northsandiego

How Many Property Inspections Should I do to Protect My North San Diego Rental Investment?

Sat, 20 Jul 2019 13:00:00 GMT

Inspecting your rental property is a good way to ensure it’s being maintained to high standards. When you have the benefit of putting your eyes on your investment, you can get a sense of whether the tenants are following the terms of the lease and helping you preserve its condition and value.

We recommend that you do complete inspections before a tenant moves in, after a tenant moves out, and at least once during the tenancy. You can also do regular drive-by inspections and ask to take a look around before you agree to renew a lease.

Move-In and Move-Out Inspections

The most crucial inspections you’ll conduct are the move-in and move-out inspections. These will be required to sufficiently and accurately document the condition of your property. Before your tenant moves in, you’ll want to go through the property and take photos of every detail. Document the way the floors, walls, ceilings, and doors look. Note the condition of each appliance and take pictures of any exterior spaces. The tenant will expect to receive a property that is clean, functional, and well-maintained, and you’ll expect to get the property back in similar condition.

The move-out inspection will occur when the tenant vacates. Using the original move-in inspection report, you’ll again go through the property and document any damage or issues. Compare the photos and descriptions from each inspection, and you’ll know whether you need to withhold any money from your tenant’s security deposit to pay for repairs or cleaning.

Drive-By Inspections

If you live close to your investment property, it’s a good idea to drive through the neighborhood once in a while. This isn’t as creepy as it sounds. You just want to get a look at the property and make sure everything appears to be in order. If you see a lot of debris or furniture outside that doesn’t belong there, you’ll want to address it with your tenants. If a window is broken or the door is hanging off its hinges, you’ll want to take immediate action.

When you aren’t living in or close to the northern San Diego area, make sure you’re working with local property managers who can check on your property once in a while and make sure it looks the way it should.

Annual Interior Inspections

Once you’re inside the property, your goal is to look for two specific things. First, you’re looking for any unreported maintenance concerns. Check under the sinks for leaks or any signs of rot. Make sure all the light switches work, and check the appliances. Get an idea of whether your tenant is changing air filters regularly and keeping the home clean. Next, look for any indications that the lease is being violated. If you have a no-pet policy and there’s a cat litter box in the bathroom, you and your tenant have something to talk about.

This is also a good opportunity to check in with your tenant and make sure everything is going well. Tenant retention is important, so let them know you appreciate that they’re taking good care of your property.

If you have any questions about inspections or rental property maintenance, please contact us at North San Diego Property Management.

What North San Diego Commercial Property Owners Need to Understand about Landlord-Tenant Laws

Sat, 13 Jul 2019 13:00:00 GMT

Working with tenants in a commercial property is often a little different than working with tenants in a residential property. While the tenants you place own their own businesses, you’re the one who owns the building. This can create some tension if the relationship isn’t managed properly.

At North San Diego Property Management, we’ve spent years managing multifamily and commercial properties in the North County area , including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. Today, we’re taking a look at some of the laws that commercial property owners need to be aware of when they’re renting out their property.

Subleasing of Property

You have the power to decide whether your commercial tenants are permitted to sublease their property, or a portion of their property, to another tenant. However, to deny your consent, you’ll need a valid reason. If you don’t want your tenants subletting an office, a conference room, or any other leased space to a subtenant, you need to put your reasons for the objection in writing. If you don’t, it’s implied by California real estate laws that you don’t have a problem with it.

Rent Control Does Not Exist

Landlords all over California are on edge when it comes to the subject of rent control. Many northern California cities and communities are adopting rent control measures, and the rest of state is also investigating what should be done to provide affordable housing to everyone who needs it.

Luckily, commercial properties are exempt from any sort of rent control. The California legislature recognizes that rent control in the commercial space would kill any type of competitive advantage that investment property owners have. So, you won’t need to follow any rent control laws with your commercial property, regardless of where you are in California.

Triple Net Leases are Common

A triple net lease is legal for commercial properties in California. They require your tenants to pay a monthly rent and also to contribute or completely pay for the expenses associate with operating the building and the communal spaces. This might include taxes and utilities as well as maintenance. Not all tenants love the idea of a triple net lease, which means you may need to offer a lower rent in order to incentivize the signing of their lease.

Evicting Commercial Tenants

You can generally negotiate any lease terms with your commercial tenants that make sense. Just make sure they’re legally compliant.

If you have any questions or need any help, please contact us at North San Diego Property Management.

How Can North San Diego Property Managers Minimize Vacancies?

Sat, 06 Jul 2019 13:00:00 GMT

Vacancies are expensive, whether you’re renting out a single-family home in Oceanside or a commercial property in Carlsbad. The cost of an unoccupied property is high – it’s money that can never be earned back. This doesn’t only damage your cash flow, it hurts your long term ROI.

There are a few things you can do to reduce your risk of long vacancies and ensure your properties are always occupied with good tenants who pay rent on time and follow the terms of the lease agreement. We’re sharing some of that advice today.

Provide an Irresistible Property

When your property is something that tenants will be eager to rent, you’ll have an easier time avoiding vacancy. Make sure it’s clean, functional, and attractive to the types of tenants you’re hoping to reach. A condo near the beach should come with amenities and a single-family home in a suburban neighborhood will rent faster with a yard. City apartments will not stay vacant long when parking is included. Before you show your property, have it cleaned professionally and make some simple updates and upgrades that will really grab a prospective tenant’s attention. Think about a fresh coat of paint, new floors, energy-efficient appliances, or upgraded landscaping.

Price it Right

One of the most common reasons that properties don’t rent quickly is that they are priced outside of what the market supports. No one wants to underprice a rental property. It will result in you earning less than you should and constantly playing catch-up with rental increases. But, listing it for a price that’s too high can be just as expensive for you because it can extend your vacancy period. Tenants are smart and knowledgeable; they know what your property is worth, and they won’t pay more than they have to.

Take the necessary time and do the necessary research to gather data on what similar properties are renting for in your area. Make sure you understand how they compare to yours, and price your home in a way that reflects what you have to offer in your local market. A home that’s competitively priced will rent quickly, and you’ll avoid the cost of extra weeks and even months of vacancy.

Be Strategic with Marketing

When you respond promptly to inquiries and questions from tenants, you’ll reduce your vacancy as well. Don’t wait days to call a tenant back; they will already have moved on to the next property. Be responsive and schedule showings. Then, you’ll get your property rented quickly.

We work hard to rent out your property to the best tenants, for the most money, and in a short period of time. If you’re struggling with vacancy, contact us at North San Diego Property Management.

How Can a Landlord Minimize the Operating Expenses of a North San Diego Rental Property?

Sat, 29 Jun 2019 13:00:00 GMT

At North San Diego Property Management, we’ve spent years managing multifamily and commercial properties in the North County area, including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. We know to really maximize the ROI on your investment property, you already understand that you need to increase your income and cut your expenses. It seems pretty simple, but when you’re looking at your accounting reports every month, it may seem impossible to save on what seems like fixed operating expenses.

Change your thinking, because there aren’t any expenses that are fixed. You can save some money and drive up your cash flows in a few simple ways.

Review your Taxes and Loan Terms

It might feel like your mortgage is your mortgage, and the amount you pay towards your loan isn’t going to change. However, if you have some equity built up and you’re in a strong financial position, you might be able to refinance and save some money every month. Take a look at your financials and see if it’s worth it to refinance your current mortgage so you have a smaller payment every month. It can make a difference in your cash flow.

Your property taxes are based on the assessment of your home’s value, which is determined by the San Diego County Assessor. You can appeal the amount of your assessment and thus lower your tax liability. The Assessment Appeals Board will make an impartial decision when you file an appeal. Submit an application with any supporting documentation and see what you can do to reduce the amount you pay in property taxes.

Choose Vendors Who Offer Discounts

If you give a lot of regular work to vendors like plumbers, electricians, cleaners, or landscapers, it’s not uncommon to receive preferred pricing. Ask the vendors you enjoy working with if they can offer any discounts. You could offer to refer them to your colleagues and other rental property owners in exchange for a volume discount. If you don’t get anywhere with your current vendors, don’t hesitate to shop around. Ask for suggestions from other people who use vendors, or talk to North San Diego property managers about the companies they use and whether discounts are offered.

Review all of your contracts, including lawn services, pool maintenance, and HVAC technicians. Find out where you can save without sacrificing service.

Avoid Deferred Maintenance

Routine repairs are always going to show up in your monthly, quarterly, and annual expense reports. It’s unavoidable. Maintenance becomes more expensive when it’s deferred. So, adopt a plan of preventative maintenance instead. Take care of small issues while they’re still small and manageable. By ignoring things that seem non-urgent, you can be setting yourself up for repairs that are more costly down the road.

Invest in Technology and Automation

There are some additional tricks we employ to keep operating expenses down for our owners. To find out more, we invite you to contact us at North San Diego Property Management.

What Can North San Diego Real Estate Investors Do to Increase the Value of their Rental Properties?

Sat, 22 Jun 2019 13:00:00 GMT

Increasing the value of your rental property provides a number of different benefits. You’ll be able to earn higher rents, you’ll attract better tenants, and once it’s time to sell, you’ll earn more on the sales price.

Tenants in North San Diego look for well-maintained homes in good neighborhoods. While there isn’t much you can do about your location or the size of your home, you can take matters into your own hands when it comes to property condition.

Create Curb Appeal

Prospective tenants are going to form an immediate opinion when they approach your property from the street. Make sure the outside of the home or building accurately reflects the inside of the home or building.

Curb appeal counts, so increase your rental property value with a good power washing, some fresh paint, and an entryway that looks inviting and attractive. Plant some bright flowers near the door, make sure the exterior lighting is adequate, and provide a yard that’s pretty, easy to maintain, and neat. The lawn should be mowed, the trees should be trimmed, and the entire area should be free from debris and weeds. When you take care of the curb appeal, you get cosmetic points which can translate into more dollars.

Invest in Affordable Upgrades

Another great way to increase your property’s rental value is with some updates and upgrades that will make it look modern and fresh. You don’t have to renovate the entire house. But, if you pay attention to the areas that matter most to well-qualified tenants , you can earn an instant return on your investment. If your kitchen appliances are getting old, replace them with energy-efficient, stainless steel appliances. Consider granite counters or hard flooring surfaces. You can also replace the faucets and the hardware on drawers or cabinets. Install ceiling fans and choose a neutral paint color that’s more interesting than basic beige.

When you take the time to make some small updates to your property, tenants notice, and they’re willing to pay more than they will for homes that aren’t updated and don’t stand out. A few cost-effective changes can make a big difference in your rental price and your tenant selection.

Provide Incentives for Higher Rents

Give good tenants a reason to pay more in rent. For example, you can offer free basic cable or set up the property for wireless internet. You can turn it into a smart home that’s compatible with all of a tenant’s phone and mobile devices. Include lawn care or pool maintenance in your rent for a higher price and a better chance of keeping your home well-maintained . Tenants want value, and they’ll pay more if they feel like it’s worth it.

Responsive Maintenance Increases Value

Increasing your rental value will help you earn more in both the long and short term. We have some additional ideas we’d love to share, so please contact us at North San Diego Property Management.

Why is the North San Diego Area So Attractive to Property Investors?

Sat, 15 Jun 2019 13:00:00 GMT

North San Diego is a popular place for investors to buy real estate. The area really sells itself: with a gorgeous climate and proximity to beaches, military bases, and some really great shopping and recreational opportunities, it’s an ideal place to buy, rent, and sell properties. There’s a diversity of opportunities available. Investors can buy single-family homes, condos, apartment buildings, and commercial real estate.

At North San Diego Property Management, we’ve spent years managing multifamily and commercial properties in the North County area , including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. If you’re looking for a community in California that will increase the success of your portfolio, consider North San Diego. Here’s why.

Population and Economic Growth

The North San Diego area is growing in people and in jobs. The economy is strong, and people are feeling comfortable with their incomes and their job stability. It’s contributing to a strong sales and rental market in the area.

Tenant Pool is Stable

As an investor, you want to be assured of a strong tenant pool. North San Diego has that, and with more people moving into the area, landlords can expect to have well-qualified tenants trying to rent homes for years to come. Many of the jobs being created in San Diego are high-paying, which means the tenants you’re attracting to your investment home are earning enough to cover rent.

Rents are also higher in this area. At the end of 2018, the average rental rate was just under $2,000. Rental rates in San Diego are growing faster than the inflation rate, and market saturation and affordability issues have not had a negative impact on the rental market yet.

San Diego Home Values

It’s increasingly difficult to enter the real estate market in other California cities like San Francisco and Los Angeles. In San Diego, however, you can still find properties that are affordable and make sense for investors. Property values have climbed by about eight percent over the last three years, however they’re still affordable. Many investors are buying with cash, and every investor knows that a cash sale will afford better negotiating power.

Some of the best neighborhoods in North San Diego to have a rental property include Carlsbad, Escondido, Oceanside, Vista, San Marcos, and Solana Beach.

Diversifying Investment Portfolios

There are new buildings going up and communities being planned. If you can get behind the idea of buying some apartment units, condos, buildings, and even commercial real estate, you’ll have the potential to build a strong portfolio of real estate in this market.

We love talking about the market in North San Diego. It’s where we live and work, and we love the community. Contact us at North San Diego Property Management for more information.

What Do I Need to Do to Find Good Tenants for My Carlsbad Rental Property?

Fri, 17 May 2019 13:00:00 GMT

Managing multifamily and commercial properties in the North County area , including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach, North San Diego Property Management has developed both a strategic marketing plan to attract tenants to your property and a thorough screening process to ensure only the best tenants are placed.

When you’re looking for good tenants , you want to find renters who will pay rent on time, take care of the property, and faithfully follow the terms of the lease. We have some ideas on how to find those ideal tenants.

Create a Strategic Marketing Plan

You’ll need to market your property effectively and aggressively. Be strategic with the people you want to reach. Make sure your listing is in all the places that good tenants are looking for properties. This is overwhelmingly online in today’s market. Take some professional pictures, write a great and detailed description that includes pertinent information like price, property size, and rental terms, and post that listing on all the sites people are using.

There’s still a place for yard signs and word of mouth. While most people are finding their next rental property online, a good sign will get the attention of people in the neighborhood and prospective tenants who might be walking or driving by. We also use our large and diverse real estate contacts to generate interest in your rental property. Make sure everyone in your network knows you have a property for rent.

Showings and Open Houses

Make sure the property is rent-ready before you invite people to see it. Good tenants will want to imagine themselves moving in right away. Be sure it’s clean, and remove any debris or things that belonged to former tenants. Create an inviting and welcoming space with the right lighting and appealing smells. You can schedule private showings with tenants and offer times for open houses, where you’ll have the opportunity to meet several potential tenants. Open houses are useful because it creates a bit of a buzz and leaves prospective tenants feeling like there is some competition for your property. They’ll feel a larger sense of urgency to fill out an application and begin the rental process.

Applications and Screenings

To find good tenants, you need to market your property well, provide an outstanding place for them to be, and screen fairly and consistently. If you have any questions about our process or need any help, don’t hesitate to contact us at North San Diego Property Management.

What Can Multifamily and Commercial Real Estate Investors Expect from a Carlsbad Property Management Company?

Fri, 10 May 2019 13:00:00 GMT

If you’re wondering what you can expect from a good property management company, we’re sharing some of the basic services you can expect.

Caring for the Investment Property

The most immediate and direct responsibility of your management company is to take care of your rental property. This includes finding and placing high quality tenants , setting a rental price that will be competitive on the market, and maintaining the condition of your investment . You can expect efficient and on-time rent collections, tenant follow-up if rent is late, including the posting of notices and eviction, if necessary. There should be frequent property inspections and an immediate response to any tenant issues or repair needs.

Caring for the property includes remaining compliant with all fair housing laws, as well as other state, federal, and local laws and regulations. Protecting you from expensive lawsuits and costly mistakes is a major role of a property manager. You can expect all of your accounting to be handled professionally and transparently. You should expect and receive monthly statements that demonstrate all of the income and expenses associated with your property.

Increasing your Return on Investment

In addition to the daily logistics, you can expect your property management company to help you increase your ROI. This is done in a number of different ways. Your property manager will understand the market and price your property correctly. That cuts down on vacancy costs. You’ll also have access to maintenance services that are better priced. Most vendors and contractors give discounts to property management companies because of the volume of work we provide them. Good tenant retention policies reduce turnover costs. A property manager will recommend updates and improvements that will attract better tenants and help you drive up your rent prices. All of these things increase your income and reduce your expenses, giving your asset a higher value.

Building Your Investment Portfolio

We work with investors at all levels. Whether you’re just starting out with one or two properties or you’ve been investing for years, contact us at North San Diego Property Management. We’d love to tell you more about what you can expect when you work with us.

What Makes a Great Carlsbad Property Management Company?

Fri, 03 May 2019 13:00:00 GMT

We have experience managing multifamily and commercial properties in the North County area, including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. By working closely with landlords, tenants, and investors and staying on top of all the best practices in the property management industry, we know what makes a great management company. We’re sharing some of those qualities with you today, in case you’re looking for someone to provide you with high quality rental management.

Timely Communication is Critical

The most important quality you can look for in a Carlsbad property management company is communication. You want the communication from your property managers to be proactive, transparent, and easy to understand. A good management company will be willing to communicate in several different ways. You should expect phone calls, email messages, and constant updates via your online owner’s portal. If your property management company doesn’t provide an owner’s portal, you should question why they aren’t willing to invest in technology.

Look for a management company that’s accessible. Your management team should be available and responsive when you have questions. No one wants to have their phone calls go unanswered or their messages unreturned. Make sure your property manager is communicating with you in the way you expect.

Authority to Make Good Decisions

You hire a property management company for their expertise and resources. Therefore, you don’t want to be burdened with too many decisions and questions. While it’s important to find a property manager who communicates well with you, make sure there’s a balance. You don’t want to be pestered every day with minor questions about how they should handle an issue at your rental property. Property managers are experts. We should be able to make important decisions on your behalf without burdening you or taking up your valuable time. The goal is to keep you in the loop, not to waste your time. Give your property management company the authority they need to do what they do best.

Managing the Day-to-Day Logistics

A great property management company is one that takes all the hassles and headaches off your plate. Great property managers will ensure you’re spending less on your investment property and earning more. If you’d like to learn more about how we can help you, please contact us at North San Diego Property Management. We’d be glad to tell you more.

California Eviction Process | Carlsbad Property Management Advice to Landlords

Fri, 26 Apr 2019 13:00:00 GMT

At North San Diego Property Management, we manage multifamily and commercial properties in the North County area , including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. We know that the eviction process is unpleasant to think about, but it’s important that you’re prepared. Today, we’re discussing some of the things you need to do if you get to the point that a tenant needs to be evicted.

Consult Your Lease Agreement

Most evictions are due to nonpayment of rent, and when you’re evicting a tenant for that reason, the process starts with a strong lease. Your lease agreement must be clear about when rent is due, how it is to be paid, and what the consequences will be if it’s late. If you have a grace period, the lease should reflect it. If late fees will be incurred after that grace period is over, make sure the lease addresses those. It’s always a good idea to contact your tenant at least once to let them know that the rent has not been received, and you need to know when you can expect it.

Serve a Notice to Pay or Quit

The first step in the formal eviction process is to serve your tenants a Three Day Notice to Pay or Quit. This notifies them that rent has not been paid and they have three days to either catch up with the overdue rent or leave the property. This must be in writing, and it must include several pieces of information, including:

You can personally hand the notice to the tenant or you can serve it to an adult at the property. If no one answers the door, you can post the notice on the front door and then mail a copy.

Filing for Eviction in Court

We strongly recommend that you get professional help if you need to evict a tenant. Even if you have all the documentation you need and you’re comfortable in front of a judge, a good eviction attorney will ensure the process moves efficiently and without error.

If you need help removing tenants who are not paying or who are violating your lease agreement in some other way, contact us at North San Diego Property Management. We’d be happy to help.

Real Estate Laws and Regulations Carlsbad Rental Property Owners Need to Know

Fri, 19 Apr 2019 13:00:00 GMT

As a professional real estate company managing multifamily and commercial properties in the North County area, including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach, we have a good understanding of the laws and regulations pertaining to renting out property. For individual investors and landlords, it can be difficult and time-consuming to keep up with all the changes in real estate law that affect your investment.

There are a few major laws you need to be aware of if you’re going to rent out property, and the issues we’re discussing here are the areas where the most common mistakes are made.

Fair Housing Laws

Federal fair housing laws have been in place for decades. They’re designed to protect people from housing discrimination. Under the federal Fair Housing Act, there are seven protected classes against whom you may not discriminate when you’re renting out a property. You cannot discriminate based on color, race, national origin, religion, sex, disability, or familial status. In California, there are additional classes of people who are protected, and you cannot discriminate based on things like age, sexual orientation, or source of income.

It’s easy to make fair housing mistakes. You may not intentionally discriminate against someone, but if you say your property is perfect for families or close to churches, those phrases could be seen as discriminatory. Be careful with your marketing, screening, and leasing processes.

Security Deposit Requirements

California has specific security deposit laws, and if you violate them, it can cost you tens of thousands of dollars. There are limits to what you can collect. On an unfurnished property, you cannot collect a security deposit that’s more than two times the monthly rent. So, if your rent is $2,000 per month, the security deposit cannot exceed $4,000. On a furnished property, you can collect up to three times the monthly rent.

When you’re returning the deposit, you have 21 days to send the tenant the full deposit or a partial deposit with an itemized breakdown of where deductions were made. Make sure you have a detailed inspection report with photographs that justify the reason for those deductions.

Eviction Laws

You cannot evict a tenant who isn’t paying rent by changing the locks or turning off the utilities. There’s a legal process that must be followed, beginning with a Three Day Notice and ending with a Writ of Possession. Follow the eviction process through the courts, otherwise you could be in big trouble. Not only will your eviction take longer and be more expensive, you could be held liable for invalid and illegal eviction tactics.

Tenant Relationships

We can help you stay up to date and compliant with all laws and regulations. Working with a professional property manager takes a lot of liability and risk off your plate.

How Routine Maintenance Today for Your Carlsbad Building Can Prevent Future Costly Repairs

Fri, 08 Feb 2019 13:00:00 GMT

Deferred maintenance leads to expensive emergency repairs, and we work with owners and investors to avoid those situations. At North San Diego Property Management, we manage multifamily and commercial properties in the North County area , including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. We have preventative maintenance plans in place that save our owners money and preserve the condition of their assets.

Identifying and Fixing Maintenance Items

When a maintenance issue is reported, it’s critical to give it attention right away. A small drip under a sink in a bathroom might seem like an issue that can be dealt with later. But if you wait too long, it becomes a full-fledged plumbing problem that may lead to more expensive repairs and damage to other parts of the property. When tenants submit a repair request, get someone over to the property to look at the problem as soon as possible. There is not a single maintenance issue that becomes less trouble and less expensive over time. When you’re proactive, you save money.

Annual Service Contracts for Buildings

Spending $300 or so to have your HVAC system inspected and serviced every year is an excellent investment. Why? Because a new air conditioning unit or furnace will cost you thousands of dollars. When an expert technician is looking at it at least once a year, you won’t be surprised when it suddenly stops working or needs to be replaced. Have your building inspected annually, and take care of any issues that are identified by the professionals who are looking at its systems and functions.

Creating a Maintenance Budget and Maintaining Reserves

If you have any questions about how to put together a smart maintenance plan, please contact us at North San Diego Property Management. We’d be happy to share more tips and advice.

What Renovations to Your Carlsbad Rental Property Are Worth the Costs?

Fri, 25 Jan 2019 13:00:00 GMT

At North San Diego Property Management, we manage multifamily and commercial properties in the North County area , including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. Our experience in preparing rental properties for the market has resulted in lower vacancy times and better tenant placement. Today, we’re discussing the updates and improvements you can make to help you earn more rent and attract high quality tenants.

Improving your Rental Property

Instead of investing a chunk of money in renovating the entire kitchen or adding on another bedroom, make some smaller repairs that cost less but have a huge impact. These include fresh paint, which makes a property look brand new, and updated lighting. New light fixtures can make a major difference, and so can small changes like new hardware on the cabinets or faucets.

Instead of cleaning the carpet between tenants, put in new carpet or consider hard flooring that’s easier to maintain and has a longer life. Take a look at the tile in your bathrooms and your kitchens. Replacing it might give the home a fresh, modern look. If your rental property appliances are looking old and worn, replace them. Stainless steel isn’t always necessary in every market, but if competing properties have those appliances, consider making the investment.

Measuring Cost against Value

These minor improvements are worth your time and money. You’re not going to attract the best tenants in San Diego with kitchen appliances from the 1970s or carpet that hasn’t been changed in 10 years. Think about the cosmetic changes you make when you’re preparing to sell a property. You do those things to sell the property quickly and to attract potential buyers. It’s the same principle with your rental property. You want it to be ready for the rental market and appealing to good tenants.

When to Make Repairs and Renovations

We help owners and investors update their homes all the time. If you would like some recommendations from our qualified team, please contact us at North San Diego Property Management. We’d be happy to tell you more.

Why is North San Diego Property Management Your Real Estate Investment Solution?

Fri, 07 Dec 2018 01:00:00 GMT

At North San Diego Property Management, we manage multifamily and commercial properties in the North County area, including Oceanside, Carlsbad, Vista, San Marcos, and Solano Beach. We are property investors too, so we understand that merely managing the operations of the property is only part of what owners need. We consider asset management, risk management, market knowledge and systems for scaling to be far more critical in our owners long term success. Today, we review what we think our roles as property managers should be and what we felt the market was lacking when we started NSDPM.

Higher Standards Started North San Diego Property Management

NSDPM was founded by partners of the development and brokerage company RAD Ventures, LLC who were looking for a better way to manage its own assets. Certainly there were competent managers, but as a whole they felt the market lacked managers with discipline and focus to consistently improve value. An investor should always be considering whether the people and systems are complacent. The property management companies they initially hired did not meet this standard.

Consistent Processes and Proven Systems

When asked what differentiates us, we often reference our people. We’ve structured a team that doesn’t rely on “industry standard”. We’ve hired project managers, marketing specialists, copywriters, agents who very often have skills not limited to real estate. Our executive director, Kyle Scritchfield with a background in project management, has designed a number of systems that would sooner be found in a tech company than a real estate office. “Property management has evolved tremendously. We can customize and tailor to owners much more efficiently now. With the resources available, a client can open up their reports in real time, see photos and videos of their property, and track the path of their tenants from screening to move-in. The days of opening your quarterly report and crossing your fingers are gone. Everything is transparent now. Our business cards are transparent.”

If you would like to learn more about how we can be your real estate investment solution, please contact us at North San Diego Property Management today. We’ll be happy to help.

How Much are Property Management Fees in the Carlsbad Area?

Fri, 23 Nov 2018 01:00:00 GMT

At North San Diego Property Management, we manage multifamily and commercial properties in the North County area, including in Oceanside, Carlsbad, Vista, San Marcos, and Solano Beach. We understand that property management fees are important to landlords and investors who are shopping for professional management services . Today, we’re talking about what you can expect to pay, and why it’s so important to measure the value of the services you’re receiving against the price you’re paying.

Carlsbad Property Management Fee Structures

Most management companies follow either the flat fee pricing model or the percentage based model. With a flat fee model, you pay one set amount every month, regardless of how much your rent is. You might pay a flat fee of $1000 or $1500 per month. With a percentage based fee, you will pay your property manager a percentage of the rent that’s collected. This might be between 8 percent and 12 percent. So, if you have a property that rents for $5,500 per month and your property manager charges a 10 percent management fee, you’ll pay $550 per month. When we started NSDPM, we started with a flat model, but we had a difficult time competing with other management companies that undercut a cheaper base price in favor of various add-ons. In the future, we should be using much bigger numbers. Aren’t we writing these for commercial owners?

What’s Included and Excluded in a Property Management Fee?

Talk to your potential property manager about what’s included and not included in your management fee. You’ll want to know if you receive tenant placement and leasing services as well as ongoing management, and whether you’ll be protected if there’s an eviction or a situation where your tenant doesn’t pay rent. Find out if you will be responsible for paying a management fee when your property is vacant. All of these things vary from company to company. It’s important that you understand the terms of your management costs and the scope of your management agreement.

Typically, the management fee will include finding a tenant , screening that tenant, conducting the move-in inspection and signing the lease, as well as collecting rent, managing maintenance, and responding to any tenant disputes or conflicts .

Watch for Hidden Fees

A good property management company will be transparent about the costs you’ll incur before, during, and after a tenancy. Some companies will charge extra for advertising, inspecting the property, and posting notices. You may run into a renewal fee or an account set-up fee. Some management companies charge a mark-up on the maintenance that’s needed at your property. This means that if you receive a repair bill from a vendor for $100, your management company may charge another 10 percent for their coordination, which would bring your repair bill to $110. Ask about these fees and be sure to check your management agreement for any mention of extra costs.

Measuring Cost Against Value

Professional property management, when done correctly, will help you earn more on your investment, in both the short term and the long term. While paying a management fee every month may seem like a drain on your cash flow, you must remember that a professional property manager is saving you money on vacancy, lost rent, deferred maintenance, tenant turnover, and legal liability. You’re receiving a lot of knowledge, skills, and talents for your management fee, and you’re also protecting your time and your peace of mind.

At North San Diego Property Management, we understand the importance of customizing our services for each client. The way we manage a single family home for a landlord with one property is much different than how we manage a portfolio for an investor with multiple properties. Make sure your property manager does the same.

If you have any questions about property management costs or what we charge, please contact us at North San Diego Property Management.

What is the Best Way to Find a Good Tenant for My Carlsbad Rental Property?

Wed, 24 Oct 2018 19:55:00 GMT

Finding the best tenant for your rental property requires the collection of data. It also requires a strategic interpretation of that data. At North San Diego Property Management, we manage multifamily and commercial properties in the North County area, including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. We know how to properly screen tenants, and today we’re sharing some tips on how to find and place a well-qualified renter in your investment property.

How to Screen Tenants: Background and Credit Checks

A full background and credit check is required when you’re screening prospective tenants. You’re looking for a clear criminal history and an indication that the applicant is responsible with money. Perfect credit is going to be hard to find, but you may want to establish a baseline for the credit scores you’ll accept. We like to see 680 and higher for our properties, however we consider lower scores if references are strong, income is higher and they’re willing to pay a higher security deposit. It’s also a good idea to check evictions or judgments for money owed to previous landlords and property management companies.

Tenant Screening: Employment and Rental History

It’s important to verify employment and income. You want to be sure your tenants earn enough to pay the rent every month. We like to see gross income (pre-tax) that is 2.5 to 3 times more than rent. Ask for documentation, such as pay stubs. If your applicant is self-employed or a contract worker, you can look at bank statements or tax forms. Speak to current and former landlords. This will give you the best picture of your potential tenant’s rental history. You can ask those landlords if the tenant paid rent on time, left any damage behind at the property, and gave proper notice before moving out. You’ll want to know if there were any problems, and if they’d rent to that same tenant again. Also, it’s important that you follow up with all of the references. One can actually get a pretty decent impression of a person after talking to their employer, landlord, and friends (uh references).

Choosing a Well-Qualified Tenant

We would be happy to help you find a great tenant. If you have any questions about our tenant screening process, please don’t hesitate to contact us at North San Diego Property Management.

Common Tenant Issues and How to Handle Them

Wed, 30 May 2018 17:54:00 GMT

Rent is Late or Doesn’t Come

When the first of the month comes around, you never know quite what to expect . While you might get the full rent in your mailbox days before the due date, you might also find yourself racing around town to get your money. Whether a tenant has a sick family member, lost hours at work or suffered other problems that led to a late payment or a nonpayment of rent, you have two options. You should have a clause in your lease that places a penalty of some kind, typically $20 per day, when the rent is past due, or you can file for eviction. Eviction is often expensive, and in some states it can take months before the court will hear an eviction. If the issue only occurs once or twice, you might work out some type of payment plan. If it is a frequent problem, eviction might be your best choice. Be mindful that some states have a maximum late payment penalty, and Judges may look at late fees of more than 10% excessive.

Pest Problems

No one wants to live in a home with pests and rodents running loose. Landlords who avoid hiring exterminators might see high turnover in their properties. Apartments, duplexes, and other types of homes can develop bug problems from neighbors attracting or bringing in bugs. If one unit has a bedbug problem, it won’t be long until those bugs spread to all units. As soon as you hear a complaint, contact an exterminator to take care of the problem.

Broken Appliances

If your lease agreement with a renter states that the property comes with appliances , you’re responsible for those appliances. Renters may move into a new home and discover that the refrigerator doesn’t work, the stove is broken, or there are other problems with appliances. Though buying a new appliance isn’t cheap, it can save you a lot of complaints and hardships in the future. Make sure that you replace those items as quickly as possible. Tenants can sue you in court or file their rent payments with the court until you replace those appliances.

Roofing Issues

You might rent a home that has a minor leak in the roof without informing the tenant of that problem, but the tenant has a right to a safe home. The longer you leave the roof untreated, the more damage you face. Even a small leak can cause water damage, lead to mold and mildew, and eventually make the roof collapse. Tenants can put their rent in escrow until you fix the roofing problem. It’s best to take care of problems like this before you put a property on the rental market. Taking care of issues quickly can make your tenants happy and keep them renting from you longer.

This article written by Tim Smith who writes for Modernize .

Do you have any of these issues from your own tenants that you have had to address? Or, if you are a tenant, what are your pet peeves of landlords?

Article originally published on: nononsenselandlord.com

How to Handle Utilities as a Landlord

Wed, 30 May 2018 17:54:00 GMT

Here is how to handle utilities as a landlord for your properties, multifamily or single family.

What Are Utilities in a Rental?

Utilities can be anything. The common ones are electricity and gas. You also have garbage, water and sewer. There are Homeowner Association (HOA) fees, which are often passed along to a tenant. Lawn and snow maintenance are part of the utilities. If you offer laundry equipment, that can be considered a utility.

Combined, these expenses can really add up. I generally never let a tenant take care of the lawn and snow, but it can work out if you have a decent property and solid tenants. Weak tenants will wear you down keeping ahead of neighbor (and City) complaints about the lawn being mowed.

Landlord Cut-over Account

If you are not paying the utilities for your tenants, you need to have all your property utilities set up on a landlord cut-over account that can be. When a tenant moves out, the utilities go in your name. There is no switch-over charge and no interruption. When a tenant moves out in the middle of the night, you still have lights and heat. When your turnover an apartment, you can come it and do your work.

If you do not have a landlord cut-over account setup, it may delay you for a few days while the utility company gets out to turn on the utility.

There is a risk that if a tenant does not pay the utility bill, it gets switched into your name too. That may be the better option than risking a freeze, or a move out when you are not expecting it.

Paying for Utilities that Stay with the Property

This is a no-brainer. Some utilities such as water, get billed to the owner of the property if they are not paid. Some water companies will not bill the tenant separately. Even if the utility company will, most water bills if not paid, become a lien on the property. It will be paid by the landlord if not by the tenant. Or the landlord may lose the property due to the utility lien.

Most water bills are paid quarterly. Tenants not used to paying a water bill will forget this bill. If you are letting the tenants pay the utility, you MUST check the status every billing cycle. You must also be prepared to evict if they have not paid the bill. And your lease should say you have the right to evict if it is not paid.

There are also some municipalities that deliver electric and gas. If these utilities will create a lien on the property if not paid, you need to stay on top of them like white on rice, or pay them yourself.

Would a judge allow an eviction is a utility bill was not paid for 15 days? Would you even notice the bill was not paid? How do you bill a tenant for water they used when they have been gone for over two months?

Why add the extra work as part of your property management? Just pay the water bill, and collect the rent every month.

Landlord Thermostats

I hear all the time from landlords about tenants that leave the windows open and turn the heat up to 90 degrees. That can actually happen, but I have never had an issue. However, I did have an issue once where the heat upstairs was too hot for the tenant as my zone control was not working.

In this duplex, I only had one thermostat at that time, and the upstairs tenant wanted it cooler, and there was no way to keep the furnace from running. Adding a zone control damper solved the issue.

You can also get a tamper proof thermostat, that the tenants cannot turn up or down too far. Here is one, but there are many options.

Section 8 Properties

If you have a Section 8 property, you should include the utilities in the monthly rent. Section 8 will pay more for a property that includes utilities. Many Section 8 tenants have such poor credit that they have difficulty transferring the utilities into their own name. By paying for the utilities, it may help you get and keep a tenant, and prevent the utilities from getting shut off. In Minnesota, getting the utilities turned off in the middle of winter can be catastrophic to your property.

There is some risk however, if you evict the tenant for lack of paying rent, you not only lose rent, but the money you spent on utilities too.

Separate Utility Meters

Ideally, you will have separate meters for all utilities. I have a duplex that only has one water meter, one electric meter, one furnace, and one washer and dryer. The laundry is free, so anyone can do as much laundry as they want. This is a common way that duplexes are set up.

I just allocate a monthly amount for each tenant. The lower half pays an extra $225, and the upper unit pays $105. How I determined that is a relatively subjective method. I advertised at different prices and sometimes I lowered the rent price and raised the utility contribution. When I got a well-qualified renter, I went with the last price that was advertised when they came in.

After Market Utility Meters

You can do a makeshift job of splitting electricity yourself with one of these meters . Someone will still have to read the meter and decide what to charge. You can get water and gas meter that do the same thing, without having to get separate meters from the utility company.

Odds are, if your building was not built with separate utilities in mind, there are some circuits that are shared between units. Adding a new meter from the electric company and getting two bills for a duplex is nice, but will not solve all the issues. A shared circuit is one. Any common area utilities, such as lights and heating are another. Can a tenant wash the car? Is there a washer or dryer that is shared and uses utilities?

Using these after-market utility meters can be a real headache and add a lot of extra work. Maybe you can squeeze a few more dollars out of your rental, and maybe the extra meter reading and utility billing will take up more time than it is worth.

Flat Rate vs. Monthly Billing

Some landlords in duplexes and even larger properties separate the utilities every month and send the tenant a bill. Water is a prime utility that often is billed to a complex, and not an individual unit.

Does the utility company finalize the bill at the same time rent is due? What happens in an overlap situation where you get new tenants, how do you split that up? What happens when the tenants move, you will be waiting on a bill and trying to collect from a tenant that has moved out.

If you have a flat number, you get that amount every month, on the first of the month, just like rent.

Single Family Home Utilities

In a single-family home, it is pretty easy to see who should pay the utilities. The person or family that lives there. There are special circumstances that may make you decide otherwise, such as a Section 8 property. If you are renting a room, that makes it more difficult. Why not just charge a flat rate for the room, which includes utilities?

You need to understand what happens when the utilities are not paid, and what your plan is when they are not paid. And you need to validate that they are being paid. If the utility is disconnected, you can suffer catastrophic damage or have a lien created on your property.

Separate Zone Controls for a Duplex or Triplex

My duplex has separate heating ducts for the upstairs and downstairs. Ducting is fairly easy to run and change, if needed. Adding a separate furnace whether you have separate ducting or not is much more difficult.

If possible, put in a zone damper control and separate thermostats for each unit in a duplex or triplex. It will save a lot of issues in the long run.

Advertising Your Rental that Includes Utilities

If you are worried that your price may be noncompetitive , price the rental at one price, and add a utility ‘fee’ to the monthly rent. For example, advertise at $1,000 a month, and have a $250 monthly utility fee, for a total of $1,250 a month. That way, you are not over-priced for a similar property down the block.

If you advertised at $1,250, any renter that has a price cap of $1,000 will miss your rental. Advertising at the higher rate, you will also seem to prospects to be $250 too high, and will not get any inquiries except from low-quality renters that cannot go anywhere else.

Families vs. Individuals

There is no legal way to charge a family more for utilities than a single person. You may get away with it, but it would probably violate the Familial Status part of the Fair Housing law. I recommend you stay away from that. Does a single person generally use less water than a family with two adults and six kids? Yes, they do, but you cannot charge more.

Just pick a number for utilities that makes you money and stay with it. Allocate the utilities by square footage if you want. Have solid screening criteria, and your tenants will respect the property and the utilities.

What has your experiences been with utilities? Do you pay your tenants utilities? If you are a tenant, do you prefer to pay, or rather have your landlord pay?

Article originally published on: nononsenselandlord.com

The Importance of Renters Insurance

Wed, 30 May 2018 17:53:00 GMT

What is Renters Insurance?

Renters insurance is the best way for a renter to protect their possessions. If a natural disaster, break-in, or other unplanned catastrophe causes major destruction and loss of personal possessions, will your renters be able to afford to cover everything?

Most likely, they’ll want some help in replacing their furniture, technology, appliances, and belongings, which can cost thousands of dollars.

What does Renters Insurance Cover?

Additional Benefits of Renters Insurance
It’s wise to encourage your renters to invest in this type of coverage, as it’s difficult for renters to foresee the collective cost of their belongings. Renters often underestimate how much money it would require to replace all of their clothes, furniture, and appliances. Even if these items aren’t top-of-the-line or worth a lot individually, they’ll add up quickly when needing to be replaced concurrently. Based on the coverage policy, renters can gain the peace of mind of knowing that an already stressful situation – like a natural disaster or break-in – can be softened by the assurance of content coverage.

The benefits make it clear: To get great protection, your renters need renters insurance.

Article originally published on: appfolio.com

Month-to-Month vs. Annual Lease: Which Protects Landlords?

Wed, 30 May 2018 17:53:00 GMT

As soon as you know you are going to have a vacancy, you want to begin marketing. If your existing tenant is a slob, a hoarder, or being evicted, it is extremely difficult to attempt any turnover until you have a vacant unit. With a long term tenant, you just need to factor in a bit of vacancy time to clean up and repair, as well as some down time until you find a tenant.

Worst case, it was a one year (or less) tenant and you have to wait for the tenant to move out to show it, you can look in the mirror for your issue. You should have bypassed this tenant.

Get a Commitment Early

Once a new tenant has committed to a unit, you need to get a Holding Fee Agreement signed. You also need to get a holding fee of at least a month’s rent, the deposit, or possibly $1,000, whichever is less. Be sure to get a Holding Fee Agreement signed as soon as you get an application — or even sooner if possible.

Always continue to show the unit until the new tenant passes the background check. Once the tenant passes the background check, you notify them that they passed. If they do not pass, refund their holding fee money. You can tell them they are preliminarily approved right away to keep their interest, but since they have money down, they are not continuing to shop.

Do Not Commit Too Soon

If you are showing an apartment that has a tenant, you need to be aware of the risks of signing a lease too early. If your tenant doesn’t move out, or if for any reason the rental is not ready, the new tenant has an agreement with you that basically states the following: “The landlord will provide the rental on a certain date, at a certain price.” If you cannot deliver it for any reason, you are in default of the contract or lease. You may be liable for any damages or hotel costs the tenant might have.

If you remember nothing else from this post, remember this: “ A lease obligates the landlord; a holding fee agreement obligates the tenant .”

Having good tenants will pay off here; if you have good tenants, they will likely not only vacate the rental on time, but they will also leave it clean and ready to go. Sometimes tenants leave early, especially if they have a job transfer or are buying a house. Often, their new landlord will not be as savvy as you; they might offer to let them move in early, as they had a vacant unit, rather than a one-day turn.

Challenges with Evictions

If you have ever been to court for a lease violation, you know that it is nearly impossible to evict for a lease violation if the tenant contests it. A judge will determine if it is a “material” violation. Generally, the judge will also give the tenant a chance to rectify the issue, maybe even 30 days to clean up their act.

Scenario #1: Pets

If your tenant was dog-sitting for a few weeks and you have a no-pet lease, the issue is resolved before it ever gets to court. You have nothing to evict over. You have a damage deposit for any damages. The dog is now gone. You have wasted time and money with an eviction.

Or maybe the tenant gets a new dog for a family pet. You saw the dog on several occasions, and you told the tenants to get rid of it. You accepted rent for the next couple of months, and each time, you reminded the tenants to get rid of the dog.

A judge will never evict over either of these scenarios. Once you notice a lease violation and you do not act decisively to evict over it, you have implicitly given permission for the violation. You have set precedence by taking rent knowing a pet was there. And if the pet suddenly becomes a therapy dog, you are at risk of being sued.

Scenario #2: Extra Occupants

Your tenant moves in a boyfriend. He doesn’t have a lease anywhere, but has a driver’s license that has a different address. He is possibly the father of the tenant’s kids. Maybe he is on probation or just got out of jail. As long as the lease signer is not on any kind of program where they are not supposed to be living with anyone else, you will likely not be able to evict over that scenario.

A judge knows kids need parents, that there is no cause for you to be concerned, and that you have a damage deposit for any damages. If the person gets in trouble, their probation gets revoked. You will likely have a hard time convincing a judge that you are being “harmed” by the extra person. A judge will likely not remove a child’s parent who is trying to “reconcile” with their spouse.

Scenario #3: Short Notice Move Out

Your tenant is just six months into a yearlong lease. They decide they want to move across town — or across the country. They pack up and move and tell you that they left and are not paying rent anymore. If you are lucky, they give you the keys, turn off the utilities, or send you a letter terminating the lease. All these items indicate that the tenants are giving up possession of the unit.

Otherwise, you might have to evict a vacant unit.

If the tenants have not provided any evidence of termination of possession, maybe you got lucky, and they gave you a forwarding address or other contact information, so you can get an official change of possession if they neglected to explicitly give you one.

Regardless of possession, you have a contract, so you take them to Court for lost rent. The damage deposit covers damages and a month’s worth of rent, but you want the remaining six months of rent. After all, a vacant unit is easy to manage if you can keep collecting rent.

A judge might award you two months’ worth of rent, one of which was paid by the deposit, but only after the end of the lease or after you have it re-rented. They cannot grant any damages for months that have not passed, as you have not suffered damages for those future months yet. And if you go six months being vacant, whose fault is that? A judge might say you should have tried to get the place rented sooner.

And what happens if the original tenant suddenly returns and expects to get back in the unit that you have already re-rented? They have a lease that runs concurrently with your new tenants. If they take you to Court, you could have an issue.

Month to Month Lease vs. Annual Leases

The first defense against these scenarios is to get better tenants. The second defense is to have a month-to-month (M2M) lease, not an annual lease. A M2M lease will protect you, the landlord. With a M2M lease, you can issue a notice to move out and not even give a reason.

As a matter of fact, no reason is the best reason. No one can infer any illegal lease termination reason(s). If you evict for staying after a lease termination, or a holdover, there is no defense for the holdover. The tenants were given plenty of notice to move, and they stayed.

Only use yearlong leases for tenants who have proven their ability to honor commitments. A tenant with a 620+ credit score is a “C” grade, which is the starting point to begin to offer a longer term lease. In addition to having a decent credit score, a tenant worthy of a longer term lease would have income of at least 3.5x the rent. And they would have job stability — at least two years in the same job or occupation. If you have ever tried to garnish wages, you know that you cannot get anything from a job hopper.

The landlord game is not hard, but it is a continuous exercise in risk mitigation. Lowering your risk with better tenants, larger deposits, and faster evictions or move-outs is the key to success.

Article originally published on nononsenselandlord.com

How to Hold Rental Property

Wed, 30 May 2018 17:53:00 GMT

Here is the way I hold rental property, and the reasons behind it.

How to Hold Rental Property for Personal Protection

Many real estate investors hold property in various entities for personal protection reasons. Make no mistake, personal protection is important. It is also important to do the right things so you avoid needing protection in the first place. You should have enough insurance so you can cover the most anticipated issues. Have an umbrella insurance policy that protects your personal assets and your business entities as a firewall.

Hiding Assets

Setting up a business entity to avoid disclosing ownership is OK, but a sharp attorney will find your assets, or compel you to disclose them. And they can pierce the corporate veil if they really try. Or cause you to go broke defending yourself. People can find out who owns what property, and where that person(s) lives, if they really want to.

Where to Form the Business Entity

There are Delaware corporations, Nevada LLCs, South Dakota entities, Irish corporations, Virgin Island business, etc. Unless you are very large, you may find it is best just to incorporate in your own state. All mine are Minnesota entities, all are pass through entities, and none are large enough to pay any extra taxes, such as apportionment taxes, due to their size.

Naming Conventions

There is a strategy that you name your LLC after a company that exists far away. Like naming the “123 Oak Street LLC” property, to “Nevada Mortgage Corporation, LLC” instead. This may throw potential lawsuits to look out-of-state to Nevada when they are actually trying to find a Minnesota LLC. It also may cause you to forget what LLC name goes to what property when you have several properties. And if you are too slick for your own good, a jury may think so too.

All my properties are in their own LLC. Each one has a unique name, which corresponds to the address for the property. Like an LLC for a property on “123 Oak Street”, is named “123 Oak Street, LLC”. It’s non-creative, but I can remember what LLC goes to which property easily. If I buy a property that a previous investor owned and they also used this naming strategy, I may need a slightly different name. I have never had an issue with someone already using the LLC name I wanted.

Expenses with Setting Up Business Entities

Each one of my business entities had to be filed with the Minnesota Secretary of State. It costs $155.00 for my most recent organization. I needed to get a Federal EIN, and a Minnesota taxpayer ID for each one. Those tax numbers are free, but it still needs to be done.

Each property files their own income taxes and has a lengthy partnership tax form. There are annual registration filing requirements with the Minnesota secretary of State, which is free, but is a time burden that must be completed.

Each Property in an LLC

Each one of my properties is in its own LLC. I am not sure if I actually need the separate LLCs, but it is what I do. They are all multi-member LLCs, with a token allocation percentage to a non-related,non-spouse person.

I have heard that multi-member LLCs are safer in a lawsuit, as the plaintiff cannot get 100% of the LLC, I am not sure. I do know that I can potentially lose my allocation, but the other member’s allocation that is not mine would not likely be ‘lost’. It may create a dis-incentive to be sued?

Since each property is in a separate LLC, if I was to get sued and lost the suit, I could jettison that single property and move on. It would sting, but I would likely not loose the entire enterprise. A different property in a different LLC may be exempt from that lawsuit. In any case, it would have to be named separately in the court action. Hopefully this helps my asset protection.

Each LLC needs to file their own taxes, something I do myself with TurboTax. I have eight rental properties, so I need to file and mail eight returns. It keeps me busy at tax time, but it is very repetitive work, not hard work.

If you can complete a Profit and Loss Statement (P&L), you can use TurboTax. Meet with an accountant once a year, or ask a lot of questions, and you can avoid paying for any tax preparation.

A Holding Company for the LLCs

I have a pass through LLC entity, or a holding company, that conducts business for all the individual properties. To be honest, I am not 100% sure I need it, but it makes sense. 100% of the income is distributed to the individual LLCs through this ‘master’ LLC. There are no expenses to this LLC, other than “Distributions to Owners”. That expense is identical to the income it takes in. The holding company, is really more of a consolidation company. It really doesn’t hold anything, and has no assets. It helps with income and expense allocation.

The holding company distributes the various income and expenses to each property LLC using an allocation strategy based on the revenue the individual property received. That way, when I go to Home Depot, I do not have to figure out what item went to what property. The expenses are all allocated across all the properties. I only need one checking account, one credit card, and one bank account. If I had a checking account for each property, I would likely be overdrawn all the time as I would forget where I wrote check from…

The holding company does not have any accounts though. It merely receives income and expenses and passes them on. It does not retain any assets. The value of this company is $0.

The holding company also needs its own tax return.

An S-Corporation to Manage Properties

I use an S-Corp as a property manager entity. It is the only entity that has a credit card, or a bank account. It is the only name that tenants write checks out to. I can deposit all checks, from all my renters, into one account, in one transaction.

The S-Corp coordinates with contractors and purchases any supplies. The S-Corp holds the business liability insurance and any Workers Compensation insurance. The S-Corp signs all the leases.

The S-Corp leases any equipment and vehicles and puts the CEO (i.e. me) as a personal guarantor. It does pass through the income and expenses to the holding LLCs at the end of each year. It gets paid by the holding LLC to manage the properties.

The S-Corp also needs its own tax return.

Mortgages and Property Holding Names

All the mortgages for my properties are held in non-business entity names. The mortgages are in my personal name. It is easier to get a 30-year residential mortgage in your own name, than an LLC name. It is difficult, or impossible to refinance it, unless you reverse the name change. And then, the mortgage bank will expect you to keep it in your own name.

Using a commercial lender will help if you have an LLC, and want to refinance using that LLC. They will be loaning funds on the property value, not your good name and credit, so you may need more money down. Loan origination expenses will likely be higher, and the interest rate may change every few years.

Due on Sale Clause

After a LLC is set up, I transfer the property to an LLC name. I have been told that banks with call a loan due when the property ownership changes from who they loaned money original to, to an LLC. I have never experienced that, and if it does, I would pay off the mortgages. It would be painful, but could be done. Or reverse the LLC to my own name again. Or punt.

Here is what it All looks like

Article originally published on: nononsenselandlord.com

The 7 Dirty Truths About Land-lording (Like it or Not!)

Wed, 30 May 2018 17:53:00 GMT

Landlording is not always making large banking deposits and Caribbean vacations. Sure, around the world trips often come with owning Real Estate, but you still need to earn it. Here are some of the dirty truths about landlording.

Disclaimer: Show me a landlord that is not in the business to make money, and I will show you a manager for government housing.

The 7 Dirty Truths about Landlording

The following are seven truths every landlord faces. They aren’t pretty, but it’s necessary to let you all know what to expect, so let’s get into it!

1. It’s a Business, not a Hobby

You need to treat a Real Estate investment as a business, not a hobby.

If Real Estate is just a hobby for you, please skip this article. If you have a hard time looking out for yourself, do not become a landlord, skip this article. If you are a tenant, keep reading and know your landlord is making decisions like most other landlords, and it is not personal.

Part of earning money in Real Estate is making the unpopular decisions that can make your life miserable in the short run, but better in the long run. And when you make these decisions, you often make your tenants life exponentially more difficult than yours. It is not the goal to make their life miserable, but it sometimes happens. It is not always pleasant, sometimes you have to ‘pull the plug’ on a tenant, and that is often a difficult decision. Once plug has been pulled, you have transferred the agony to someone else.

Some landlords hire a property manager to make or carry out the decisions for them. They can remain faceless, hiding behind a property manager façade, and do the dirty work but not actually feel it. Make no mistake, you are just as much a part of the tenants misery as the PM is, you are just insulated by them. Taking the cowards way out does not make you any less a part of the tenant’s agony. Just because you buy your steaks at the grocery store, does not make you any less a part of killing the cow.

On the other hand, if you do not make these important decisions, you could go broke yourself. Your eventual distress will be far greater than any tenant discomfort that is caused in the short run. Your distress will go on for years, as you recover your credit score and lost investments.

You are not in the landlording game to provide housing to others; you are in the landlording game to make money. Providing housing is how you make the money, not the purpose of your business. The Mortgage Company needs to make their money, and will take away your property if you do not give them their money. They will make the hard decisions if you fail to do so.

You must make the decisions that can cause your tenants suffering, to avoid longer term suffering for yourself; but also so you can make more money.

2. Making Decisions on Tenant Applications

When a tenant applies for your unit, you have to make the decision to accept or reject them.

Solid tenants can go anywhere. Marginal tenants have to look at many places before they are accepted. You want solid tenants. I have had tenants cry over the phone when they are telling me how they need a place to live. It may have been a medical issue, a criminal issue, or a bad marriage issue that caused their situation. Regardless of the cause, they always say it was not their fault.

The marginal tenant will have poor credit, low income, criminal issues, evictions or even other events in their past. The marginal tenant “just needs a chance”. They may be trying to find a place for a family relative, but yet they do not offer their own couch for the relative. It may have been a “one time stupid mistake” that the tenant made and got caught. It may have been a result of “foolish decisions they made when they were young”, I especially like this excuse when it comes from a 23 year old renter.

Either way, your decision just made someone’s life more difficult. Your own life is better off with a more solid tenant. If you really want to help out someone like this, co-sign on a different apartment with them, it will be far cheaper for you.

I have declined many tenants that may have made good tenants, somewhere else.

You decline tenants to avoid longer term misery for yourself, and so you can make more money.

3. Evicting Tenants

When you file an eviction, you make your tenants life extremely difficult.

You are taking away their home, and getting back your property. It may be because the tenant did not pay rent or many other reasons they need to go, but they have to move regardless. Moving is costly for them, and an eviction on their record makes it more difficult for them to get a new place. It is a scar on their rental record.

It may well be necessary, and you suffer too, but your tenant’s will suffer more. It may be a 98 year old woman or a person on their last days. It doesn’t matter, your mortgage payment is still due on the same day.

I have had to evict tenants with stage 4 cancer that did not pay rent. The tenant died six months after the eviction. It’s not always fun, but needs to be done.

You evict tenants, to avoid longer term misery for yourself, and so you can make more money.

4. Forced Move Outs

When you do not renew a lease, it is nearly like an eviction for a tenant.

You may want to move into the home you were renting yourself. Maybe you want to sell the property and decide it is better selling a vacant place. Maybe the tenants were a real hassle, and you want to avoid the expense of an eviction. Maybe your tenants in a multifamily have had issues that cause your other tenants to move out.

You may be remodeling to get higher rents, and there is no good way to do it with the tenants in place. Either way, your tenants need to find a new place, and it will be difficult for them.

I have had to move good people out, as they were no longer compatible with the longer term direction of my properties. I recently terminated a 7+ year tenant that has always paid rent.

You force out tenants, to avoid longer term misery for yourself, and so you can make more money.

5. Raising Rents on Your Tenants

Taxes go up, utilities go up, insurance goes up, office expenses go up, and your standard of living goes up.

All of these mean you need to charge more for your rental unit. Your tenant needs to pay more so you can have enough pocket money to buy your $5 cup of coffee at Starbucks.

Their income may be stagnant, or even decreased. They might have gotten a new job and are working fewer hours, and making less money. Their employer might have initiated higher co-payments for insurance, and their net pay is smaller. Or perhaps they could not work as much because they were sick, and did not have enough paid sick days or vacation to get them by.

I have had to raise rents on tenants that could barely afford their current rent, let alone the higher rent.

You increase rents on tenants, to avoid longer term misery for yourself, and so you can make more money.

6. Saying No to a Tenant’s Pet(s)

If you have been a landlord anytime at all, you have had to deal with tenants pets.

Most often, you know about the pets coming in, but not always. Sometimes a “lab mix” turns out to a purebred pit bull. Or you happen to notice a new puppy in a place you do not allow pets. After about two hours, a renter becomes permanently emotionally attached to a puppy. Perhaps it is the renters’ older childhood family pet that the parents needed to pawn off on the kids, who are now renting from you. There are lots of reasons pets show up unexpectedly.

But the pet cannot stay; you need to make your tenant get rid of it. Your insurance company may demand it. When you force a tenant to get rid of a pet, you are forcing them to get rid of one of their most cherished things in their life. But you do it anyway.

I have had to say no to tenants with pets, even though I knew it was a hardship for the tenant.

You require the tenants to give up their best friend, to avoid longer term misery for yourself, and so you can make more money.

7. In the End, Real Estate is all about Money

A landlord is a business owner. As a business owner, you are required to make the tough decisions.

That is life. You and your tenants need to know it is not personal; the decision is simply about making more money – for you. You can use this money so you can live better, even if the tenant is worse off than before your decision. Making money in real estate provides jobs and incentives to continue the process of making money.

Have you ever had to make a decision that made your tenants life more miserable? Was the decision an effort to make more money for you?

Article originally published on: nononsenselandlord.com

Disclose! Disclose! Disclose!

Wed, 30 May 2018 17:52:00 GMT

There’s an old adage that if you don’t have anything nice to say, you should say nothing at all. The exception is real estate.

What to disclose

As soon as you accept an offer on your home, it’s time for full disclosure. That means telling your buyer anything and everything that could negatively impact the usefulness, value or enjoyment of the property. In most places, that means filling out multiple lengthy forms detailing everything from leaks and home improvements to plans for a new development nearby.

In a few states, you’ll even be required to disclose if the home has been a crime scene or if it’s haunted. Most times, buyers are expected to identify these so-called “stigmatized properties” on their own, since a “stigma” isn’t a material fact. But follow your agent or attorney’s advice.

Other than things that may go bump in the night, what should you disclose? Everything. Did you build an addition? Disclose it. Was it permitted or not? Disclose it. Does your next-door neighbor cheat at Scrabble? OK, maybe that you don’t need to disclose. But almost everything else is disclosure material.

Consequences of failing to disclose

What’s the harm in just omitting the fact that you had a flooding issue in the basement three years ago if it hasn’t happened since? Plenty. Obviously a full and honest disclosure gives buyers the information they need, and it’s the right thing to do. But just as importantly, it protects you from future legal action.

If it’s a particularly rainy winter and the basement floods a few months from now, that Scrabble-cheating neighbor will probably mention it’s happened before. Or the contractor hired to pump and dry the basement will have a record of the previous job. Either way, the new owners will know you hid an important fact and may sue for failure to disclose. The time limit varies, but you can be on the hook for things you failed to disclose for up to 10 years.

The best solution to disclosing past problems is to also outline exactly what steps you took to remedy them. Did you install a new drainage system to alleviate flooding? Fully dry and clean the basement to prevent mold after the flood? Tell them that and better yet, show them the receipts.

Inspections vs. disclosures

Don’t confuse an inspection , either by you or the buyer, with disclosure. Satisfying an inspection contingency doesn’t let you off the hook. Inspections are designed to let the buyer kick the tires, so to speak. Disclosure means you tell them anything you already know about.

Those words, “you already know about,” are important. You aren’t required to search out problems. You just need disclose those you know about. Is there asbestos in the acoustic ceilings? Lead-based paint on the window sills? If you don’t know, that’s all you have to say. You aren’t required to send samples out for testing so you can provide an answer. But once you know, you must share that information with the buyer.

If you’re working without an agent, be sure to understand the state and local disclosure laws where you are and get the appropriate forms. It’s probably worth hiring a local real estate attorney just to walk you through that part of the sale if you’re going it alone.

Pointing out the flaws probably seems like a strange and frightening exercise when you’re trying to sell something. But, in real estate — and life in general — honesty is the best policy.

Article originally published on zillow.com

Showings and Open Houses

Wed, 30 May 2018 17:52:00 GMT

Of course, you want as many interested and qualified buyers as possible to visit, so an open house is ideal. Open houses let shoppers see your home, while getting a feel for the neighborhood and market. It’s your chance to make a good impression in a short time. Serious buyers usually follow up with a private showing or two with just their agent.

In some markets, listing agents use lockboxes so the home can be accessed just about any time. The agent places a digital lockbox on the front door for agents to access with their buyer clients.

If you’re serious about selling, you should be ready to show your place at a moment’s notice. So keeping your home picked up, clean and “show ready” are crucial. To help prepare yourself and your home, here are a few tips:

Feel your way

Selling your home is an emotional process, and opening your personal space to scrutiny can be difficult. Make sure you’ve given yourself enough time to prepare so you don’t feel rushed or pushed, especially if you’ve been in your home for a long time.

To begin seeing your home as a financial asset, start by de-personalizing your rooms. Buyers want to experience the space, not your latest trip to Disneyland, so stow away snapshots and souvenirs. Putting your personal things away should help you feel less like your space is being invaded.

Stages of staging

If it’s financially and logistically possible, move out of your home and stage it for maximum impact. It helps you begin the separation you’ll need when you actually sell. And having a more neutral space will appeal more to buyers.

Short of that, do some heavy-duty staging while living in your home. Staging your home is crucial in preparing for your open house. If you don’t hire a professional home stager, we have tips to make your home look spacious and inviting .

Safe and secure

If you stay in your home during the selling process, make sure you secure your valuables and personal papers. An agent will be present during open houses and showings, but they can’t keep an eye on everyone every minute.

Make sure any expensive items like jewelry are secured, ideally in a safe, or rent a safety deposit box while you’re selling this home and moving to your next one. Also turn off your computers and securely store any paperwork that might have personal information such as your Social Security number.

Go for clean and pet-free

To prepare for your show times, clean like you’ve never cleaned before: windows, appliances, baseboards and crown molding, carpets, tile and hardwood floors. Organize drawers and closets to make them look spacious. If you can afford it, hire a professional cleaning crew.

If your household includes pets, do an extra deep clean. Ask family or friends if they can house your critter family while you’re selling, or at least during open houses.

Leave it to your agent

As much as you may be tempted to hang around, steer clear of your home during the open house. If buyers know that the owner is present, they might feel a little awkward exploring or asking tough questions. The agent hosting the open house is there to answer any questions shoppers have about the home or the neighborhood. Trust that your home is in good hands.

Article originally published on zillow.com

How to Provide Rental Property Appliances (No good deed goes unpunished)

Wed, 30 May 2018 17:52:00 GMT

When my boyfriend moved in with me about a year and a half ago, he decided to rent his place out for some extra rental income. Because we were combining households, we had no need for his washer and dryer, BBQ, or refrigerator. He figured that he’d be a nice guy and offer those items to potential renters for their use while they remained renters.

The washer and dryer were nice front-loader models, and had many years of useful life left. The BBQ was just a little free-standing propane deal. The fridge was an old battle-axe from many decades ago that just refused to quit. It was ugly, and we considered hauling it out of the kitchen for property showings because it was so unattractive, but we figured we’d leave it there in the off-chance a tenant would want to use it.

I asked the boyfriend what he wanted to happen if those items broke. Would he offer to replace them, or would he expect the tenant to replace them? He said if they broke due to normal wear and tear, he would want the tenant to replace them, and then the tenant would own the replacement appliances. Essentially, they weren’t supposed to be considered as part of the items he would agree to provide with the rental, they were just “bonus” items that the tenants could use so long as they were working.

My boyfriend has never been a landlord before, so he’s learning the ropes with this one. I told him that when he showed the property, he should be careful to mention that the fridge, BBQ, and washer/dryer could be left behind for the tenant’s convenience, but that they were explicitly not part of the rental , so if they broke due to wear and tear, it would be up to the tenant to replace them.

Why Do You Need to Specify What’s Included in the Rental?

If you don’t specify what’s included in the rental and what isn’t included, then you could be setting yourself up for a problem. The laws of your state may vary, but the general rule is that if you advertised your rental as coming with a fridge, or if the tenant saw the fridge during a walkthrough, or you told them that the fridge would be there when they moved in, then you are responsible for ensuring that a fridge would be available during the entire lease term, unless you and the tenant agree to a different arrangement.

So let’s say you’ve got a leftover fridge from a prior tenant, and you tell the next prospective tenant that the fridge was left behind, but that the new tenant can use it if she likes, or dispose of it. Well, as soon as the refrigerator breaks, expect a call from the tenant insisting that you either repair or replace the refrigerator, or reduce the rent amount to account for the cost of renting a replacement refrigerator.

But you said it was left behind, and that you didn’t care if she used it or trashed it, right? So obviously you weren’t taking any responsibility for the fridge, you were just trying to be the nice guy. Surely the tenant would understand that you meant you weren’t going to replace it if it broke, right? Not necessarily. You need to protect yourself (and set clear expectations for the tenant) by clearly defining your responsibility for the appliances in writing.

Do I Really Need to Have It in Writing? Can’t We Just Verbally Agree?

You’ve heard the saying: “Oral agreements aren’t worth the paper they’re written on.” Some people forget, and other people lie, and either way, you’re probably going to be on the hook if you don’t have something in writing to protect you. A really good rental agreement is worth its weight in gold.

Imagine this scenario: the fridge breaks, and your tenant says you have to replace it. You remind the tenant that you were providing the fridge as a courtesy, and that you specifically discussed that it would be her responsibility to replace it if it broke. She doesn’t remember that conversation. Now she’s angry.

She pays her rent a few days late, minus $50, which is approximately the cost of renting a replacement fridge. You demand that she pay the last $50, and she refuses. A few months of this go on, and while it seems silly to evict over $150, you eventually decide that you have to evict her or she’s just going to continue to fall farther behind.

You file the eviction action, and she disputes it. The two of you end up before the judge, and you tell the judge that you specifically told her at the beginning of the tenancy that the fridge was not included. She says you never said any such thing. She says she’s just a poor [insert occupation here,] and you’re a big, mean landlord, and she specifically rented your place because it included a fridge and she couldn’t afford one otherwise. The judge asks to see your rental agreement, and asks why you didn’t specify that the fridge was not included as part of the rental. Now you’re hosed.

You may get the rare judge who is biased toward landlords, but in most cases, you’re going to look like the person who is more sophisticated (you own rental property!) and more financially able to afford the cost of a fridge (you own rental property!) and more responsible for the failure to address this situation in the rental agreement ( you wrote your rental agreement, not the tenant!).

Real Life Scenario

In my boyfriend’s case, I said he needed to explicitly tell prospective tenants that those items were not included in rent. In addition, I insisted that we put it in the rental agreement. We didn’t bury it in the middle of a paragraph, either. We put it in a paragraph clearly titled “Appliances Included / Not Included.”

Guess what happened? The fridge broke, and over a series of emails, the tenant said she expected a discount in the rent because now she was providing her own refrigerator. I specifically remember talking to this tenant before she signed the rental agreement, and telling her myself that the fridge was not included as part of the rental. She claimed not to remember that conversation.

I then politely pointed her to the provision in the rental agreement that discussed that the fridge was not included in the rental, and the replacement of the fridge was her responsibility. Having it there in black and white resolved the situation immediately. She might have been a bit upset at first, but after re-reading the agreement she signed, she got over it.

Article originally published on nononsenselandlord.com

Moving Checklist

Wed, 30 May 2018 17:51:00 GMT

Map out everything you need to do, week by week, until the big day.

When it comes to moving, proper organization is the defining difference between ultimate success and complete failure.

Even if you’re already an excellent organizer, you might still feel overwhelmed by the number of relocation-related tasks you have to complete before moving day — unless you find a way to bring order to the chaos.

Here’s a moving timeline that will do the trick. It will help you organize your time, prioritize your tasks, track your progress, and reduce moving stress. What’s more, you’ll never forget anything important, because your week-by-week moving checklist will remind you of what to do every single day until moving day.

Eight weeks before moving day

Organizing a safe, efficient, and trouble-free relocation requires about two months of careful planning and hard work. So, start your moving preparations about eight weeks before the big day:

Six weeks before moving day

Four weeks before moving day

Two weeks before moving day

One week before moving day

Two days before moving day

Moving day

Even though most moving tasks are common for all residential moves, you can modify them to meet your personal needs and requirements. Certain aspects of your move will be unique and will require a different approach, so personalize this moving timeline checklist and make it work perfectly for you.

Article originally published by: moving.tips

Selling Your Home To Millennials

Wed, 30 May 2018 17:51:00 GMT

They’re open to a new world of suburban living, with single-family homes, more storage and closet space, and some outdoor space all their own.

These millennials, born between the mid ’80s and the late ’90s, came of age in a shifting cultural and social environment. Their experiences aren’t the same as their Baby Boomer parents, and as such, their preferences differ from those of their parents, who bought a generation ago.

Here are some real estate considerations to help you sell to millennial buyers.

Millennials are busy

Today’s young people work long hours, and they want to spend the free time they have with friends and family.

They’re also more transient than their parents’ generation. So, when it comes to real estate, many of them seek turn-key homes for quick and easy move-in. They can’t fathom taking the time to undertake renovating a bathroom or kitchen.

No matter how great the opportunity, many of today’s buyers aren’t interested in painting or “making it their own” as our parents did when they moved into homes they planned on living in for 30 years or more.

Home searching is like dating

Millennials grew up attached to their phones. They hail a car and order food with their fingertips. And now, instead of meeting at a bar, they date with their thumbs. Swipe right for the potential mate, or reject them by swiping left.

When it’s time to buy a home, their experience is much the same, thanks to smartphones and real estate apps. As a home seller, you and your agent must invest an incredible amount of time and money on your home’s photo shoot . If you don’t, you may never get a first “date” with your prospective suitor. If the buyer isn’t drawn to your photos, they’re on to the next place.

Bigger is no longer better

In the ’80s, a McMansion with quadruple master closets, oversized Jacuzzi tubs, formal rooms, and large basements were a sign of success, and coveted by home buyers.

Today, millennials want smaller and simpler homes on smaller parcels. Bigger houses or any land more than half an acre equals more work and maintenance to these first-time buyers, accustomed to the easy life.

You can’t make your home smaller, but if you are serious about selling and want to account for this trend, your price will need to meet the market.

Location matters more than ever

Millennial buyers want the urban experience, as best as they can get, in the ‘burbs . This means homes that are walking distance to a village or town, near the train, and in bustling neighborhoods are among the most popular.

While being away from town, secluded, and with more land was a status symbol in the ’80s, it’s a deal killer today. Unfortunately, you can’t move your home to a better location — but you can adjust your price to meet the market.

If you’re a Boomer selling a long-time family home now or in the future, and the millennial is your potential buyer (think: customer), you need to adjust your mindset to meet theirs. You can’t assume that anything related to your original home search applies today. Get ahead of it, or your home may spend many months (or even years) on the market.

Article originally published by: Brendon Desimone on zillow.com

Staging Your Home To Sell

Wed, 30 May 2018 17:51:00 GMT

Move out

OK, not completely. But you’re moving anyway so if getting a head start will help your home sell faster and for more money, why wouldn’t you start packing things away? A storage unit is almost always a smart investment when selling a home. Personal photos, excessive knick-knacks and general clutter make it hard for most buyers to see your home as anything but someone else’s home.

Don’t empty your bookshelves completely, but do remove enough books to give the shelves some breathing room. Stack some books vertically, some horizontally and put an interesting vase or sculpture up. While you don’t want clutter, you also don’t want it to look so sterile no one could imagine calling it home. And it should go without saying that if you have books or memorabilia relating to any, ahem, colorful hobbies or interests, best pack them away.

All those pictures of your kids and pets? Pack them away. A family photo or two is probably fine if it’s a home likely to be marketed to a family. But you want buyers to envision their kids in the home, not yours. You want art on the walls, but nothing too edgy or overly personal. You don’t want prospective buyers getting curious about you and your family and your interests. You want them to be focused on the home and how they would live in it.

Clean like company’s coming

The de-cluttering you’ve done should make this a whole lot easier. Strange as it seems, you don’t want buyers to see any signs that people actually live in the home. That means no smudges on the windows, no dust bunnies on the floor, no handprints on the walls and no water marks on the counters. If you have rugs that are worn or stained, replace them. Even a cheap new rug will show better than an expensive one with a wine stain. Just make sure it’s sized properly for the space.

Hide away things like toilet bowl brushes, even if they’re decorative and tasteful. Not only does a clean home make a good impression, but it sends the message that you take care of things. Buyers will be put at ease about your home maintenance if you have a spotless home to show them. If cleaning just isn’t your thing, consider hiring a weekly cleaning service or a one-time deep cleaning service. You’ll still have to maintain the clean, but that’s easier to do when you start fresh.

Never work with kids or pets

It’s an old show-business adage that works for home staging as well. Kids and pets can both upstage your best efforts to present a lovely home. Neither of them is particularly interested in maintaining the kind of white-glove environment you need so you’re going to have to do the work for them. With kids, it’s a little easier because you don’t need to hide their very existence. You just have to clean up after them.

With pets, well, that’s a different story. You want potential buyers to see no clue that a dog or cat or hamster or pot-bellied pig lives in the home. That means you must find a place to take your pets and all of their accoutrements during showings. If you can’t board your pets, have a “go-bag” ready to load up the animals and their stuff on short notice. Don’t leave behind a dog bowl, nose marks on the glass or paw marks on the door. (And don’t even think about leaving a litter box in the home, no matter how recently you cleaned it.) Once a buyer knows an animal lives in the home, they will literally turn up their noses, looking for any sign of a pet smell and they may imagine one even if it doesn’t exist.

And, of course, there shouldn’t be any odor. You’ll likely be nose-blind to the smells in your home that you’re used to. But buyers won’t be and an unfamiliar smell is a huge turnoff. Ask your agent and friends to be brutally honest with you so you can eliminate any scents you don’t even notice.

Let there be light

Staging a home is no time for mood lighting. One of the first things potential buyers usually comment on is the amount of light in a home. You want your home to be light and bright. That means putting higher wattage bulbs in fixtures if possible, making sure all the lights work, cleaning the fixtures and opening all the shades and window coverings before each showing. If possible, it’s best to have three types of lighting in every single room—overhead, task and accent lighting. And despite the nagging voice in your head of your father complaining about the electricity bill, leave them all blazing when you have a showing scheduled. It’s a small thing that makes a big difference.

Once you’ve got the interior well-lit, think about lighting outside as well with solar-powered pathway lights and string lights for the back patio. As with the indoor fixtures, made sure that your porch light works and isn’t dated or dirty.

Rearranging the furniture

Take a look at each room and play around with the arrangement of your furniture to create more conversational spaces. Point love seats and couches toward each other, which will actually increase the amount of space in rooms. Don’t be afraid to mix things completely up. Yes, in real life, you’d probably point the couch toward the television.
But staging your home for sale isn’t about living in it. It’s about selling it.

If you have a large bedroom, think about putting an armchair in a corner to make a little reading nook or prominently display an otherwise overlooked desk and make an inviting little space. Look to magazines and even Pinterest as inspirations for your staging.

Don’t forget the window treatments. Ditch the heavy drapery or the mini-blinds with broken slats. Invest in some simple, inexpensive shades or blinds. You’re going to leave them up during showings anyway.

Mirror, mirror, on the wall

If you’re looking for something to replace the gallery of family photos you took down, consider a nice mirror. It will make the room brighter and bigger and has the bonus of letting prospective buyers literally see themselves in the home.

Don’t be too colorful

Yes, that bright red accent wall really shows off your personality. But there’s only one you and you’ve already bought this home once. You need to tone down the colors. Neutrals are your friends. In the bathroom, invest in some new white towels to hang to give the look of a spa. Again, you don’t want it to look cold and sterile but do want it to look appealing to the widest group of people possible.

Step outside

Curb appeal is real. Make sure your lawn is mowed and neatly edged. Pressure wash the siding and spruce up any peeling paint. Oil stains in the driveway? Now’s the time to get after them. First impressions are lasting impressions.

Hire a pro

Hiring a stager isn’t an all-or-nothing proposition. You can hire someone to do anything from “fluffing” your home by using your existing furniture and décor to bringing in their own furniture to do a complete stage. It probably makes more sense to invest in a complete staging if your home is more high-end than if you’re selling your starter home.

But if you’re completely overwhelmed by the whole idea of staging, your agent probably has some good advice and good references if you want to turn it over to a pro.

If you can’t do it all, do what you can

Keeping your home show-ready can be overwhelming. If you can’t do everything, don’t give up. Do as much as you can and know that for everything you do, you’ll likely reap the benefits in a quicker sale for a higher price.

Article originally published on: zillow.com

Home Maintenance Every 10 Years

Wed, 30 May 2018 17:50:00 GMT

Approaching your 10th home-iversary? Congrats! It’s probably time for a little maintenance.

No matter how much you love and care for your home, things are bound to wear out and need fixing — especially when you hit the 10-year mark.

To keep your house in tiptop condition, consider making these updates every 10 years or so.

Get new carpet

The average medium-grade carpet has a life expectancy of approximately 10 years. Of course, that depends on several factors, including the number of people and pets.

Signs that you need to replace your carpet: rips, tears or stains, and odors that remain even after a good cleaning. And even without any of those, you carpet might just look old and worn out. An update wouldn’t hurt.

Replace hot water tank

A water heater may not show many symptoms before it leaks or fails, so it’s important to know its age. If the manufacture date isn’t shown, then it may be embedded in the serial number on the tank.

A good rule of thumb: Any tank that’s been around for 10 years or more is a candidate for replacement.

Update ceiling fans

A midrange ceiling fan should last about 10 years, if it’s running frequently. A common sign that it might be time for a new one: the lightbulbs seem to burn out more quickly than usual.

And since a ceiling fan is about style as well as function, you may just want a more modern model.

Buy a new dishwasher

Like your water heater, consider replacing your dishwasher if it’s 10 years old. You’ll likely get a more energy-efficient model that’ll pay for itself over time.

Signs that you should replace your dishwasher sooner rather than later are an unresponsive control board, poorly cleaned dishes and cracks in the tub.

Replace garbage disposal

You’ll know you need a new garbage disposal when it doesn’t work as well as it used to. This is because the blades dull over time.

The average garbage disposal should last about 10-12 years with regular use, so if yours is around that age, consider replacing it.

Replace washer and dryer

The average lifespan of both appliances is about eight years. So, if your set is 10+ years old and running without any issues, consider yourself fortunate! That said, think about replacing them before you have any real problems or leaks.

Repaint inside and outside

There’s no hard and fast rule about when to repaint your home. It depends on where you live, humidity and many other factors.

People often repaint certain areas, such as a heavily used living room, every three to five years. But if some areas of the home haven’t been repainted in 10 years or more, now’s definitely the time to do it.

Re-caulk showers, bathtubs and sinks

Few jobs offer as much bang for your buck as re-caulking. Whether you just haven’t gotten around to it yet or you’re moving into a 10-year-old home, go ahead and re-caulk the tub, shower and sinks. You can easily do this yourself, and it makes everything look so much brighter.

Re-glaze windows

Re-glazing old windows is easier and more cost-effective than replacing them. And generally speaking, re-glazing should be done about every 10 years or so.

But check your windows every year before the cold weather arrives to make sure you don’t have any leaks or cracks.

Article originally published by: See Jane Drill on zillow.com

Budgeting for Home Repairs

Wed, 30 May 2018 17:50:00 GMT

Home repair expenses won’t keep you awake at night when you know you’ve got a plan in place.

Many people will become first-time home buyers this spring. Those buyers are probably running the numbers now: This much for the mortgage, this much for property tax, a bit more for utilities….

Some of them will get renovation loans that allow them to rehab a fixer-upper and make it fit for fine living, but many won’t think to include the cost of ongoing maintenance as they plan their new budgets.

The adventure of buying a home was one that my husband and I approached with great excitement. We were ready to dive into gardening, outdoor entertaining, having a dog, and creating a space that was all ours.

Like many first-time home buyers, we had a lot to learn. In addition to delving into our personal finances, we studied up on things like mortgage insurance , flood zones, and — after a particularly revealing inspection on a home we didn’t end up buying — foundation types.

One thing that didn’t come up in our new-homeowner education: Budgeting for home repairs.

While unexpected home repairs can strain almost any budget, being prepared for these inevitable costs promised deep peace of mind.

We wanted to be the kind of homeowners who were prepared to replace a water heater or repair a roof without pulling out our credit card, so we began researching how much we should save each month to keep our home safe and sound.

As part of our research, we tried out two different methods of estimating home-maintenance costs, and set up a successful home repair budget.

Option 1: The assessed-value method

Many experts advise setting aside between 1 percent and 4 percent of the assessed value of your home each year for repairs and maintenance. Maintenance costs for homes that are aging, remotely located (like island homes), or lavishly trimmed out with features like swimming pools can run toward the higher end.

Our home didn’t fall under any of these categories, so we chose 1.5 percent (one of the most commonly recommended rates) when we set up our estimate.

The assessed value (which forms the basis for property taxes) can vary a lot from the market value of a home. Knowing this, we also used our home value on Zillow to create our estimate.

This method was incredibly easy, but it didn’t give us complete peace of mind. Three major factors led us to take a deeper look at our actual home-maintenance costs:

Our specific situation gave us additional reason to doubt the assessed-value method of estimating. Because we are close to great amenities like a commuter rail station and a walkable historic downtown, we could own a much larger home just a half hour away with a lower assessed value. This much larger home would be more expensive to maintain than our cozy abode, but a savings rate based on assessed value would have us putting aside less money. The only way to ensure our peace of mind was to test the accuracy of this repair-cost estimate.

Option 2: Itemized project costs

Testing the accuracy of our home-maintenance budget required figuring out the cost of individual home repairs, and the lifespan of things like paint jobs and furnaces.

Here are a few factors we kept in mind as we put together a second estimate based on itemized costs:

Finding the facts

We are not experts in home construction and repair . When we weren’t sure how much to estimate, we used the Home Advisor True Cost Guide or talked with experienced friends.

We also didn’t need this budget to cover the cost of small expenses like lawnmowers or minor repairs. We knew we would use our everyday spending money to cover these less significant expenses, and save our home repair dollars for when we truly needed them.

A customizable solution

The beauty of a customizable solution like this one is that we can update our savings goals whenever we have new information about our home. If we discovered that our roof should be replaced within five years, we could change the lifespan and instantly update our monthly savings goal.

This method would be especially helpful if we owned an older home with several pressing repair needs.

What did we learn?

After all the time-consuming work of putting together the itemized estimate, it came out surprisingly close to using the assessed value method. This was especially true when we used our home’s market value instead of the value assigned by the Assessor-Treasurer’s office.

Unless there are dramatic fluctuations in the housing market, we’ll be setting our savings rate based on our home’s estimated market value in the future. We’ll also be sure to update our savings goals each year to make sure the amount we’ve budgeted is enough to keep up with inflation.

If we decide that something more than plain-Jane home maintenance is in our future, we’ll set aside a bit more to allow us to pay for remodels or renovations.

These tools together helped us set up a successful home-repair budget. The money we contribute to our home-repair fund each month is a small price to pay for peace of mind.

Ready to set up your customized home-repair budget? Download the Home Repair Budget Tool to estimate the costs for your home using either of these methods.

Article originally published by: Melanie Harding on zillow.com

How to Know If You Can Afford a Home

Wed, 30 May 2018 17:49:00 GMT

To get a more accurate picture of what you can afford to borrow, you should analyze three things: you and your co-borrower’s income, your budget and your savings.

Income Questions To Ask Yourself

Your Monthly Budget

It’s very important to know not only how much you earn but how much you spend per month. Even with low mortgage rates , a mortgage payment and the additional monthly expenses that go along with owning a home could break your budget.

You should outline how much you currently spend on the following categories: auto and transportation, bills and utilities, education, entertainment, food and dining, gifts and donations, health and fitness, home, kids, personal care, pets, shopping, taxes, travel and other miscellaneous monthly expenses. How much do you have left over to put toward a mortgage?

A typical rule of thumb is you should not put more than 36 percent of your income toward debts (mortgage payments, car payments and credit card payments), 31 percent toward taxes and then have 33 percent for everything else (including savings or investments). Of course you will probably have to consider other factors such as the average cost of living in your area, median house prices and your immediate need for more or different housing space.

Savings

You will likely need a significant down payment in order to buy a new house (mostly likely 3.5 percent or more; 20 percent down is the most common). Do you think you will have enough money for the necessary down payment, closing costs, plus the new monthly mortgage payment? Will you have enough money either in your savings or your monthly budget to buy discretionary items? Do you have enough money in savings in case of an emergency such as an injury or a broken water heater?

It is important to not completely raid your savings when you buy a new house. It is always advised to expect the unexpected with homeownership. In general, you should budget 1 to 3 percent of your budget on house repairs and maintenance.

To easily determine how much house you can afford, use our home affordability calculato r.

Once you’ve determined how much you can afford, start shopping for real-time mortgage rates here .

Article originally published on: zillow.com

A Checklist for Keeping Your Home Up

Wed, 30 May 2018 17:49:00 GMT

2018 is going to be your home’s cleanest, most organized year yet. Little steps add up to big results. And if you dedicate some time to home maintenance — two hours a week, an afternoon per month and a couple of days a year — your home will remain in tiptop shape this year.

Here’s our easy-to-follow checklist:

Weekly home maintenance

Your weekly home maintenance ritual will be largely determined by the features of your home, but may include some of the following tasks:

Monthly home maintenance

These are the projects we all know we should do regularly but often don’t get to. Just pick an afternoon, and go for it!

Yearly home maintenance

Schedule these tasks in a way that makes sense to you. You can do them on a seasonal basis or just schedule one or two days per year to knock everything out.

Here are some bigger tasks to take on once a year:

By following this easy checklist, you can have a wonderfully maintained home with a minimal investment of time and energy.

Article originally published by: See Jane Drill on zillow.com

Should You Rent or Own?

Wed, 30 May 2018 17:48:00 GMT

Painting your rental apartment walls mango or some other trendy color may put your security deposit in jeopardy. But taking that same sense of color style and applying it to a tired room in an old house you just purchased is called “sweat equity.” That has a nice ring to it.

Reasons to Rent

There is definitely an upside to renting:

Reasons to Buy

There are upsides to buying a home:

While a home is a good investment — and let’s face it, you have to live somewhere — many financial experts caution against purchasing a home simply as an investment. Historically, the real estate market increases have been slow and steady, not meteoric (until recently). The stock market, on the other hand, has generated returns of between 8 and 10 percent pretty steadily for decade.

Is Renting Cheaper?

That depends on your market and where you choose to live. And consider whether or not you like to do maintenance. Homes cost money. Appliances break, roofs leak, and you are the lucky soul who gets to pay the bill. If you are renting, landlords pay the plumber and water/sewer and garbage bill to go along with it.

But, of course, there is that tax break. Depending on your tax bracket, a first-time purchaser’s 1040 tax deductions heavily subsidize housing expenses in the first few years. Since a 30-year fixed mortgage requires high interest payments — all deductible — at the beginning of the loan, you deduct a larger share of the mortgage cost early in the life of the loan.

Rent vs Buy Calculator

Use Zillow’s Rent vs Buy Calculator to help determine if it is cheaper to rent or buy a home. Our calculations will also help you determine your breakeven point of when your buying costs will equal your renting costs.

Article originally published on: zillow.com

4 Tips for Buying a Fixer-Upper

Wed, 30 May 2018 17:48:00 GMT

What if your dream home just happens to have ancient wiring and a cracked foundation?

So you’ve set your sights on a home that, to put it mildly, needs a little repair work. The stairs are creaky, and you’ve noticed a leak (or three).

Still, your mind is made up. What’s a love-struck home buyer to do?

If your heart is set on a fixer-upper, this advice from real estate experts can help you make that “needs-work” house a home.

Check the zoning

“Any municipality has zoning districts, and you need to know what uses are permitted,” says George Vanderploeg, a luxury real estate broker with Douglas Elliman in New York. Knowing the zone is important because it will tell you what you can and cannot do to the home.

For instance, when interiors photographer Josh Gibson decided to renovate his 19th-century cottage in Beaufort, SC , he had to contend with the historic district landmarks commission, which required hours of research and visits downtown. Among the many requirements he had to adhere to were installing single-pane windows and maintaining the home’s unique brick-pier structure.

To research your prospective home’s zoning requirements, you can visit its municipality’s website, or arrange to meet with a staff member, who can walk you through the legalities.

Bring in a home inspector

Once you’ve made a verbal agreement to buy the house and are waiting for the contract to be drawn up, you’ll want to hire a home inspector.

A home inspector will look for structural issues and advise you on things that may or may not need to be replaced, such as plumbing, electricity, and roofing.

Your broker can refer you to an inspector, but it’s important that this person not be biased, as you’ll need an objective opinion. With this in mind, Vanderploeg advises finding someone who will work for you — not for the broker or seller.

Be sure to set aside about an hour or two to walk through the building with the inspector and ask questions. “This allows the buyer to get to know the house really well before they buy it,” Vanderploeg says.

Home buyers tend to ask questions about asbestos and termites, but Hal Einhorn, the principal inspection consultant for Old House Inspection in New York, says it’s equally important to ask about the “general age of certain systems,” as those will indicate when they’re nearing replacement. A 26-year-old boiler, for instance, is likely to go kaput soon, whereas a newly-installed air conditioning unit probably won’t be a problem for the next 20 years.

Depending on the home’s location, you may also want to ask about issues specific to its region, Einhorn says. In New York City, for instance, where the water mains tend to be dated, you’ll want to clarify that the one in your coveted home isn’t made out of lead.

And with today’s families using more electricity than ever, you’ll need to find out if the amount of power coming to the house is suitable, or needs an upgrade. Doing a little research online can be helpful.

Another important topic to bring up is any work you’re preparing to do, like upgrading the bathroom or turning a one-bedroom home into a two-bedroom, Einhorn says.

Find out the agency requirements, and if the home is in a landmarked district, make sure you know the ramifications. Will your project require filing documents, and if so, what is the process?

Hire an architect and/or contractor

Hiring an architect is important because you’ll want their take on what you can do from a design perspective, says Vanderploeg.

The architect will also be able to point out the home’s load-bearing walls, which will determine whether they can be moved around or not, says Scott Oyler, a broker with Coldwell Banker in Cincinnati.

When hiring a contractor, be sure to do your homework so you find someone you can trust. “I’ve heard of horror stories where contractors left in the middle of the job and never came back,” Oyler says — so make sure your crew has good references.

Also be sure to recruit more than one, he adds, as you can never have too many opinions.

Research tax incentives

Depending on where you live, you may eligible for a tax abatement, a tax credit for homeowners who improve their property’s value, Oyler says.

Philadelphia offers one; Cincinnati does, too. Check to see what’s available in your area.

If you decide to buy and improve a fixer-upper, have patience. Once the sawdust clears, you may just find the home of your dreams.

Article Originally Published by: Jill Krasny on zillow.com

Things To Do When Buying a Home

Wed, 30 May 2018 17:48:00 GMT

Everything you need to know about buying a home — on one index card.

A home is often the biggest financial investment you’ll make in your lifetime. In fact, a recent Zillow analysis reports that the typical American homeowner has 40 percent of their wealth tied up in their home.

Several years ago, I wrote a complete guide to financial planning on one index card, which went viral and later became a book: “ The Index Card: Why Personal Finance Doesn’t Have to Be Complicated ” (co-written with Helaine Olen).

Now, following up on my original index card, I’ve written a guide on buying a house. Below is the housing index card — a handy resource to print out and take with you as you look at houses or think about buying one, plus some additional advice as you contemplate making the big decision.

1. Buy for the long run. Assume you’ll own your home for at least five years.

A home is a significant investment, not to mention a linchpin of stability. According to the Zillow Group Consumer Housing Trends Report 2017 , the majority of Americans who sold their homes last year had lived in their home for at least a decade before selling.

Some are even staying for the long haul. Almost half (46 percent) of all homeowners are like me — living in the first home we ever purchased. In short: Buy a home you want to live in — one equipped (or ready to be equipped) with the features and space you need, both now and in the future.

2. Buy to improve your life, not to speculate with your money.

Your home is more than a financial investment; it’s where you sleep, eat, host friends, raise your children — it’s where your life happens.

The housing market is too unpredictable to buy a (primary) home purely because you think it will net a big short-term financial return. You will most likely be living in this home for several years, regardless of how it appreciates, so your first priority should be finding a home that will meet your needs and help you build the life you want.

3. Focus on what’s important to you. Don’t be distracted by features you don’t need.

Today’s housing market is short on inventory, with 10 percent fewer homes on the market in November 2017 than November 2016.

So, focus on finding a home you can afford that meets your needs — but don’t get distracted by shiny features that might break your budget. Nice-to-have features often drive up the price tag for things you don’t particularly value once the initial enjoyment wears off.

Make a list of your basic needs, both for your desired home and for your desired neighborhood. Stick to finding a home that meets these needs, without buying extra stuff that adds up.

4. Determine a budget and stick to it. Don’t look at houses above that budget.

It’s important to set a budget early — ideally before you even start looking at homes. In today’s market, especially in the more competitive markets, it’s incredibly easy to go over budget — 29 percent of buyers who purchased last year did.

The most common culprit? Location. Zillow’s data indicates that urban buyers are significantly more likely to go over budget (42 percent) than suburban (25 percent) or rural (20 percent) buyers.

There’s nothing inherently wrong with that. Local schools matter, and psychologists tell us that a short commute improves your life. But be realistic about your local market and about yourself. Know what you’re willing to compromise on — be it less square footage, home repairs or a different neighborhood.

5. A 20 percent down payment is ideal. If you can’t afford that, consider a smaller down payment, or lower your budget.

If you can afford it, a 20 percent down payment is ideal for three reasons:

6. Keep a six-month strategic reserve after down payment. Stuff happens.

While a down payment is a significant expense, it’s also important to build up a strategic reserve and keep it separate from your normal bank account.

This reserve should cover six months of living expenses in case you get sick, face an unexpected expense or lose your job. A strategic reserve will not only save you from financial hardship in the event of an emergency but also provide peace of mind.

When we accumulated a strategic reserve, my wife and I finally felt ready to build for our future. Without it, we were living from paycheck to paycheck, anxiously managing our cash flow rather than saving or budgeting.

7. Get pre-approved, and if you want to avoid uncertainty down the road, stick with a boring 30- or 15-year fixed-rate mortgage.

The pre-approval process requires organizing all your paperwork; documenting your income, debt and credit; and understanding all the loan options available to you. It’s a bit of a pain, but it saves time later. Getting pre-approved also shows sellers that you’re a reliable buyer with a strong financial footing. Most importantly, it helps you understand what you can afford.

There are a variety of mortgage types , and it’s important to evaluate all of them to see which is best for your family and financial situation. Those boring 30- and 15-year mortgages offer big advantages.

The biggest is locking in your mortgage rate. In short: A 30-year fixed mortgage has a specific fixed rate of interest that doesn’t change for 30 years. A 15-year fixed mortgage does the same.

These typically have lower rates but higher monthly payments, since you must pay it off in half the time. Conventional fixed-rate mortgages help you manage your household budgeting because you know precisely how much you’ll be paying every month for many years. They’re simple to understand, and current rates are low.

One final advantage is that they don’t tempt you with a low initial payment to buy more house than you can afford.

8. Comparison shop to get the best mortgage.

Though a home is the biggest purchase many of us will ever make, most home buyers don’t shop around for a mortgage ( 52 percent consider only a single lender).

I certainly didn’t. This did save me some annoying phone calls and hassle, but it cost me $40 or $50 every month, for years. The difference of half a percentage point in your mortgage rate can add up to thousands of dollars over the lifetime of the loan. It’s important to evaluate all the available options to make sure you’re going with the lender who meets your needs — not just the first one you contact.

The three most important factors to buyers are that the lender offers a loan program that caters to their specific needs (76 percent), has the most competitive rates (74 percent) and has a history of closing on time (63 percent).

9. Spend no more than a third of your after-tax income on housing (unless you live in an especially pricey market).

It’s better to regret spending too little on your home than spending too much. One-third of your after-tax income is a manageable amount. This isn’t always possible if you live in a place like San Francisco or New York, but it’s still a good yardstick for where to be.

10. When getting ready to buy, always be willing to walk away.

Buying a home is a time-consuming, stressful but ultimately rewarding endeavor — if you end up closing on a home that meets your needs. But it’s important to manage your expectations in case you don’t immediately find a home you can afford with the features you need.

Always be prepared to walk away if the sellers don’t accept your offer, the home doesn’t pass a rigorous inspection or the timing isn’t right. Hold fast to your list of must-haves, stick to what you can afford and don’t overreach or settle.

It’s no tragedy to miss out on any particular house. Remember that you’re playing the long game. You want to be happy 10 years from now.

Article originally published by: Harold Pollack on zillow.com

What Are The Benefits of Using a Property Management Company?

Wed, 30 May 2018 17:47:00 GMT

A competent property manager can add significant value to your investment, which is why many seasoned real estate investors will tell you that a good management company is worth their weight in gold. Here are a few ways that a good property manager earns their keep:

Higher Quality Tenants

Think of tenant screening as the moat and draw bridge around your castle. It is certainly possible to get a bad tenant out of your home once they are in, but it’s a real hassle and you are so much better off never accepting them in the first place. A thorough screening process results in reliable tenants that:

An experienced property management company has seen thousands of applications and knows how to quickly dig for the real facts about candidates and analyze that information for warning signs. By allowing a management company to handle the screening, you will also be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process. This kind of experience takes time, and insomuch as it means avoiding bad tenants, scams and lawsuits it is arguably one of the most significant benefits a property management company will provide.

Fewer costly and time consuming legal problems

Veteran landlords know it only takes one troublesome tenant to cause significant legal and financial headaches. A good property manager is armed with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential law suit. Each state and municipality have their own laws, these plus federal law cover a number of areas including but not limited to:

Avoiding a single law suit can more than pay for the property management fees, and spare you time and anguish.

Shorter vacancy cycles

A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:

Better tenant retention

While its easy to see the effects of lost rent, there are other equally serious problems with a high tenant turnover rate. The turnover process involves a thorough cleaning, changing the locks, painting the walls and possibly new carpet or small repairs, not to mention all the effort associated with marketing, showing , screening and settling in a new tenant. This is a time-consuming and expensive process that can often be averted by keeping tenants happy and well cared for.

A good property management company will have a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties. These kinds of programs require a consistent, systematic approach, which is where a good property management company will shine.

Tighter rent collection process

The way you handle rent collection and late payments can be the difference between success and failure as a landlord. Collecting rent on time every month is the only way to maintain consistent cash-flow, and your tenants need to understand this is not negotiable. By hiring a property manager, you put a buffer between yourself and the tenant, and allow them to be the bad guy who has to listen to excuses, chase down rent, and when necessary, evict the person living in your property.

If you let them, your tenants will walk all over you. They have to be trained to follow every part of the lease or deal with the consequences. Property managers have an advantage because tenants realize that they, unlike the owner, are only doing their job and are obligated to enforce the lease terms. Many property managers will tell you that it is considerably easier to manage other people’s units rather than their own for this reason.

Regarding evictions, there are strict laws concerning the eviction process, and doing it wrong, or trying to evict a “ professional tenant ” can be a MAJOR fiasco. A good property management firm knows the law and has a good process for obtaining the best possible outcome given the circumstances. Never having to handle another eviction can be a compelling reason to consider hiring a property management company.

Assistance with taxes

A property management company can help you understand which deductions you can claim, as well as organize the necessary forms and documentation to make those claims. Additionally, the property management fees themselves are also tax deductible.

Lower maintenance and repair costs

Good maintenance and repairs keep tenants happy and preserve the value of your investment which make them a very important part of land-lording. By hiring a management firm you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work. This can translate into significant savings compared to going through the yellow pages and hiring a handyman yourself. Not only is the firm able to get volume discounts on the work, they also know the contractors and understand maintenance issues such that they are capable of intelligently supervising the work.

Increase the value of the investment

Preventative maintenance is achieved through putting systems in place that catch and deal with maintenance and repair issues early on, before they grow into larger more costly problems. This requires a written maintenance check program, detailed maintenance documentation and regular maintenance visits. The management firm can also offer you suggestions and feedback on upgrades and modifications, both how they will affect the rent you can charge, as well as their impact on maintenance and insurance.

Personal benefits for owners

A final thought

Of course, this is an ideal scenario. These results can only be expected if a management company is competent, trustworthy and a good fit for your property. A poor choice of a management company can produce many headaches of its own.

Article Originally Published by: Jordan Muela on managemyproperty.com

3 Weird Things You Can Ignore When Home Shopping

Wed, 30 May 2018 17:47:00 GMT

Ugly paint colors? Treadmill in the kitchen? Creepy family portraits in every room? Don’t let it bug you.

In 15 years of real estate, I can honestly say that I’ve seen it all. Toilet seats up in listing photos, shag carpet covered with dog hair, bedrooms doubling as marijuana growing centers, and avocado green appliances from the ’70s.

Sellers aren’t required to get their homes in their best condition before showing them — let alone cleaning their home before listing. But one seller’s laziness can spell a giant upside for the right buyer.

Here are three sights that may be off-putting when you’re shopping for a home, but shouldn’t stop you from considering making an offer — particularly if you love the home, layout or location.

Odd wallpaper and dirty carpet

Today’s buyers generally prefer a home that’s turn-key or move-in ready. They’re too busy with their day-to-day lives to take on a renovation — and this is especially true for the continuously connected, mobile-ready millennial home buyer.

But painting walls and replacing carpets isn’t always time-consuming or expensive, and you can do these projects before moving in.

If a seller won’t replace their shag carpet or paint the interior a neutral color, they’re shooting themselves in the foot.

A fresh coat of paint and finished floors or new carpet won’t break the bank or take more than a week, and the end product will be a like-new home for you to move into.

Rooms being strangely used

It’s not uncommon to see a home’s dining room transformed into a full-fledged office. Some homeowners even have a bedroom doubling as a walk-in closet. I once saw a first-floor bedroom turned into a wine-tasting room.

Just because the homeowner uses these spaces in a way that suits them, doesn’t mean you have to. These rooms might stand out as odd to you, but try to forget that the seller lives there.

Once they’ve moved out, the dining room will be a space that just needs a great light fixture and table. The walk-in closet can be turned back into a bedroom in less than a day.

A too-strong seller presence

It’s difficult for a buyer to imagine themselves in a home if it’s full of the seller’s photos, diplomas and other personal belongings. The best homes for buyers are those that are neutral and lacking any items specific to the owner.

What’s worse is when the seller is present at a showing. It makes everyone uncomfortable. The buyers feel like they need to be on their best behavior and can’t explore the house, dig deep into closets or cabinets, or feel free to talk out loud about what they see.

A home that is too personalized or where the seller is always present can sit on the market and get a bad reputation over time. A smart buyer will use that to their advantage and snag it below the asking price.

Sellers who sabotage their home sale — whether intentionally or not — leave money on the table for the buyer. But typical consumers today have a hard time seeing through a seller’s mess, personalized design style or custom changes.

If you see a home online that’s in a great location with a floor plan that’s ideal, go see it. Ignore the things you can change, and think about whether you can make the home your own

Article Originally Published by: Brendon Desimone on zillow.com

northsandiego

How Many Property Inspections Should I do to Protect My North San Diego Rental Investment?

Move-In and Move-Out Inspections

Drive-By Inspections

Annual Interior Inspections

What North San Diego Commercial Property Owners Need to Understand about Landlord-Tenant Laws

Subleasing of Property

Rent Control Does Not Exist

Triple Net Leases are Common

Evicting Commercial Tenants

How Can North San Diego Property Managers Minimize Vacancies?

Provide an Irresistible Property

Price it Right

Be Strategic with Marketing

How Can a Landlord Minimize the Operating Expenses of a North San Diego Rental Property?

Review your Taxes and Loan Terms

Choose Vendors Who Offer Discounts

Avoid Deferred Maintenance

Invest in Technology and Automation

What Can North San Diego Real Estate Investors Do to Increase the Value of their Rental Properties?

Create Curb Appeal

Invest in Affordable Upgrades

Provide Incentives for Higher Rents

Responsive Maintenance Increases Value

Why is the North San Diego Area So Attractive to Property Investors?

Population and Economic Growth

Tenant Pool is Stable

San Diego Home Values

Diversifying Investment Portfolios

What Do I Need to Do to Find Good Tenants for My Carlsbad Rental Property?

Create a Strategic Marketing Plan

Showings and Open Houses

Applications and Screenings

What Can Multifamily and Commercial Real Estate Investors Expect from a Carlsbad Property Management Company?

Caring for the Investment Property

Increasing your Return on Investment

Building Your Investment Portfolio

What Makes a Great Carlsbad Property Management Company?

Timely Communication is Critical

Authority to Make Good Decisions

Managing the Day-to-Day Logistics

California Eviction Process | Carlsbad Property Management Advice to Landlords

Consult Your Lease Agreement

Serve a Notice to Pay or Quit

Filing for Eviction in Court

Real Estate Laws and Regulations Carlsbad Rental Property Owners Need to Know

Fair Housing Laws

Security Deposit Requirements

Eviction Laws

Tenant Relationships

Top 10 Questions to Ask a Prospective Carlsbad Property Management Company

1. What is your property management experience?

2. What is your leasing and screening process?

3. How do you handle maintenance?

4. What will you do to protect my property?

5. How do you communicate?

6. How do you collect and pay rent?

7. What kind of accounting can I expect?

8. Do you belong to professional associations?

9. May I see a management agreement?

10. How are your fees structured?

How Routine Maintenance Today for Your Carlsbad Building Can Prevent Future Costly Repairs

Identifying and Fixing Maintenance Items

Annual Service Contracts for Buildings

Creating a Maintenance Budget and Maintaining Reserves

What Renovations to Your Carlsbad Rental Property Are Worth the Costs?

Improving your Rental Property

Measuring Cost against Value

When to Make Repairs and Renovations

Why is North San Diego Property Management Your Real Estate Investment Solution?

Higher Standards Started North San Diego Property Management

Consistent Processes and Proven Systems

How Much are Property Management Fees in the Carlsbad Area?

Carlsbad Property Management Fee Structures

What’s Included and Excluded in a Property Management Fee?

Watch for Hidden Fees

Measuring Cost Against Value

Top Questions Military Families Should Ask Property Management Companies in Carlsbad, CA

Technology and Communication

Maintaining a Local Presence