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Mortgage and your Down Payment

August 26th, 2009

For most people, buying a home means applying for a mortgage. Unless you can buy in cash, you will need a mortgage to make your dream a reality. There are hundreds of lenders that offer mortgages, and you will find out soon enough that some are better than others. Before you begin to shop for a mortgage you will want to get a good idea of how much money you can afford to put down. This is something the lender is going to want to know before they can offer a loan and let you know what rate you qualify for.

How much money do I need? In the past, you may have been able to get away with 100 percent financing. But in today?s world the economy is bad and the real estate market is struggling. For this reason, lenders are no longer offering this deal. Instead, they are asking for at least 5 percent and in most cases more.

To be safe, you should have 20 percent for a down payment. Not only will this give you instant equity, but it will also allow you to avoid private mortgage insurance. If you don?t have 20 percent to put down you have two options: you can wait to buy and continue to save, or you can attempt to find a lender that will offer a good deal with less than 20 percent down.

Don?t be afraid to shop around for the best mortgage. Lenders offer different rates, and depending on your down payment you may find your pool of options getting smaller.

Add Foreclosures to your to-see List

August 25th, 2009

Are you shopping for a new home? Do you want to get involved with investment properties? If you answered yes to either question it is important to consider all options, including foreclosures. A foreclosure is not right for every buyer, but you don?t know where you stand until you consider them. Once you learn the pros and cons of foreclosures you will have a better idea of what they can and cannot do for you.

Why would I buy a foreclosure? The reason for this is price. The bank is usually willing to offer a great price on a foreclosure because they need to sell it in order to recoup some of their money. Does this mean that all foreclosures are a steal? Definitely not. But if you look long enough you will realize just how much money you can save.

On the downside, you may not like foreclosures because most of them are rundown. This is not always the case, so you should keep an open mind. But it is very uncommon to find a foreclosure that does not need some work.

Additionally, it is not always easy to buy a foreclosure because the bank does not offer much flexibility. They probably won?t entertain lowball offers, and in many cases you may not have a right to an inspection. These are details to discuss with your real estate agent as you are shopping and ultimately making a decision.

You should add foreclosures to your to-see list even if you don?t think you will move in this direction.

Flooring Options: From Cheap to Expensive

August 20th, 2009

If you are interested in changing your flooring you should be aware of all your options from cheap to expensive. With so many flooring options it can be difficult to decide which one is right. Not only do you have to consider the cost, but you also have to look into other details such as durability, your decor, etc.

Price may be most important to you; there is nothing wrong with this. But even then you still have to make decisions on what type of flooring is best. For instance, ceramic tile is going to be cheaper than travertine or slate. It may not look as high end, but it is a cheap option that gives you a similar look and feel. The same holds true when buying wood flooring. Laminate flooring is cheaper than real wood. But while it looks the same in many ways it is not going to appear as high end or as durable to the feet.

As you can see, flooring ranges from cheap to expensive and everything in between. This is true no matter if you are buying tile, wood, vinyl, or carpeting. As a buyer you need to know what type of flooring you are interested in, as well as how much you are willing to spend. Shop with these details in mind, and the perfect flooring will present itself to you soon enough.

photo credit: Velo Steve

Selling a Rental Property when it becomes too much

August 18th, 2009

Most people buy a rental property because they are looking to make money. Even if things start out this way, you never know how your life and vision is going to change in the future. There may come a time when you want to sell a rental property because it is becoming too much for you to handle.

Here are three times when selling a rental property makes sense:

1. You no longer have the time. Keeping up with a rental property is a lot of work. You have to keep tenants happy, maintain the property, and collect rent payments. Do you have the time for all of this and much more?

2. The money you are making is not more than what you are spending. In other words, you are not making a profit. Not every rental property is going to be profitable. And even if your property is making money right now, this can change in the future. Positive cash flow is a must in the rental property industry.

3. You don?t have the patience. One of the greatest skills you need as a landlord/property manager is patience. Are you willing to deal with tenants that don?t care? How will you deal with late payments? If you are ?burnt out? on the rental property game it is time to get out.

photo credit: lemonjenny

Property Management Problems? Change your Strategy

August 17th, 2009

Are you having problems in the property management department? This is something that nearly every property manager or landlord faces at some point. It is essential to know when a problem needs fixed, and when you are simply going through a rut. If you are facing an issue that needs addressed, it may be time to take care of by changing your strategy.

Take a common problem such as not getting paid on time, for instance. When it comes to being a property manager, this is just about as big an issue that you will face. How are you going about getting paid right now? Once you answer this question and consider the pros and cons of your strategy, you can then decide how to make the necessary changes.

Changing your strategy will not always work the first time around. You may have to go through a trial and error process to determine what is going to work best for you in the future. The last thing you want to do is make things worse on yourself. Continue searching for a solution until you find it.

Every property management problem, big or small, can be fixed. If you are willing to tweak your strategy you can find a solution and a better strategy in no time at all.

Speak with Other Landlords before getting involved

August 5th, 2009

Do you have an itch to become a landlord? Do you want to invest in real estate so you can make more money and enjoy a better lifestyle? It sounds like a great idea to become a landlord, but unless you know what you are getting into you don?t really know this for sure. It is very important to speak with other landlords before getting involved yourself. This will allow you to learn about the pros and cons of this type of lifestyle.

Where can I find a landlord who is willing to speak with me? The easiest place to search is online. There are many websites and forums at which landlords from all over the world correspond with one another. You can join in on the action as to learn from those with more experience. Of course, you can also ask specific questions to better understand if this career is right for you. Most landlords love to help others who are joining the industry.

There are some things you can only learn from experience. While you are sure to learn a lot after becoming a landlord, you don?t want to get involved if this is not the right move for you. Taking the time to speak with other landlords before getting involved is a big step. This will give you the knowledge needed to decide if moving forward is in your best interest.

How to not break your Remodeling Budget

August 4th, 2009

Any remodeling project, big or small, needs a budget. This is true no matter if you are doing it yourself or hiring a professional. Moving forward without a budget is a good way to get into financial trouble. Here are three ways to avoid breaking your budget:

1. For do-it-yourself projects add up all the costs of material before you buy anything. This will give you an idea of whether or not your project is on the right track. You may find that you have more money in your budget, or maybe that you are overdoing things and need to take it back a bit.

2. If hiring a professional you must receive a solid quote before moving forward. This is something that many people forget, and soon enough they regret it. If a contractor does not want to give you a firm quote you should move onto somebody else.

3. Be strong! The best way to stay on budget is to tell yourself ?no? when you get the urge to spend more. You know how much you can spend, but only you can hold yourself to this number.

If you want to stay on budget during your next remodeling project, follow the tips above.

photo credit: pnwra

Property Management and Time Management: You need both

August 3rd, 2009

When it comes to managing real estate you need to know a lot. One thing you don?t want to overlook, no matter how boring it may sound, is time management. If you are not careful with your time you may end up failing as a real estate investor. And that is not what you want.

Are you managing your properties full-time or just on the side? Either way, you are putting in a lot of time. That being said, a full-time property manager does have more hours to devote to their job. Those who do this part-time must also worry about their full-time career. But no matter what, if you develop the right time management skills you can work this into your schedule.

The way you manage your time is very important. Above all else, you must prioritize. It is essential to know what is most important, and then take care of these tasks before you do anything else. For example, it is more important to fix a leaking pipe than it is to pull weeds in the backyard. You only have so much available time, so make sure you are spending it wisely.

Property management and time management should go together hand in hand. If you are going to successfully manage real estate you need to know how to make the most of your time.

The Basic Costs of Real Estate Investing

July 31st, 2009

The cost of investing in real estate is not the same for everybody. You may want to spend less than $100k while some investors surpass $1 million on every deal they make. With this in mind, there are some basic costs of real estate investing that fit into several categories.

1. The cost of the property. No matter what, if you are investing in real estate you are going to spend money on the property and all that goes along with it. As noted above, how much you spend on a piece of real estate depends on what you want as well as your budget.

2. Taxes. If you own real estate you are going to pay taxes on it. Do you have enough money in your budget to buy the property you want while also being able to afford the taxes?

3. Maintenance. Investing in real estate means making repairs and upgrades from time to time. You do not need this money upfront, but make sure you have enough available so you can take care of the proper fixes when need be.

Getting involved with real estate is a great way to turn an initial investment into bigger things. Consider the three basic costs above when deciding how much you can spend on your next piece of real estate.

Landlords and Late Night Repairs

July 23rd, 2009

Being a landlord is not an eight hour a day job. There will be days when you rarely think about your property, but others that call for much more attention. Simply put, if you are going to work as a landlord you should be ready for calls and repairs at anytime of the day or night. If you are not ready for late night repairs you may want to think twice about becoming a landlord.

If you are called on to make a repair you have to quickly assess the situation, and then determine the right course of action. For instance, a tenant who calls with no heat in the dead of winter will need some sort of assistance. If you don?t give it to him you could be in a lot of trouble. On the other hand, there are some repairs that may not need to be fixed right away. Of course, you don?t want to delay anything that will put a tenant and/or your property in harm?s way.

Being a landlord is not always an easy job. You can make a lot of money by investing in real estate, but don?t think you will never have to work for it. After making a few late night repairs you will realize just how hard you have to work to get paid. Simply put, being a landlord is a hands on job that will call for your attention morning, noon, and night.

photo credit: normalityrelief