Posts Tagged ‘rental properties’

Anyone trying to sell a home in a falling market is probably a bit fed up, frustrated and worried just now. However, with a bit of help you can either sell your home, or accept that it might be better to stay where you are for a while, or even improve your home so you don’t need to move at all.

Check whether your property CAN sell

Whether you are thinking of selling, or are already marketing your property, chat to local estate agents to establish if there are any buyers who are currently in a financial position to purchase your home. Ask if any properties like your have been sold recently and if so at what price.

Unfortunately at the moment, as there are so few buyers and lenders lending criteria is so tight, properties that might be worth £150,000 might only sell for £135,000 or less – as there will always be someone that ‘has to sell’ and they will keep dropping the price until someone buys. 

Consider Investing in a RICS Survey

To help your property stand out and to speed up a potential sale, it might be worth getting an independent survey, which shows what work needs to be done OR that no work is required.

Either way you can then be honest with buyers to say the property needs no major work; that work is required but you will negotiate on the price; OR that the work required has already been priced into the property’s value. It can reassure buyers about purchasing your property over and above someone elses. 

Showcase an Electrical and Gas Safety Certificate

Although required for rental properties, bizarrely these are not required when selling a home, but if you have can give your gas and electrics a clean bill of health, that can be very attractive to buyers and make your property more likely to be chosen over others.

Choose the Best Agent

It’s advisable to gain a valuation from at least one agent that either has someone in their office who is experienced at selling in a falling market (ie the 1990s) or was operating during the 1990s. The reason being is they are likely to better understand how to price properties to sell.

To find an agent that CAN sell properties during these difficult times check the local newspapers and property portals to see which agents have actually SOLD properties similar to yours, not ones just advertising them for sale. Alternatively contact Designs on Property to find who the best selling agent is locally. This service costs just £9.99!

Be a Buyer for a Day!

A great way to work out how to sell your property is to be the buyer. Look at other properties on-line and even visit them to see whether they offer more for a buyer’s money than yours and make changes accordingly. One thing that is essential is to look for is the pictures of your property on-line – do they encourage the buyer to visit or put them off? People buy properties for their views, the kitchen/bathroom, a wow factor for example the garden. So make sure that the first pictures really show off your property in it’s best light. Ideally don’t actually put huge numbers of properties on-line, otherwise people might think they have ‘seen’ the whole property so they don’t bother to visit.

Make sure your property stands out from the crowd

Anyone buying at the moment will want a deal, but they will also want to buy a home to live in. Make sure your property is targeted at the right buyer. If it’s someone that wants a doer upper, don’t spend money preparing it for sale. If it’s someone who wants to just move straight in – make sure they can and prepare the home well.

Price your Property Right

In a normal market, most homes that are priced correctly, will receive an offer within eight weeks after an average of ten viewings. In the current market, the only properties that will sell are the ones that are competitively priced versus everything else on the market. So if you have a three bedroom 1930s property and there are three for sale locally, or even in your street, it’s only the lowest priced property that will sell.

Always use a For Sale Board

Unless you are in a rural area, it’s a good idea to have a for sale board as most people move within three miles of where they live – so they are likely to see your board and then enquire about the property.

Prepare all your Paperwork

Many people see a Home Information Pack (HIP) as a waste of time – it is if you don’t put the effort in to make the most use of it. Fill in the Property Information and Fixtures and Fittings Form; make sure that your property is as energy efficient as possible; ensure that any paperwork such as planning permission and/or building regulations is readily available. If you really must move, progress your legals to contract stage, then when you do get an offer, you can proceed quickly and are less likely to lose your buyer due to delays.

If there are not takers – can you rent it out, improve or stay?

Unfortunately the market has so few buyers at the moment, that it just may not be possible to find one for your home without crashing the price. If you don’t want to do that, why not consider renting it out and still moving, improving your current home so you don’t need to move, or even just staying put for a few years until the market recovers enough to sell, which is likely to take a couple of years.

I have been a consultant to the property sector for a number of years and been renovating properties for over 20 years. I have also written a number of books, including four for Which? – Buy, Sell, Move House, Renting and Letting, Develop your Property and the Property Investment Handbook.

I am currently one of the top property experts in the UK and regularly quoted in the press including the Telegraph, Independent, Times, Daily Mail and Express as well as featured on a number of local BBC Radio stations.

http://www.designsonproperty.co.uk/categories/20090223_1

Author: Kate Faulkner
Article Source: EzineArticles.com
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In this article we’ll consider why serious real estate investors–those who want to make the best return possible on their real estate investments–use real estate investment software to evaluate investment opportunities.

1. It’s fast. Good investment property analysis software makes it possible to analyze cash flows, rates of return, and profitability of rental properties in minutes. This enables investors to collect the data needed for decision-making quickly.
2. It’s precise. Good investment evaluation software makes accurate calculations for a wide-range of returns and measures deemed crucial to sound real estate analysis. The last thing analysts should have to worry about is faulty math.
3. The reports are informative. Good real estate investment software creates professional-quality reports investors can confidently pass on to colleagues, partners, and lenders.
4. It knows what data is required. Good rental property software includes forms specially designed to gather the appropriate facts and figures about a property. This is particularly helpful to investors with little or no real estate analysis experience because they just fill in the forms and print.
5. It keeps the seller’s data honest. Investors who have the ability to run the numbers themselves prevent anyone from making an unrealistic presentation of the property and perhaps “slipping one” by.
6. It’s inexpensive. Good realestate investment software does not have to cost an arm and a leg. Anyone can create top-notch real estate analysis presentations forever for just a few hundred dollars.

Okay, now let’s consider the alternative.

1. You can create your own spreadsheet. Excel makes it possible for anyone to mimic investing software solutions. But it takes time (lots of time) to develop the reports and calculations provided in good real estate investment software. You should ask yourself whether you are inept enough about real estate investing and Excel before you get started. Plus, remember that your goal is make a profit on investment properties and not to shave a few bucks off your analysis presentations.
2. You can rely on rules of thumb. It’s easy to calculate a property’s cap rate or gross rent multiplier. But what about cash-on-cash return, cash flow after tax, internal rate of return, and mortgage amortization? Bear in mind that you are planning to make a huge property investment, so you should rely on something more meaningful than on simple calculations you can do in your head.
3. You can accept the seller’s data. But it’s never a good idea to accept property data point blank because it leaves too much room for others to embellish reality. You should always be prepared to verify the numbers you are presented about any investment opportunity to be sure that they comply with your real estate investing plan.

Once you’re ready to invest in good real estate investment software you’ve got to know what to look for. So here are a few suggestions.

1. Foremost, be sure that the software is user-friendly–that you know what to do from the moment you open it. If not, be sure you have a number you can call for tech support.
2. Preview the reports. Are they easy to read? Do they contain all the crucial returns you will need (or desire) to make an intelligent investment decision? Are they professional quality?
3. Consider what rates of return you desire. For example, are you interested only in suitable returns calculated without consideration for the elements of tax shelter, or would you prefer full consideration of tax shelter? If so, then look for real estate investment software that includes calculations for things such as depreciation, mortgage interest, amortization of loan points, and cash flow after tax.
4. Would you like both analysis and marketing presentations? If so, then look for a software solution that will create an Executive Summary or Marketing Package in addition to an APOD, Proforma Income Statement, and Rent Roll.

You get the idea.

The important thing is to realize that real estate investing is a business and real estate investment software is a tool that will help you to grow that business wisely. And in the same way that serious investors have come to rely on good real estate investment software to help them make smart investment property decisions, so should you.

About the Author

James Kobzeff is the developer of ProAPOD – leading real estate investment software since 2000. Want to start working with rental property today? Discover how to create cash flow, rate of return, and profitability analysis presentations in minutes! Learn how at http://www.proapod.com

Author: James Kobzeff
Article Source: EzineArticles.com
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I have a few rental properties. I always seem to get tenants that are very rough on the houses and break minor things like door handles, stopping up the toilet, etc. and have an idea I wanted to check if it would hold up legally. Can I offer my tenants $100 monthly discount on the rent if they agree to a $50 deductible for repairs? This saves the tenant $100/month to maintain the house in great shape and save the landlord the money too. Would this hold up legally if they accept the monthly discount in their lease agreement?

Answer:
You might need to word it differently like make it a cash bonus at the end of the lease if they have less than 10 service calls. You want them to call if they have a leak or important item. Making them pay $50 will make them slow down calling. Then they might say you didn’t fix things that you legally had to without charging them. Making them pay the entire rent then giving them the a free month every year or reduced January 1 rent by a few hundred gets you the same answer that they call less but makes them feel more free to call when they should. So if they called 10 times and you deducted 500 from the 1,200 they would get 700 off January 1 rent.

To me, having a fish is like having a plant.

Answer:
I have rental properties. I do allow fish but only the “non-aquarium” type. I had a tenant with a huge aquarium which leaked while he was on vacation and it completely ruined my hardwood floors and some of my carpet. Luckily, insurance took care of it, but I will not allow aquariums in the future.

There are many more than five kinds of residential rental properties depending on how you classify them. But from the perspective of basic investment differences, there are five types that come to mind, each with their own problems and advantages. The first type is single family homes.

Single Family Rental Properties

Houses are appealing to investors for a few basic reasons. First, they provide the easiest way to get into real estate investing, because of the financing options and possibility of a low down payment. Second, they can build equity fast during times of rising prices – even if rents are not rising. Third, they can be sold to other investors or home owners. These two markets make the eventual sale easier.

Of course they have problems too. First, it is very difficult to find houses that can produce cash flow after all expenditures are considered. Also, as a single unit, if you lose your tenant, you lose 100% of your income until it is rented again. If you own multiple homes, it can be a lot of work to collect rent and maintain them versus an apartment building with a similar number of units.

Apartment Buildings

The primary advantage of apartment buildings is that the prices are based on income, because unlike houses, only investors are buying them. This means decent cash flow is normal (otherwise why buy?). Also, because the prices are based on net income more than anything else, if you can find a building with low rents, you can quickly increase the value just by raising them. Of course, the primary problem with apartment buildings is the greater difficulty in financing them, and the larger down payment normally needed.

Small Multiple-Unit Residential Rental Properties

Between single family homes and apartment buildings are the duplexes, triplexes and four-plexes. As long as you stay under five units, you can finance these like a home. Though this is an advantage, it is also the reason it is tough to make this type of rental produce cash flow. There are many people out there buying them to live in one unit and get the equity gains from the whole property. Most of them are not thinking of cash flow, so they push the prices too high. It is convenient to live where your rentals are, though, so if you can come close to breaking even, the eventual gain from equity build-up may be worth it.

Low Income Housing

Mobile homes and small houses in need of repairs get their own category because this low income market has unique advantages and problems. Normally you’ll have more late rent payments and other issues with tenants. You also will have more repairs. In general, investing in low income housing means more hassles and more time invested.

What makes it worth it? Cash flow. Suppose a normal three-bedroom house costs $130,000 and rents for $750 per month. You may find a three-bedroom mobile home on a lot nearby for $45,000, and get $600 per month in rent. Repairs, though more frequent perhaps, are cheaper, as is insurance and property taxes. You can see that there is greater potential for cash flow.

Low income housing is all about cash flow. As for the added hassles, there are ways to deal with that. I know a man who has forty rental properties with low income tenants (mostly mobile homes with real estate), and he gives free rent and a small salary to a handyman/manager who does everything from fix toilets to collecting rent.

Other Residential Rental Properties

This “other” category includes the less common residential rentals. Since these properties often don’t have the advantages that the ones above have, people invest in them for one reason: cash flow. For example, a large house that would lose money every month as a normal rental might do well as a boarding house, where you rent rooms out individually. This can be very profitable in a college town.

Even less common, but still potentially profitable, are rentals of RVs, or recreational vehicles. You’ll see this more in the southwest than in other areas (it’s almost common in Arizona). Conversion of old motels into residential rental properties is another way investors create cash flow. Certainly there are a few I have missed as well. Probably houseboats are rented by the month somewhere.