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Posts Tagged ‘Property’

Loan approvals more efficient under new rules

February 8th, 2012

Rules announced in December by the Federal Housing Administration (FHA) have sped up the process of reviewing and approving many of the federal agency’s loans, according to Apartment Finance Today.

The rules changed the criteria for having market-rate construction and rehabilitation loans reviewed by FHA regional and national loan committees, so that loans for less than $25 million and fewer than 250 units are now exempt from the national committee review process. Previously, any loan for more than 150 units or $15 million had to be reviewed before approval.

According to the source, these reviews were slowing loan approvals significantly before the new rules were implemented. Some other changes were also made. One executive told the source a deal saved at least four to six weeks because of the change, allowing construction to begin.

Rental managers and property investors may want to keep an eye on these loans, since this change means that competing properties or investment opportunities might be begun and completed more quickly. The changes were made in response to the FHA’s increased role in industry lending.

10 tips for buying your first investment property

May 19th, 2010

photo credit: Seven_Null7

When it comes to purchasing the first investment property, a smart investor will study up, and research the market. These 10 easy tips for buying the first investment property in one’s portfolio will give all the necessary indications to finding the right property, the right time to buy, and the right time to sell.

1) Where is it located?
A prime location is near good schools, landmarks

2) Is the property dividable?
If there isn’t already a home built on the land, the investor may wish to rent out a house or duplex on the property. To do so, dividing the property may be a prerequisite. Especially in the case where two homes are to be built on the same property. If there is not enough allotted space for construction, the permission will be denied.

3) What is the yearly property tax? Knowing the exact year-by-year cost will save an investor a lot of bookkeeping time.

4) Check a lot of different mortgage offers from banks. Some will be great opportunities, others will rip off the investor..

5) Get the loan pre approved.

6) Prepare a 5% deposit, as this is a standard practice in property purchases.

7) Start saving for the property. Using a CD, or other savings method is a great way to be prepared for the purchase and various fees that are involved.

Prepare the proper documentation.

9) Look for the property using newspapers, craigslist, and other resources available to investors and future home owners.

10) Purchase a property that is within a comfortable price range. Take into account the future of the family, other business ventures, and how much risk one is willing to undertake.

For the smart investor, it pays to be cautious when making that first investment property purchase. So keeping in mind the location, future prospects that are indicated by the property’s amenities, whether or not the property is dividable using government forms, and the cost of year-by-year property taxes the smart investor will make the right choice with confidence.

Are you Really Ready for a Foreclosure?

January 15th, 2009

shutterstock_207598541 Unfortunately, foreclosures are increasing all over the United States. While this is unfortunate for the homeowner there are others who feel that this can work in their favor. The question is: are you truly really ready to buy a foreclosure? You can ask yourself this question no matter if you are buying a home to live in or one as an investment. Even though a foreclosure may look good on the surface you need to know exactly what you are getting.

If you are going to buy a foreclosure there are two important details to keep in mind. For one, you will be buying directly from the bank. With a foreclosure the bank owns the home. This means that you and your agent will have to work with them when it comes to the asking price, etc. Generally speaking, banks do not offer much flexibility.

Secondly, most (but not all) foreclosures are in bad shape. This does not mean that the home will have major problems, but there is a chance that it will be trashed in one way or the next. Are you willing to possibly go through a long clean up process? If you are going to purchase a foreclosure this is something you should be ready to face.

There is no denying that you can save money by purchasing a home that is in foreclosure. But while there are many benefits of buying a foreclosure there are also potential drawbacks such as buying from the bank and getting involved a home that has not been kept up.

At the very least you should consider a foreclosure if you are in the market. Soon enough you will get a feel for the pros and cons of these properties, and whether or not you should buy one.

When to Hire a Property Manager

August 11th, 2008

photo credit: merfam

If you’re a property owner you will no doubt find yourself frustrated, exhausted and sick of dealing with your properties and tenants at one point or another. It’s just a part of the investment, the highs and lows of being a landlord. But some people actually suffer from more of these lows than others and hiring a property manager is the perfect solution. If you fall into the following categories you may want to consider hiring a property manager for your rental properties.

“Too Much Property”
If you have a lot of rental units or properties and are finding them just too taxing then it’s probably time to seek outside help. You?re not doing your tenants or yourself a favor if you?re spread too thin.

“You?re too Far Away”
If you live quite a long way from your properties then you may want to find someone who is in the area who can deal with your tenants and any problems that may arise. What is too far? Well, that?s up to you and your schedule.

“You?re Not Good at It”
Let?s face it, some people just aren’t good at dealing with other people or don?t have the organization skills necessary to be a hands on landlord. If you’ve ever rented you’ve probably come across these people before and the last thing you need to do is be one of them.

If you fall into any or all of these categories you probably want to consider hiring a property manager, either a full time service or possibly just some part time help. Whatever you decide, make sure you’re making an informed and well thought out decision.

Tax Deductions for Property Owners

August 5th, 2008

photo credit: kozumel
Getting all the appropriate tax deductions is an important part of managing a property. You want to be sure that you’re getting the deductions you deserve and that you’re spending your money wisely throughout the year.

In addition to interest, depreciation and repairs you can also claim deductions for travel, your home office and related business expenses, any employees or independent contractors you hire, casualty and theft losses as well as insurance.

Also, if you’re doing improvements you can deduct your expenses and if planned correctly you may be able to deduct them in a lump sum rather than spread out over several years. Segmented depreciation is another way to organize your property in order to take advantage of the greatest deductions. Small landlords get some extra breaks when it comes to losses so make sure you’re figuring this into the equation.

If you’re renting a vacation home look into your local laws, in some places you can do this totally tax free. But in other renting news, if you?re renting to family and friends it?s possible to lose virtually all of your tax deductions.

If you decide that these tax issues a too overwhelming, then hire an attorney or a tax professional and remember to deduct that expense as well.

Basic Types of Real Estate Insurance

April 4th, 2008

credit: VisitMyLuxuryHome.com

If you’re going to make the sometimes-risky investment in real estate, you should make sure that you protect your purchase and your new property with the right type of insurance. The type of insurance that you’ll get depends on what your involvement is with the home (whether it’s your primary residence or a rental property) and whether you desire any additional or extended insurance.

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