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With the current economic crisis rolling through the United States it’s tempting to pull in your spending wherever and whenever possible and tackle projects in a do it yourself fashion. This is not just a property owner inclination but also something that property managers and landlords are apt to do.

In some situations this is a great idea, why hire a landscaping service if you can mow the lawn yourself. Or instead of hiring an expensive company to plow the snow, offer some responsible tenants a discount for handling the work for you. This can work out well for both tenants looking to save some money in a financially tough time and for landlords looking to keep their bottom line intact.

When it becomes a problem is when people are looking to cut corners by performing do it yourself tasks that they have no experience in and are not equipped to handle. Tenants deserve to live in safe environments and a landlord that thinks he can suddenly handle plumbing or electrical work could just be asking for trouble.

So, go ahead and save money where you can but don’t tackle projects in someone else’s home that you’re not qualified to handle. Remember it’s your property but it’s also your tenant’s home.

The market seems to indicate that homebuilders are feeling the pressure of the economic crisis and aren’t expecting it to let up anytime soon. It appears as though this country not only has a real estate crisis and a foreclosure situation on its hands, but not surprisingly, the homebuilding industry is suffering as well.

Builders were surveyed by The National Association of Home Builders and the overwhelming sentiment is that the economy has consumers concerned and is the reason they’re delaying building new homes and buying new homes. With consumers reluctant to buy, old homeowners cannot sell their property and build new homes. The tightening of the mortgage lending situation is also another area that has potential new home owners worried and is slowing the homebuilding business.

It looks like this current trend is far from over as prospects for future building are grim. Most homebuilders say that their 2009 outlook is considerably slower than it had been in previous years. And unfortunately for this industry, a turn around is not on the immediate horizon. Consumers are going to have to feel more secure in the value of their dollar as well as the value of their homes before they once again look to expand. The homebuilding industry will most likely be facing some serious problems for the foreseeable future.

Did you know that remodeling a home is most likely going to be much more “green” or eco-friendly than any new home you can buy. Construction material is one of the largest contributors to landfill waste, so just by building a home (no matter how energy efficient it will be) you’re creating scads of refuse and you’re also going to consume ridiculous amounts of energy in the construction process.

So if you’re trying to be eco-conscious, forego that new home in urban-sprawl-land (let’s not even get into how that harms the environment) and find a nice home to remodel.

If you’re going to remodel and add on to an existing home, consider moving up rather than out. Building up is more cost efficient and eco-friendly as you’re creating a much smaller carbon footprint. Also re-evaluate the space you’ll need. A big problem with builders in the past couple decades was their obsession with space. The average home size increased by about 800 square feet of floor space in the last 30 years and much of this space is just that…space. Do you need a sitting room in your bedroom, most likely you don’t. Do you need one bathroom for every person in the home, probably not. Do you really need an office, a craft room, a playroom and a spare bedroom? Be practical and you’ll save money that would normally be wasted on heating and cooling these unused spaces.

photo credit: lumaxart

If you want to remodel but just don’t want to spend an arm and a leg the following tips can help you get what you want without the cost.

Home Recycling Centers

Home recycling centers offer great deals to people who want a discount on new or slightly used products. Look for recycling centers (such as ReStore) in places that have a lot of financially successful people. Usually the very well off purchase a home and then basically gut it, even if the current appliances and other features are basically new. Their discounted items often end up at a home recycling center and you can then get a great deal.

Do It Yourself

Obviously a great expense saver, learn to handle these projects by yourself. From electrical to masonry, you can learn the basics of these techniques online or at a retail store seminar. By doing it yourself you can often save over half of the overall costs and end up with results that are just as good as the pros.

Get Creative with Function

Take a second and third look at stock items and see if they can be used in new and creative ways. A stock kitchen cabinet set may be a perfect home entertainment center with a couple small adjustments. Don’t always assume an item ahs to serve the function it was designed for.

Being creative, flexible and handy will help you save money on your home remodeling projects and give you incredible results that can fill you with pride.

The standard used to be 20% down on all mortgages or else you faced the dreaded PMI Insurance. Today people aren’t putting their full 20% down and some are able to do it without having to pay PMI insurance. One of the most popular ways to get a low down payment mortgage is by getting an FHA loan. Until the end of 2008 you were only required to pay 3% down to get these loans, but after the first of 2009 that amount will rise to 3.5%. (more…)

photo credit: Casey Serin

If you’re thinking about selling one of your rental properties, whether you want out of the business or you’re just looking to unload a rental, you’re going to have to take a realistic look at what taxes you’ll have to pay before you decide on a price or go through with the sale.

Your rental property is considered an investment by Uncle Sam. Basically there are two types of investments, long term and short term. Short term investments are ones that you’ve held for less than a year. Most likely your rental property doesn’t fit into this category and is then considered a long term investment.

With a long term investment you’ll have to pay capital gains taxes on any profit you make from the sale. The maximum tax on that investment will be 15 percent, but you can do a lot of things to defray this expense if you’ve kept careful records throughout the years. You can subtract your cost of sale and any expenses you’ve had over the years related to upkeep and maintenance.

If you’ve been depreciating the property over the years you’ll have more to pay when it comes to taxes because in essence you’ve declared your property less valuable and so more of the purchase price will count towards your profit.

Landlords need to be able to calculate the cash flow from their rental properties to make sure they’re charging a profitable rent and to weight future investments.

If you want to figure out what your rental cash flow is you’ll first need to calculate the amount of rent you expect to get from the tenants. If you own multiple units you may want to figure in a vacancy rate, some experts suggest a 5% unoccupancy rate is reasonable, but this depends on your property and its desirability.

Once you figure out what you expect to receive in rent then you’ll need to figure out your property losses. This means you’ll want to calculate the expenses of the property operations, any depreciation and mortgage interest expenses.

Then take your expected rent income and subtract the above expenses to figure your tax savings or losses. Add or subtract that tax result from the amount expected from your renters, subtract again your operating expenses and your mortgage payments. This is your cash flow.

Once you’ve determined your cash flow you can use that number to determine what price you should establish for renters or if a new investment property is worth the investment.

photo credit: kozumel

If you’re thinking about selling one of your rental properties, whether you want out of the business or you’re just looking to unload a rental, you’re going to have to take a realistic look at what taxes you’ll have to pay before you decide on a price or go through with the sale.

Your rental property is considered an investment by Uncle Sam. Basically there are two types of investments, long term and short term. Short term investments are ones that you’ve held for less than a year. Most likely your rental property doesn’t fit into this category and is then considered a long term investment.

With a long term investment you’ll have to pay capital gains taxes on any profit you make from the sale. The maximum tax on that investment will be 15 percent, but you can do a lot of things to defray this expense if you’ve kept careful records throughout the years. You can subtract your cost of sale and any expenses you’ve had over the years related to upkeep and maintenance.

If you’ve been depreciating the property over the years you’ll have more to pay when it comes to taxes because in essence you’ve declared your property less valuable and so more of the purchase price will count towards your profit.

It’s hurricane season again and the south has been hit pretty hard. Not everyone that has been evacuated or suffered damage owns their own homes, many people are tenants and suddenly their living situation is tenuous and they must depend on landlords, insurance companies, contractors and a whole slew of people. The situation can be overwhelming and both tenants and landlords can feel helpless.

If you?re a tenant you need to quickly review your lease (which you probably lost in the hurricane but your landlord will have on file) to see what your responsibilities are and what options you have.

As a landlord you need to let your tenants immediately know what their options are and how much damage you have suffered and then give them as much information as you can on the repair timeline. Everyone should keep in mind that repairs are going on all over the region and contractors are in high demand.

If the property is too damaged to be safe or fit then tenants no longer need to pay rent or live on the premises until repairs are made. Make sure that new addresses are shared between both tenant and landlord. If the property is too damaged for repairs you may be able to break the lease, but check with local agencies to find out what the exact regulations are in your region.

The best way to proceed is by being forthright and honest and keep the lines of communication open.

Savvy landlords know that setting the appropriate rent rates can mean everything. Charging too much will keep your units open longer, charging too little may mean little or no profit and possibly may bring tenants that are less desirable. Your rent also partially determines your reputation in the market. Fair landlords charge reasonable rates and are usually respected, unfair landlords charge too much rent for the property and tend to withhold security deposits which quickly disturbs tenants and local advocacy groups.

To set the right rate for your rental unit you’ll want to know what the local rental market rate is. Each town has different pockets of rental units with different price ranges and this should be your first consideration. Is your property location desirable or less popular than some other locations in town? The next thing you’ll want to consider is the economic environment of your community. Has a large factory or business recently shut down? Are unemployment rates on the rise? Or are you living in a community that has a booming economy and more people are flowing into the region? These are factors which can also help you determine what rental rate to charge.? And finally, you’ll want to keep your finger on the pulse of your local rental market. Are other landlords having trouble filling their units? Are landlords offering discounts, free cable or internet or other incentives?

Know your market, know your target audience and keep your pulse on the community so you can track your local rental market rates and get the right tenants for the right price.