HOUSE DEED: WHAT YOU NEED TO KNOW ABOUT PROPERTY DEEDS
If you’re a real estate investor or just own a home, it’s important to understand what a property deed is and what it means for you. A property deed is basically a document that shows who owns a piece of property. There are different types of deeds, and each one has its own pros and cons. 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! Did you know that house deeds are some of the most important legal documents when it comes to property ownership? In this blog post, we’ll explain everything you need to know about property deeds so you can make sure your interests are protected. Let’s dive in! WHAT IS A PROPERTY DEED AND WHAT DOES IT INCLUDE? A property deed is a legal document that transfers ownership of real estate from one person to another. The deed must be signed and notarized by the seller and delivered to the buyer. The buyer then records the deed at the local land records office. The deed should include a description of the property, and the names of the buyer and seller, and be signed and notarized by the parties involved. It’s also common for the deed to include language that gives the buyer certain rights, such as the right to use the property for certain purposes, or the right to terminate the sale under certain circumstances. The inclusion of these rights is generally negotiable between the buyer and seller. Ultimately, the goal is to create a legally binding contract that clearly sets forth the terms of ownership for all parties involved. HOW DO YOU TRANSFER A PROPERTY DEED TO ANOTHER PERSON OR ENTITY? There are a few different ways that you can transfer a property deed to another person or entity. · One way is to simply sign the deed over to the new owner. You will need to include the date of the transfer, your signature, and the new owner’s signature. · Another way to transfer a property deed is to sell the property and have the new owner file a new deed. This is a more complicated process, but it does have the advantage of giving you some money for the property. · Finally, you can also donate the property to a charity or other organization by filing a deed of gift. Whichever method you choose, be sure to consult with an attorney to ensure that the transfer is legal and binding. WHAT ARE THE BENEFITS OF HOLDING A PROPERTY DEED IN YOUR NAME? If you own a home, chances are good that the property deed is in your name. But what does that mean, exactly? And what are the benefits of holding the deed in your name? There are several benefits to having the deed in your name. · First, it provides evidence of ownership if there is ever any question about who owns the property. · Second, it can help you to get a loan against the property if you need access to liquidity. · Third, it can help to ensure that your heirs inherit the property if you pass away. · And finally, it can provide peace of mind knowing that you have your paperwork in order, should you ever sell the property. If you’re thinking about buying a piece of property, be sure to have the deed transferred into your name or the name of your LLC or corporate entity. It’s one of the best ways to protect your investment. HOW CAN YOU CHANGE THE NAME ON A PROPERTY DEED IF NEEDED? If you need to change the name on your property deed, the process will vary somewhat depending on your situation. For example, if you are changing your name after getting married or divorced, you will need to present a certified copy of your marriage certificate or divorce decree. However, if you are changing the name for any other reason, you will likely need to go through a more formal process. This may involve contacting your local registry office or getting a court order. In any case, it is important to make sure that the deed reflects the correct name, as this can help to prevent problems down the line. ARE THERE ANY RESTRICTIONS ON WHO CAN HOLD A PROPERTY DEED? The answer to this question depends on the jurisdiction in which the property is located. In some jurisdictions, there are no restrictions on who can hold a property deed. In others, there may be restrictions based on factors such as age, citizenship, and criminal history. For example, some jurisdictions may require that deedholders be 18 years of age or older, while others may impose additional requirements such as a minimum length of residency in the jurisdiction. In most cases, however, the requirements for holding a property deed are relatively straightforward and can be easily met by most individuals. As such, it is generally not difficult for someone to obtain a deed to a piece of property. SUMMING IT ALL UP So, what is a property deed? A property deed is a document that shows ownership of the real estate. The deed includes the name of the owner, as well as information about the property itself such as its legal description, square footage, and address. It’s important to hold a copy of your property deed in your own name, as it provides evidence of ownership and can be used for security purposes, or in case you need to transfer the deed to another person or entity. If you
HOW TO ESTIMATE YOUR RENTAL PROPERTY EXPENSES
Breaking into the world of real estate investment can seem daunting, but it doesn’t have to be. By estimating your expenses, you’ll have a better idea of what you’re getting into and whether the investment is worth your time and money. MY SMART COUSIN is here to help you realize your real estate investment goals. As a Real Estate Investment Coache, we have the skills and expertise that can position almost anyone for success in this competitive market. We help aspiring investors and homeowners, particularly, Black and Brown folks and women, develop and execute a customized, step-by-step plan to scale their finances and move from idea to action. With planning and persistence coupled with guidance from us, we will help you develop a portfolio and break into the most elusive of all real estate channels— buying a house for the price of a car. When structuring your first rental property acquisition, it’s important to estimate your expenses ahead of time. This will help you determine if the property is worth your investment, and whether you can afford it. There are a few different factors you’ll need to consider when projecting your expenses, so keep reading for more information. WHAT ARE THE MOST COMMON TYPES OF EXPENSES FOR A RENTAL PROPERTY? There are several different expenses that you may incur when you own a rental property. · Acquisition expenses are those expenses associated with the initial purchase of the property. These include fees charged by the mortgage lender, legal fees, and municipal or county fees associated with recording the deed. Importantly, the real estate commission will not be paid by you as the buyer— the seller pays the real estate commission, and that commission is split between the buyer’s real estate agent and the seller’s real estate agent. For instance, if the property you purchase costs $50,000 and the real estate commission rate is 6%, the resulting $3,000 commission will be paid by the seller and split 50/50 by the seller’s agent and buyer’s agent. · Rental leasing expenses are those expenses associated with finding and signing a renter, such as advertising and background checks. If you are managing the property yourself, then you will incur these costs, both in money and time. If you hire a property manager, then the property manager will charge you the first month’s rent (or a higher or lower amount, depending on the property management company), and that fee will be used to pay for the advertising, screening, and other renter-onboarding expenses. As an example, if your rental property is listed for a rent of $1,000 per month, then the first month’s rent will be paid directly to the property manager as their fee for finding and placing a tenant. Each time a new tenant is placed in the unit, the one-month fee will be charged. · Operating expenses are those expenses associated with the day-to-day operations of the property, such as maintenance materials, repair costs charged by handymen or contractors, and property insurance. As with the rental leasing expenses, if you hire a property manager, the property manager will charge a fee, ranging from a low of 5% to a high of 15%, depending on the market and the services provided. That fee will pay for the manager to communicate with the tenant on any issues with the property. · Finally, owner expenses are those expenses associated with your involvement in the property, such as travel costs to visit the property. By understanding all of these expense types, you can be better prepared for the financial commitment of owning a rental property. HOW TO ESTIMATE YOUR RENTAL PROPERTY EXPENSES If you’re considering acquiring and renting out a property, it’s important to have a clear understanding of all the associated costs. · CALCULATE THE MONTHLY MORTGAGE PAYMENT One of the biggest expenses you’ll need to account for is your mortgage payment, which comprises principal and interest. To calculate the principal, simply take the total amount you borrowed and divide it by your loan term. For example, if you owe $100,000 on your mortgage and have 20 years, or 240 months, mortgage, the principal portion of your monthly mortgage is $416. Your mortgage interest expense will equal the interest rate on your loan times your loan amount. · ADD IN THE QUARTERLY PROPERTY TAXES In addition to your mortgage payment, you’ll also need to factor in property taxes. These are typically paid every quarter, so you’ll need to divide the annual amount by four. For instance, if your annual property tax bill is $2,000, your quarterly property tax expense would be $500. . ESTIMATE MONTHLY HOMEOWNER’S INSURANCE PREMIUM To estimate your monthly homeowner insurance premiums, start by looking at the average cost of premiums in your area. Insurance rates and provisions vary by the insurer so be sure to get quotes from at least three companies. · INCLUDE ESTIMATED MONTHLY MAINTENANCE AND REPAIR COSTS Next, you’ll need to calculate an estimated monthly maintenance cost. This can be done by taking into account the age of your rental property and the expected wear and tear that it will experience over time. If you think your rental property will need major repairs or renovations in the near future, be sure to factor that into your estimate. By taking the time to calculate these monthly expenses, you can get a good idea of what it will cost to rent out your property each month. This information can help you make informed decisions about the appropriate rental rate to charge. · FACTOR IN ANY APPLICABLE VACANCY RATES OR LEASING FEES You’ll also need to factor in any applicable leasing fees. These can vary depending on the type of property and the location, but they’re typically a percentage of the total rent amount. · SUBTRACT POTENTIAL RENTAL INCOME TO GET YOUR NET OPERATING INCOME (NOI) To calculate your net operating income, take your potential rental income and subtract any vacancy loss,