Is An Income Property Right For You?
The appeal of income properties and the potential for what may seem like easy money and early retirement have likely crossed the mind of anyone who has heard of this business venture. There is a lot more to consider before entering the income property game, however, than simply purchasing a property and watching the dollars roll in. Here are a few things to consider before launching into your new career. Can You Recognize An Income Property When You See It? There are a lot of features that make a good income property. Whether you are considering flipping it for a profit or renting it out to potential tenants, knowing what to look for is more than half the job. Can you realistically estimate what the cost of renovations to the property will be? Do you know what the value of the home will be after the renovations, based on its size, location, etc.? Do you know what the market rent would be for the property? If you can’t answer any of these questions you either have a lot of work to do, or you may want to reconsider. Not Scared Off? So you think you can reasonably identify an income property and are still interested in making your first purchase. Here are a few tips for making that a success! Know Your Intent-Whether it’s flipping or renting the property, you should have a clear picture before you make the purchase. Have an estimate of what the renovations will cost as well as the profit margin of the investment, both in the short and long term. Consider Splitting The Costs-Many people who enter the income property market reduce the risk by having partners. Whether it’s a friend, relative, or business partner, this may be the right decision to minimize your risk in your first venture. Make It Your Business-Whether you plan on doing this as an additional source of income or you are going into it full time, realizing that this is now a business will prevent you from losing a fortune. You will spend a lot of time getting to know both the real estate and the home renovation industries, and the more you know, the more successful you will be. Deciding to get into the income property business can be a time consuming, but ultimately very rewarding, venture. Like any business, the effort you put in and the knowledge you have will determine the success you achieve.
Negotiating Contract Contingencies From The Seller
When the housing market is up and sales seem to favor sellers rather than buyers, negotiation contract contingencies may seem like a lost cause. But there are always cases where you as the buyer can effectively negotiate purchase protection into the contract of your home, and you may even be able to convince your seller to throw in a few perks. Here are some tips to negotiating contract contingencies from the seller. Common Contract Contingencies Knowing what contingencies are often included in home purchase contracts is the first step in getting what you want from the seller. There are a number of contingencies that are commonly included in contracts, and while this list is not exhaustive, it can give you a good idea of what you may want to consider. Appraisal-This is usually required by your lender, and while traditionally it is the responsibility of the buyer, you can get it covered by the seller. Home Inspection-This important step can find any major problems with the house or property that could cause a decrease in value, or make it an unwise investment. Loan Contingency-This is a term in the purchase contract that allows a buyer to back out of the contract if, after making a good faith effort to obtain a loan, the buyer is unable to obtain the loan. The buyer must remove the loan contingency (agree to proceed with the transaction) within the stated amount of time or withdraw from the contract. If a buyer withdraws from a contract because of failure to obtain a loan, generally the buyer is entitled to a refund of his or her earnest money deposit, less any costs actually incurred. Early Occupancy Agreement-This agreement can speed up the usual 60-day closing period by allowing you to move in faster. Existing Home Selling Clause-This clause makes the purchase of your new home contingent on your selling your existing home. This prevents you from being in a situation where you may be paying two mortgages at once. How To Negotiate Contract Contingencies In most cases if the seller is happy with your offer, and is looking to sell their home hassle free, they are likely to offer at least a few contingencies to a buyer. The best approach is to inform your agent of any contingencies that are an absolute necessity for you, such as an existing home selling clause, so they can clearly express this to the seller and the agent representing them.
Understanding Buyer Closing Costs
Most people who are in the market for a new home are aware of the costs associated with purchasing a home and moving, but closing costs can be expenses that may be overlooked, especially for first-time home buyers. The amount of the closing costs will depend on where you live, the type of home you are purchasing, and the type of mortgage you are going to carry, but in most cases they can equal anywhere from two to four percent of the purchase price of your home. So before planning your home purchase budget, here are some hidden expenses that you may want to include. In general there are two types of closing costs, recurring and non-recurring. Recurring costs include things like fire and flood insurance, property taxes, and mortgage insurance; these are expenses that will have to become part of your monthly budget and in most cases are often anticipated by new home buyers. Non-recurring costs are one-time costs that are associated with closing a home purchase, and in most cases make up the bulk of extra expenses. Non-recurring closing costs usually include: Title Policies Escrow Wire Fees Delivery Attorney Fees Endorsements Recording Transfer Taxes Home Protection Plans Natural Hazard Disclosures Home Inspection Lender Fees Depending on your particular circumstances, the actually closing fees may include just a few of these costs, or even include ones that are not listed here. Purchasing a home is a huge investment and expense, and getting a clear picture of the cost before signing your name on the dotted line is important. Your REALTOR® can usually give you a detailed list of these expenses.
What A REALTOR® Can Do For You As A Buyer
When we think of selling a home, the services a REALTOR® can provide usually seem worth the cost of their commission, but what about as a buyer? What can a REALTOR® do for you as a home buyer, and is the commission worth the services they can provide? Here are five great reasons you should hire a REALTOR® when you are in the market for a new home! REALTORS® Can Help You Determine Your Budget-With a few simple pieces of information, a REALTOR® can help you pre-determine what kind of budget you may be looking at for your new home, and can match you with potential lenders that are right for you. REALTORS® Have Access To Resources You Don’t-While a lot of real estate listings are available online, there are still resources and listings that are only available through a REALTOR®. If you are looking for something very specific, having their insider knowledge may be crucial to finding that perfect home. REALTORS® Can Read Between The Lines Of Listings-There are a lot of catchy phrases that often appear in home listings, and your agent can tell you what they really mean. REALTORS® Increase Your Negotiating Power-A REALTOR® cannot only increase your ability to negotiate things like price, they can also give you advice on things like contingency contracts and required paperwork. A REALTOR® Can Help You Navigate Through The Closing Process-The closing process can be a complicated process, and a REALTOR® can make sure all the details are addressed and that you are making a good financial investment. Purchasing a home is a huge financial investment, and having a professional REALTOR® looking after your interests through the process is important.
What Is A Property Survey?
When purchasing a home, especially for the first time, you are going to encounter a lot of terms and jargon you may never have heard before. “Property survey” is one such term you may encounter in the process, and it is often not considered one of the more important parts of the home buying process, but it is an essential part of any home purchase closing process and should not be overlooked. What Is A Property Survey? A property survey is a document, usually in the form of a map or sketch, that outlines all the prominent features of a property, including the house and the physical boundaries of that property. It can also include other items, such as natural features on the property, including ponds or lakes, and man-made features such as pools. These property surveys must be completed by a professional qualified to carry out a property survey, and usually have to be done within six months of any change of deed. Why Do You Need A Property Survey? In some states a property survey is required for a number of reasons. From the perspective of a home buyer, your mortgage lender will usually want to see a recent property survey of the home and land you are purchasing for their records. Also, you will need one for title issuing, and for your municipal office to calculate your property tax. It is also important to note that if you plan on doing any renovations to your home after you purchase it, you will need it for your contractors. This gives them a clear picture of the features of the property as it stands, and the boundaries of the property itself. What Does It Cost, And Who Is Responsible? In general, there are two types of property surveys-house location surveys and cadastral surveys-and in most cases it is the buyer who is responsible for the cost of the property survey. If you are just planning to get the required documents for your mortgage lender, the more inexpensive house location survey is the way to go. If there are any doubts about the property, however, such as whether a particular feature lies entirely on the property or not, it is a good idea to go for the more complete survey. In these cases you may be able to convince the seller that you require it in order to make a choice about whether you will purchase the property or not. It is always advisable to have a REALTOR® who will help you navigate through this process, and they can give you the best advice on making a choice that is right for you. While all this work may seem like a lot of effort to put forth for what may turn out to be just red tape, if there is a serious problem with the property you are hoping to buy and it goes undetected, what should be your greatest investment may turn out to be your greatest liability.
What To Consider Before Buying An Older Property
Whether it’s the character and charm of an older home with its original features, hardwood floors, and wood burning fireplace, or the quaint historic feel of the neighborhood in which it is found, there is a certain appeal to older property. But purchasing an older home may involve additional work and costs that a newer home may not. With a little research and preparation, however, you may find that purchasing an older property may be the right decision for you. Here are a few things to consider before making an offer on an older home. Age Of The Home Depending on where you live, an older home can mean 30 years to 300 years. Naturally, this is the first point to consider when deciding whether an older home is right for you. The age of the home, the foundation, and the roof can make a big difference in the type of maintenance it will require, how frequently things may need to be replaced, and the difficulty and expense of replacing them. You will also want to know what kinds of materials were used in the construction of the home. Age Of The Features Older homes can sometimes have very old features and appliances lurking within them. Be sure you consider whether or not you will have to replace the kitchen appliances, and be sure to ask when features such as the furnace were last replaced. The age of the home you are looking to purchase may also mean that your decoration budget will have to include costs that you might not have originally anticipated. Importance Of Home Inspection The importance of getting a home inspection cannot be understated when purchasing any home, but when in the market for an older home this is a step that should also be done with the utmost care and by a true professional. A home inspection can find problems that are more common in older homes, such as electrical and plumbing issues. Knowing what you are getting yourself in for when purchasing an older property can make all the difference in finding a home that is right for you. Older homes can certainly be a rewarding purchase, and if you recognize the maintenance costs and any potential renovation costs you will be prepared to make your new house a home.
A Nice Home Or A Nice Neighborhood: Which Matters More?
When you start shopping for a home, you probably have a very specific image of what you would like that home to look like. You probably also see the perfect neighborhood surrounding that perfect home. Every buyer sets out with an image of the house they want to own, but in reality compromises are often necessary in order to stay within your budget. Compromising On The House There may be certain things that are non-negotiable when it comes to your new home, such as the number of bedrooms or a two-car garage. But as you take a look at the homes that are within your budget, you may discover that it is not likely you will get everything on your wish list. But the great thing about owning a home is that you have the power to remodel it at any time. Once you are in your new home, you can renovate or even add on if necessary to create the home you really want. And if you have managed to stay below your budget, you will even have the extra money each month to make some of those changes. Compromising On The Neighborhood So you’ve found the house of your dreams, but the neighborhood isn’t precisely what you were hoping for. Too much traffic, some houses that are becoming run down, or many other issues can mar the area your house is in. In most cases, you will have to accept that you cannot change the neighborhood, and this means that you have to decide if the problems are things you can live with or not. In some cases, buying in a run-down neighborhood can be a strategic move. If many people are buying up the houses and improving them, then your home might one day be worth a lot more. However, you must realize that this is a risk and it might not work out that way. Another thing to bear in mind is that if you choose to buy the nicest house in the neighborhood, you may have trouble selling it down the line. If other houses in the area are available for less, why would anyone buy your expensive house to get into the area? So Which Matters More? In the long run, when it comes down to choosing between the right house and the right neighborhood, you should choose the right neighborhood. While you can change your house for the better, you can’t count on your neighborhood changing; in fact, it might get worse. So choose the best neighborhood you can afford even if the house there isn’t perfect.
Choosing A REALTOR® You Can Trust
When it comes to shopping for a home, especially if you are buying for the first time, having an agent on your side is extremely helpful. But if you have never bought a house before, you may have no idea where to begin finding a REALTOR® that you can really trust to help you with this important decision. If you open the phone book you will see a long list of names, and very little help to figure out which one to call. There are a few ways you can narrow down the field of real estate agents to find someone you can trust. Ask Your Friends And Family To find a real estate agent you can trust, start with the people you trust-your family and friends. Of course, the best people to ask are those who have bought a home recently, as the experience they had will still be fresh in their memory. Ask them how happy they were with the service they received, and if they would recommend you hire the same agent. Ask Others In The Field Another source of good referrals is through some of the people you may know who work in related fields, such as mortgage brokers and insurance agents. They often know many different agents and work with them regularly. Ask them to provide you with a few names of the people they would trust most with their own home-buying process. Meet With The Possible Agents When you have created a short list of possible agents to hire, call a few of them and make an appointment. Sit down and discuss your home buying plans with them. Ask them about what sort of services they provide as well as things like their commission structure. Treat this interview the same way you would in hiring any other professional to handle important business for you. A good REALTOR® will be happy to answer your questions openly and honestly. Take the time to meet with several agents before you decide who you would like to represent your interests. That way you can compare the different experiences and see who you feel most comfortable with. The agent’s experiences in real estate, their dedication to their clients and, of course, the rapport you develop with them are all important considerations. Remember, you are looking for someone you can really trust. Your REALTOR® is your home-buying partner and needs to be someone who is there for you and knows all the ins and outs of home buying. Take your time and choose the right person for the job.
Examining A Home Objectively: What Matters And What Doesn’t
Everyone heads out to look at potential homes with a list of the things they want in a house, and a list of the things they definitely do not want. In addition to that wish list, there are also some other things you will notice about the homes you visit that may strike you as potential problems. When looking at homes, it is important to know what things are deal breakers and what things are minor issues that you can deal with easily. Turning down a dream home because of something that is an easy fix seems like a silly thing to do, but it happens surprisingly frequently. Cosmetic Issues You walk into a home and it has terrible wallpaper or paint colors you wouldn’t dream of using, and it turns you off immediately. While the gut reaction is normal, it is important to step back from that instinct and think about it objectively. Painting is not particularly difficult or expensive, so try to imagine how the home would look with a different color palette, one that is more your style. The ability to recognize which issues are merely cosmetic and can be easily fixed is an important key to finding a house you will love. Be prepared to visualize the home as you could make it with a few cosmetic changes. It will open you up to the possibilities and might allow you to consider homes that aren’t perfect the way they stand now, but could be just right with a little elbow grease and paint. Major Repairs In some cases the major repairs that a house needs might be obvious. In other cases they might only be unearthed during a home inspection. Either way, you will need to give serious consideration to whether or not you are willing to deal with the problem. If the home needs expensive repairs, you can either try to get the seller to do the repairs or accept that you will need to do them yourself. In most cases, the seller will probably not be willing to take on major repair work, but might reduce the price accordingly. Still, this might be a deal breaker if you are seeking a turnkey home. Knowing The Difference A home inspection is the best way to uncover all of the issues, both minor and major, that a house might have. When you review the inspection, look for things that can be easily fixed as well as those that can’t. The amount of work you want to do on your home will determine what problems you can personally live with.
Finding A Neighborhood With Great Schools
If you have children, or even if you don’t yet but plan to in the future, schools are something you will need to take into consideration when you search for a new home. In most areas, certain boundaries define which schools your children will go to, and switching to a different school can be complicated and expensive in many cases. Fortunately, finding a great neighborhood with good quality schools is not difficult, thanks to the internet. Online ratings and reviews of schools can help you to make the right call when it comes to finding a home that will offer your children a quality education. Start With The District The first thing you should look into is which school district you are considering moving into. Find out if the schools in that district tend to be highly rated, and what kind of test scores are generally seen among students in the district schools. All of this information is readily available online. The school district Web site will be able to tell you which school your children would go to if you were to buy a particular house. There is usually a boundary map you can check, or you can enter your address and search to find out which school is the right one. Check The Reviews The internet allows people to review everything from appliances to doctors-and schools are no exception. Search for your school of choice online and you will find plenty of reviews from parents whose children have attended the school. Getting an unbiased opinion of the school will help you to get an idea of what you can expect. When You Love The Neighborhood, But Not The School If you really want a particular house in a particular neighborhood, but aren’t too happy with the schools, you can look into your other options. Most school districts have a system by which you can choose to send your child to a different school. This usually involves either particular needs that can’t be met by the in-area school, or a fee or lottery system to allow your child to attend the school of your choice. Find out what the rules are in your school district. Your other option is to look into private schools. This is, of course, the more expensive choice, but should you select a private school you will have the freedom to live wherever you like, without worrying about what school your child will be slotted to attend.
