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Summer Maintenance Tips for Homeowners

There are always a number of tasks for homeowners to complete to properly maintain their home.  Here’s a summer maintenance checklist from BlackRock to you.

Air Conditioning Tune-Up
During the hot summer heat, it’s important to stay cool. To prevent unwanted problems, a regular inspection is a smart idea. This will save money in the future. Also, if your AC is running efficiently, your energy bills will be much lower. Experts advice changing out air filters once a month when using your unit everyday.

Check Your Roof
Roof inspections are simple to perform, but safest is done by a professional. The best time to do so is before and after a rainy season. This will often prevent water damage and leaks.

Gutter Cleaning
Prevent clogged gutters and pesky leaks by cleaning your gutters. This particular chore she be performed every season, but during the summer and fall is most crucial.

Window Inspection
If you don’t want your energy bills to skyrocket during the summer, check your window to make sure the hot air isn’t entering. Routinely check the sealants by ensuring both the inside and the outside are completely sealed. If you find any open areas, caulking is a quick fix.

Exterior Pressure Wash
During the summer, it’s likely you’re spending some free time outside. Keep your home looking fresh and spotless with a quick power wash! This process will help remove concrete stains, dirt and mildew. You’ll be surprised what a difference this makes!

Hawaii real estate, property management honolulu, property management hawaii, property management oahu, property manger oahu and honolulu. Property Manager in Hawaii.

Moms and daughters on playdate in house's front porch | Sean Justice/Getty Images

While home prices for starter-to-midrange homes are pushing upward toward pre-recession peaks, especially in secondary markets, they’re stabilizing in higher-priced areas.

Prognosticators see the robust markets of Seattle, Portland and Denver as this year’s top performers, with 10 percent to 11 percent price growth. If mortgage rates rise modestly as expected in 2017, sales elsewhere may normalize with smaller price appreciation, especially as housing starts rise to fill the inventory breach, but recently, rates have been on the decline.

Here are 10 tips to adapt to the latest market conditions.

1. First-time homebuyers: Get that starter home now

And we mean now! More than half of the home sales (52 percent) in 2017 are expected to be to first-time buyers, and mostly to the millennial set (19 to 34 years old), many moving from urban rentals, research by the National Association of Realtors shows. That means competition — and bidding wars — could become fierce through the rest of the year for such “starters” in desirable areas.

While there’ll be less inventory this winter, there’ll also be less competition per unit and a higher percent of motivated sellers.

2. Sellers: Hire the right agent

Oftentimes, the best investment a seller can make is time spent researching agents. A bad hire can cost sellers tens of thousands of dollars and months of worried waiting.

First, look at an agent’s online marketing material and listings. Is there good photography or video? Does it “pop”? Are descriptions accurate and complimentary without seeming exaggerated?

Then, look at profiles of the agents on LinkedIn, Facebook and other social media; and be sure to read web reviews. What kind of vibe is an agent sending out?

Narrow your search to three agents and interview each, ideally in person. Ask for sales-activity reports, existing listings and time-on-the-market averages, plus the requisite local comps.

A seasoned listing agent also will know the best times for open houses and how to initiate a price war if the market allows. Never consent to a listing contract of longer than 90 days in a seller’s market. You can always extend later.

3. Buyers: There’s more loan money out there

Those who couldn’t get mortgages during the downturn because they didn’t have 20 percent to put down can find affordable financing again.

Borrowers with FICO scores as low as 690 are now getting conforming mortgage loans (those under $417,000).

One telling sign: About two-thirds of mortgage refinancers were getting approved in the fourth quarter of 2016 compared to just one-half of those at the end of 2014.

However, borrowers without a 20 percent down payment will still pay private mortgage insurance, or PMI, until they hit the 20 percent to 25 percent equity mark.

The best rates go to those with 800-plus credit scores, though 750-plussers are getting virtually the same terms.

Unfortunately, those seductive interest-only loans are also on the menu again. Avoid them. They’re affordable at first since you’re not paying principal, but then years later, well … see the Great Recession of 2008.

4. Sellers: It may be a seller’s market but …

Home sellers can do several simple things to enhance appearance, increase buyer interest and boost their home’s profile:

  • Renew selectively: Instead of wholesale renovations from which sellers recoup maybe 60 percent on investment, do light makeovers everywhere, with an eye on the kitchen and bathrooms. They’re far more cost-effective.
  • Clean, clean and clean some more: It’s hard for buyers to picture themselves living in a dirty house. Scrub floors, baths, kitchens, windows and walls, and be sure to clean, vacuum and deodorize rugs. This is simple but effective.
  • Depersonalize, declutter: Show the space, not the contents. Box up family photos, kids’ school papers and excess art, and store bulky and worn furniture. Organize your closets to make them look half empty.
  • Illuminate: Think bright and cheery. Open drapes and add brighter light bulbs in dark areas. Repaint where needed but use neutral colors.

5. Renters: It might be time to buy

In many cases, rents are rising faster than home values, yet mortgage rates remain low. That, and the fact that renters now account for 37 percent of households (the highest level in 50 years), seem to indicate an imminent coming-out party for renters-turned-buyers, especially if they plan to stay put for five to 10 years after buying.

6. If you’re a buyer, don’t believe the house is yours

Don’t bank on a done deal or other verbal promises from listing agents until you sign a contract.

In heated markets across the country, sales agents are giving buyers false hope and using their offers to bid up the price for preferred buyers who they think can pay more and close faster. Have other homes in mind.

Strategies such as preapproval (versus prequalification), proof of funding, closing flexibility and the always-risky practice of waiving inspection and repair contingencies can help sway buyers.

For added clout, tell sellers you’re willing to “escalate,” or exceed all offers to a certain limit. Some agents even advise buyers to write so-called “love letters” to sellers, telling them how much the home will mean to their families.

7. Sellers: The grass is always greener …

… in yards with a “sold” sign. Major presale upgrades typically aren’t needed, but a little greening outdoors is a must.

Surveys show that strong curb appeal can increase prices by 10 percent or more. Greener grass, whether derived from new sod or fertilizer and water, is a must.

New shrubs, plantings and flowers also project a welcoming feel. Sellers typically enjoy a 100 percent return on the money they put into curb appeal.

Another form of green, sustainable landscaping has become a value-add for buyers. Native plants, native grasses and perennials that require less water and attention fill that bill.

Do some local research or ask your local home-and-garden pro for simple “greening” tips.

8. Sellers and buyers: Know the state of your market

A balanced housing market is defined as one with an average inventory of 6.5 months, according to Texas A&M University Real Estate Center research. When inventory remains below equilibrium, sellers enjoy more control over prices and terms, and the area becomes a seller’s market.

When inventory lingers well above stasis, you have a buyer’s market where sellers must get more serious about price reductions, credits and throw-ins. Of course, these averages don’t necessarily reflect demand in certain desirable and undesirable submarkets.

Go to Realtor.org for such market home sales data by state or to a local agent, business journal and daily newspaper you can read online. In 2016, the U.S. housing inventory average was under five months.

9. Sellers: House going on sale in the spring?

Do some prep work now. First, grab your camera or smartphone and do an exterior autumn photo shoot, with the leaves changing colors.

It’s a much better way to showcase your home than to wait until late winter when everything is still dead and brown and mucky. Also take some landscape shots after the first snow, ideally on a sunny day, to show how cozy your place looks in winter.

Take a preliminary inventory, too. Look through your attic, closets, basement and garage to see what stored items you’ll want to keep, give away or sell in the spring. This will help you determine whether you’ll need a storage unit when your home is on the market and if there are any problem areas that need repairs or attention.

It’s also a good time to start discussing financing options with a local lender and interview prospective listing agents who also might provide additional preparation tips.

10. Buyers: Relocating near a waterfront?

You’d best consider weather and insurance realities. Major hurricanes and floods of the past dozen years have pushed the National Flood Insurance Program into a $23 billion hole, forcing flood-insurance rates to spiral.

FEMA flood-map changes are aggressively expanding flood zones, especially along the East Coast and Gulf Coast, forcing hundreds of thousands of homeowners to buy flood insurance for the first time and others to pay thousands more annually.

Parts of Florida saw 20 percent increases in 2016 and will likely see similar hikes through the end of 2017. Insurers also are imposing coverage caps so there’s no guarantee you’ll be made whole post-catastrophe.

Some home sellers and their agents are conveniently not disclosing these realities, so buyers will have to ask pointed questions and do their own research. Go to FEMA.gov for more info.

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7 Smart Steps Every New Homeowner Should Take

TUTORIAL: How To Buy Your First Home

Don’t be one of those people; take a few moments to ponder these seven practical concerns that will help ensure that your first home becomes the place of luxury and financial freedom you’ve anticipated.

You’ve just handed over a large portion of your life savings for a down paymentclosing costs and moving expenses. Money is tight for most first-time homeowners – not only are their savings depleted, their monthly expenses are often higher as well, thanks to the new expenses that come with home ownership, such as water and trash bills, and extra insurance.

Everyone wants to personalize a new home and upgrade what may have been temporary apartment furniture for something nicer, but don’t go on a massive spending spree to improve everything all at once. Just as important as getting your first home is staying in it, and as nice as solid maple kitchen cabinets might be, they aren’t worth jeopardizing your new status as a homeowner. Give yourself time to adjust to the expenses of home ownership and rebuild your savings – the cabinets will still be waiting for you when you can more comfortably afford them. (For further reading, see To Rent Or Buy? The Financial Issues.)

2. Don’t Ignore Important Maintenance Items
One of the new expenses that accompanies home ownership is making repairs. There is no landlord to call if your roof is leaking or your toilet is clogged (on the plus side, there is also no rent increase notice taped to your door on a random Friday afternoon when you were looking forward to a nice weekend). While you should exercise restraint in purchasing the nonessentials, you shouldn’t neglect any problem that puts you in danger or could get worse over time, turning a relatively small problem into a much larger and costlier one. (For tips on how to spot problems with a potential home before you buy it, see Do You Need A Home Inspector?)

3. Hire Qualified Contractors
Don’t try to save money by making improvements and repairs yourself that you aren’t qualified to make. This may seem to contradict the first point slightly, but it really doesn’t. Your home is both the place where you live and an investment, and it deserves the same level of care and attention you would give to anything else you value highly. There’s nothing wrong with painting the walls yourself, but if there’s no wiring for an electric opener in your garage, don’t cut a hole in the wall and start playing with copper. Hiring professionals to do work you don’t know how to do is the best way to keep your home in top condition and avoid injuring – or even killing – yourself. (For tips on finding qualified workers, read The Better Business Bureau’s Tool Belt For Saving Cash. For home improvement projects most homeowners can tackle themselves, read Do-It-Yourself Projects To Boost Home Value.)

4. Get Help with Your Tax Return 
Even if you hate the thought of spending money on an accountant when you normally do your returns yourself, and even if you’re already feeling broke from buying that house, hiring an accountant to make sure you complete your return correctly and maximize your refund is a good idea. Home ownership significantly changes most people’s tax situations and the deductions they are eligible to claim. Just getting your taxes professionally done for one year can give you a template to use in future years if you want to continue doing your taxes yourself. (For more insight, see Crunch Numbers To Find The Ideal Accountant and Give Your Taxes Some Credit.)

5. Keep Receipts for Home Improvements
When you sell your home, you can use these costs to increase your home’s basis, which can help you to maximize your tax-free earnings on the sale of your home. In 2008, you could have earned up to $250,000 tax free from the sale of your home if it was your primary residence and you had lived there for at least two of five years before you sold it. This assumes that you owned the home alone – if you owned it jointly with a spouse, you could each have gotten the $250,000 exemption. (To learn more about how having a spouse can affect your tax return, read The Tax Benefits Of Having A Spouse and Happily Married? File Separately!)

Let’s say you purchased your home for $150,000 and were able to sell it for $450,000. You’ve also made $20,000 in home improvements over the years you’ve lived in the home. If you haven’t saved your receipts, your basis in the home, or the amount you originally paid for your investment, is $150,000. You take your $250,000 exemption on the proceeds and are left with $50,000 of taxable income on the sale of your home. However, if you saved all $20,000 of your receipts, your basis would be $170,000 and you would only pay taxes on $30,000. That’s a huge savings: in this case, it would be $5,000 if your marginal tax rate is 25%. (For more insight, see Is it true that you can sell your home and not pay capital gains tax?)

6. Don’t Confuse a Repair with an Improvement
Unfortunately, not all home expenses are treated equally for the purpose of determining your home’s basis. The IRS considers repairs to be part and parcel of home ownership -something that preserves the home’s original value, but does not enhance its value. This may not always seem true. For example, if you bought a foreclosure and had to fix a lot of broken stuff, the home is obviously worth more after you fix those items, but the IRS doesn’t care – you did get a discount on the purchase price because of those unmade repairs, after all. It’s only improvements, like replacing the roof or adding central air conditioning, which will help decrease your future tax bill when you sell your home.

For gray areas (like remodeling your bathroom because you had to bust open the wall to repair some old, failed plumbing), consult IRS Publication 530 and/or your accountant. And on a non-tax-related note, don’t trick yourself into thinking it’s OK to spend money on something because it’s a necessary “repair” when in truth it’s really a fun improvement. That isn’t good for your finances. (To find out which improvements can add the most value to your home, read Add Value To Real Estate Investments.)

7. Get Properly Insured
Your mortgage lender requires you not only to purchase homeowners insurance, but also to purchase enough to fully replace the property in the event of a total loss. But that’s not the only insurance coverage you need as a homeowner. If you share your home with anyone who relies on your income to help pay the mortgage, whether it’s a girlfriend or a child, you’ll need life insurance with that person named as a beneficiary so he or she won’t lose the house if you die unexpectedly. Similarly, you’ll want to have disability-income insurance to replace your income if you become so disabled that you can’t work. (For ideas on how to save money on your home insurance, read Insurance Tips For Homeowners.)

Also, once you own a home, you have more to lose in the event of a lawsuit, so you’ll want to make sure you have excellent car insurance coverage. If you are self-employed as a sole proprietor, you may want to consider forming a corporation for greater legal protection of your assets. You may also want to purchase an umbrella policy that picks up where your other policies leave off. If you are found at fault in a car accident with a judgment of $1 million against you and your car insurance only covers the first $250,000, an umbrella policy can pick up the rest of the slack. These policies are usually issued in the millions. (For more on car insurance, see Shopping For Car Insurance.)

Bottom Line
With the great freedom of owning your own home comes great responsibilities. You must manage your finances well enough to keep the home and maintain the home’s condition well enough to protect your investment and keep your family safe. Don’t let the excitement of being a new homeowner lead you to bad decisions or oversights that jeopardize your financial or physical security.

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20 Creative DIY Project Ideas

However, before you start cleaning your home, we want to show you 20 incredibly creative Do It Yourself projects that may change your mind. You’ll learn that a lot of useless items can be transformed into wonderful creations.

You can turn an old glove into a cute chipmunk toy, toilet paper rolls into a beautiful floral wall art, plastic bottle into a broom and many more.

We’ve been working on this list for a long time, but I’m sure there are many more awesome DIY ideas that we’ve missed. So if you know one or have done a cool DIY project yourself, feel free to share it in the comments!

1. Pop Tabs Bag

More info: here | Buy: here

2. DIY Windshield Rainbow

More info: here

3. DIY Spoon Lamp

More info: here

4. DIY Missioni Shoes

More info: here

5. Turn a Glove into a Chipmunk

More info: here

6. Dried Pineapple Flowers

More info: here

7. Rosy Stationery

More info: here

8. Maple Leaf Roses

More info: here

9. Easter Eggs

More info: here

10. Toilet Paper Roll Wall Art

More info: here

11. Lace Lamp

More info: here

12. Cherry Blossom Art from a Recycled Soda Bottle

More info: Alpha Mom

13. Recycled Bottle Broom

More info: here

14. Solar Bottle Bulb

More info: here

15. Plastic Spoon Rose

More info: here

16. Cutting Board Bird Feeder

More info: here

17. DIY TetraBox Lamp

More info: here

18. Lightbulb Bud Vase

More info: here

19. DIY Planter & Candle Holder

More info: here

20. DIY Clouds Night Light

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The Questions to Ask Before Hiring a Property Manager

Picture of Property Management Interview Questions
If you want to hire a property manager for your rental, the questions you ask during the interview are incredibly important. These questions will help you determine their actual skills and knowledge and whether they are the right fit for you and your rental property. The four areas you should focus on include their experience, their educational background, their knowledge of legal issues and their actual results as a property manager.

 Interview Questions About Property Managers Experience:

These types of questions will give you information about the property managers background. You will learn if their experience is the right fit for your needs as an investor.

  • How long have you been a property manager/management company?

 

 

  • Have you had experience dealing with *insert the type of property you own*?- If you own a 10 unit building and the manager has only had experience with single families, they may be too inexperienced for your specific needs.

 

  • How many properties are you currently managing?- You don’t want your property to get lost in the shuffle.

 

  • Do you have the time and resources to successfully add my property(ies) to your workload?

Interview Questions About Education:

Questions about college degrees and higher education learning are important, but your focus here is to learn about their education as a property manager.

You want to know if they have acquired the knowledge and training necessary to obtain the proper certification.

  • Do you have your real estate broker’s or property management license?– Most states require property managers to have a license so they can show apartments.

 

  • Do you have any type of certification?- Trade organizations such as IREM, NAA, NARPM and CAI offer education and training courses and provide certification after completion.

Interview Questions About Knowledge of Landlord-Tenant Law:

A property manager with an extensive knowledge of landlord tenant law is non-negotiable. Since they are representing you, any missteps could result in lawsuits against you and your property.

  • Do you understand the city, state and federal laws for property managementand dealing with tenants?

 

  • Do you know the steps to properly evict a tenant?

 

  • What are the safety codes for my type of property(ies)?- How many smoke detectors are needed? Do they have to be hard wired? Do you need window guards on second floor windows?

 

 

 

  • How to terminate a lease?

Interview Questions About Filling Vacancies/Retaining Tenants:

These questions will give you an idea if they are any good at their job. If the property manager has a high tenant turnover rate or a tough time filling vacancies, they are probably not the right person for the job.

  • How long does it take you to fill a vacancy?- If it takes them longer than a month, what are you paying them for? Are they available to show apartments seven days a week? At what times? Where do they advertise to find tenants?

 

  • What is the average length of tenancy?- If they get tenants to sign long leases and actually stay for the duration of the lease, this will cut down on costs to fill vacancies — including advertising costs, apartment turnover costs, and lost rent.

 

  • How many tenants have you evicted over the past year?- This can help you determine if they are properly screening tenants. What is their process for screening tenants?

 

  • How do you set the right rent for the property?– How many comparable properties do they look at? How often do they adjust the rent?

 

  • How do you collect rent each month?- Do they allow tenants to use direct deposit? Do they only accept money orders or certified checks? Is there a set day each month? Is there a grace period? Do they enforce late fees?
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Top 20 Questions to Ask Before Hiring a Property Manager

Questions to ask a Property Manager

It takes a talented and unique skill set to be a professional property manager. Not everyone is cut out for it, but this article will help you tell the amateurs from the pros.

Property management is a complicated, fast-paced business, but generally speaking, there are some of the traits I see in successful property managers

  • Pleasant, but firm
  • Communicative, but not aggressive
  • Detailed oriented, but not in the weeds
  • Organized, but not obsessive
  • Calm, but not seemingly apathetic
  • Truthful, but does not overshare
  • Is always learning, but is not arrogant
  • and lastly, is passionate about real estate investing

Obviously, there’s more to being a successful manager, but I’m going to stop there. You see, most of the managers I’ve met only possess half of these traits (at best), and as such, it causes the business to struggle.

I’m not saying that they need to be perfect (I’m sure not!), but there needs to be a pursuit for something bigger and something greater. Managers who push themselves professionally towards these traits are the ones that will be able to keep your rental property occupied, meticulously maintained, and your tenants happy.

A good property manager is worth his or her weight in gold.

So, how exactly do you find a quality property manager?

Simply put … just like any other job opening – you interview them of course!

 Top 20 Questions to Ask a Property Manager

Recently, the folks at Active Renter put together an in-depth guide to interviewing a property manager before you hire them. While I think 74 questions is a bit much (okay, way too much), the premise is solid.

With their permission, I’ve picked my top 20 questions to ask a property manager – which would still take 30 minutes or more to ask. In my opinion, these are the most important questions to ask a property manager that you are thinking about hiring.

1) What are the various services that you offer to your clients?

You want to make sure that you find a property management company that can market, lease, manage, and sell your property. It is also important to make sure that this company can provide top-notch maintenance, conduct inspections, and administer in-depth background checks.

2) How many rental units do you manage?

This will help you understand their size. Too few rental units and they are either inexperienced or have lost clients due to poor service. Too many rental units and you will get lost in the shuffle. Look for a property manager with 200 to 600 rental units. That’s when you’ve found your Goldilocks level of “just right.”

3) What experience does your company owner have in managing rentals?

Some company owners have never even managed a property. If the company owner has never managed a rental, what is the chance that he or she runs a company that can effectively help you with your investment property?

4) How do you determine rent amount?

A property manager should be able to complete a comparable market analysis of all the other available listings near your property. They should use properties that just went off the market and properties that are currently on the market to determine the highest possible rent. They should also have the expertise and experience needed to factor in the unique aspects of your rental property, like a pool or a new kitchen.

5) Are you currently an active real estate investor in your market?

The company’s leadership should be investing in the real estate market themselves. Period. If they don’t invest in your market then they lack the understanding they need to help you excel.

6) Under what conditions can I cancel my management contract?

Never get locked into a contract you can’t escape. Some companies will try to hold you captive with a contract and others will keep your business with great service. If a company is offering you an inescapable contract, it’s time to look elsewhere.

7) What are the management fees and/or pricing options when the property is being rented?

This question will help you understand your average monthly fee, if any. Some companies will offer a flat rate and others will offer a rate based on the rent amount. Others will offer 3 levels of pricing, which includes a lease only plan, standard plan, and a premium plan.

Again, you’re best off looking for a percentage of collected rents. This motivates your property manager to fill vacancies because they don’t get paid if you don’t have a tenant. It also motivates them to fight for higher rent amounts because this helps their bottom line too. Flat rate companies will get the same pay no matter what, so why would they be motivated to get you a higher rent?

8) Are their fees when the property has no tenants?

This is a very important question to ask for two reasons. One, many companies will offer a “flat rate,” which sounds great until your property is empty…and they still continue to charge you. If a company is taking money with the property empty, how motivated do you think they are to fill the vacancy?

9) What miscellaneous fees could I be charged for the management of my property?

Again, some companies will try to get you to sign because they offer a low rate. As the saying goes, if it is too good to be true, it probably is. Once you’ve signed, a company that seemed inexpensive will now charge you lots of extra fees. Remember, a property management company has to make money, so if they aren’t making money from the low monthly fee they will find another way to do it.

10) Do I have to sell my property with you if I want to list it?

Some property managers will ask you to sign a contract that forces you to sell the property with them. Don’t fall for this. A quality brokerage would never require this- but rather they would be available if you wanted to use their brokerage services.

11) Do you offer direct deposit for your owners?

Unless you’re living in Back to the Future and you’ve traveled to the 1800’s, your property manager should be able to deposit your check in your account. This saves you time and effort, which is the whole reason you hired them.

12) How do you collect rent from tenants?

Asking tenants to bring checks to an office is a lot like wearing acid washed jeans, it might have been okay in the 80’s, but the times have changed. If your property manager isn’t having your tenants pay online that is a red flag for two reasons. One, it slows down the speed at which you can get paid. Two, it makes it easier for tenants to miss paying the rent. If payment is online, tenants can automate their payment and these two problems are avoided.

13) Do you conduct property inspections and, if you do, what charge is associated with them?

Your property is at risk if your property manager doesn’t conduct inspections. This should require a small fee and it will be one of the best investments you can make. It ensures you catch problems before they spiral out of control.

14) Do you offer eviction warranty (also called a “screening guarantee”?

Some companies, such as ourselves, will offer eviction warranty. It is only a small fee, but it will give you major coverage should you need to evict a tenant.

15) What steps do you take to market properties?

Your property manager should be advertising properties through a variety of channels. If they are still just placing newspaper ads and hoping for the best then you should steer clear.

16) How long are your properties typically vacant?

The average vacancy time after a property is ready should be about 2-4 weeks. Any longer than this suggests the property manager is struggling to find tenants, any shorter than this suggests that your asking rent amount is too low and you might be leaving money on the table. Either of these scenarios is bad for you and your rental property.

17) What are your income and screening requirements for applicants?

If they don’t set a standard then how can they be sure this tenant will make rent? It should go without saying that a tenant needs to have enough income to pay the rent.

18) What control do I have over the tenant lease agreement?

Your property manager should give you some input into the lease agreement if there are one or two issues that are important to you. However, if you are putting in lots of additions, you should have just written it yourself. Make sure your prospective property manager is confident in the leases that they have written for tenants by asking this question.

19) Do you mark-up maintenance and repairs?

You need to make sure that a prospective property management company doesn’t make a profit any time they do maintenance. If they are willing to charge you for maintenance then your profits could greatly diminish.

20) How often will I get updates on my portfolio?

Just like payment statements, you should be able to get updates on your portfolio as often as you need them. Your properties are your business and to not offer updates as often as you want would be the equivalent of telling your property manager that they can’t check their email for a week. It is a situation that would guarantee failure.

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3 SUMMER HOME IMPROVEMENT PROJECT IDEAS YOU’LL LOVE

Nearly 60 percent of homeowners plan home improvement projects during the summer months, and for good reason: warm weather and longer daylight hours are a great opportunity to get outside and pull up your sleeves. Here are three great project ideas to consider this summer:

A New Porch or Patio

New porches and patios are a great home addition that will significantly add value to your home should you choose to eventually put it on the market. In the meantime, outdoor games, barbecues, and family events will be so much more enjoyable on a beautiful new porch.

Outdoor Spaces

Outdoor spaces with kitchens and custom wood-fire pizza ovens are one of our favorite new home improvement trends. With covered spaces and surrounding masonry, your reworked outdoor area might just be your new favorite spot on those cool summer evenings.

Improve Your Windows

Every home has dim and dark corners and rooms. Taking advantage of the balmy weather and opening up a section of your house for new, big windows can be a beautiful way to increase sun exposure and bring a little more light into your home.

Home improvement projects can be a fun way to spend the summer months, but only a professional construction company can provide a finished product that will impress your friends and neighbors. To get more project ideas, check out our Houzz profile or our projects page for a little inspiration. When you’re ready to sit down and discuss your remodel or home addition plans, give Vertical Construction Group a call.

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How Your House Can Help Pay For Retirement

The baby boomer generation is facing a retirement income shortfall. This is no surprise if you take a look at how much money the average retiree has saved for retirement. According to U.S. census data, the average 65-year-old couple has about $100,000 saved for retirement. Applying the 4% withdrawal rule to this $100,000 of savings, the couple could only generate $4,000 a year safely over the course of their retirement. Well, $4,000 a year is not going to cut it. While this couple hopefully has Social Security, which will provide the majority of retiree income, they will likely need more income. This leaves the couple with two choices: continue to work or use their largest asset – their home.

Tapping into home equity to support retirement is easier said than done. One reason is because retirees still need a place to live, so it is hard to completely cash out of the home and tap into all the home equity. Additionally, many people have a strong sentimental attachment to the home that keeps them from being willing to let go of ownership, move, or strategically tap into their equity to support their retirement lifestyle. But Americans need to fundamentally change their behavior if they want a more secure financial future, as the average retiring American has roughly twice as much value in home equity ($200,000) as they do in their other savings.

So how can a retiree effectively use their home equity? According to Shelley Giordano, the Chair of the Funding Longevity Task Force, a coalition of retirement and housing thought-leaders, “more retirees could benefit from accessing home equity strategically through the use of a reverse mortgage.” Furthermore, Shelley notes that many of the negative perceptions that people have about reverse mortgages no longer hold true, as the program has been significantly overhauled in the last five years. For instance, according to a recent American College of Financial Services survey, most Americans believe you give up ownership of your home if you enter into a reverse mortgage. However, the opposite is true; you maintain ownership of the home just like you do with any other mortgage. The home is used as the collateral for any money you borrow, just like with a traditional mortgage. The one big difference between a traditional forward mortgage and a reverse mortgage is that you do not have to make monthly mortgage payments, but instead can let the debt grow until you die or move out of the house. Furthermore, you cannot owe more than the value of your home, even if the debt surpasses your home value.

A reverse mortgage can be effectively used in a number of strategic ways. First, a reverse mortgage can be used to help pay for unexpected expenses. For example, if the roof starts to leak and the homeowner needs to make a repair, a reverse mortgage might be appropriate. It would also be appropriate to look at a home equity line of credit at that time and do a comparison. Second, a reverse mortgage can be used to create a monthly flow of income for as long as the person lives in the home, basically annuitizing the home value over the course of retirement. Third, a reverse mortgage can be used as a non-market correlated asset. By setting up a reverse mortgage line of credit, a homeowner could take withdrawals from home equity to offset bad market years. For example, everyone knows that in 2008 when the market crashed, the last thing a retiree wanted to do was sell their stock investments to meet their income needs. Instead, borrow from your home after bad market years. Research from financial planning renowned experts like Dr. John Salter, Dr. Barry Sacks, and Dr. Wade Pfau, has shown that this strategy can significantly improve the longevity of a retiree’s portfolio. A fourth strategy is to flip an existing traditional mortgage to a reverse mortgage at retirement. This can help free up cash flow for the retiree by removing the requirement that monthly mortgage payments be made. However, a retiree can continue to make the same payments on the reverse mortgage that they were making on the traditional mortgage. But if you have a tough month, you can choose not to make that monthly payment with no threat of missed payments or default. It really can add flexibility to the retiree’s situation.

Reverse mortgages can be an effective tool for some retirees, but they are not for everyone. Other people might benefit more from downsizing. By selling the home and moving into a smaller or less expensive home, the retiree could cut housing costs by being in a smaller home or free up equity by buying a less expensive home. Both options can work for a retiree who is willing to relocate. However, most retirees show a strong desire to age in place in their current home throughout retirement. This means many people are just unwilling to relocate in retirement, and this desire to age in place only grows as the individual ages. The older a retiree is, the less likely it is that they will want to willingly relocate.

Downsizing and reverse mortgages are not mutually exclusive according to Alex Pistone, President of Retirement Funding Solutions. “A reverse mortgage can actually be used to purchase a home in retirement. This is a relatively new feature of the program, where a 62+ homebuyer makes a 30%-50% down payment and never has to make a mortgage payment again.” By using a HECM for purchase, the homeowner can relocate to a smaller home, free up some equity, and still turn off the monthly outflow of mortgage payments.

While there is no one housing strategy that works for every retiree, more attention needs to be paid to home equity as a potential retirement income source. Retirees need more money, but they are ignoring their largest asset. On its face, that should strike you as a misstep. That does not mean you need to use a reverse mortgage, downsize, or set up a line of credit, but you should consider the strategic financial potential of your home. For some, the risks and costs associated with borrowing from the home might feel like too much to handle. For others, the home might be their legacy asset they want to leave to their children. Even further, many want to leave their home to help cover long-term care costs at the end of life. All of those are legitimate strategies where the home is being strategically used. So if you do own your home, make sure you think about all the value you have saved in it over the years and how you want to use that value.

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10 Reasons to Hire a Property Manager

hire a property manager

If you’ve owned income property for any length of time, you know that managing a rental can be financially rewarding. At the same time, you’ve also likely discovered that property management requires a large commitment of time and effort.

While it may make sense to take the do-it-yourself approach if you’re a handy person, live close to your property, and don’t mind devoting several hours per month to the task, in many cases this just isn’t practical—especially if you hope to expand your business. With this in mind, here are some critical tasks a property manager can help you with:

Setting the right rental rates: While looking through the classifieds to see what other landlords are charging for similar properties is a fine way to ballpark your rent price, a good property management company will conduct a thorough market study in order to set a rental price for your property, ensuring that you achieve the perfect balance between maximizing monthly income and maintaining a low vacancy rate.

Collecting and depositing monthly rent payments on time: If you’ve ever worked in a billing department, you know that securing payment from clients can be difficult, not to mention awkward. Property management companies have efficient, tried-and-true systems in place to effectively collect rent and maintain on-time payments. You’ll find this particularly important if you have a limited number of properties, and collecting payments on time is crucial to maintaining your cash flow.

Marketing and advertising your property: Through long experience, a property manager will know exactly where to market your property and how to craft compelling advertising materials—a significant advantage when it comes to filling your properties quickly and avoiding long vacancies.

Finding the right tenants: Experienced property managers are experts at finding good tenants, and will take care of all the details, including the securing all criminal background and security checks, running credit reports, verifying employment, and collecting previous landlord references.

Managing tenants: In addition to finding good tenants, a property management company will manage all aspects of the tenant-landlord relationship. The property manager will handle both routine and emergency maintenance, take care of routine inspections, and manage any situations where conflict resolution is required.

Managing vendor relationships: Property management companies have relationships with maintenance workers, tradesmen, contractors, suppliers, and vendors that it’s almost impossible for an independent landlord to duplicate. Not only will your property manager get you the best work for the best price, they’ll oversee any necessary maintenance projects.

Ensuring that you’re in compliance with housing regulations and property laws: There is a multitude of applicable laws and regulations to abide by when renting and maintaining your rental property. These include local, state and federal regulations, as well as fair housing regulations (such as the ADA). A property manager can help you avoid lawsuits by keeping your property up-to-date and in compliance with these regulations.

Enabling you to invest in geographically distant properties: If you manage your own properties, you’re pretty much limited to investment opportunities within a tight radius of your own home. By hiring a property manager, you can take advantage of investment deals in any location you wish.

Maximizing the profitability of your time: By having a property manager take care of the day-to-day aspects of running your income property, your free to spend your time identifying further investment opportunities or otherwise furthering your career.

Maximizing the profitability of your money: Most property managers charge a percentage of your property’s monthly rental rate in exchange for their services. The rate typically runs anywhere from 6-10%, which is generally less than the money you save by hiring a professional to take care of your property.

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Even before handing over to a property management company in hawaii. Turning the key in a lock that no landlord has access to, reading in a hammock in your own backyard and painting your dining room bright red – what could be more exciting than making the leap from renter to first-time homeowner? Getting swept up in all the excitement is a wonderful feeling, but some first-time homeowners lose their heads and make mistakes that can jeopardize everything they’ve worked so hard to earn.

Don’t be one of those people; take a few moments to ponder these seven practical concerns that will help ensure that your first home becomes the place of luxury and financial freedom you’ve anticipated.

1. Don’t Overspend on Furniture and Remodeling
You’ve just handed over a large portion of your life savings for a down payment, closing costs and moving expenses. Money is tight for most first-time homeowners – not only are their savings depleted, their monthly expenses are often higher as well, thanks to the new expenses that come with home ownership, such as water and trash bills, and extra insurance.

Everyone wants to personalize a new home and upgrade what may have been temporary apartment furniture for something nicer, but don’t go on a massive spending spree to improve everything all at once. Just as important as getting your first home is staying in it, and as nice as solid maple kitchen cabinets might be, they aren’t worth jeopardizing your new status as a homeowner. Give yourself time to adjust to the expenses of home ownership and rebuild your savings – the cabinets will still be waiting for you when you can more comfortably afford them. (For further reading, see To Rent Or Buy? The Financial Issues.)

2. Don’t Ignore Important Maintenance Items
One of the new expenses that accompanies home ownership is making repairs. There is no landlord to call if your roof is leaking or your toilet is clogged (on the plus side, there is also no rent increase notice taped to your door on a random Friday afternoon when you were looking forward to a nice weekend). While you should exercise restraint in purchasing the nonessentials, you shouldn’t neglect any problem that puts you in danger or could get worse over time, turning a relatively small problem into a much larger and costlier one. (For tips on how to spot problems with a potential home before you buy it, see Do You Need A Home Inspector?)

3. Hire Qualified Contractors
Don’t try to save money by making improvements and repairs yourself that you aren’t qualified to make. This may seem to contradict the first point slightly, but it really doesn’t. Your home is both the place where you live and an investment, and it deserves the same level of care and attention you would give to anything else you value highly. There’s nothing wrong with painting the walls yourself, but if there’s no wiring for an electric opener in your garage, don’t cut a hole in the wall and start playing with copper. Hiring professionals to do work you don’t know how to do is the best way to keep your home in top condition and avoid injuring – or even killing – yourself. (For tips on finding qualified workers, read The Better Business Bureau’s Tool Belt For Saving Cash. For home improvement projects most homeowners can tackle themselves, read Do-It-Yourself Projects To Boost Home Value.)

4. Get Help with Your Tax Return
Even if you hate the thought of spending money on an accountant when you normally do your returns yourself, and even if you’re already feeling broke from buying that house, hiring an accountant to make sure you complete your return correctly and maximize your refund is a good idea. Home ownership significantly changes most people’s tax situations and the deductions they are eligible to claim. Just getting your taxes professionally done for one year can give you a template to use in future years if you want to continue doing your taxes yourself. (For more insight, see Crunch Numbers To Find The Ideal Accountant and Give Your Taxes Some Credit.)

5. Keep Receipts for Home Improvements
When you sell your home, you can use these costs to increase your home’s basis, which can help you to maximize your tax-free earnings on the sale of your home. In 2008, you could have earned up to $250,000 tax free from the sale of your home if it was your primary residence and you had lived there for at least two of five years before you sold it. This assumes that you owned the home alone – if you owned it jointly with a spouse, you could each have gotten the $250,000 exemption. (To learn more about how having a spouse can affect your tax return, read The Tax Benefits Of Having A Spouse and Happily Married? File Separately!)

Let’s say you purchased your home for $150,000 and were able to sell it for $450,000. You’ve also made $20,000 in home improvements over the years you’ve lived in the home. If you haven’t saved your receipts, your basis in the home, or the amount you originally paid for your investment, is $150,000. You take your $250,000 exemption on the proceeds and are left with $50,000 of taxable income on the sale of your home. However, if you saved all $20,000 of your receipts, your basis would be $170,000 and you would only pay taxes on $30,000. That’s a huge savings: in this case, it would be $5,000 if your marginal tax rate is 25%. (For more insight, see Is it true that you can sell your home and not pay capital gains tax?)

6. Don’t Confuse a Repair with an Improvement
Unfortunately, not all home expenses are treated equally for the purpose of determining your home’s basis. The IRS considers repairs to be part and parcel of home ownership -something that preserves the home’s original value, but does not enhance its value. This may not always seem true. For example, if you bought a foreclosure and had to fix a lot of broken stuff, the home is obviously worth more after you fix those items, but the IRS doesn’t care – you did get a discount on the purchase price because of those unmade repairs, after all. It’s only improvements, like replacing the roof or adding central air conditioning, which will help decrease your future tax bill when you sell your home.

For gray areas (like remodeling your bathroom because you had to bust open the wall to repair some old, failed plumbing), consult IRS Publication 530 and/or your accountant. And on a non-tax-related note, don’t trick yourself into thinking it’s OK to spend money on something because it’s a necessary “repair” when in truth it’s really a fun improvement. That isn’t good for your finances. (To find out which improvements can add the most value to your home, read Add Value To Real Estate Investments.)

7. Get Properly Insured
Your mortgage lender requires you not only to purchase homeowners insurance, but also to purchase enough to fully replace the property in the event of a total loss. But that’s not the only insurance coverage you need as a homeowner. If you share your home with anyone who relies on your income to help pay the mortgage, whether it’s a girlfriend or a child, you’ll need life insurance with that person named as a beneficiary so he or she won’t lose the house if you die unexpectedly. Similarly, you’ll want to have disability-income insurance to replace your income if you become so disabled that you can’t work. (For ideas on how to save money on your home insurance, read Insurance Tips For Homeowners.)

Also, once you own a home, you have more to lose in the event of a lawsuit, so you’ll want to make sure you have excellent car insurance coverage. If you are self-employed as a sole proprietor, you may want to consider forming a corporation for greater legal protection of your assets. You may also want to purchase an umbrella policy that picks up where your other policies leave off. If you are found at fault in a car accident with a judgment of $1 million against you and your car insurance only covers the first $250,000, an umbrella policy can pick up the rest of the slack. These policies are usually issued in the millions. (For more on car insurance, see Shopping For Car Insurance.)

Bottom Line
With the great freedom of owning your own home comes great responsibilities. You must manage your finances well enough to keep the home and maintain the home’s condition well enough to protect your investment and keep your family safe. Don’t let the excitement of being a new homeowner lead you to bad decisions or oversights that jeopardize your financial or physical security.