How To Value A Rental Property Before You Buy

Side-by-side doubles will rent for less; duplexes (units above and below each other) will rent for even less, and three to four units in a single two-story building will often rent for less still. Only in fairly depressed markets would most investors be able to buy properties that perform this well. Estimate the potential rent price. Determine what your ROI should be — not what you want it to be. In Springfield that target may be 15% to 20%, but realistically in an appreciating market, 10% may be a spectacular return. In the case study above, I calculated my ROI based on the forecasted profit and on the amount of money invested in the property. What is invested in the property is a hard number; there is no estimating involved. It is possible to make a very accurate estimate of the value of a rental property before you buy it. This number is your projected profit. The resulting number will give you your target purchase price.

6 Ways To Get Your Home Ready For A Spring Sale

Selling your home in the spring doesn’t mean you have to actually wait until spring to prepare your home for a sale. “The best way to prepare your home for a spring sale is to open it up, lighten it up and brighten it up,” says Cook. “There was a period of time when people were doing a lot of decorative valances,” says Cook. “For instance, a major kitchen remodel will cost an average of $66,000 but will only add about $41,000 to your home's value with a 62% return on investment.” Think small with renovations. “Rather than replace the kitchen cabinets, just replace the doors or repaint the cabinets instead,” says Dutton. If you're going to spend serious money on anything, focus on the exterior of your home, since this is the very first impression buyers get of your home and it counts.” For instance, she says one renovation that pays for itself and boosts curb appeal is a garage door replacement, which will cost around $3,600 but net a 97% return on investment. Cook says make sure all your lightbulbs are operable to show your home in its best light. “Go around and check all your lamps and light fixtures and make sure that all your bulbs are working.” Paint with whites and neutrals. “You'd be amazed how tiny flaws you've ceased to notice in your own home like a loose doorknob or creaky window can stick out in buyers' minds and make them think, 'What else is broken here?’ says Dutton, adding: “Be sure to make any repairs, particularly to things buyers will notice, but also other things you just know must be done. She recommends having your carpet professionally cleaned before putting your home up for sale.

5 Smart Tips for Successful Long-Distance Real Estate Investing

I recently hosted my monthly Denver women’s investing group, and the focus was long-distance investing, a theme that remains attractive and frightening to the masses. 5 Smart Tips for Successful Long-Distance Real Estate Investing 1. As they see it, time works against appreciation. Had they done more research, talked to more people, and studied more maps, they might have known those neighborhoods had crime and other issues. Still, knowing areas to avoid isn’t the same as being a local. Out-of-state people get routed here, while locals avoid it like the plague. Attend local real estate meet ups. Related: The Core 4 Members Vital to a Profitable Long-Distance Real Estate Investing Team Related: She advises picking somewhere with cheap flights from your location. I find this reaction to be common and was happy to hear it reflected again at the investment group. What has long-distance investing (or researching long-distance investing) taught you?

5 Reasons to Buy a Fixer-Upper Instead of a Perfect Place

“Location, location, location” is the mantra when it comes to where to buy a home. But when it comes to what to buy, it gets a little more complicated. There is definitely a contingent who would insist that you would buy the best home you can afford. You don't have to go all Chip and Joanna here, but buying a fixer-upper makes sense for so many reasons .It costs less “Fixer-uppers list for an average of 8% below market value,” said LearnVest. “Fixer-uppers in Phoenix have the smallest cash discount, saving buyers just $1,000 off list price. Fannie Mae’s HomeStyle loan and FHA’s 203(k) loan both bundle a mortgage and funds for renovations. It gives you the opportunity to build value With an already-updated home, “If a seller has redecorated or improved the whole place, that seller is reaping the benefit,” said Forbes. Also, consider this reality: A seller who re-does a whole house in order to sell is not likely putting in the highest-quality materials. Taking your time to make updates as you’re able gives you the opportunity to save money and recover from all the expenses of buying the home and moving in. If you buy a house with the intention of fixing it up, you get to update and upgrade it to your standards, and you have the money to do so.

5 Simple Ways to Make Your Rental More Attractive in Under a Week

Is your rental property a bit of a dump? Thankfully, these improvements don’t have to be costly or time intensive. Boost the Appeal of Your Rental Property When the bones of a house are good—i.e. So stop complaining that your rental never stays rented, or that the landlords nearby are getting a much higher rate for similar properties, and do something about it. Thankfully, curb appeal is one of the quickest things to fix. Related: 13 Proactive Ways to Increase Rent & Add Value to Your Rental Property 2. Fresh Paint Paint is cheap, easy for the average DIYer, and makes a huge aesthetic difference in the overall look and design of a rental property. This can be done very inexpensively, but will make even the oldest, dingiest spaces instantly look nicer. It also has a way of holding smells and making a rental seem old and worn. New Appliances Few things frustrate tenants quite like faulty appliances that stop working at the worst possible times.

5 Millennial names that tell us where home buying is headed

They were the top five names associated with the fastest levels of home sales growth in 2018. “They are entering that stage of life where it’s more about they must have that house as opposed to it would be nice to have that house,” he explains. “They are really leaning into the fact that qualifying for a mortgage with a good job is not as hard as it used to be,” says Vivas. And that’s what we’re seeing with these Millennials.” Single women are one of the fastest growing demographics in the housing market. The 2018 deed data also reflects women’s impact on homeownership as a whole. Sales associated with female buyer names increased while sales with male names declined, up 1.6% and down 0.1% year-over-year on average respectively. James could be 100 years old or 20 years old, but when you take the data in an aggregate, it’s colorful evidence of how the profile of the home buyer is changing quickly.” Social Security Administration data shows half of Hannahs were born before 1993, and 80% between 1987 and 1997, giving Hannah a high likelihood of being a Millennial buyer. “Before getting my mortgage through Quicken Loans, I made a budget and put money away monthly into a savings account with a long-term plan to buy a home. “I don’t know whether I’ll do that or not, but student loans are a big factor in regards to what type of home I can buy and how much of my income I can use to actually put towards my investment in my home,” she says. That was a requirement.” Though Strasser is still learning the ropes of homeownership, she has no regrets.

Student Loans Keeping You From Buying A Home? Think Again

Student loan debt has long been cited as one of the Millennial generation’s biggest barriers to homeownership. But it seems the hurdle might not be as insurmountable as many think. Odeta Kushi, a senior economist for First American, said that extended loan terms, higher incomes and the lower payment-to-income ratios that result from these factors are helping minimize the impact student loan debt has on homeownership. “Millennials in their 30s have higher median incomes compared with Baby Boomers when they were in their 30s and are on track to surpass Generation X.” First Am’s recent Real Estate Sentiment Index shows that inventory levels and overall affordability are the biggest barriers to homeownership for today's buyers. “Persistent myths regarding down payment may be discouraging would-be Millennial homebuyers,” she said. “Many millennials could qualify for a mortgage and may indeed have the income to afford a house, but misperceptions regarding down payment may be holding them back.” Kushi said many Millennials believe that a 20% down payment is required to buy a home. Want to buy a home but have thousands in student loan debt? Here’s what Freedom Debt Relief’s Michael Micheletti recommends: Understand your entire debt portfolio, your debt-to-income ratio and your FICO. Investigate local, municipal and national down payment assistance programs. Looking into a shared equity program for the down payment.

Four Ways To Keep Cool When Your Real Estate Business Is Heating Up

Choose Your Attitude You can choose how you feel and how you react to situations. Research has found spending time in nature can help alleviate mental fatigue by relaxing and restoring the mind. Additionally, spending time outdoors can also improve your problem-solving skills. It can be hard to step away from the screen and put down the phone when your clients or employees require your attention. I value spending time outside, and I go hiking with my family every Sunday. Practice Meditation Meditation is a simple, effective method that can help you to improve your productivity. The study also found the distress-reducing effects of meditating can be recalled when someone is not in a meditative state, which can help with stress management. If you are completely relaxed and stress-free, then your mind will also work more effectively. Find someone better than you at the job and work to try to reach their level. While staying focused on business, apply helpful practices like these to enjoy the process.

6 Reasons Why Active Duty Military Should Consider Turnkey Real Estate

In most cases, people are buying liabilities instead of assets—and depreciating liabilities at that. And I truly believe real estate investing is one way both active service members and veterans can create a solid financial foundation—and even achieve financial freedom! What is the Best Real Estate Investing Strategy for an Active Duty Service Member? For that reason alone, any passive income-producing asset, such as a turnkey property, is likely the best option to get started. 6 Benefits of Turnkey Investing “Passive” Investing: This is in quotation marks because there isn’t really a way to be completely hands-off. You can expect 10 to 20% cash-on-cash return from a good turnkey (TK) provider. Remember, the IRS doesn’t have “loopholes” for real estate investors. As your tenant pays down your principal each month (through rent payments), your equity increases—and thus, your net worth. More Investing Strategies to Explore After separating or retiring from service, VA loans are available that can be used to, say, house hack a one- to four-unit building with ZERO down payment and without private mortgage insurance. When done right, it can serve as a passive path to real estate investing for beginners, while providing solid, long-term returns.

America’s Housing Affordability Crisis Only Getting Worse

A shortage of housing inventory, a deepening construction labor shortage and high land costs are fueling the crisis, according to Robert Dietz, chief economist for the National Association of Home Builders. “We’re definitely in the first half of it.” The NAHB/Wells Fargo Housing Opportunity Index shows that the peak of housing affordability was reached in 2012 when 78% of new and existing home sales were affordable for a typical family based on their incomes and current interest rates. “If rents are high and the rental market is tight, then it becomes harder for those households to save for a down payment and buy a home.” Frank Nothaft, chief economist for CoreLogic, a data analytics company, said lots of people are buying homes, but it has gotten much more financially burdensome for first-time home buyers to buy homes, especially in high-cost markets. Certainly some of them are doing very well income-wise and can afford to buy, but at the margin, it’s become more challenging.” Nothaft said that if you combine the effect of the rise in home prices with the rise in mortgage rates over the last year, that works out to about an 18% increase in the monthly principal and interest payment to buy the same house today that you could have bought last year with the same amount of down payment. “The typical family has not had income growth of 18%,” he said. “Some lucky families had it, but your typical family is not seeing that.” Dietz believes the housing market will continue to have sluggish growth this year in single-family construction and relatively flat apartment construction. That’s really the pivot point where the housing market is at.” Of course, some affordability issues are more complex, Dietz said, driven by geography in some higher-cost markets. “If you’re land constrained because you’re up against water or the market is constrained by mountains, you’re really running low on land, that contributes to the factor,” he explained. “That would include townhouse construction.” Markets that can add housing at an affordable level, particularly entry-level townhouses, are the markets that are going to grow, he said. “Those are the markets that are going to allow young people to establish roots and buy a home and grow a family,” said Dietz.

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Four Ways Real Estate Can Boost Retirement Income

Buy shares in real estate investment trusts (REITs). Private mortgage funds lend money to real estate flippers who buy, improve and resell properties. Independent home lenders offer investment property home loans with as little as 15% down, so you could buy a $200,000 property with $30,000 cash down. Let’s say home prices rise 5% next year. Real estate also tends to move with inflation. Timing your rental property mortgages to pay off by the time you retire creates an inflation-hedged income stream. After the real estate crisis, median home sale prices hit a low point of $148,000 in 2012. If you buy with a 15- to 30-year mortgage and don’t sell your rental property, home price changes won’t influence you. Real Estate Investment Trusts (REITs) Pros And Cons Real estate investment trusts (REITS) take money from shareholders to invest in real estate, such as residential or commercial properties, or mortgage-backed securities. To cash out home equity, you have to either sell a home you’ve built equity in, refinance or take out a reverse mortgage.