Money & Finances « AllPropertyManagement.com

Archive for the ‘Money & Finances’ Category

Job Transfer and Ending your Lease

Wednesday, June 3rd, 2009

If you’ve got a new job offer and have to leave the city in which you live you may find yourself in the difficult situation of having a lease that you’re unable to complete or that you don’t want to complete.

Now some larger rental agencies may have a clause in your lease that lets you break a lease in the case of a job transfer or a move for any reason as long as you give a specified amount of notice.? This is the ideal situation as you simply have to follow the outlined procedure.

If your lease doesn’t have a clause that lets you terminate because of a move you’ll have to see if your landlord is willing to let you out of your lease. A lot of landlords understand that moves happen and if you’re up front and give them as much notice as possible they may be very willing to let you end your lease.

Some landlords aren’t nearly as flexible and they aren’t about to let go of a paying tenant while they have one. If this is your situation you can ask if the landlord will let you sublease the apartment, at least this way you can find a tenant yourself and recoup part of the expenses.

If you’ve got a great new employer and you can’t break the lease, see if the employer is willing to pay any of your moving expenses, this money can be used to pay part of your lease.

Posted in Money & Finances, Rental Market, Tenants | No Comments »

5 Musts of Every Lease or Rental Agreement

Monday, May 25th, 2009

Learn the 5 things that every lease must contain. Without these items your lease or rental agreement will be missing important elements which could cause your problems in the future including possible lawsuits.

Names?

Including the names of your tenants seems obvious but many landlords only include the name of one tenant. Rather than single out one tenant, make sure every tenant signs the lease or has their own lease which they’re required to sign.

Occupancy Expectations?

Spell out occupancy expectations in writing. If you only allow two tenants per unit then let the tenants know that they cannot invite others to move in. Also if you do not allow pets then this must also be stated in the lease.

Financial Expectations?

Not only should you state how much rent will be but you should include any security deposits and other deposits, you need to state if the tenant is responsible for their own utilities and additional expenses.

Term of Tenancy

Is your lease a rental agreement or a fixed term lease? Rental agreements are a month to month agreement and tend to self renew. Fixed term leases typically last a year and then are renewed or terminated. This needs to be clear to all parties.

Access to Property

Most states or local areas have laws about when a landlord can enter a tenant’s apartment and how much notice must be given. This should be stated in the lease, but you should also include information on emergency entrance or notice necessary to make repairs or perform routine maintenance.?

By including these five points in your lease you’re protecting yourself from some problems in the future or legal actions against you. These are by no means the only information that is necessary in your rental contract but it’s a great starting point.

Posted in Money & Finances, Property Management, Rental Property Management, Tenants | No Comments »

Home Appraisals

Monday, May 4th, 2009

This is a great time to dive into the home ownership pool if you’ve never owned a home and have a steady income. One big part of the home purchase process is the appraisal. A home appraisal is required to get your loan and typically the lender will only loan you somewhere between 80 to 90% of the appraised value of the home.

Lenders have their own licensed real estate appraisers who will come to the property and do the assessment. The appraisal is actually an arbitrary opinion but it is based on a complex set of criteria.?

If your property appraises for less than the purchase price then you may not qualify for the loan amount that you need and you’ll have to come up with the balance on your own. If the appraisal comes in where you need it to or even higher then you’re in the clear and the purchase should go through as planned.

Sometimes you will get an appraisal that seems too low, in this situation you can ask your lender if there is another licensed real estate appraiser that they would be willing to have look at the property. In some cases this can solve the problem and the second appraisal may come in in the price range you need it to so you can get your loan.

Posted in Money & Finances, Real Estate Market | No Comments »

Debunking the Myth Renting is Throwing Money Away

Friday, April 24th, 2009

Too often you hear that renting an apartment is just throwing money away, whereas owning a home is an investment in your future. Harvard University has done a study that has shown that there are times, places and situations where renting makes more economical sense than buying.

Some of the most prominent myths are listed below with additional information which may change your mind about renting versus owning.

Is renting throwing away money while home ownership is building equity? Actually, for the first five years of your mortgage most of the money you are paying for your mortgage goes to pay interest only. You’re not actually creating equity until after five years and a third of all people move within those five years, meaning they never actually begin accumulating equity.

Are mortgage payments less than rent? It depends on what you decide to spend on rent or a mortgage, but keep in mind that there are a lot of hidden costs involved with homeownership and when there is a big expense or repair it is entirely your responsibility.

The third myth is that purchasing a home is a safe investment and the current U.S. housing market proves that this is simply a myth and nothing more.

So, if you’re not planning on staying in one place for a long time and you don’t have a good cushion for emergencies then renting may be a smarter move, especially until the housing market picks up.

Posted in Money & Finances, Real Estate Market, Rental Market | No Comments »

Tax Deductions for Landlords

Wednesday, March 11th, 2009

Once that tax time rolls around most people are scraping the barrel looking for deductions so they can save just a little bit of money. Landlords are lucky in a way because they have? a lot of built in deductions with their rental properties, the problem is a lot of landlords and property managers forget to take some of their most basic tax deductions.

Interest

Interest can add up to a huge tax deduction if you keep good records. Interest doesn’t only mean the interest you’re paying on your mortgages, but it also refers to any interest on loans you’ve taken to improve the property. Interest can even go a bit further to include interest charged on credit cards for items purchased for your rental properties.

Depreciation

The cost of your rental unit(s) are not deductible in the year in which you pay for it, instead you deduct a portion of the cost of the property over several years. This is how you recoup the cost of your property through real estate.

Repairs

Not only is the interest charged on repairs deductible, but the repair costs themselves are as long as the repair is warranted. Keep careful track of these expenses as you can only use them in the year that the repair occurs.

If you’re still trying to find some deductions for your rental property, contact a tax specialist as there are many of them out there just ready to help you cut your tax bill.

Posted in Money & Finances, Taxes & Finances | No Comments »

Buying Your First Home

Monday, March 9th, 2009

If you’re thinking about purchasing your first home there are a few things you can do to make the process go a little more smoothly and to help you purchase a bit more home.First, evaluate your long term plan and decide whether you’re actually planning on being in the area long enough to justify your home purchase. If you’re thinking about an investment purchase, look at the housing market where you live and evaluate how long you would have to hold the property to make it financially beneficial.

Months before you plan on buying, study your credit and learn what you can do to improve your credit rating. The better your rating the more likely you are to get a good loan at a low percentage rate.

Then only look at homes you can actually afford, there’s no reason to tempt yourself with something that is simply out of your reach.

Because you’re making your first home purchase you probably won’t need to come up with 20% to pay down. Many organizations offer first time buyers a deal and in some cases the down payment can be as low as 3%.

Then, get preapproved so you know your loan amount and you’re ready to start bidding. Only bid on homes you are sure you want to buy and only bid informed prices that are based not based on heart or gut feelings.

Posted in Investment Property, Money & Finances | No Comments »

Save Energy at Home

Wednesday, March 4th, 2009

photo credit: midnightcomm

Not only are energy bills breaking a lot of budgets, but we’re also choking the planet with carbon, so whether you’re looking to save energy to help pad your checkbook or so the world can breathe more freely, the following tips will help.

Cut Back on Heating

Purchase a programmable thermostat so you can drop the temperature during the day when you’re away and bring it back up to a comfortable temperature by the time you get home. You can also try to learn to live a few degrees cooler and bundle up more.

Seal up your Home

Look for cracks and any openings where the climate controlled indoor air can leak out or outside air can invade your home. Seal up these cracks to prevent drafts and energy loss.

Switch to Fluorescents

Traditional incandescent bulbs use three to four times more energy than compact fluorescent bulbs. They do cost more initially, but last quite a bit longer so in the long run you’ll be saving money on the purchase.

Use Natural Light

As often as possible, take advantage of natural light for illumination and heating. It’s free!

Check the Insulation

Typically, older homes suffer from poor insulation more frequently than newer ones, but it doesn’t hurt to check the insulation in every home as a properly insulated home saves energy costs in many ways.

Leave Nothing in your Wake

Break any bad habits of leaving lights, televisions, radios, etc on when you leave a room, or leave the house entirely. Learn to turn everything off before you exit the room and save energy where you aren’t using it.

The above energy saving tips are easy and common ways to cut down on energy consumption and costs. If you’ve already taken these steps or are looking for a more dramatic savings, get creative and come up with your own ways to limit the amount of energy you’re regularly consuming.

Posted in Money & Finances | No Comments »

Home Heating Options

Tuesday, March 3rd, 2009

Cold snaps have hit some all time lows across the U.S. this year and, at the same time, many people are thinking about finding more efficient? ways to heat their home, perhaps ways that will also be less harmful for the environment. There are a number of options available that are both efficient and eco-friendly but not every solution works for every home. photo credit: midnightcomm

Solar Heat

Solar heat is quite a commitment to reducing energy bills in your home and saving the environment but it’s very effective and eco-friendly. If you’re not financially able to completely overhaul your home for solar heat try a do it yourself project that incorporates some of the benefits of the sun, or go the very inexpensive route and use your windows to draw as much solar heat and light into your home as possible. Even a small sunlight collecting mirror is a great way to start.

Earth Sheltered Homes

Not really a possibility for most existing homes but this is something to consider if you’re building. Your home doesn’t necessarily have to be completely underground, but even partial earth-bermed shelter can greatly reduce your consumption of energy, keeping you cool in the summer and warm in the winter. But for homes with a basement, you can take advantage of your pre-made earth shelter by spending more time in the basement and treating it as a family room.

Renewable Heating Fuels

Instead of going with traditional fossil fuels, look into using renewable heating fuels in your home. Renewable fuels include wood and biodiesel so using an energy efficient, wood burning fireplace is not only romantic, but a great home heating option.

Posted in Money & Finances | No Comments »

Are You Ready To Invest Again?

Sunday, February 8th, 2009

If you or your company chose to stop investing in new properties as a response to recent uncertainty in real estate markets, at what point will you continue investing toward long term goals? According to Ronald Oral in MarketWatch, the US Government is hoping that you’ll restart spending soon.

In a move Presidential economic advisor Lawrence Summers hopes will go a long way to sparking economic renewal, plans are being submitted for a federal “bad bank” that picks up toxic mortgages from other banks. The hope is that such a bank will remove much of the uncertainty in the mortgage and loans sector, inspiring private investors to pour money into banks that will then offer loans to eligible buyers.

For many large property investors, the recent downturn has been taken in painful stride. For smaller, more personal ventures, tightfisted banks have brought investment projects to a screeching halt. By offering banks a way to free up funds, the Treasury has found a way to assure newly risk-averse bankers that the financial world is going to keep turning. You will continue to hear talks of the “next great depression” and “endless recession” for some time, but there is tremendous value in being able to look back at how banks failed in the past in the hope of making them work for the future.??photo?credit:?epicharmus

Tags: Bailout, Banking, investments, real estate
Posted in Money & Finances | No Comments »

Is Renting Cheaper?

Wednesday, January 28th, 2009

In the past the argument could be made that by renting you were just throwing money away, but by buying a home you were spending the same amount of money on an investment that would pay out in the end. This just isn?t the case anymore. In very populous areas, the coasts, its more expensive to buy right now and the prediction for the future of home values is that it will continue dropping for at least three to five years and probably wont rise much after that, if at all.

Also the costs of home ownership are more expensive than for renters, where basically your maintenance and repair costs are very limited if not nonexistent. You?ll also be paying more in insurance for a property that you own that you would in renter?s insurance. All roads are currently leading toward renting as the better choice in this economic crisis.

But if you look at things from a different angle, this is the time to get a really good deal on a home as housing prices drop. Just make sure you?re financially stable enough that you won?t suffer from current layoffs and other financial issues the country is facing. You?ve got to consider it a long term investment if you plan on making money in the end, but for just the right person, buying could be a good investment.

Posted in Money & Finances, Rental Market | No Comments »