SPEC HOMES: IS BUILDING A SPEC HOUSE A GOOD INVESTMENT?
Homebuilding is on the rise and, as a Real Estate Investor or homebuyer, you may be thinking about whether investing in a spec home, that is, a custom home that is built to your specifications, is a good idea. There’s no doubt that buying a that’s already built and pre-owned is cheaper than building one from scratch. However, there are a few compelling reasons why building a custom home might be a good investment after all. In this blog post, we’ll take a closer look at what spec homes are, and consider the question of whether to build one based on current market conditions. We’ll also discuss some of the pros and cons of investing in spec homes, as food for thought, should you be considering this path. So, if you’re thinking about becoming a spec home builder, or just curious about what they are, keep reading! MY SMART COUSIN provides expert guidance on how best to get started in Real Estate Investing today and every day. We all know that becoming a property investor is no easy task. There are so many things to be taken into consideration, and the process can often seem daunting for beginners! Whether it’s purchasing your very first home to live in or investing in a property to begin your dream of owning a portfolio of investments, MY SMART COUSIN has your back as your seasoned Real Estate Coach, guiding and assisting you every step of the way. Whether you’re thinking about what type of property interests you or how to establish your budget, we help aspiring investors, with a particular focus on Black and Brown folks and women, find and invest in properties. WHAT ARE SPEC HOMES, AND WHAT ARE THE BENEFITS OF BUILDING ONE? A spec home, short for speculative home, is a property built without a specific buyer in mind. Builders typically construct spec homes in areas where they think there will be high demand for new homes. When building spec homes, investors must move on two parallel paths, both deploying a strong sales force to sell buyers a concept of their soon-to-be dream home, and working with general contractors to quickly build homes that will be appealing as-is to future buyers. The name of the game with spec homes is to sell the home as quickly as possible after it is completed.
FAIR MARKET VALUE: DEFINITION & CALCULATOR
Home buyers and investors often hear the term “fair market value” when talking about buying or selling a property. But what does it mean? Fair market value is defined as “the price at which a property would sell between a willing buyer and seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts.” But if you’re thinking about buying or selling a property, it’s important to have an idea of what fair market value is. And luckily, there’s an easy way to calculate it. We understand that buying a house can be stressful and overwhelming, especially if you don’t know what to do. MY SMART COUSIN is here for all your Real Estate needs! Whether it’s finding an affordable property or helping with financing options so the process goes as smoothly as possible – as a Real Estate Investment Coach, we’ve got just about everything covered at this one-stop shop. We offer tailored solutions to every individual, with a particular focus on Black and Brown folks and women, in every aspect of investing, and particularly for those seeking to Buy a House for the Price of a car, our personal favorite to buy a property!
WHAT IS THE BEST TYPE OF MORTGAGE FOR A NEW REAL ESTATE INVESTOR?
We’ve all heard the old saying “ buy low, sell high. But what does that really mean? It means getting a great deal and then turning around so you can pass those savings on to your customer! MY SMART COUSIN helps as an experienced Real Estate Investment Coach position Black or Brown folk (especially women) to purchase their investment property quickly and knowledgeably by leveraging our skill set which has already helped many like ourselves achieve what everyone deserves – ownership of their own home! With our strategies and guidance, we help them buy a house for the price of a car. Are you thinking of investing in real estate? It can be a great way to build wealth over time, but it’s important to choose the right type of mortgage. So, what’s the best type of investor mortgage for a new real estate investor? Read on to find out! WHAT IS AN INVESTOR MORTGAGE AND HOW DOES IT WORK? An investor mortgage is a type of loan that is designed for people who are looking to purchase property for investment purposes. The key difference between an investor mortgage and a regular home loan is that the interest rate on an investor mortgage is typically higher. This is because lenders view investment property as a higher risk than a primary residence. As a result, people who are looking to take out an investor mortgage need to be prepared to make a higher monthly payment. However, the potential return on investment (ROI) can be much higher for an investment property than a primary residence, making an investor mortgage an attractive option for many people. WHAT ARE THE BENEFITS OF USING AN INVESTOR MORTGAGE FOR A NEW REAL ESTATE INVESTOR? When you’re first starting out as a real estate investor, it can be tough to get approved for a traditional mortgage. That’s where an investor mortgage comes into play. Investor mortgages can be particularly helpful for new real estate investors, and they offer a number of benefits. YOU CAN ALSO READ: FEE SIMPLE OWNERSHIP VS. LEASEHOLD: KEY DIFFERENCES FOLLOW US: @MYSMARTCOUSIN
WHAT IS THE GROSS RENT MULTIPLIER (GRM) IN REAL ESTATE?
If you’re a real estate investor or just in the market to buy a home, then you’ve likely come across the term “gross rent multiplier” or GRM. But what is it, exactly? And what does it mean for you? When you’re buying a property, one of the most important things to understand is your potential return on investment or ROI. This is calculated by multiplying the annual rent by the gross rent multiplier (GRM). At MY SMART COUSIN, we want to help you make your first step in real estate investing as straightforward and painless as possible. As seasoned Real Estate Investors and Investment Coach, we lead aspiring homeowners and investors, and especially Black and Brown folks and women, through the process of implementing real estate investment goals. We develop custom-designed strategies and roadmaps that are tailored to your particular situation and interests. And if you’d like to buy a house for the price of a car, our personal favorite way to invest, we’ve got you covered there too. In this blog post, we’ll break down everything you need to know about GRM and explain how it can help you make better investment decisions. Stay tuned! WHAT IS THE GROSS RENT MULTIPLIER? The gross rent multiplier, or GRM, is a tool that investors use to estimate the potential return on investment for a rental property. To calculate the GRM, you simply take the purchase price of the property and divide it by the annual gross rent. For example, if you purchase a property for $100,000 and the annual rent is $10,000, the GRM would be 10. Or said another way, if you purchase a house for $100,000, then it would take you ten years to reach breakeven on a rent revenue basis. However, it’s important to remember that the GRM is just an estimate and doesn’t take into account other factors that could affect your actual return, such as vacancy rates, competing for rental options for tenants, and market conditions. So while the GRM can be a helpful tool in your investment decision-making process, it shouldn’t be used as the sole deciding factor. HOW IS THE GRM USED IN REAL ESTATE INVESTING AND ANALYSIS? The gross rent multiplier helps investors quickly get their arms around the potential value of a property of an income-producing property. Generally speaking, a lower GRM indicates a better deal, as it means that you are paying less for each dollar of rental income. Or said differently, it is taking you fewer years to recover your investment cost through rent revenues. In addition to being used as a valuation tool, the GRM can be used to compare properties against one another. For instance, if one property has a GRM of 8 and another has a GRM of 12, then the first property is considered to be a better investment because it has a shorter breakeven period and requires fewer investment dollars per dollar of rent revenue. While the GRM is not a perfect measure, it is a useful tool for taking a quick snapshot of the value of an income-producing property. WHAT FACTORS INFLUENCE THE GRM FOR A PARTICULAR PROPERTY OR MARKET AREA? There are a variety of factors that can influence the GRM for a particular property or market area. · One of the most important factors is the current state of the housing market. If there is high demand for housing, the price of entry for an investment property will generally be higher, leading to a higher GRM. · Another important factor is the location of the property. Properties in desirable areas will often sell for a premium, resulting in a higher GRM, which may outweigh the value of the higher rental income. · Additionally, the size and condition of the property can impact the GRM. Larger properties or those in better condition will often sell for more, resulting in a higher GRM. · Ultimately, the GRM is impacted by a number of different factors, all of which should be considered when evaluating a potential property purchase. WHAT ARE SOME OF THE PROS AND CONS OF USING THE GRM IN REAL ESTATE INVESTING DECISIONS? The GRM is a powerful tool that aids in making real estate investment decisions. THE PROS · The GRM can be used to quickly and easily compare different properties. · It can help you evaluate whether a property is a good investment, · It can provide valuable insights into the market. THE CONS · The GRM does not take into account all of the factors that affect real estate values. It is important to remember that the GRM is just one tool, and the number should not be followed blindly as a rubber stamp of whether the property is a good or bad investment. YOU CAN ALSO READ: CAP RATE EXPLAINED AS WE BEGIN EYING 2023, AND WHY IT MATTERS WITH RENTAL PROPERTIES FOLLOW US: @MYSMARTCOUSIN
CAP RATE EXPLAINED AS WE BEGIN EYING 2023, AND WHY IT MATTERS WITH RENTAL PROPERTIES
In some parts of the country, rental properties are in high demand. This is due to several reasons including people wanting to downsize, people wanting to live in a more walkable /livable area, and greater interest in trading away the cost and time of home maintenance for a maintenance-free lifestyle. Whatever the reason, the net result is that renters will always be a preferred or required lifestyle for a large segment of the population. As such, it pays to understand cap rates and how they are calculated. In this blog post, we’ll explain what a cap rate is and why it’s important when buying or selling a rental property. So whether you’re a landlord interested in understanding what your property is worth or someone curious about the real estate market, this blog post has got you covered! WHAT IS A CAP RATE AND WHY DOES IT MATTER FOR RENTAL PROPERTIES? A cap rate, short for capitalization rate, is a simple but important metric for evaluating investment properties. It tells you the expected rate of return on a real estate investment, expressed as a percentage. As an example, let’s say you’re considering buying a residential property. You’ve run the numbers and estimated the market value of the property, after renovations, at $100,000. If you rent the property for $1,500 per month, then your annual rental revenues are $18,000. Your rent revenues, however, are not the return you earn on the property— your return is your rent revenues minus your operating expenses. Operating expenses include property management, maintenance expenses, and property taxes. Let’s say that these expenses add up to $8,000 a year; with $8,00 in operating expenses, your operating income will be $10,000, yielding a cap rate of 10%. Why are cap rates important? Because the cap rate gives you a yardstick to compare different investment opportunities. For example, let’s say you’re considering two rental property investments. Property A has a purchase price of $100,000 and an annual operating of $10,000. Property B has a purchase price of $400,000 and an annual operating income of $20,000. Which one provides a higher return on investment? At first glance, it might seem like Property B does because the net operating income is twice as high. But when you look at the cap rates, things look different. Property A has a cap rate of 10% ( $10,000 / $100,000), while Property B has a cap rate of just 5% ( $20,000 / $400,000). That means that Property A will generate twice the return on your investment as Property B. So even though Property B has a higher absolute return in total dollars, it’s a less profitable investment when considering the return against the amount of money invested. Of course, there are other factors to consider when choosing an investment property. But the cap rate is a good place to start because it gives you a clear picture of the potential return percentage on your investment. And that’s why it’s a particularly useful tool for rental property investments. EXAMPLES OF HOW THE CAP RATE CAN BE USED FOR REAL ESTATE INVESTMENTS One way the cap rate can be used for real estate investments is to help you determine how much rental income you need to earn, or what your maximum operating expenses should be, in order to achieve a target cap rate. Let’s imagine that you are considering purchasing a property that has no rental history. The property is selling for $100,000, and your goal is to realize a minimum cap rate of 5%. You have obtained quotes from several property managers; the consensus is that property management costs plus maintenance are $6,000 a year. Your property insurance is $2,000, bringing you to a total of $8,000 in expenses. The initial rent you were targeting for the property was $1,000 a month, or $12,000 a year. But subtracting $8,000 from this leaves a net operating income of $4,000, or a 4% cap rate. You quickly realize that your rent will need to be on the order of $13,000 a year, or $1,083 a month, in order to achieve a 5% cap rate. HOW YOU CAN USE THE CAP RATE TO MAKE MORE INFORMED DECISIONS ABOUT YOUR INVESTMENTS There are a few things to keep in mind when using the cap rate. First, it’s important to look at the cap rate in context. Meaning, you will want to compare properties with similar risks and rewards. For example, a property that requires significant renovations is likely to have a lower cap rate than a property that’s move-in ready. Likewise, a property that’s in a high-demand location such as near a desirable school district is likely to command a rent premium versus one that isn’t. Second, it’s important to remember that the cap rate is only an estimate. Your actual return on investment may be higher or lower than the projected cap rate. Therefore, it’s important to do your due diligence and research properties thoroughly before investing. By considering these factors, you can use the cap rate to make more informed decisions about which investment properties are right for you. SUMMARY So, what is a cap rate? In short, it’s the projected annual return on an investment property— after operating expenses— divided by the property’s market value. It matters for rental properties because it can help investors determine whether a particular property is worth buying. YOU CAN ALSO READ: THE HIDDEN BENEFITS OF OWNING TURNKEY RENTAL PROPERTIES FOLLOW US: @MYSMARTCOUSIN
THE HIDDEN BENEFITS OF OWNING TURNKEY RENTAL PROPERTIES
Turnkey rental properties have been growing in popularity over the past few years. Many investors are considering them as an option for their portfolio, and for good reason—they can be a great way to get started in real estate investing. Whether your focus is buying one investment property or a large portfolio, buying a high-end property or a low-cost one, you need a strategy that is customized to your interests, and a coach dedicated to making it happen. In other words, MY SMART COUSIN. At MY SMART COUSIN, we offer tailored solutions in every aspect of real estate ownership, with a particular focus on Black, Brown, and women real estate investors. Whether you’re looking to buy a house for the price of a car, or are looking to buy at a higher price point, we can take you from strategy to a targeted list of matching properties, to negotiation, financing, closing, and property management. If you are considering investing in a particular type of real estate— turnkey rental property— you’re not alone. Turnkey rentals have been growing in popularity, thanks to their many advantages. But before you dive in, it’s important to understand what turnkey properties are, and what to look for when choosing one. In this blog post, we’ll discuss the pros and cons of turnkey rentals and help you decide if this investment is right for you. Stay tuned! WHAT ARE TURNKEY RENTAL PROPERTIES AND HOW DO THEY WORK? A turnkey rental property is a property that is ready to rent out as soon as you purchase it. This means that everything from the kitchen appliances to the furniture is included in the sale. The value of this structure is that you won’t need to make any additional investments in the property after you close, bringing you that much closer to earning immediate rental income. While turnkey properties can be more expensive than properties that require some renovations, they can also be a great way to get started in the rental market without any additional hassle. And, since the property is already generating income or can be positioned to generate income in short order, you’ll have a much easier time qualifying for a mortgage to finance the investment. If you’re thinking about purchasing a rental property, be sure to ask your real estate agent if there are any turnkey options available. ARE TURNKEY RENTAL PROPERTIES A GOOD INVESTMENT? Turnkey rentals typically come with a higher price tag than properties that need some work. That’s because you’re paying for the convenience of having a property that’s immediately lease-ready, as well as the cost of the renovations, fixtures, and in some cases, even furniture, that the seller paid for. And while turnkey properties can be a good option for busy investors who don’t have the time or inclination to take on repairs, it’s important to remember that you’ll trade off some control over the design and layout of the property if you go this route. That can be a good thing or a bad thing, depending on your preferences. So, is a turnkey rental property right for you? If you’re looking for a property that is wrapped up in a pretty now and can offer immediate cashflow, a turnkey rental can be a great option. Just be sure to do your homework before making any decisions – and remember that there’s no such thing as a perfect investment! WHAT ARE THE PROS AND CONS OF OWNING A TURNKEY RENTAL PROPERTY? The concept of owning a turnkey rental property can be appealing to many investors, but it’s important to consider both the pros and the cons before making a purchase. · On the plus side, turnkey rental properties will take much less time to bring to market versus a property that has to be gutted and renovated. · Additionally, turnkey rentals are often located in desirable neighborhoods or areas that are primed for growth, which can make them easier to rent and command higher rents. On the downside, turnkey rental properties can come with some risks. If the seller went over budget on the cost of renovation, or perhaps worse, if the seller totally ignored or cut corners in some areas of the property to save money, then the seller’s bloated budget or shortcuts will become your problem. In short, it’s important to do your due diligence before investing in any turnkey property. HOW DO YOU FIND THE RIGHT TURNKEY RENTAL PROPERTY TO INVEST IN FOR YOUR NEEDS AND GOALS? There are a lot of factors to consider when you’re trying to find the right turnkey rental property to invest in. Front and center should be your budget, your goals for the property, and what kind of property will be a good fit for you. If you’re not sure where to start, it can be helpful to talk to a real estate agent or property investment coach who specializes in turnkey investments. They’ll be able to help you figure out what your options are, and what kinds of properties are available in your price range. Once you’ve narrowed down your search, you can start looking at specific properties and see which ones seem like they would be the best fit for your needs. With a little bit of homework, you should be able to find the perfect turnkey rental property for your needs. FINAL THOUGHTS So, are turnkey rental properties a good investment for you? That answer depends on a lot of factors, including your goals, budget, and the market where you live. But as with any investment, it’s important to do your research and understand what you’re getting into before making a decision. We hope this article has helped give you some insight into what turnkey rental properties are all about and how they work. If you have any questions or want more information, be sure to reach out to us – we’d be happy to help! YOU CAN ALSO READ: WHAT HOMEBUYERS WANT: THE MOST IMPORTANT FEATURES FOLLOW US: @MYSMARTCOUSIN
WHAT HOMEBUYERS WANT: THE MOST IMPORTANT FEATURES
It’s no secret that the housing market continues to be hot, even with high prices and higher mortgage rates in the mix. In May of this year, average home prices hit a record high of $400,000 and then some, despite surging inflation and the resulting downward pressure it placed on sales. But even when prices are generally high across the board, there are always bargains to be had, if you know where to look. What if I told you that you can buy a house for the price of a car! At MY SMART COUSIN, we help you achieve your real estate investment goals, using tools and channels that are often overlooked by others. As your Real Estate Investment Coach, we have the skills and expertise to position almost everyone, with a particular focus on Black & Brown folks and women, for success in this competitive market. With planning, persistence, and guidance, you can buy a house for the price of a car and finally get your foot in the door of home ownership and property investment! If you’re in the market for a new home, you know there are a lot of things to consider. How big should it be? What’s the commute like? What’s the neighborhood like? It can be tough to figure out what’s important to you, and even tougher to find the right home that meets all your needs. But don’t worry – we’re here to help. In this blog post, we’ll take a look at the top features homebuyers are looking for in a new property. So whether you’re just starting your search or you’ve been looking for months and still haven’t found “the one,” read on for some valuable advice. WHAT ARE HOME BUYERS LOOKING FOR? Homebuyers are looking for features that will make their lives easier, as well as add value to the home. Popular features that continue to stand the test of time include energy-efficient treatments throughout the house (think insulation and solar panels as well as efficient appliances and windows), open floor plans, and smart technology. Homebuyers are also interested in outdoor living spaces, a flexible space that they can use as an office (given the COVID ripples felt in the work world), and everyone’s favorite— updated kitchens and bathrooms. Let’s dive into some of the most important attributes at the top of that homebuyers’ lists. · LOCATION, LOCATION, LOCATION The location of the house is one of the most important features that a homebuyer looks for, as centrality to required locations (school and work) and neighborhood favorites (shopping and restaurants) is key when choosing a home. The factors that you prioritize are ultimately a personal choice. For instance, most homeowners want to live near the city, but not smack-dab among the bright lights and car horns of downtown. Likewise, many homeowners rank peace and quiet high on their list, but not at the expense of living far from civilization (particularly if playmates for children are important). The perfect balance is a neighborhood that’s close enough to the city center for accessibility, but far enough away from noise and chaos. Also high on many people’s lists is an established area. An area that has plenty of amenities like schools, hospitals, parks, and shopping centers is far more attractive than the prospect of living in a construction zone. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort · UPDATED KITCHEN AND BATHROOM When it comes to buying a home, everyone has different tastes and styles. But some features endure no matter your preferences. A modern kitchen and bathroom are two of the most important attributes that home buyers look for. A kitchen is the heart of the home, and a bathroom, particularly one that has a spa-like sense of tranquility, is a place to relax and rejuvenate. Neither of these rooms should feel dated or cramped. A well-designed kitchen should have plenty of storage space and counter space, while a bathroom should feel clean, uncluttered, and serene. · HARDWOOD FLOORS Flooring is one of the most important things that home buyers look for when they are purchasing a new home. Many people believe that hardwood floors are the best type of flooring to have in a home. Although hardwood floors are beautiful, they can also be very expensive. Great alternatives are vinyl plank flooring which comes with the added advantage of being waterproof, and laminate or tile. · ENERGY-EFFICIENT EQUIPMENT According to a recent study, the most important features that home buyers look for are energy-efficient equipment such as solar panels, draft-free windows and doors, high-efficiency furnaces, water heaters and appliances, and a well-insulated and solid structure. While energy-efficient fittings can add to the purchase price of the home, the savings can last for many years. If the cost of adding solar or other equipment is beyond your budget, other options include adding energy efficient lighting and thermostats, and low-flow shower heads and toilets. · A LONG-LASTING ROOF One of the most important features that home buyers look for is a roof that is built with quality materials and still has many years of life left in it. A tile roof can last for decades and comes in many attractive finishes. Asphalt shingles, which are the most common type of roofing materials, are durable, fire-resistant, and have a lifespan of approximately 20 years, depending on your climate. Metal roofs made out of steel are also becoming more popular because they are low-maintenance and energy-efficient, and can last as long as 50 years. · PATIO AND DECK ADDITIONS A slice of backyard greenery is popular across the board with most home buyers. Potential uses range from having a play space for kids to backyard barbecues and entertaining, to having an open area for pets to run around. Patios are natural additions for backyards as they extend your indoor living area, convert your lawn into usable space, and add significant value to your
NO SECRETS – THE FUNDAMENTALS OF REAL ESTATE INVESTING SUCCESS
There’s no hiding the fact that real estate investing can be incredibly lucrative. But like any other business venture, there are no guarantees. If you’re looking to get into the world of real estate investing, it’s important to arm yourself with as much information as possible so that you can make informed decisions and increase your chances for success. At MY SMART COUSIN, we help aspiring homeowners and investors, with a particular focus on Black and Brown folks and women, make their Real Estate investment journey a success. As experienced and successful Real Estate Investors and Coaches, we help you determine your strategy and implement a custom-designed business and financing roadmap. And if your focus is on the lower end of the market, we help you buy a house for the price of a car, our personal favorite way to buy real estate! In this blog post, we’ll discuss some of the basics of real estate investing, and highlight key factors to keep in mind if you’re just starting out. Let’s dive in! THE BASICS OF REAL ESTATE INVESTING- WHAT YOU NEED TO KNOW Real estate investing is a great way to make money and build long-term wealth. However, it’s not a get-rich-quick scheme. There can be pitfalls aplenty, and patience, expertise, and persistence are required to be successful. The basics of investing in real estate are as follows: · First, you need to find good properties that have the potential to appreciate in value. If the properties will be rental properties, they also must provide steady rental income. A good rule of thumb for rental properties is to buy the property for no more than 100 times the monthly rent. Is it a single-family house renting for $1,000 a month? Add two zeros to the end, taking you to $100,000, which should be your maximum purchase price. Are you looking at multifamily that generates $5,000 a month in rental income? Adding two zeros means you should pay no more than $500,000. The two-zero rule, of course, has many exceptions, but it gives you a quick snapshot of the property’s price relative to its income potential. · Once you’ve found a good property, you need to finance it. You can do this by taking out a loan from a third party such as a hard-money lender or private individual, obtaining seller financing, bringing in others as equity partners or investors, or using your own savings. If you’re using a loan, you’ll need to make sure that the interest rate, any fees, and other terms still make the deal profitable and affordable for you. If you’re involving partners or equity investors, you’ll need to ensure that your investment strategy and goals for the property are aligned, and roles are clearly defined. You will almost certainly want to engage the services of a lawyer for partnership and equity investment deals. · After you’ve purchased the property, you’ll need to manage it properly in order to maximize its value. Property management can either be handled by you, or by a third-party professional manager who is paid a fee. In either case, property management boils down to making sure that the property is well-maintained, good tenants are identified and in place, customer service is a priority, maintenance is timely, and rent is collected on time. Real estate investing is not for everyone, but it can be a great way to build long-term wealth. If you’re willing to put in the work, it can be a very profitable endeavor. HOW TO FIND THE BEST PROPERTIES AND MAKE THE RIGHT OFFERS You’ve finally decided you’re ready to take the plunge and buy an investment property. But where do you start? And how do you make sure you’re getting a good deal? Here are a few tips to help you find the best properties and make the right offers. · First, do your homework. Research the market and talk to experts to get a feel for what kind of property is likely to appreciate in value, and how to assess the rental rate for a unit. Explore MeetUp and Facebook groups as a first step in learning from others. · Next, once you’ve found a few properties that meet your criteria, it’s time to start making offers. It’s important to be realistic with your offers, based on the current market value of the property and its potential for growth. Don’t be afraid to negotiate hard – but also be prepared to walk away if the seller isn’t willing to meet your terms. WHAT KIND OF RENOVATIONS WILL GIVE YOU THE BIGGEST RETURN ON INVESTMENT When it comes to renovations, there are a lot of factors to consider. How much will the project cost? How much value will it add to your property? And how long will it take to recoup your investment? If you’re planning a renovation and hoping to get the biggest return on your investment, here are a few projects to consider: · Updating the kitchen is always a good bet. A well-designed kitchen can add significant value to your investment property, and it’s something that potential buyers and renters alike will definitely notice. · Adding an extra bathroom, even a half bath, is another great way to increase your property’s value. Particularly if you’re flipping the property, an extra bathroom can be a real selling point. · Finishing your basement is another great option. A finished basement can be used as extra living space or even rented out for additional income. Whatever renovation you decide to undertake, make sure you do your research and plan carefully. With a little forethought, you can make sure your renovation adds both value and curb appeal to your home. HOW TO MANAGE YOUR PROPERTY PORTFOLIO FOR MAXIMUM PROFITABILITY As a property investor, you know that there’s more to success than simply acquiring as many rental properties as possible. To really maximize your profitability, you need to carefully manage your property portfolio. Here are a few tips for
LANDLORDS, ARE YOU AT RISK OF YOUR TENANT BEING ABLE TO LEGALLY WITHHOLD RENT? READ ON TO AVOID THIS SCENARIO!
Imagine this scenario: you’re a tenant who has agreed to rent a property from a landlord. However, after moving in, the house leaks and creaks, and all manner of other problems begin to crop up. Even more frustrating, the landlord, who seemed ultra-responsive when you were considering renting the house, is now nowhere to be found! The thought of solving the problem by moving seems overwhelming. Fortunately, there is another option: withholding rent. Rent withholding is a law that allows tenants to withhold part of their rent payment to make repairs if the landlord does not fix critical issues with the rental unit. Investing in real estate can be both exhilarating and profitable for existing and aspiring property investors. But as the above rent withholding example shows, it also has its share of risks and requires ongoing investments for the life of the property. At MY SMART COUSIN, we know that great investments don’t just happen. You need the right strategy and expertise to make them work, which is why we’re here! As a Real Estate Investment Coach who focuses on Black, Brown, and women real estate investors, in particular, we offer tailored solutions in every aspect of real estate ownership. Whether you’re looking to buy a house for the price of a car, our personal favorite way to buy, or are looking to buy at a higher price point, we can take you from strategy to a targeted list of matching properties, to negotiation, financing, closing, and property management. In this post, we’ll discuss what rent withholding is, how it works for landlords and tenants, and some common misconceptions about it. Stay tuned! WHAT IS RENT WITHHOLDING AND WHY DOES IT HAPPEN? Whether you’re a tenant or a landlord, chances are good that even if you haven’t heard the term ‘rent withholding’ per se, you’ve heard of cases of tenants being fully justified to pay less than the full amount of rent. But what is rent withholding exactly? In short, rent withholding is a temporary stoppage in some or all of the rent by the tenant, typically granted in response to a critical problem with the property, such as required repairs yet to be made by the landlord to make the property habitable. When the stoppage is made by the tenant without the landlord’s agreement, that is typically referred to as rent withholding or repair-and-deduct. When the stoppage is a reduction rather than complete non-payment, and mutually agreed to by the landlord and renter, that is usually referred to as a rent abatement. While at first blush it may sound like a landlord is at risk of having a rent stoppage occur for any and all repairs, the criteria for withholding rent is often quite strict. Rent withholding rules vary from state to state, but at their core, the damage caused cannot be due to tenant neglect or improper use of the rental unit. Further, the poor condition of the property must be severe enough to be hazardous to the health and safety of the renter and no longer livable. Examples include no running water in the house, a broken furnace causing no heat in the winter, a badly leaking roof, or dangerous wiring. Importantly, rent withholding laws don’t require that wear-and-tear or maintenance issues that don’t affect the livability of the unit to be addressed. Only serious defects are covered under the law. WHAT IS THE PROCESS FOR REQUESTING RENT ABATEMENT? If the landlord and tenant are in mutual agreement that the rent be totally or partially reduced for a certain period of time until the agreed repairs are made, then the landlord and renter together will submit a written request to the city housing department requesting rent abatement. The reduction request must include the following information: · The address of the rental unit · The dates of the rent reduction period · The reason for the request · The signature of the renter and landlord Once the request is received, a housing inspector will visit the rental unit to determine if the conditions warrant a rent abatement. If so, the inspector will issue an order granting the rent abatement. The order will specify the amount of rent that is to be abated and the duration of the abatement period. Landlords and tenants are responsible for making sure that all other terms of the rental agreement, including any rent that is not reduced, are met. WHAT STEPS SHOULD A TENANT TAKE FOR WITHHOLDING RENT? Tenants should be aware that rent withholding can be tricky business, and should only be pursued as a last resort, and after obtaining legal counsel. Below is a high-level roadmap of steps to take when withholding rent. Step 1 – Tell the Landlord About the Problem. Tell your landlord, in writing, what the problem is and what you plan to do about it. For example, if there is no running water in the house due to a plumbing issue, then tell your landlord that you will withhold your rent because of the plumbing issue that occurred on X date, causing there to be no running water in the house. While most communications these days occur electronically, it is best to send a letter by certified mail. Be sure to keep a copy of the certified mail receipt and the letter itself to prove that you notified the landlord. Step 2 – Give Your Landlord Time to Make the Repair. Most states have laws that give landlords a reasonable amount of time to make repairs. In the case of an emergency such as a broken furnace on a winter day, only 24 hours might be allowed. For non-emergency issues such as a broken furnace in the summer, the landlord might be given 30 days or more to make the repair. Step 3 – Collect Evidence to Prove That the Landlord Did Not Make Repairs. You can show that the landlord did not make repairs through pictures, witnesses, or a report from a
WHY FF&E IS A HIDDEN GOLDMINE WHEN BUYING A HOUSE!
When you’re buying or selling a house, you’ll likely hear the term FF&E. But what exactly does that mean? Furniture, fixtures, and equipment – or FF&E for short- is everything in the property that’s not permanently attached to the walls or floor. In most cases, that means appliances, furniture, window treatments, and anything else you might find in a typical home. FF&E is an asset, much like the house itself. But as the old saying goes, one man’s trash is another man’s treasure. The furniture or appliances that a home seller leaves behind can be particularly valuable for flips when staging a house for buyers, for Airbnbs as part of the furniture package required for long-term stays, and even for rentals to give an interior designer’s touch to otherwise bare walls. Whether you’re considering buying a single-family or multifamily investment property brimming with FF&E or one that’s completely empty, MY SMART COUSIN can take you through the critical steps of buying and owning real estate— from evaluating markets and identifying appropriate strategies, to securing financing and managing properties. As a Real Estate Investment Coach, we specialize in helping you buy a house for the price of a car, our personal favorite way to invest or to buy at a higher price point. If you’re new to real estate investing or are looking to buy your first home, it’s important to know what FF&E is and how it affects your purchase. This guide will teach you everything you need to know about FF&E in real estate transactions. WHY DOES FF&E MATTER IN REAL ESTATE TRANSACTIONS? FF&E, or furniture, fixtures, and equipment, is everything inside a property that isn’t part of the structure itself. As an example, window air conditioners that sit in a window and can be removed, are not part of the structure and thus would be FF&E. A central air conditioning system, on the other hand, is part of the heating and ventilation systems for the house, and would not be considered FF&E. When you’re buying or selling a property, FF&E can be an important factor in the transaction. For sellers, FF&E can add value to a property. If you’re selling a furnished property, buyers will be willing to pay more for the convenience of not having to buy their furniture. Likewise, if you’re renting the property, the ability to attract tenants and long-term guests increase significantly when the house is already outfitted with homey touches. For buyers, FF&E can be a valuable asset. If you’re buying a furnished property, you’ll be able to use the furniture right away. And if you’re buying a commercial property, equipment that is left behind can be useful if you’re in the same line of business, or if not, sold online to buyers who use that equipment. If there is FF&E at the home or commercial business that you want to be included in the purchase of the property, stipulate this in the purchase agreement or you may find that the seller removes it prior to close. In short, it’s important to factor FF&E into your real estate transaction. Whether you’re buying or selling, make sure you know what’s included in the deal. HOW DO YOU DETERMINE THE VALUE OF FF&E IN A PROPERTY? There are a few different ways that you can determine the value of FF&E in a property. · First, you can look at the replacement cost of the items. This is the cost of buying new items to replace the existing ones. · Another way to determine value is to look at the depreciation schedule. This takes into account how much the item’s usefulness or operating life has been used up and how much remains. · Finally, you can look at the resale value of the items. This is what you could expect to get if you sold the items on the open market. All of these methods have their own pluses and minuses, and it’s important to consider which approach makes the most sense when determining the value of FF&E in a property. WHAT ARE SOME KEY CONSIDERATIONS WHEN NEGOTIATING FF&E IN A DEAL? When it comes to commercial real estate, furniture, fixtures, and equipment can often be one of the most expensive aspects of a deal. As such, it’s important to carefully consider all of your options before making any decisions. Here are just a few key things to keep in mind when negotiating FF&E in a deal: · First and foremost, you need to determine what kind of FF&E is included in the deal. This can be anything from office furniture to kitchen equipment and everything in between. Make sure you have a clear understanding of what’s included so there are no surprises down the line. · Next, you’ll need to take a close look at the condition of the FF&E. If it’s well-maintained, in good working order and already installed, you may be able to rationalize paying a higher price to keep it. However, if the furniture is old and outdated or the equipment or appliances need repairing, you’ll likely have to pay more than the items are worth to get everything in working order. · Finally, don’t forget to factor in delivery or removal costs when negotiating FF&E. If the buyer wants the seller to remove FF&E before close, the cost of clean-out can be steep. Be sure to include these costs in your overall budget. By keeping these key considerations in mind, you’ll be better prepared to negotiate FF&E in your next real estate deal. HOW DO YOU MANAGE FF&E DURING OR AFTER A PROPERTY TRANSACTION? When it comes to managing FF&E during or after a property transaction, there are a few things to keep in mind. · First, it’s important to inventory all FF&E items and documents their condition. This will help to ensure that everything is accounted for and that any damages can be noted and repaired before the transaction is finalized. ·