Posts Tagged renting
Mortgage Bits: How to Rent to Own, Today
Posted by Top Home Loans in General Banking, General Business, Mortgage Advice on November 8, 2009
Rent to own properties have been a great way for first time home buyers to have the ability to purchase their first home; however, with the extremely low interest rates, this old strategy no longer works. In today’s booming real estate market, a new strategy is needed for new and old home buyers.
Evolution of Rent to Own
The fact is, in today’s real estate market it is now cheaper to own than it is to rent. For an average $400,000 property, it can cost as low as $1300/month to own, whereas if you rented the same house, it would cost as much as double the amount. Not to mention the equity that is being built and the property appreciating.
The fact is home ownership is within everyone’s reach; however, a house that is more than affordable at 3% may not be affordable at all when rates reset at much higher interest rates.
The cold fact remains that house prices are going up far more faster than annual incomes for people living in Canada. This will eventually cause depreciation in the amount of disposable income the average person has.
Is it a right time to buy? Yes. Is it the right time to live beyond your means? No.
Do the economy a favor and live within your means.
Do you know any examples of renting vs. buying? What is your home ownership strategy?
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Landlords and Tenants; What to Repair and When to Renovate
Posted by Top Home Loans in Investing, Landlord Guide, Property Management, Real Estate on April 13, 2009
Why is it Important to Renovate and Repair
Renovating and repairing a property is common to perform when maintaining a property. It is not uncommon to replace of repair floors, walls, electrical, and plumbing in units. It is important that these common upkeep methods are done many times through the lifetime of the property. This is important for a few reasons. First of all, by renovating a property, the property will have a new look and feel to the property. If a tenant thinks that a property is new or fresh, then the potential tenant will be willing to pay more money for the property per month. Using white or a bright color can make the property seem larger than it actually is.
The second reason to renovate is to maintain or increase the intrinsic value of the property. The return on investment for properties is based on how much you had initially invested in the property, and what the property was eventually sold for. The difference between those two numbers is the return. A property can obtain a higher return on investment if it is able to be sold for higher when it is marketed.
A property maintains and grows in value when renovations are completed on the property. These renovations are important to maintaining the upkeep in the property and keeping it marketable. If you wait until when you are selling the property to complete the renovations, then the damage might be already done on the property.
When can I Renovate if I Always have Tenants?
Finding time is difficult if you always have the property rented out in full. It is difficult to get in and get out to even get any minor repairs completed. If a landlord is entering an apartment, usually the tenants will not feel at ease. It is best to hire a contractor if you need to complete renovations while a tenant is living in the unit. If a tenant is moving out, then take this time to invest in renovating the property. It may take a few months to complete; however, the results will be worth the effort. If renovations are a necessary, then your municipality may have laws to evict the tenants so that you can complete the necessary repairs and renovations.
What is best to renovate or repair?
When a person is viewing a property to rent or own, the main selling places of the area include the washroom and the kitchen. These two areas of the house are critical to the sale or lease of a property. To retain the best value, then consider putting the most work into these areas. In a rental unit consider putting tile and hardwood floors in the entire unit. Carpets go neglected by clients and can easily grow mold. When painting consider white colors and colors that are bright. Choose gender neutral colors. Also, make sure that the house is in a clean upkeep. Getting rodents or bugs in the house can be a nightmare. Make sure to review the property in full from time to time to make sure everything is in working order. Gutters must be cleaned and roof work must be completed annually. These items are critical to complete because if they are not, then they can cause the house to depreciate faster.
When renting a residence, make sure that you take advantage of the tax advantages of owning a rental unit. Make sure that you take the time to put the effort into making the property stay in a good upkeep. The better you take care of the property, the better return you will receive at the end of the day.
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The Landlord’s Market, and What you Can do to Capitalize on this Emerging Market
Posted by Top Home Loans in Economy, Mortgage Advice, Property Management, Real Estate on January 4, 2009
With the events over the last year in the real estate market, more and more people have gone out of the real estate market entirely or have gone into foreclosure. Less buyers and more sellers is a reality of today’s market, and house values continue to drop; however, with the fall of house values, it could be a great time to start property management. Rent rates have continuously stayed constant, and with more and more people fleeing the real estate market, then it could be a good time to purchase rental units at rock bottom prices.
What you Need to Know about being a Landlord
Being a landlord is a great way to position yourself to earn residual income as well as capital growth in the long term. Being a landlord should not be confused with a get rich quick scheme or something along that lines. It should be viewed as a viable long term income stream that you are willing to invest the time and effort to ensure that you are successful. If you are considering managing several properties or properties that are away from your home, then you may want to hire a property management firm. Property management firms will look after your property and collect the rent; however, this may reduce your overall incomes from the property.
The disadvantages of using a property management company or individual could be the following:
- High costs that could consume up to 25% of your rental income.
- The company may put less priority on marketing your rental property. This may cause an increased duration of time that your property is not rented.
- Substandard service to the rental property due to lack of time or resources from the property management firm.
If the property is some distance from where you live, then you should definitely hire a property management firm. This is because it is extremely difficult to manage a property from a distance. It is hard to maintain, hard to collect rent, hard to bring in perspective tenants. If you can manage the property yourself, then it may be in your best interests to become the landlord yourself.
In future articles, we will be providing you with all the knowledge that you need in order to manage properties on your own. From marketing to managing your tenants, we will provide you with all the knowledge you need.