of work and then factor these into their development schedule.

7. Avoid buying a property because you want to invest. Landlords should buy because it’s a good investment opportunity. They should do their sums and make sure that the figures ‘stack up’ by doing a full investment appraisal.

8. Ex-council houses are not always the bargain they may seem. Undoubtedly they can be cheap and make good family accommodation but make sure you can get a loan for them first . Landlords that buy these properties in the expectation that they will be able to rent them to tenants receiving benefits should understand that housing benefit is no longer paid directly to the landlord. The new system of the Local Housing Allowance pays the benefit to tenants and this could increase the chances of a landlord not receiving their rent.

9. Landlords should beware of ubiquity. They should avoid investing in a large residential block if there are a high proportion of units already or are likely to be owned by investors. A residential investor will normally be able to tell this by the number of To Let boards and the profusion of letting adverts in the local property press. The reason for this is that where and when over supply exists a landlord will be forced to compete on price. This has already occurred in many of the large provincial city centre developments. A landlord needs to ask themselves where there are already tens if not hundreds of rental units in the same residential block, why would a tenant choose their property. A landlord should be convinced that they can win the ‘rental game’ if the competition gets tough.

10. Investing in property outside a landlords local area in a perceived ‘property hotspot’ can seem like an attractive proposition. However, landlords will need to ensure that once bought that they have the time and capacity to be able to continue to manage these investment properties. If things go wrong they me be required to visit the property personally to sort out the problems which could be very time consuming!

11. Too many landlords have been suckered into buying ‘discounted properties’. If a landlord is contemplating buying a property with a discount ensure that it is a genuine discount to the market price and that the developer has not inflated the price first and then knocked some money off.

12. Avoid putting all your eggs in one basket. Landlords should avoid buying too many units on one development. This is because if the development performs badly then this will have a significant effect on a landlord’s investment returns. Instead they should look to spread their investments amongst different types of property e.g. flats, houses and in different locations.

13. Landlords should avoid over gearing their portfolio. Many landlords in recent years have looked to borrow the absolute maximum to fund their investment portfolio in the belief that residential property will go up and up in value. They have used interest only buy-to-let loans to finance their portfolio. This leaves a landlord exposed should property values fall or interest rates rise. Instead property investors should avoid over borrowing and look at a mix of repayment and interest only mortgages which will ensure that in the long-term the equity in their property portfolio rises in a sustainable way even during years when property values are not growing.

14. Before employing a letting agent to manage their investment properties a landlord should ensure that they have obtained an acceptable contract with the terms of engagement. Many landlords will employ a letting agent either on a let only, or sometimes landlords prefer to opt for a full management service where the letting agent looks after the day to day running of the property investment. The mistake that many landlords make is that they do not insist on a contract. The problem for landlords is that there aren’t standard terms of engagement from letting agents or agreed fee structure. This means that what might be covered by one letting agent another letting agent will charge extra for the same service. One way that letting agents can charge landlords additional & unnecessary fees is by renewing an Assured Shorthold Tenancy every 6 months and charging a landlord for each tenancy although the agreement is with the existing tenant. Firstly, there is no need because the tenancy if left would just become a periodic tenancy and secondly if the landlord is having their property managed they should negotiate to have this service included as part of the overall management contract.

15. One of the biggest investment pitfalls is a landlord who fails to vet their tenant properly. Having found a tenant the landlord assumes that being a ‘good judge of character’ they can tell a good tenant from bad. They are then susceptible to becoming victim to a professional scammer who will be costly and stressful to remove.

PropertyHawk.co.uk, is aimed directly at UK Landlords. The site incorporates free property management software lets a landlord track their financial data relating to their portfolio. A mass of information on BTL mortgages [http://ww2.propertyhawk.co.uk/Mortgages.aspx] and landlord insurance.

Author: Chris Horne
Article Source: EzineArticles.com
Duty on LCD/Plasma TV

Renting can be a tricky business whether you are renting out your home or renting a property for yourself. In both conditions, there are many issues to consider, and it is something that should be entered into after much thought.

Renting a property is a good option if you cannot afford to buy a house, and pay the mortgage. If you are unemployed or do not earn enough money to come up with the mortgage payments every month, then it is better that you rent a place. In addition, if you are moving to a place on a temporary basis, renting is a better alternative.

However, there are also many pitfalls of renting that you must consider. The first disadvantage is that rent payments seldom stay constant. Most of the time, they increase after the lease is renewed, and you might find out that you have to pay more than what you agreed to. If the landlord makes any renovations to the house, he may ask for more rent, which can be difficult to adjust to, if you are on a fixed budget.

When you are living in a rented property, you do not get a chance to build your equity, which is another pitfall. You will be paying rent every month for the entire period, but once you move out, you do not have anything to show for it.

If you buy a house instead, you will be the owner, and can even sell it later on to recover your mortgage payments. Another downside of renting is that you cannot take advantage of any tax breaks on the rent you pay. It is your landlord who will get to reap the benefits.

One of the major disadvantages of living in a rented property is that you have to obey the rules of the landlord. You are not allowed to make major changes to the property, and have to accept it as it is. Many landlords even have strict rules when it comes to keeping pets, or coming and going at late hours. Some places will not allow overnight guests, or visitors who stay for an extended period. Thus, it can sometimes be difficult to get used to.

Similarly, if you are renting out a property, there are issues you need to take into account. When you rent out your property, you become the landlord. This means that you become responsible for all the aspects associated with the renting process. You have to set up the property for renting out, manage the tenants, take rent every month, and be responsible for anything going wrong in your house. It can no doubt be a big burden, and responsibility. If you get unlucky and end up with bad tenants, then renting can be a nightmare. You may not get the rent on time, and may even have to take responsibility for any damage done to the property.

Although renting may be a good alternative for you, it is better to keep these pitfalls in mind. In this way, you can make an informed decision, and explore all the options.

James L Harrison is a real estate expert. You can take his services to find apartments to rent Manchester and get wide rage of affordable apartments. For more details visit the recommended website at http://www.mancitylettings.co.uk.

Author: James L Harrison
Article Source: EzineArticles.com
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