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Steps to Take When Selling an Occupied Rental Property

The time has come for you to sell your rental property. If a tenant occupies your property, there are ways to help you make it through the selling process without breaking the law. While it is your residence, you should keep your tenant’s best interests in mind during the sale process. As a responsible landlord, it’s imperative for you to show your tenants some respect. If you fail to do so, you could end up having an angry tenant on your hands and potential legal troubles. Let’s take a closer look at some steps you should take when selling an occupied rental property.

Dealing with Month-to-Month Rental Agreements

If your tenant signed a month-to-month rental agreement, the law requires you to give your tenant proper notice about a sale. You must mail or hand-deliver a letter 30 days prior to the date you would like for them to vacate the premises. Please keep in mind that the required notice period varies from state to state. Because you generally do not need a reason to cancel a month-to-month rental agreement, many landlords prefer using month-to-month rental agreements over fixed.

Dealing with Fixed Term Rental Agreements

Dealing with fixed-term leasing agreements require a little more finesse. They typically don’t end when the property is sold to a new owner. Here are five ways of handling fixed-term rental agreements properly:

Sell the Property to Your Tenant

There’s a possibility that your tenant may be interested in buying your property. Your tenant can get their own financing or you can offer seller financing. With seller financing, you are the lender and your tenant makes monthly payments to you. It’s important to mention that you must get permission from your lender if your property is not free and clear.

Wait Until the Lease Agreement Expires

If you have a good tenant, you can allow them to stay until the lease expires. This is probably the easiest option on the table. However, you can terminate the lease if they have violated any terms in the agreement.

Exercise the Early Termination Clause

Do you have an early termination clause listed within the agreement? If so, you can exercise it.

Pay Your Tenant to Move

If there are several months left on the lease, you could work out a deal with your tenant. You could offer to cover their moving expenses, pay their deposit on a new property, or give them money as a settlement.

Sell the Property with an Active Lease

You can sell your property, but your buyer must honor the existing rental agreement. This option can pose a challenge because some investors won’t be interested in buying a property that comes with an existing tenant.

This article was originally published on roberthagaman.net.

How to Choose the Right Fixer-Upper For You

 

Buying a fixer-upper can help you save a significant amount of money. You should not have any trouble finding hundreds of discounted houses in your area. However, you should take careful measures while shopping for any house that needs cosmetic or structural repair.

Many first time home buyers and novice real estate investors make tons of mistakes while acquiring their first fixer-upper. Here are a few tips that can help you have success with this exciting project.

Choose a Desirable Location

Location is the first thing that you should take into consideration. The subject property should be in a desirable neighborhood so that it will be attractive to prospective buyers. Here are a few questions to keep in mind:

-Are the property values rising in the neighborhood?

-Is the crime rate low?

-Is the house located near schools, a shopping mall, or a business district?

Buying a fixer-upper in the wrong area can lead to problems down the road. The answers to the questions above will help you pick the right neighborhood.

The Selling Price

If the subject property is being marketed as a fixer-upper, it should be listed at a discounted price. You should do your due diligence before making an offer. Don’t fall in love with a house before you check out the price first. Find out what similar homes are going for in the area. A seasoned real estate agent or a real estate valuation service can help you with this.

Get an Inspection

You may have a knack for do-it-yourself projects, but this is not the time for you to put your skills to the test. When it comes to rehabbing a house, you should hire a professional home inspector to check out the property. The inspector will look at the home and make a detailed list of necessary improvements. The home inspector’s service will help you save time and money. The inspector’s report will also help you decide if you should buy the house or walk away.

Place Contingency Clauses in the Contract

Don’t be afraid to put contingency clauses in the contract. They will protect you from unforeseen events that could ruin the deal or project.

Hire an Experienced Rehab Team

When it comes time for you to hire a rehab team, make sure you get several bids from experienced crews in your city or town. In addition to comparing price quotes, it’s imperative that you check references before making any decisions.

Buying a fixer-upper can help you save thousands of dollars. You will also get instant home equity after your purchase. Following the simple tips listed above will help you have success with finding and rehabbing a home that needs a little tender loving care.

This article was originally published on roberthagaman.net.

3 Tips on Choosing Properties to Invest In

Intelligently picking the right property to invest in can virtually guarantee years of consistent returns. Selecting a property on a whim, though, can create undue stress and poor returns. Some of the landmines to avoid are high-maintenance properties, slow-growth areas, and properties that require a lot of maintenance over time.

In one way or another, following all of the tips below will ensure that your next investment is truly a lucrative one rather than a money pit that you continually throw money into.

Seek Out High-growth Areas 

Some areas of the company are on the way up, and other areas are stagnating or on the way down. Seek out high-growth areasfor your next property investment.

Make sure that the area is expanding in terms of population and investment in the community. Be wary of areas that promise investment at some point in the future if you can’t see any intimation that the area is improving in the near term.

The economy, infrastructure, and private investment should all be at a level that breeds confidence before you make your property investment. After all, property investment is a fairly gradual, long-term growth strategy.

Consider All the Costs 

The ideal property investment would be one that’s based in an area with a solid foundation in terms of having a robust economy and solid infrastructure. The area would also be one with property taxes or, if you’re thinking about renting, one that has potential renters lining up and waiting to check out your property.

Obviously, you want to balance your initial investment against the returns over the first few years. Smart property investors also look for hidden costs, such as poorly functioning hot water heaters or a roof that needs repair before the property can open itself up to renters.

See Into the Future 

Anticipate the future by looking at government websites and checking to see if there are any infrastructure projects slated for the next few years. New roads, parks, public transportation lines, and schools suggest the area is a good future investment.

In terms of private investment, new shopping malls are a sign that businesses have decided the area is a good investment. Maybe the area truly is promising.


This article was originally published at RobertHagaman.net

4 Tips for Purchasing Your First Home

First-time home ownership can be an exciting time. It can also be a stressful time in terms of negotiating your first home mortgage and knowing that you have enough saved up for a down payment.

With the average home cost well into six digits at $300,000 and the average home spending less than two months on the market before selling, you know that time is of the essence. Here’s what to get working on today:

Pay Off Your Debt 

Paying off your debt right now is extremely important because first-time home ownership can wind up being more costly than renting an apartment in terms of month-to-month expenses. You might be wondering how that could possibly be the case with a 30-year mortgage and low monthly payments.

The truth is that home ownership comes with hidden costs like maintenance and upkeep expenses, so it’s best to have your debts settled and some extra money set aside beforehand.

Determine What You Can Afford 

Buying a home for the first time can be an enchanting experience. Taking a step back and soberly analyzing the situation can be invaluable, though, before you get in too deep. Determine how much you’ll need upfront and how much you’ll need every month for the next few years. After that, narrow down the search for a new home.

Homeowner’s associations can have their own fees, and you can expect to pay property taxes and homeowner’s insurance. If that’s not something that you’ve thought about as you’ve been budgeting for an apartment, then looking into that.

Get Loan Pre-approval 

As a basic rule of thumb, you should have 20 percent of the money your new home will require set aside an 80 percent financed by a mortgage. Receive pre-qualification for a loan before starting your home search.

Consider Your Closing Costs 

Closing costs can amount to around four percent of your total costs when you factor in the following factors: the appraisal costs, a credit report, an attorney, homeowner’s insurance, and selling your old house.

down payment on your new home could also swallow a lot of your savings, so budget accordingly when you’re setting aside a little extra money heading into your first home.


This article was originally published at RobertHagaman.net

Tips for Refurbishing Your Outdated Rental

When it comes to rental properties, appearances truly matter. Since most renters cannot change things like paint or fixtures themselves, they are not willing to settle for a rental that looks ugly. Landlords who take the time to stay up to date on current trends can make more money by making properties look more modern. Just a few simple changes can make a huge difference in how a rental property is perceived.

Switch to Stainless Appliances

Most renters agree that they find stainless steel appliances more attractive. This type of appliance automatically makes a kitchen look more up to date than a basic, matte white or black appliance. Since kitchens are one of the things renters are willing to pay more for, this simple appliance switch pays for itself.

Add Trendy Fixtures

Fixtures are one of the simplest things to upgrade in any rental. Cabinet handles, doorknobs, sink faucets, and lights can be changed in under a day. Current trends are moving away from busy, shiny, and ornate fixtures to more delicate or minimalist designs. However, fixture styles are continually changing, so this is something landlords need to do a little research on and update every five years or so.

Change the Color Palette

Color is one of the most significant factors in a first impression. The warmer, darker, earth-toned hues so popular a few years ago can now make a building look very dated, and renters may worry that the shades will clash with their belongings. Lighter, cool-toned color palettes like grey and white tend to be more appealing to renters.

Open Up the Floor Plan

Almost all renters say they are looking for buildings with open floor plans. Most younger people do not care about having separate dining, gaming, cooking, and entertaining rooms. Instead, they like an open living and cooking space with just a few private areas for bedrooms and bathrooms. As long as the walls in a rental property are not load bearing, it is very easy to remove them.

Add Online Management Opportunities

Refurbishing a rental can also mean rethinking the way the rental is handled. Modern customers want to be able to browse floor plans on a website, pay rent online, and manage maintenance requests over the internet.


This article was originally published at RobertHagaman.net

3 Technologies Changing The Future Of Real Estate

Technology is already having a significant impact on real estate. Online listings give sellers the ability to attract buyers from across the globe and out of market buyers can gain more comprehensive information about a property than ever before. Instead of having to go out and look at dozens of homes physically, they can quickly narrow the field online to just a few of the most desirable options. But listings are not the only way that technology is affecting real estate. Here are three technologies that are poised to have a significant impact on real estate.

  1. AR and VR

At the moment, buyers can browse thousands of listings online and look at dozens of photos of each property. When they find one they like, however, it is still challenging to get a sense of the exact proportions and layout without physically walking in the space. That may all change soon, however, with virtual reality walking tours. Soon, buyers in Japan can tour a property just as easily as someone right down the street. Also, augmented reality programs will allow potential buyers to take guided tours without an agent present. An AR guide can point out any architectural features and even answer questions.

  1. Blockchain

Any time property exchanges hands, it generates an enormous number of fees thanks to the vast amount of parties involved. Some unscrupulous lenders can even tack on garbage fees. At the moment, closing costs can run anywhere from two to five percent of the value of the property. These fees, in addition to the time it takes to complete a sale, diminish the value of property every time it is bought or sold. Blockchain is poised to change all of that. Blockchain has the potential to generate smart contracts, which narrow the parties involved in the transaction down to three: the buyer, the seller, and the blockchain. Soon, buying and selling a home may be no more expensive or time-consuming than leasing an apartment.

  1. Fractional Property Investment

Real estate is generally considered to be a very stable investment, but the upfront costs are high. Fractional investment platforms allow even those of the most modest means to make investments that were previously only available to the wealthy. Instead of pulling together thousands of dollars from a few investors, fractional investment platforms pool a few dollars from thousands of investors.


This article was originally published at RobertHagaman.net

Customer Service Tips for Landlords

Every business runs and revolves around customers. Proper customer service practices allow businesses to ensure customers receive ample services that leave them satisfied. In the real estate industry landlords are no exceptions. A good landlord focusing on boosting and maintaining his reputation across the market should ensure that his or her tenants are handled rightly. Here are some vital customer service tips for landlords.

Be attentive in listening

Tenants and landlords rarely interact with each other, unless in cases where tenants raise some issues in their houses with the landlord. To maintain a cordial relationship between the two, landlords should endeavor to always listen attentively to tenantswho raise complaints. Any complaints raised in the landlord’s office should be quickly and effectively responded to. This includes undertaking repairs when necessary to the satisfaction of tenants.

Be a bit organized

Landlords rarely think of their investments as businesses. They, therefore, rarely organize themselves and their offices or operations well. To impress the tenants, it is good to have a bit of organization, especially in the office as well as how they handle the real estate properties’ operations. It may pay greatly to organize their operations by making use of a tenancy software which helps to coordinate functions such as payment and collection of rent, raising of complaints by tenants and issuance of payment acknowledgment.

Be more accommodative

The chances are that landlords will meet and rent properties to persons with different personalities. The diversity of composition of the tenants is replicated in various ways, including how organized and disciplined the tenants are and their abilities to adhere to a strict rent payment schedule. Being accommodative allows landlords to deal fairly with all persons living within the premises.

Go a step further

In the process of handling tenants well, landlords may be overwhelmed with the weight of responsibilities, questions, and concerns raised by tenants. In such cases, a landlord may boost their customer service by creating an online community open platform where all tenants get to share ideas and frustrations with their landlord. This concept is already being used by major businesses and can thus boost the landlords’ organization and responsiveness.


This article was originally published at RobertHagaman.net

Keys to Eco-friendly Apartments

A growing awareness of environmental concerns has led to a rise in eco-friendly apartments built with sustainable materials. With an increasing number of buyers and renters seeking to contribute to sustainable living, people are learning to cut energy costs and plan toward a lifestyle that takes into account environmental issues. Here are essential elements to look for in eco-friendly apartments.

Efficient Heating and Cooling

The structure of each unit should be free of air or water leaks, so energy is not wasted. One way to make energy more efficient is to use Energy Star certified appliances. Another characteristic of eco-friendly apartments is they use large appliances such as modern refrigerators that have energy-saving settings. Newer or renovated HVAC systems are usually built for efficiency, which leads to lowering utility bills by up to 35 percent.

Window Space

The amount of window space in an apartment is a factor that affects energy consumption, as more windows generate more sunlight and warmth, reducing the need for electric lighting. Look for maximum natural light so that you don’t need to turn on lights most of the day and if you do consider LEDs. During the winter if any windows let in a draft, it can cause you to use more energy to compensate. Ideally, the apartment doors and windows have been weatherized to be efficient throughout the year.

Smart Technology

Modern thermostats and light controls with a wireless connection to the internet can contribute to lowering energy coststhrough automated monitoring of energy levels. A smart thermostat, for example, can detect the number of individuals in a room and set the temperature to an appropriate level. If no one is in the room, then the smart sensor shuts off the heating or air conditioning.

Green Certifications

To ensure an apartment complex is built with sustainability as a priority, look for official green building certifications. Two widely known certifications are LEED and Passive House, which are awarded for following specific green construction standards. These certifications have been given to skyscrapers and high-rise apartments. The most eco-friendly buildings include solar panels and are built with durable materials. Timber is starting to be favored over cement since it uses less energy and clean water for construction.


This article was originally published at RobertHagaman.net

The Housing Market Is Favoring Buyers This Spring

The Housing Market Is Favoring Buyers This Spring Robert Hagaman

Over the last few years, sellers have been on top of the housing market. This spring, housing market conditions are favoring buyers in major metropolitan areas around the country. Factors favoring buyers include a decline in mortgage interest rates, trends in home prices, rising inventory, and homes spending more days on the market.

Borrowing to purchase a home has become more affordable. The spring housing market has begun with mortgage interest rates near historic lows. For 30-year fixed-rate mortgages, the interest rate dropped to 4.17 percent in March 2019. The rate was 4.54 percent a year ago and four weeks prior.

Prices have started to favor buyers. Nationally, home prices have increased by 0.6 percent over the last year, which is a significant drop from the 10 percent price growth over the year prior. In some metropolitan areas, prices are decreasing. Home prices have slipped by 15.2 percent in Bridgeport, Connecticut, which is the most significant price drop in the country. Housing prices have also declined in San Jose, Honolulu, and San Francisco.

The inventory of homes for sale is increasing. Compared to the same period last year, the number of homes for sale was up 2.9 percent in February 2019. Seattle and San Jose led the nation in inventory growth at 101.2 percent and 82.1 percent respectively. Inventory growth seems to be driven in part by homes spending more days on the market. While the national median number of days homes spent on the market was 35 in May 2018, it was 59 days in February 2019. When comparing that month with February 2018, the number of days homes spent on the market has gone up sharply in several markets. The increase was by 25 days in Santa Cruz, by 13 days in Sacramento, and by 11 days in Modesto.

The combination of low mortgage rates, rising inventory, and homes spending more time on the market has created widespread homebuyer confidence. Real estate agents report signs of homebuyer confidence such as fewer bidding wars and a willingness to wait rather than rush into a home purchase. Another indication comes from Redfin agents who have seen the portion of contracts with a sale contingency go up to 7.1 percent for February 2019. That’s two points over the same month last year.


This article was originally published at RobertHagaman.net

Common Errors of Predicting Market Sizes

Executives have two different types of investment war stories: those that are akin to the proverbial fish that get away and those that involve overestimating opportunities. An example of the first type is the situation where Blockbuster had the chance to purchase Netflix. For the second, look at Eddie Lampert buying Sears for over ten billion dollars and how it went bankrupt later.

We are just not good at conducting analyses for “size of the prize.” Under- and overestimation problems have a few errors in common. The first is confirmation bias. Every expert brings confirmation bias to the table. The next two mistakes could be considered sins of omission. They involve treating this purely as a theoretical math exercise. Consumer passion must be factored in lest the size of the prize is too low. But practical application must also be factored in lest the size of the prize is too high.

The first error is an integral part of this task’s most common approach, which is seeking out a comparable example or comp as an analogy. Investment bankers are fond of comps because they give a quick shorthand in examining potential EBITDA or earnings before interest, tax, depreciation, and amortization multiples about other transactions. For comparison, this is somewhat like what an agent of real estate does to assist in valuing your residence before you make a sale. But what happens, to follow the analogy, if the comps selected are single-family homes and the property in question is a luxury condo happening to be within the same zip code? This is, unfortunately, something that happens far more frequently than we realize.

Executives also experience confirmation bias. Some have powerful incentives to select a potential opportunity and throw darts at it, not only because the majority of acquisitions has an unfortunate habit of failing to pay back; they also have to integrate and deliver promised results. Other executives might overestimate the benefit of a brand new category as they are hoping to buy growth or seeking to cement their legacies fully.

As regards the second error, the misunderstanding of consumer passion typically forms the root cause of the reasons why an analysis for the size of the prize is too low. One way consumer passion is miscalculated is treating everything via an approach of problem and solution, which is rational but lacks an emphasis on the upsides from passion and emotion.


This article was originally published at RobertHagaman.net