1. LocationBeing located in a quiet neighborhood or near popular amenities such as restaurants and grocery stores can make a home worth more. Not every buyer needs a home to meet every location requirement, but if you can say your home is situated in or near things people deem important, it will retain its value better. On this same note, if your home is located near schools, daycare, or even a school bus stop, it will be more attractive to buyers with children or who plan to have children, making it worth more, especially if it checks other boxes for them, too.
2. A Beautiful ViewCan you look out your window and see a beautiful skyline? If so, your home may be worth more. Being able to look out a window and see something lovely calms the nerves, and buyers appreciate that. On the other hand, if you look out your window and all you see is your neighbor’s house, a flashing neon sign, or some other unattractive view, it could bring down the value of your home, too.
3. Curb AppealIf your home looks nice from the outside, it will retain its value better. If you mow your lawn, landscape your yard attractively, and maintain the exterior of your home, it shows you’ve kept the property in good shape. Curb appeal works both ways, however. If you don’t maintain your yard or the exterior of your home, the overall value will be less.
4. Major SystemsNo one likes to move into a home and immediately have to shell out money to fix any heating, cooling, plumbing, or electrical issues. Selling a home with issues like these is usually the result of neglected maintenance and will subtract from the home’s value. If you know your home has issues with any of its major systems, be sure to fix them before putting it on the market for sale to get the most out of its value.
5. StorageA home with lots of storage is usually worth more than one that doesn’t have enough. If your home has plenty of closets, cabinets, and drawers, as well as basement, attic, and/or garage storage, buyers will be willing to pay more for the convenience. Many factors influence the value of a home, with the 5 listed above being just a start. Be sure to keep these things in mind as you set an asking price for your home as it could be worth more (or less) than you think.
Start Saving Early and Check Your CreditThe home buying process starts long before you actually begin actively searching for the perfect house. The average mortgage lender requires a 20 percent down payment, although many first-time homebuyer programs allow for as little as 3.5 percent. Be aware, however, that lower down payments often force you to pay for mortgage insurance, so it’s best to be prepared to put down as much money as possible to get the best deal. Your credit score is one of the most important factors lenders look at when determining whether to finance your mortgage or not. Check your credit score before starting your search for a home, and do your best to dispute any discrepancies and take care of any outstanding debt as soon as possible. It’s also very important to halt all new credit activity if you plan to buy a house anytime soon. Opening any new lines of credit such as credit cards or auto loans cause a slight decrease in your credit rating when the lender does a hard inquiry.
Figure Out How Much House You Can AffordMany first-time homebuyers make the mistake of buying a home based on the idea that their income will increase in the future. This often leads to higher mortgage payments than they can comfortably make while they wait for their income to go up. Play around with a mortgage affordability calculator to figure out what you can afford based on your income now. You can always sell the home and upgrade as your income increases in the future.
Explore Your Down Payment and Closing Cost OptionsOne of the biggest problems people have with purchasing their first homes is coming up with the down payment. Luckily, there are many options available for a first-time homebuyer that decreases the down payment amount to as low as 3 percent. Many new homebuyers mistakenly give little consideration to the closing costs associated with their mortgage. These expenses can add up to thousands of dollars, so it’s a good idea to consider your two options here: pay them yourself or have the seller pay them for you. Both options have pros and cons, so discuss them with your lender to find out which works best for you.
Shop Around for the Best Mortgage RatesShopping for the best mortgage rates is just like shopping for anything else. You wouldn’t hire the first contractor you call to fix your roof, and you shouldn’t go with the first mortgage lender that gives you what sounds like a good deal either. Gather mortgage rate quotes from at least three lenders before deciding which one fits your budget and your needs best.
Get Pre-approvedSellers like to see that you’re serious about buying their property. Before heading out to find your dream home, take the time to get a pre-approval letter from a lender that states how much they are willing to lend you and at what terms. Not only will you have an upper hand over other buyers who haven’t completed this step, but you’ll also have a better idea of how much house your lender is willing to finance in your name.
Fewer People Means Fewer Public ServicesOne of the reasons people love living in a rural area is the fact that there are fewer people. Your closest neighbor may be a mile or more away. While this affords plenty of privacy and quiet, it also means there are fewer public services available nearby. If you’ve lived in urban areas all your life and are now considering moving to a rural home, you must realize you’ll need time to adjust to this lesser level of public service nearby.
Fewer Business OpportunitiesIf you’re planning to live in a rural home, you’ll likely have to make a longer commute to work since there are fewer business opportunities close by. On the other hand, if you’re planning to use the rural home as an investment property, it’s important to have clear expectations when it comes to renting or selling it as it’s likely to sit vacant and/or for sale longer for the same reason.
Fewer RestrictionsUrban properties often come with a plethora of restrictions in terms of property development. Rural properties, on the other hand, often have fewer restrictions, giving the owner more leeway when it comes to land development. Furthermore, when it comes to listing rural homes for sale, the listing regulations are less strict than those for urban properties in cities like Los Angeles or New York.
More Opportunity For Land DevelopmentStrategically purchasing multiple rural properties gives investors more opportunities for extending land development, increasing their profitability as a long-term investment. Should the investor decide not to pursue development, the rural property(ies) typically garners a profit when sold.
Cheaper Purchase PricesRural properties are typically cheaper to buy than their urban counterparts. As an investor, you can expect to pay about half what you would pay for an urban home of the same size. This makes it extremely easy to buy more than one property at a time and still stay within your budget.
Less Competition In The MarketRecently, there has been an increase in rural properties for sale with a lack of interest from investors, which means there is less competition in the market for purchasing these properties. This factor also drives the prices lower for these properties, making them prime investment opportunities. It takes the right type of person to reap the benefits of investing in or living in a rural home. If you’re thinking of buying a home in the country for either reason, the pros and cons listed above may help you decide whether or not the purchase is right for you.
1. The Right ApproachReal estate investment is a business. You need to approach it as such and devote as much time and energy to it as possible. Even if you’re only planning to have one rental property, it deserves your undivided attention. Should you decide to expand your investment business, you’ll need to devote even more time to attending open houses, researching neighborhoods, monitoring your financial state, and estimating costs in order to find good deals with high return on investment.
2. Dealing With HasslesBeing responsible for a rental property can be challenging, especially when tenants aren’t happy, or things need fixing. You can maintain a cordial relationship with your tenants by being discerning and smart. Avoid potential issues by building a network of reputable contractors you can count on when repairs are necessary. Furthermore, create a schedule for paying bills, insurance, and other expenses so you do so on time, and be sure to keep an emergency fund at the ready for unexpected expenses.
3. LocationIt’s much easier to manage a rental property that’s close by than one that’s in another town or state. If you’re very resourceful, you can pull it off, but problems of any kind can arise without warning, and being close to the problem makes it much easier and cheaper to solve.
4. Finding Good TenantsOne of the most challenging aspects of being a landlord is finding good tenants. It pays to do your due diligence when screening prospective renters. Do criminal background and credit checks and speak with previous landlords if possible. Renting to the wrong tenant can end up costing you big in terms of time and money. Should you need to start eviction proceedings, it will be impossible to rent your unit out again until they are finished, which could be several months. Furthermore, should your tenants be unhappy with your services or feel slighted in any way, they could take it out on your property, costing you way more in repairs than they’ve paid with their security deposit. Moral of the story? Don’t take shortcuts when screening potential renters. While the idea of making money being a landlord sounds easy, the reality is, it’s quite challenging. If you’re thinking of becoming a landlord, be sure to consider the four points above so you’re prepared.
ElectricalOlder homes sometimes have outdated electrical components that are inefficient and potentially dangerous. Old wiring can cause electrical fires in some cases, so it’s important you hire an electrician to inspect the home’s electrical system and correct any problems before you move in. In many cases, a homeowner won’t be able to sell a home with outdated electrical components, but it’s your responsibility to make sure everything is up to code and safe before moving into your new home.
PlumbingSmall plumbing issues can become big headaches if they aren’t addressed quickly. A plumber can inspect your home’s water and sewer pipes and fix any issues he finds. In some cases, you might be able to fix small problems (like a leak under the kitchen sink) yourself, but for a good bill of health on the home’s entire plumbing system, it’s best to hire a professional.
Heating And CoolingMany homes have an HVAC system that needs to be inspected regularly. Before moving into your new home, this is a necessity to ensure the system heats and cools your home efficiently and that the ductwork is clear of any allergens and/or debris. You can do some of the work yourself (changing filters, clearing the area around the unit), but to ensure everything is in proper working order, it’s best to have an HVAC technician come in and inspect the unit. The technician will change the filters, ensure the unit is working well, check the thermostat, and clean out the ductwork as needed. This will ensure your unit is as energy-efficient as possible and that your family doesn’t suffer allergies due to poor air quality in the home.
SecurityMoving into a new home can be somewhat scary since you don’t know the area very well. To help alleviate you and your family’s unease, installing a security system might be a good idea. Today’s security systems are very interactive. They can be controlled using your smartphone and you can receive instant notifications of any emergencies while you’re away. It may also be possible to monitor your residence via a streaming video feed when you’re not home. Having a security system may help your family feel more at ease in your new home, especially if you train everyone on how to use it properly so they can feel in control of their new surroundings. You’re probably very excited about moving into your new home but be sure you have the above-mentioned services conducted ahead of your actual move-in date. Doing so will ensure you and your family will be as comfortable and as happy as possible in your new home.
1. Choose Properties In Up And Coming NeighborhoodsBuying rental properties is a great way to increase your wealth through real estate investing. Purchase the right property in the right neighborhood and you’ll enjoy huge returns on your investment. Up and coming neighborhoods offer the potential for growth as well as tax incentives for buyers.
2. Diversify GeographicallyThere’s a lot to be said for buying close by and understanding the local market. However, by purchasing properties in other areas, you diversify your investments and protect your portfolio from the volatility of a local market.
3. Don’t Spend Too Much On RenovationsYou don’t need to buy high-end fixtures and accents in order to make a rental attractive. Middle-of-the-road pieces are just as enticing to renters and a lot less damaging to a limited budget.
4. Don’t Over-Leverage YourselfSuccessful real estate investors have a combination of properties that they own free and clear and some that they finance. This creates a healthy balance that promotes profit while giving you the funds you need to grow your business.
5. Consider Investing In A Single-Family HomeMost people would love to live in a house, but some lack the finances to own one and others simply do not want to own. Whatever the case, a single-family home is a good investment as they have a history of appreciating quickly and profitably.
6. Get Ahead Of Big Maintenance ProblemsFinding and fixing minor issues before they become big ones can save you a lot of money. Unfortunately, not all tenants will alert you to small issues until it’s too late. Write a bi-annual walkthrough into the lease to give your tenants an opportunity to point out any potential problems they see as well as to give you a chance to spot anything that needs attention. You’ll come to look forward to these walkthroughs, especially when you spot a small water leak or two that could have cost you a lot of money had they gotten worse.
As a homeowner, you are responsible for a lot of things in and around the house. Below is a list of things you are responsible for when you own a home. Be sure to consider these things when deciding whether home ownership is for you or not.
1. The Legal Side Of ThingsIf you’re planning to build a home from the ground up, it’s your responsibility to make sure you have the proper permits in place to do so. Every community is different, so it’s up to you to find out what they require.
Obtaining approval on building permits can take weeks or even months to come through, so skipping this step might be tempting. It’s in your best interest to go through the proper channels, however, because without the right permits, the authorities could halt progress on your house, or worse, demolish it altogether.
2. Dealing With Homeowners’ AssociationsIf the home you’re considering is in a neighborhood overseen by a homeowners’ association (HOA), you could be in for some difficulty. These associations tend to have strict guidelines you must follow and even stricter enforcement and penalties if you don’t.
The best way to know what your HOA responsibilities are is to read the HOA agreement closely before buying or renting in the neighborhood and attending regular HOA meetings.
3. Paying The MortgageResponsible homeowners pay their mortgages on time, plain and simple. Failing to do so can result in harassing phone calls and letters from the lender, as well as legal action and/or foreclosure. To ensure you always have the funds available to pay your monthly mortgage payment, set a clear budget that sets the money aside for this payment before anything else. After all, you have to have a place to live, right?
4. Dealing With NeighborsUnless you move into the country where houses are few and far between, you’re going to have neighbors. It’s in your best interest to get along with the people who live around you. As a responsible homeowner, you should be polite when you see your neighbors, and you should go out of your way to remedy any situation your neighbors may find disturbing.
5. Understanding The MortgageMortgages can be complicated, so it’s a good idea to understand yours completely so there are no surprises when it comes time to make your first payment. Find out what your payment includes. Are you paying just principal and interest, or does it include escrow for homeowners’ insurance and/or property taxes, too?
Be sure you understand the going interest rates and how they apply to your loan. Is the interest fixed, or will you need to consider refinancing in a few years when your interest rate adjusts? Knowing the answers to these questions will help you prepare for anything that may arise with your mortgage payment in the future.
Owning a home is more than just making monthly payments. There are many things you become responsible for as a homeowner. Although not comprehensive, the list above gives you many things to consider if you’re thinking about buying a house.
1. Hang A HammockWho doesn’t like lying in a hammock on a warm, breezy day? If you have two trees within hammock-hanging distance of each other, or, even if you don’t (you can install your own poles for hanging), you can hang a hammock or some other swinging-type seating to enjoy the great outdoors in.
2. Hang Lanterns Or String Lights In Your YardJust as lighting plays a big role in the ambiance inside your home, it can also lend a warm, relaxing vibe to your outdoor spaces, too. Try hanging decorative lanterns or stinging pretty lights across your yard or along a fence for a rustic look that begs you to enjoy it once the sun sets.
3. Play Around With SeatingGone are the days when patio furniture had to match. These days, you have a multitude of options when it comes to outdoor seating. If you like collecting individual pieces and creating your own seating arrangement, go for it to create an outdoor seating area that portrays your personal style.
4. Accent With TextilesMake your outdoor space fun and exciting by adding accents in bright colors and textures. From area rugs and throw pillows to slipcovers and more, you can make an extension of your indoor living area. Just be sure to choose fabrics that are designed to withstand the elements, so you don’t have to worry about storing any of your accents when the weather turns foul.
5. Consider Your Outdoor ActivitiesHow will you use your outdoor space? Not only should it be comfortable and inviting, but it should also be functional. By adding a fireplace, you create a warm atmosphere that enables you to use the space during colder months. You can also add an outdoor kitchen, which will enable you to cook and dine outside on those beautiful summer evenings. Hopefully, the upgrades above will help you create an outdoor space that you love to spend time in.
1. What’s Old Is New AgainWhile styles come and go, it’s the nostalgia that’s playing a big role in today’s interior décor trends. Styles from the Victorian era, Art Deco, and even grand millennial aesthetics are making a comeback as many people wish longingly for what used to be in a world so full of uncertainty and strife.
2. Easy To Clean Is Always GoodWe’ll be seeing lots of easy to clean fabrics and surfaces. Expect non-porous surfaces like glass and metal to be part of many home renovations as they deter the growth and spread of bacteria. Also, the kid-friendly, durable, stain-proof fabric will take center stage where applicable.
3. Warm, Cozy ColorsEarthy tones and warm neutrals will be popular as we begin making our homes cozier places to be. Today’s trend is organic shades like Camel, which adds a layer of warmth and hominess gray just doesn’t have.
4. Calming Shades Of BlueColor has a big impact on our emotions, which is why shades of soft blue will be trending this year. The calming effect this shade has on the mind will help alleviate some of the stress we’re all feeling as we stay quarantined in our homes. Blue is a timeless color that never seems to go out of style, making it a great choice for a fresh look.
5. Natural Materials Aren’t Going AnywhereWood tones, organic materials, and natural accents are going to be extremely popular.
6. Say Goodbye To The Open Floor PlanIn years past, the open floor plan, where one room flows seamlessly into the next, was valued as it brought the family closer together. This realization puts open floor plans on the outs and closed floor plans at the top of many homeowner’s renovation plans.
7. A Shift Toward Sustainable FurnishingsSustainability is a subject that impacts our daily lives in many areas. Today’s homeowner is opting less for cheap, DIY furnishings and choosing instead to buy furniture that’s more expensive and better made. These furnishings are kinder to the environment and they give their owners a sense of pride in being able to hand down an heirloom rather than throwing the piece in the landfill.
1. The Seller Will Work with Your AgentA majority of sellers know you’ve worked with your agent closely for weeks (months?) before coming across their FSBO home and will gladly compensate your agent as any other seller would do.
If you’re interested in a for sale by owner home, have your agent make the first contact. This gives your agent the opportunity to find out if she can still work for you and collect payment on the deal should it proceed.
2. Be Prepared to Meet the Owners Face-to-FaceThe biggest difference between an FSBO home and one listed by an agent is that you’ll get to meet the owners face-to-face rather than meet with an agent when looking at the home. Selling a home is a sentimental time for the owners, so it may seem a little uncomfortable for you when meeting with them to look at or discuss their home.
If this is the home you’ve got your heart set on, you’ll need to move past those uncomfortable feelings and be respectful of their emotions. Don’t forget to use your agent as necessary and don’t be afraid to ask for some time alone in the home if you need it.
3. FSBO Sellers Must Still Abide by the LawAs with any other home sale, there are laws the FSBO sellers must abide by. If the law says a seller has to inspect the home, make repairs, or disclose any problems, then the FSBO seller must oblige. One of the biggest problems with FSBO home sales is that the sellers often don’t know or understand real estate law, or they simply want to do things their own way. At any rate, trust your agent and your own gut. If you think a seller isn’t on the up and up or isn’t allowing you due diligence, it might not be the right home for you.
For sale by owner homes can be just as great as homes listed with a real estate agent. While the same laws and requirements apply, there could be problems if the seller lacks real estate knowledge or isn’t willing to do things by the book. Keep these three things in mind if your dream home happens to be an FSBO home.
To help make keeping your house clean easier and less stressful, we’ve come up with several cleaning ideas for you to tackle. These ideas are designed to help you work smarter, not harder, so without further ado, here they are.
1. Clean Your EquipmentBelieve it or not, your cleaning equipment could use a thorough cleaning, too. Begin by swishing your broom’s bristles in a tub filled with hot, soapy water. Throw in any scrub brushes and let them soak.
If you use microfiber cloths, toss them in a washing machine on the gentle cycle, then transfer them to a low-heat dryer. Lastly, soak sponges in a solution of 1-tsp. bleach to a gallon of water for five minutes before rinsing and allowing to air dry. Having clean equipment to work with makes your job so much easier and you’ll know your house is truly clean when you’re done.
2. Dust The Light FixturesIf your living room is looking gloomier than usual, it might be because the light fixtures need dusting. Turn the light off and wait for the fixture to cool. Take it down from the ceiling, if possible, and use a microfiber cloth to remove dust and debris. If the dust is especially stubborn, use a damp rag to remove it. Wipe all surfaces of the fixture and let it air dry before reinstalling.
3. Clean BookshelvesBookshelves and their associated books and knick-knacks are dust magnets. Many people forgo cleaning their bookshelves often because it’s such a tedious chore. If your bookshelves could use some TLC, turn on some tunes or your favorite podcast and get to work.
Remove everything from the shelves and place it aside. Use a feather duster or a dry microfiber cloth to remove surface dust. You can go a step further to protect the wood by using a quality dusting spray next. Buff the shelves to a shine, and then wipe down all the books and knick-knacks as you return them to their home on the shelves.
4. Refresh Framed PicturesGive your home a completely clean look by cleaning the framed pictures on the wall. Start by taking each picture down from the wall and placing it on the table. Spray window cleaner on a clean microfiber cloth and wipe the glass and frame of each picture. Let the pictures dry, then hang them back on the wall.
5. Wipe The Walls And TrimUnless your child expresses himself on the wall, wiping down the walls probably isn’t something you think of doing often. Taking the time to get rid of cobwebs and dust on the walls, though, can make your space look and feel brighter.
Grab a broom or feather duster and clear the walls of any visible dust. Pay special attention to the corners where cobwebs like to form. Lastly, use a feather duster or microfiber cloth to wipe down the trim, and you’re done!
1. Tidy Those BookshelvesIf you have bookshelves in your home, it’s the ideal place to store things you don’t want others to see. Take a moment to organize the contents and then install a pull-down window shade to cover the section that contains the stuff you’d like to hide. The result is elegant – almost like it’s supposed to be that way.
2. Store Chargers And Other CablesIf you’re like most people, you have a drawer or basket full of tangled cables. Attempting to pull just one from the mass is nothing less than a 15-minute act of frustration. To remedy this headache, coil each cord into its own empty toilet paper roll and then toss the rolls into a basket or drawer for safekeeping.
3. Hide Clutter In The PlayroomKids’ playrooms are hard to keep organized. There’s so much stuff… If it seems like there isn’t enough room for everything in the playroom, try hiding what you can behind a good old-fashioned shower curtain. Install a shower curtain rod above a shelving unit and slide a coordinating shower curtain across the clutter to instantly hide it and make the room appear tidy.
4. Utilize The Space UnderneathYou can declutter a room quite easily if you utilize the space underneath the furniture. For instance, under the coffee table or the bed are great places to put things. Just add a skirted tablecloth over the top and you have instant storage nobody will notice.
5. Storage In The Laundry RoomHiding clutter in a small laundry room is challenging. The trick is to use coordinating baskets and/or bins to organize everything from dog food to trash bags. Give yourself extra space by installing shelves on the wall to hold the baskets so they aren’t taking up space on the floor.
6. Organize That PantryIs your pantry a crazy, disorganized mess of cans and boxes? Do you have no idea what’s expired and what’s not? Put that chaos to rest by creating a roll-out storage shelf that utilizes the space between the fridge and the wall. This handy DIY project lets you see at a glance what you have so you know what to add to your shopping list and what’s going to expire soon.
7. Under The BedUnder the bed is prime real estate for storage. All you need to do is purchase a couple of under the bed storage bins and you’re all set. To upgrade this decluttering hack, install some wheels on the bottoms of the bins for super-easy retrieval.
Clutter happens in almost every home. Whether the stuff is necessary or not so much, clutter can be exhausting to deal with. To get rid of clutter – or make it appear like you have – try the clever storage hacks listed above.
1. Long-term Rental PropertiesInvesting in long-term rental properties is maybe one of the best ways to make a profit in real estate. It takes a lot of capital up front, but the return on investment (ROI) is high, with the biggest benefit being the constant monthly cash flow.
Both single family and multi-family units have the potential for being great moneymakers, but it can be difficult finding just the right property in just the right area to really make this type of investing worthwhile. Most investors prefer to purchase single-family homes because there are more of them for sale, which increases the chances of finding the right one.
2. Fix and FlipMany beginning real estate investors start with fix and flips. They buy properties on the cheap, fix them up, and resell them at a profit. A lot of money is needed upfront for down payments and repairs, as well as the funds necessary for carrying costs until the house is sold again. It can be overwhelming managing contractors during the repair phase, as well as when trying to sell the house again when everything is complete.
The biggest mistake people make when investing in fix and flips is trying to do the repairs themselves. They think they are saving money, but in the long run, it costs more because it takes longer to finish repairs. It is best to hire professionals to make the repairs quickly so you can get to making a profit sooner.
3. WholesalingWholesaling is when an investor buys a residential property, and then turns right around and sells it to another investor without making any repairs. In some cases, the first investor never even actually buys the property, but obtains it under contract before handing it over to another investor. Wholesaling goes very quickly, and many real estate investors make hundreds of thousands of dollars a month doing it.
4. Vacation RentalsVacation rentals are those properties purchased in a great tourist-y area and rented out on a monthly basis. During peak seasons, vacation rentals can bring in quite a profit. However, during off-peak seasons, they sometimes barely cover the monthly mortgage, upkeep and management fees. The key to continually making a profit with a vacation rental is to set the rent at a level that keeps renters in it year-round.
5. Long Distance RentalsWhen investing in residential real estate, it’s important to look for the best deals possible to increase profits in the end. This isn’t always easy because some markets have incredibly high prices for real estate. Places like New York, for example, see purchase prices as high as $500,000 or more. This makes it very hard to buy property because it requires too much money upfront. What buyers are doing to avoid this issue is investing in residential real estate in another market.
A lot of work goes into investing in long distance real estate. You have to choose a good market, find a superstar realtor, hire a property manager, and then look for the right property. You have to trust the people you have working for you, and be willing to travel if needed to.
Investing in residential real estate is definitely a great way to increase profits and save for retirement. There are several ways to do it, but it all depends on how much time and money you’re willing to put into the process. The five options above give an idea of just what it takes.
Watch the Market CloselyWhether you’re a buyer or a seller, you should watch the market closely for going trends and conditions that could be favorable to your situation. Knowing what’s popular at the time, in addition to the supply and demand in the area you’re buying or selling, are great negotiating tools.
Having said this, it’s important to note here that even if the market isn’t favorable at the time you’re selling, you could still have the upper hand in negotiations. For instance, if you are selling a nice house in a popular neighborhood where few houses are up for sale, you have leeway to negotiate a higher asking price because the supply of properties for sale in the area does not meet demand.
Know Who Holds All the Cards WhenAs the real estate deal progresses, the person with the most negotiating power changes. For example, at the beginning of negotiations, the buyer holds all the cards. As the deal moves forward, however, the buyer loses some of the power, until ultimately, the seller has all the power because he chooses the buyer with the offer and terms that best suit his needs.
Get the Best DealsIn a real estate deal, both the buyer and seller look for ways to save the most money. For the buyer, negotiating a good deal means getting the lowest transaction costs possible through concessions offered by the seller. For the seller, a good deal means selling the property without having to give any concessions at all.
The Financial Side of ThingsSecure financing is important to both the buyer and the seller. Without pre-approved financing in place, a buyer may not qualify for financing. For the seller, it may be hard to close a deal if the buyer isn’t pre-approved. Having secured financing in place ensures both parties can proceed with the transaction.
Know the Going Interest RatesLow interest rates are beneficial to both buyers and sellers. Buyers are looking for the lowest interest rates possible, as well as the lowest down payment, too. For a seller, lower interest rates encourage buyers, which increases demand for properties. The higher the demand for a property, the more negotiating power a seller has.
Don’t Underestimate the Other PartyWhile expertise and experience surely give a leg up in any transaction, it’s important to never underestimate the other party. Even with the most financial backing and best representation, an underdog could come along and negotiate a better deal no one ever saw coming.
How to Act When NegotiatingWhen negotiating a real estate bargain, keep the following behavioral aspects in mind.
- Negotiate face-to-face – Meeting face-to-face and speaking directly with the other party allows you to react appropriately and build a rapport with them.
- Be assertive – Let the other party know it won’t be easy to con you by asking knowledgeable questions and stating informed facts about market trends.
- Be polite – Mind your manners and speak politely when negotiating. Be prepared to walk away if the deal doesn’t suit you or you feel pressured, as it’s your right to do so.
- Be flexible – You may go into a deal with a certain plan but be prepared to alter that plan to seal the deal. It would be a shame to miss an opportunity because you’re unwilling to budge a little bit on the financial side of things.
The good news is if you’re in the market for a new home, following the tips below can give you a leg-up on the competition and make it possible to secure the house of your dreams.
Get Pre-Approved For A MortgageBefore you even begin looking at houses, get pre-approved for a mortgage. It’s important to note here that pre-approved and pre-qualified are two different things.
Pre-approved means a lender has already looked at your credit, income, and expenses to determine how much home you can afford using their underwriting guidelines.
Pre-qualified simply shows the amount of house you can afford based on your income. It doesn’t mean that a lender will approve you for a loan.
Having a pre-approval letter in hand when looking at homes shows you’re a serious homebuyer.
Submit A Clean Offer With No ContingenciesIf you submit an offer with contingencies, the seller may pass over it for one that has no stipulations. Contingencies like needing to sell your current home before closing on the new one will quickly send your offer to the bottom of the pile. Try to submit an offer clean of contingencies to show you’re serious about buying a home and closing on time.
Make An Appealing Net-Price OfferThe net price is the amount the seller gets after everything is said and done. The less they have to pay for, the more money they put in their pockets when the home sells. Try to make sure they get as much money as possible by not making them pay for things like closing costs. Anything that makes them have to shell out more cash in the sale could cause them to turn down your offer.
Make A Sizeable Down PaymentSubmit an offer with a sizeable down payment. At the time of this writing, the average down payment is nearly 8 percent of the median sale price. The reality is, sellers are more likely to accept an offer with a larger down payment because they feel the bigger down payment will put the buyer in a better position to qualify for a mortgage.
Don’t Ignore The Fixer UpperMany homebuyers will pass over homes that need fixing up. It can be difficult living through a home renovation, but if you can purchase the house for a decent price, it may be worth it to get the house of your dreams in the end.
If you’re looking to purchase a home that needs more than just a coat of paint and some new carpeting, do your homework when it comes to hiring contractors to get the job done. Check with some of the non-profit housing organizations for recommendations on construction professionals for your renovation.
The housing market is a competitive one for homebuyers these days, but when you come prepared, you can beat out the competition to secure the home of your dreams. Use the tips above to be a serious contender in a hot real estate market.
Be Careful What You Put Down the DrainsOne of the biggest culprits of slow-moving and clogged drains and pipes is not being careful of what goes down them. Grease is probably the most problematic substance people allow to go down the drain. While it’s easy to assume the liquid goes through the pipes as water does, the reality is it actually solidifies quickly and collects in specific spots along the way. As it builds up, it causes problems. Luckily, grease is the easiest drain problem to deal with since you have total control of whether it goes down the drain or not. Rather than pour grease down the drain as you’re cooking, collect it instead in an old coffee can that you throw away once it’s full.
Run Hot WaterOne of the easiest ways to help your drains stay clear is to get in the habit of running hot water down them after each use. While oils and other substances can settle, hot water keeps things moving along nicely. All you have to do to ensure your drains stay clear is turn the hot water on and let it run in the sink for a moment or two.
Use Baking Soda and VinegarIf you have a slow-moving drain or there’s a foul odor coming from the pipes, use vinegar and baking soda to clear it up. Simply pour a quarter-cup of baking soda in the drain and follow it up with a cup of white vinegar. The combination creates a volatile reaction that foams inside the pipes to clear the offending clog or buildup. Let the combo do its job for 15 minutes and then run hot water down the drain for a few seconds. This natural drain cleaner can be used regularly to keep your pipes clean and fresh. Your home’s pipes are very important. When they don’t work as they should, it’s very inconvenient and unhealthy. Use the tips mentioned above to keep your drains and pipes in tip-top shape.
Who Needs to know?The list of people who should know that you’ve moved can be rather lengthy so be sure to make a list. Find your holiday greeting card list to be sure you’ve included family and friends. Next, include all your doctors, dentist, optometrist, etc. Your child’s school and any regular services such as lawn care or cleaning services should go next. Lastly, jot down magazines, newspapers, and even the IRS.
When to Notify EveryoneThe postal service suggests putting in a change of address no later than two weeks before you move. The ideal time to do this, however, is about three months before you move. Since the postal service will continue to forward your mail for 12 months, this gives you plenty of time to notify everyone on your list.
How to Notify EveryoneHow you notify the people on your list is up to you. If it’s close friends or family, you can simply pick up the phone to relay your new contact info. Many creditors have a place on their monthly statements for you to enter your new address and phone number. Alternately, there are post cards available at the post office for you to fill out and send in the mail to notify others of your impending move.
What You NeedWhen you contact people you have accounts with, be sure you have your new address and phone number handy, as well as account numbers, an email address, and any other information that may help them identify you and your account.
What to do After You MoveIf you receive any forwarded pieces of mail, contact the sender to verify they have your new address on file. It could be that the change simply hasn’t had time to process in their system or that they didn’t receive your new contact information. Keep an eye open for your forwarded mail in about 7 to 10 days after you move in.
Moving is a chaotic event with lots of things to do. Use the tips above to easily change your address with the people who need it most.
So when it comes to remodeling your kitchen, you have a lot of options in terms of layouts and features. It can seem overwhelming, but below, we discuss several layouts and what you can expect with each so you can choose one that suits your needs best.
The IslandIslands in kitchens are popular as they not only add interest to the room but also functionality. They work well in large kitchens with plenty of space to maneuver around. Kitchen islands can be stand-alone versions where food prep takes place or part of a bigger unit such as a wall or half-wall for additional vertical storage and interest.
Single & Double Galley KitchensGalley kitchens are known for their compact layouts that put everything within easy reach. In a single-galley kitchen, the cabinets, appliances, and countertops are all strategically placed on one wall. In a double-galley kitchen, all the elements of the room are placed on two walls that run parallel and opposite each other.
If space is a concern, the single-galley kitchen works well, while a double-galley kitchen is best suited for rooms that are longer than they are wide.
An L-Shaped KitchenL-shaped kitchens feature the sink and cooking areas on different sides of the “L.” This design is especially great in smaller kitchens where family members love cooking together as it gives ample space for everyone to work.
U-Shaped KitchenCommon in open floor plans where the dining room and kitchen are one big space, the U-shaped kitchen helps divide the area into two separate rooms. The U-shaped kitchen can also be used in smaller kitchens to provide ample storage and workspace, but it can also give a feeling of being closed in. In this instance, open shelving helps reduce the closed-in feeling.
You have many options when it comes to kitchen layouts, so if you’re planning a kitchen remodel, be sure you understand the differences between them so you can choose the one that works best with the space you have and your particular needs.
There’s a lot to do when it comes to real estate investing. From finding good investment opportunities to managing them all, it’s a full-time job. Here are a few tips to help you get started on building a sizeable real estate portfolio.
Build a Team to Help Manage It AllBeing a landlord is a full-time job. Each property will require your time, and the more properties you own, the more time it will require. Begin building a team of people you can trust to help you manage it all. Professionals such as property managers, contractors, inspectors, etc. will help you stay on top of things and take some of the responsibility off your shoulders.
Spread Your Investments Over Several MarketsIf you’re managing everything yourself, you’ll likely want to keep all your investment properties close together for convenience. However, this is like putting all your eggs in one basket.
If you purchase investment properties in more than one market, it protects your money in the event that one market struggles, the other can keep things afloat.
Have Plenty of Available CashTo build your portfolio, you need to have plenty of easily accessible cash to take advantage of opportunities fast. There are a few different ways to ensure you have the cash you need on hand.
- Refinance or sell an existing property
- Partner with other investors
- Do a 1031 Exchange when you sell an investment property
Know Your Investment GoalsIt’s hard to achieve goals when you don’t fully understand what it is you hope to achieve. Before you begin looking for investment properties, ask yourself the following questions.
- Do I want to invest in different markets or stay local?
- Do I want to focus on the value of my portfolio?
- How many properties do I need to buy in order to reap a profit that exceeds my expenses?
- What do I hope to achieve? Higher monthly cash flow, more stability, or a combination of both?
Most real estate investors start out by owning a rental property or two. They quickly find out that real estate investing is quite lucrative and want to buy more properties. It’s a lot of work building a sizeable portfolio, so be sure you commit to memory the tips outlined above.
Advantages Of Paying Down Your Mortgage
1. You’ll Pay Less Interest Over The Life Of The LoanEveryone knows interest is calculated by the amount and the length of a loan. That being said, the less time you take paying a loan off, the less interest you end up paying. Even though it’s a well-known fact, not everyone realizes the astronomical savings this amounts to when it comes to a mortgage loan.
Here’s an example. If you have a $100,000, 30-year mortgage with a 4.5 percent interest rate, and you pay an extra $100 every month, you will save $26,377.36 in interest over the life of the loan.
This fact alone is enough of a reason to pay down a mortgage, but here’s another.
2. You’ll Pay Off The Loan And Build Equity FasterObviously, if you pay more each month, you’ll pay the loan off faster. Using the example above, you would shave 8 ½ years off the length of your loan, which helps you quickly build equity you can use later on.
3. You Have More OptionsWhen you pay extra toward your mortgage, it opens doors that would otherwise be closed to you. For instance, you would be able to take out a home equity line of credit that gives you fast cash for just about anything you need.
As a general rule, you can’t get a home equity line of credit on an investment property, but you still have flexibility when it comes to who you rent to once the property is paid off. You could let someone stay rent-free if you wish because you don’t have to worry about making mortgage payments anymore.
4. You Can Refinance Easily For A Lower Interest RateThis advantage is most useful once the property is paid off, but even before that happens, paying extra sets you up for easy refinancing at lower interest rates to save yourself even more money.
Disadvantages Of Paying Down Your MortgageNow that you understand the advantages of making extra payments to pay your mortgage, it’s important you also understand the downside to making those extra payments. Every mortgage is unique, so you’ll have to weigh your options before deciding whether to put extra cash toward paying yours off early.
1. You May Sacrifice LiquiditySometimes it’s smart to hold onto your cash. There are instances where paying extra towards your mortgage principal does nothing to increase your cash flow. Here’s an example.
You are a real estate investor with multiple rental properties. You have $10,000 in your investment checking account, and all your properties have paying tenants. You have a total of $600,000 debt, but your lowest loan is just $30,000. Do you put that $10,000 toward paying down that lowest loan? Maybe not.
If that loan is a fixed-rate loan, paying down 1/3 of it won’t lower your payments, which does nothing to increase your cash flow. Yes, it decreases the length of the loan, but as an investor, you’re in it to make money, so it makes no sense to use that money to pay down the loan.
2. You Don’t Qualify For Tax BreaksWhen you pay interest on a mortgage, you can write that amount off on your taxes. The less interest you pay, the less of a tax break you get.
3. You Miss Investment OpportunitiesPutting your extra cash toward paying down a mortgage takes capital away from future investment opportunities. If you are trying to build a real estate investment company, you need any extra cash for new investment properties.
As you can see, there are several great advantages to making extra payments to pay your mortgage. On the flip side, there are a few reasons you may not want to, too. Assess your situation and decide if it makes sense to use your extra cash to pay down your mortgage.
1. Real Estate AgentThe real estate agent is often the first person a buyer or seller sees. This real estate professional’s job is to negotiate the best terms for whomever he or she is working. The real estate agent also helps their clients through the legal requirements of the buying or selling process.
For investors with multiple properties for rent, real estate agents can help you set prices and find qualified renters. In some cases, a real estate agent will also screen potential tenants, field phone calls, and show your properties.
2. Home AppraiserThe home appraiser works for the lender. This real estate expert takes into account several factors including a comparison of the home with similar ones in the area that have recently sold, the cost of the home, and the income potential of the home before presenting the lender with a price for the property. Other factors an appraiser looks at is the size of the home, its condition, and the condition of the surrounding neighborhood.
3. Home InspectorA home inspector looks at every nook and cranny of a property and gives a detailed report of his or her findings for the buyer. Any offer to purchase should be contingent on the inspector’s report. A home inspector looks at major aspects of a home such as its electrical wiring, plumbing, heating/cooling, as well as the roof, walls, floors, windows, and doors.
4. Insurance AgentEvery mortgage requires the borrower to have homeowners insurance in place. The policy protects the owner from loss in the event of things like natural disaster, accidents, and lawsuits. Not all homeowner’s insurance policies are created equal, so it’s important you have a knowledgeable insurance agent on your side. This person can ensure you have sufficient coverage for both common and not-so-common mishaps. If you’re a landlord, an insurance agent can make sure your policy covers things like problematic tenants as well.
5. Loan OfficerA loan officer works for the lender, but it’s his or her job to help you qualify for a loan. This real estate professional gathers personal information from you such as your income, your employment status, and other qualifying information to determine whether you have the ability to pay back a loan. If you have less-than-perfect credit, the loan officer tells you what you need to do to fix it in order to qualify for a loan in the future. A loan officer also helps you get pre-qualified for a loan, which presents you as a serious buyer in the eyes of sellers and real estate agents.
6. Mortgage LenderThe mortgage lender uses the recommendation of the loan officer in deciding whether to grant you a mortgage loan or not. Based on the loan officer’s opinion that you can, and will, pay the loan back, the mortgage lender provides qualifying buyers with the money they need to purchase property. A mortgage lender can be a bank, a savings and loan institution, a credit union, or some other financial institution that lends money.
Whether you’re buying or selling a single home, or you’re an investor buying and/or selling multiple properties, the real estate professionals above are vital to being successful. Gather a team of these experts that you can count on every single time.
1. A Place for Everything, and Everything in its Place.You’ve probably heard this saying before, but its meaning is especially true where bill paying is concerned. How can you make sure all your bills are paid on time if you don’t know where they are?
Dedicate a specific area for placing your bills as they arrive in the mailbox. Ideally, this will be the same place you actually sit down to pay the bills and balance your checkbook so you don’t have to transport anything from one spot to another. If you always place the bills in the same spot, you’ll always know where to find them when it’s time to pay them.
2. Schedule Time to pay BillsWhether you pay bills every week, bi-weekly, or once a month, schedule a dedicated time to do so. When you set aside a specific time/date to pay your bills, you can plan accordingly so that nothing else interferes and your focus is on the task at hand. Do your best to stick to your schedule so you can get the job done and not have to worry about whether a bill is past-due or not.
3. Open Each and Every BillMany people think if they don’t open a bill, they won’t have to face the potential bad news inside. But what if the news is good? Maybe you over-paid a doctor bill, and they’re sending you a refund check. Not opening every piece of mail that comes to your mailbox or email could mean you miss something important. Having piles of unopened bills (even if you’re behind on them and have several copies of each) does not depict an organized bill-paying system.
4. Sort your Bills by DateSort all your bills by their due date. This way, you’re more apt to pay the ones due the soonest first. As soon as you get a bill in the mail, open it up and place it in the appropriate slot according to the date it is due. When it’s time to sit down and make out bills, you’ll know at a glance, which ones have to go out first.
5. Don’t Forget about Online BillsMany people prefer to pay some or all of their bills online. In fact, some people even have certain bill payments automatically withdrawn from their bank accounts so they don’t have to worry about them. While technology definitely makes things easier when it comes to bill paying, you must be even more vigilant with bill management if you pay your bills online. During your weekly/monthly bill pay sessions, it’s important to:
- Ensure you have enough money in your account to pay your online bills
- Check for emails with important information concerning your online bills, and
- Write down any confirmation numbers you receive when you pay your bills online in case there’s any discrepancies with the payments.