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6 Apartment Upgrades That Landlords Hate

When you move into a place, it’s normal to want to make it your own, by hanging pictures or even painting an accent wall cherry red. But when you’re renting, you’d best remember: Any changes you make may be reversed by your landlord once you move out and with your money. That’s why renters have to walk a fine line between making themselves feel at home and making changes that will cost them their security deposit.

“If you decide to paint the walls while you are there, you must return them to their original color or the landlord is within their rights to use the deposit to pay for it themselves,” says Trent Zachmann of Renters Warehouse. He explains that many landlords treat modifications or improvements and accidental damages the same when it comes to taking money from your security deposit. “An owner can withhold all or part of the deposit to correct either type of issue,” he says.

But all is not lost: Sometimes modifications can be made with the owner’s approval. Just make sure you’re 100% clear about the stipulations of your lease before you pick up a paintbrush or hammer. Straight from the mouths of landlords, here’s a list of upgrades tenants have attempted that they hate—and will use your security deposit to fix.

1. Painting

This is the No. 1 alteration that landlords complain about.

Annmarie Bhola, a landlord in New York City, understands that, for first-time renters especially, there’s an excitement with moving into a new home. And, to many, that means breaking out the paint.

“To feel at home, a fresh coat of personality-defining color is the icing on the cake,” she says. “That’s all cool, but know that if you paint the walls hot pink, it will be coming out of the security deposit! That was one of the most memorable colors I’ve had to repaint.”

Atlanta landlord Bruce Ailion describes creative painting projects as his biggest headache.

“You would think a tenant would pick a neutral color and have a professional paint,” he laments. “Instead they paint purple or black, get paint on the ceiling, on the trim, on the door knobs and outlets. Some will paint around the bed and pictures. It’s a mess.”

2. Hanging pictures

After repainting, filling in holes in drywall is one of the most common issues landlords have to deal with after a tenant moves out.

“Everyone likes to put up pictures, and fortunately new technologies have brought about alternative, less destructive hanging methods, which is great,” says Bhola. So then why don’t more people think to use Command strips instead of nails? “Nine out of 10 times, I always have to fill in the holes and bust out the spare bucket of paint.”

3. Installing window treatments

We know: Those white plastic vertical blinds are so ugly. Your impulse to put up a curtain rod or Roman shades is completely normal. But the holes you have to drill into the wall to mount the window treatments, like those for your pictures, will require patching once you move out. Landlords fume every time they see big screw marks around the window frame.

“Repairing the holes ends up being expensive and time-consuming,” says Zachmann. If you must hang curtains, use large Command hooks that adhere to the wall and don’t leave any stickiness behind.

4. Mounting a TV

What’s worse than hammering nails into the drywall to hang pictures or curtains? Drilling holes in the wall to mount your flat-screen TV.

“The screws have to go directly into the center of studs,” says Brian Davis, director of education at real estate service company SparkRental. “At best, the renter will have screwed 10 to 20 holes into the wall. At worst, the TV will crash to the floor [because it wasn’t mounted correctly], possibly injure someone, shatter the TV, and take a chunk of the wall down with it.” He recommends that renters use a TV stand.

5. Gardening

You would think that planting a few tulips would delight a landlord. But that’s not necessarily the case.

“As a landlord, I want the most maintenance-free rental as possible,” says Atlanta-area property owner and real estate writer Laura Agadoni. “In some cases, I pay for a landscaping service, but I would not want to keep up a garden.”

So, don’t make any changes to the landscaping without the landlord’s written permission. And if you do, don’t be surprised if your security deposit is used to  return the yard to its previous state.

6. Updating appliances

If you’re not a fan of that noisy old refrigerator in your rental, it’s perfectly fine to swap it out with a new one of your own so long as you talk it over with your landlord first, and then reconnect the old one after you move out.

“What’s never acceptable is swapping out an appliance, throwing the old one away, and then taking the new one with you when you move out, leaving a gaping hole where there was once an appliance,” says Davis.

So if there’s something you’d like to update, just ask your landlord about it first. You never know.

“What some landlords will allow may be different than what other landlords allow,” says New York City broker Eric D. Rosen. “In some cases, it might even be possible that a landlord will share the cost.”

7 High-Impact Home Improvement Projects You Can Do for $10K or Less

You don’t have to spend a lot to make these valuable home improvements.

With so much emphasis on buying and selling homes — the truth is that for most of your life as a real estate consumer, you’ll be a homeowner. And because your home is so much more than a transaction, spending some portion of your time, energy, and money improving your home makes sense.

Many homeowners waituntil saving up tens or hundreds of thousands of dollars in equity to make a major change to their home. And that means they almost never do the project, or do it only when it’s time to sell. If you’re planning to stay put in your home for a while, home improvement projects will drive even more return on your home investment.

7 home improvement projects for $10,000 or less

  1. Crank up the curb appeal

    Enhancing curb appeal is one of the most cost-effective home improvement projects. There’s just something about loving the way your home looks when you drive up to it day after day that dramatically increases your enjoyment of home.

    Depending on which projects you choose and whether you do the work yourself, you can crank up your curb appeal for a few hundred dollars or a few thousand. Some curb appeal ideas to consider include painting or power wash your home’s exterior, painting or installing a new garage door, front door or exterior trim work, exterior or landscape lighting, or a simple front yard landscaping spruce-up.

  2. Get rid of a wall

    The number one remodel fantasy of homeowners-to-be: knocking down a wall.

    In fact, removing walls, even structural walls, is highly feasible and much less expensive than many homeowners assume. (If a load-bearing wall is removed, the structural component can often be preserved and finished by simply leaving a beam at the ceiling.) What can jack up the price is the relocation of plumbing or wiring contained in the wall being removed.

    Reconnecting interruptions in flooring and adding features like an island also increase expenses. Check with a reputable contractor to find out how such a project can be planned and executed efficiently.

  3. Swap out old windows for new, dual-paned windows

    Replacing old, single-paned windows for new dual-paned windows might make your home look better, but it will definitely make your home operate more efficiently — and more comfortably. They’re also a must if you have street noise or other noise challenges around your home; the extra insulation traps noise before it can get to you.

    As with everything, costs vary by location and by the quality of window you choose, but you can use $200 to $300 per window, installed, as a rough rule of thumb.

  4. Build an outdoor kitchen

    The National Outdoor Kitchen and Fireplace Association pegs the average cost of an outdoor kitchen at $12,000 to $15,000 on average — but if you can cut costs, find appliances on sale, or do some of the work yourself, you might just be able to get one in your own backyard for the $10,000 price point. Outdoor kitchens can be as simple as a table and grill, or as complex as wood-burning ovens, refrigerators, and big-screen TVs.

  5. Buy new kitchen appliances

    In terms of sheer functionality, new kitchen appliances can create an upgrade to your family’s everyday life. A new fridge will run you anywhere from $350 to $2,000 on average, a new stove/oven range can run anywhere from $300 to $6,000, and a dishwasher will cost you somewhere around $250 to $1,600.

  6. Swap out your carpet

    If you have $10K to spend and you can’t stand your carpet, you can estimate that it’ll run you about $300 to $500 per room to replace it with new carpet, or $1,500 to $2,000 per room to replace it with hardwood, depending on where you live, how large your rooms are, and what specific materials you choose.

  7. Build in organizing systems

    One of the most significant advantages to owning your home is that you can customize it to manage your stuff and your activities, rather than being forced to fit your things into someone else’s system. If you have $10K in hand to make your home more “you,” consider having custom organizing systems built into your closet, office, pantry, or garage, tailored to your family’s stuff and needs.

Courtesy of trulia.com.

4 Real Estate Trends for 2017 Investors Should Be Aware Of

Photo credit: ImageFlow / shutterstock.com

Real estate investing carries a certain degree of risk, but it also has the potential to be very rewarding. One factor that may contribute to your success as a property investor is the ability to adapt when necessary. Staying abreast of the latest developments and trends in the commercial and residential markets is important if you want to stay ahead of the curve. As 2017 looms on the horizon, here are the most significant trends that may impact real estate investors in the near future.

1. Drone Technology Takes Off

Earlier this year the Federal Aviation Administration (FAA) approved the use of drones in commercial activity. For real estate agents, that opens the door to new possibilities in terms of how they show available properties. That also expands the scope of how investors are able to vet homes, office buildings or other potential investments.

A drone video feed could allow you to view a property from every possible angle without having to see it in person. You can check for any possible defects in the structure that are visible to the naked eye before moving on to a more in-depth inspection. That could save you time and money in the long run if the drone video exposes a serious flaw. (For more, see Delivery by Drone: New Rules for Flights.)

2. Global Economic Growth May Be Muted

In terms of the worldwide economic forecast, the global economy is expected to grow by 3.4% in 2017, according to the International Monetary Fund (IMF). While that’s an increase over the 3.1% growth rate for 2016, it still represents a slight downgrade of the IMF’s original forecast. That was triggered by a dampening of the economic outlook in the wake of the U.K. Brexit and a U.S. economy that didn’t grow as quickly as initially expected. (For more, see Brexit’s Effect on the Market.)

While global markets were shaken after the recent presidential election, they’ve more or less rebounded. However, now that the Federal Reserve has raised interest rates by 0.25%, the second increase in a decade, there may be a dampening effect on stocks. Taken together, those factors could work to quell the real estate market to a degree, as well. Investors may need to consider how foreign markets may be affected by a global slowdown and what that could mean for U.S. real estate.

3. New Home Construction Will Regain Steam

After a period of slowdown, 2017 looks like it may be the year that housing starts begin to climb once again. Kiplinger’s predicts that single-family-housing starts will rise 11% in 2017, up from the 9% increase estimated for 2016. With inventory 4.3% lower than it was a year ago and home prices continuing to rise, there’s an opportunity for builders to fill the gap in demand.

Commercial construction is also expected to see some positive growth in the new year. According to Dodge Data & Analytics, U.S. construction starts will grow by 5% for 2017, totaling $713 billion. That’s an improvement over the 1% increase in commercial construction reported for 2016, although it falls short of the 11% gain reported in 2015. While the increases on both the residential and commercial sides are modest, they’re still a positive for investors whose focus is on ground-up properties.

4. Optionality Will Reshape the Way Properties Are Used

The sharing economy has had an impact on the way people work, vacation or simply catch a cab, and it’s also leaving its imprint on the real estate market. According to the Urban Land Institute (ULI), optionality is adding a new dimension to the way that property investors – and their tenants – define the use for a particular space.

Co-living is perhaps the most visible example of this phenomenon. Companies such as Common, WeLive and Commonspace are putting a new spin on apartment living by offering units that combine private living space with communal areas for cooking, dining and socializing. A 2017 forecast for the U.S. and Canada done by ULI and PWC features optionality front and center as developers seek to identify the best use for investment properties. (For more, see Is Cohousing Right for You?)

The Bottom Line

These are just some of the things set to influence commercial and residential real estate in 2017, and they may afffect some investors more than others. As the new year gets underway, reviewing your property investments while analyzing your goals for the next 12 months is a wise move. Understanding what trends are poised to take off can make it easier to spot potentially valuable investment opportunities going forward.

Post courtesy of Investopedia.com

How To Prep Your Bank Account To Buy A Home In 2017

Getting your finances in order can help you buy a home in the new year.

This is it: 2017 is the year you will finally buy a home! But even once you’ve made the ultimate decision to make the leap into homeownership, your hard work is far from complete. Buying a home is a big commitment and costs a lot of money — and getting the mortgage you want at the best interest rate possible is enough to stress anyone out. Organizing your financial house, so to speak, can help reduce that stress and set you up for home-buying success.

Whether you’re eyeballing a home for sale in Jacksonville, FL, or a humble abode in Phoenix, AZ, you can take action to prep your bank account and savings to be ready to buy a home in 2017. So, if your goal is to nab the keys to a brand-new place, these six steps will help you get organized, stay on track, and fund your dreams.

1. Set a specific goal

It’s hard to make a plan of action if you don’t know where you want to go. Look at how much it will cost you to buy a home in 2017. What amount of money do you need to save for that down payment? Your best option is to save at least 20% of a home’s purchase price. This allows you to get better options when it comes to mortgages and interest rates, and it means you avoid the extra cost of PMI (private mortgage insurance).

Once you have the specific target number in mind, you can break it down by month. If you want to save a total of $20,000 before you buy, for example, you need to put away about $1,667 per month to meet your goal at year’s end.

2. Designate a savings account just for your down payment fund

You can stay organized by putting the money you save for this specific purpose into its own savings account. Online banks like Ally or CapitalOne360 offer great options, because they allow you to have multiple accounts that you can designate for specific goals. (CapitalOne360 allows up to 30 accounts without a fee!)

Online banks also tend to offer higher interest rates in the current low-rate environment than traditional, brick-and-mortar banks. But that’s not a hard-and-fast rule. Shop around and look for a bank (or credit union) that offers the best savings account option, with the best interest rate — and don’t settle for an account that charges you fees. There are too many no-fee options available.

3. Create an automatic transfer

You have your specific goal and now you know where you’ll put that money while you save. The next step: Set up an automatic transfer from your checking to that designated savings account. Setting up an automatic transfer is a great way of “paying yourself first.” You prioritize your savings by moving it into the designated account first. This means you won’t be tempted to spend that money like you might if it sat in your checking account for a while before you made the conscious decision, month after month, to transfer it to savings.

It also means you’ll make progress toward your savings goal even if you forget about it one month (or two). An automatic transfer means you won’t fall short of your goal at the end of the year simply because you forgot to move the money to the right savings account.

4. Revise your budget to cut costs

Depending on how much you want to save for a down payment, you may need to move a lot of money from checking to savings each month. This can severely limit your cash flow and leave you short in other areas of your budget. To prevent this, review your budget with your monthly savings goal in mind. Where can you cut costs so you can afford to save this much per month? Start by looking at your discretionary income. You don’t need to eliminate everything, but could you cut back on how much you spend to eat meals out, for example?

Don’t forget to evaluate your bills and living expenses too. While you may not be able to cut these costs entirely, you can take action to reduce them. Call providers and ask about discounts or lower-priced options. Every little bit of expense you can eliminate makes it that much easier to add to your savings so you can stay on target.

5. Allocate extra funds to your home-buying goal

In addition to freeing up money from current costs in your budget, you can allocate any extra money you make to your down payment fund. This can accelerate your progress toward your ultimate savings goal — and even help you exceed it. Put any kind of windfall toward your designated savings account. This could include overtime pay, quarterly or annual bonuses from work, or extra money you make on the side (but be sure to set aside funds to cover taxes on your added income). Allocate at least half of cash gifts to savings too.

6. Resist making massive transfers before you apply for a mortgage

You’ve worked hard to save up the money you need to buy a home in 2017. You know your home-buying budget, you’ve identified a lender, and you’re ready to apply for a mortgage. Now is not the time to do anything drastic with any of your bank accounts. Remember, when you apply for a home loan, the lender will carefully scrutinize all of your financial activity. You’ll need to explain the source of any large transfers and provide documentation for proof.

Talk to your lender about what kind of funds they’ll approve and what cash they won’t allow you to use toward a down payment. Ask what documentation or proof you need for different kinds of transfers. Doing so now will help you prepare to buy a home in 2017 and secure the mortgage you need to help you reach your goal.

 

Post courtesy of trulia.com

5 Entryway Essentials to Welcome People Into Your Home—and 3 Eyesores

Photo credit: moodboard/Getty Images 

Your home’s entrance, or foyer, isn’t just a path into your house. It’s a space that should draw you into your home as soon as you open the door. It should also be inviting to all your guests and (if you’re trying to sell your home) prospective buyers who visit.

“Just like we like to be greeted with eye contact, a warm smile, and a firm handshake, an entryway should greet someone and make them feel welcome,” says Larina Kase, an interior designer and home stager in the Philadelphia area. All too often, she says, people ignore the entryway and concentrate on a home’s larger spaces. That’s a mistake.

“The entryway gets neglected because it isn’t necessary in the same way that a living room sofa is,” Kase says. “But it’s actually one of the simplest and least expensive areas to decorate to get the biggest impact.”

So what are some simple ways to make your entryway more inviting? Try adding these five items, and eliminating much else.

A mirror

No entryway is complete without a mirror, says Jack Menashe of New York–based Menashe Design.

“Every entryway needs a spectacular mirror, especially in small spaces,” he says. “It makes them optically larger and adds depth. Plus, who doesn’t want to check themselves out before they leave the house?”

A lamp or light

Another necessity for entryways is a lamp. You’ll need to be able to see even when you turn off the house lights to leave, and when you come back, a small lamp will offer a welcoming glow.

Ideally the lamp should have adjustable settings—bright for day, low for night. If your entryway has a hanging light, make sure the bottom of the fixture clears people’s heads by 18 inches, or it could feel claustrophobic.

Flowers

Fresh flowers add that extra touch of natural beauty that can turn an otherwise humdrum entrance into a tiny oasis. Try an orchid, potted plant, or vase of cut blooms.

A bench or seat

After all, if you need a place to take off your shoes, you’ll need to sit down, right? A bench that has storage underneath the seat can do double duty. If you want a pop of color, throw on a bright pillow.

A bowl for keys and change

Meridith Baer, owner of Meridith Baer Home in Los Angeles, says no entryway is complete without a pretty bowl for keys and change. For one, it keeps messes contained. But if you’re trying to sell your home, it also entices buyers to envision living there.

“That way, whoever walks in will see themselves there, hopefully putting their own keys and glasses in the bowl,” she says.

 

Last but not least, here are few things to avoid putting in your entryway. We know it’s hard, but they really do start things off on the wrong foot, so to speak:

Stacks of mail

We know it’s tempting to dump your junk mail as soon as you set foot indoors. But let’s get real, stacks of mail or paperwork are an absolute downer, particularly if you’re trying to sell your home. As Baer points out, “People want to see a new lifestyle, not be reminded of the one they’re looking to move from.”

An overloaded coat rack

We know it’s easy to keep your coats by the door, but at the very least try to keep it to just the few things you wear—and no more. Stash anything you don’t wear regularly in a nearby closet.

Oversize furniture

“Cluttering the entryway with an oversize console table and other furniture can be the biggest mistake,” says Menashe. “Try to keep the foyer area clean and open with lots of light to create a feeling of spaciousness and openness.”

Post courtesy of realtor.com

10 Simple Ways to Increase the Value of Your Home or Investment Property

Photo: shutterstock.com

It is often asked if it is “too late” to buy real estate. After all, prices have climbed dramatically over the past several years, and many homeowners and investors are worried that they’ve missed their chance.

My answer is always the same: No, it’s not too late.

However, today, unlike the past, when almost every property was a good deal for buyers, you have to hunt for (and buy) only the best. And one specific way to do that is to purchase a property and increase the value significantly. That way, if home values do drop, you’ll avoid being “underwater.”

But how do you add value on a piece of real estate without spending tens of thousands of dollars? While there are potentially hundreds of techniques, here are my favorite ten methods for helping the value of your properties to increase.

1. Don’t buy stupidly.

While this first item technically does not require you to do anything special to the property, it is nevertheless the most important step in building quick value. If I buy a home for $20,000 less than it’s worth, I’ve forced an appreciation of $20,000. While I don’t need to go into detail explaining exact methods, just know that your profit is made when you buy, not when you sell.

2. Try out the ‘Ikea bedroom miracle.’

One of my favorite ways to quickly improve a property is to simply turn a “bonus room” into a bedroom. The best transformation involves turning a two-bedroom home into a three-bedroom one. Oftentimes. this can be accomplished for the price of an Ikea wardrobe, but can add tens of thousands of dollars to the value of the home.

3. Increase your property’s curb appeal.

It may be obvious but it is still shocking: the number of investors who spend thousands remodeling a home but neglect to do any more to the outside than a quick paint job. While fresh paint is a great way to add value, there are many more steps you can take as well to spruce up a home’s curb appeal. A nicely manicured lawn with well-defined landscaping can help achieve higher rent or a quicker sale — both of which can make the value climb.

4. Raise the rent.

If we’re talking about rentals — especially multifamily properties — raising the rent can be the key to increasing a property’s value. If your rents are low, a small increase can add significant value to your property. This is especially true for multifamily properties. Raising rent just $25 per month per unit on a four-plex can add $1,200 per year in extra income and (depending on your area’s cap rate), up to $20,000 in forced value overnight.

5. Rent out those nooks and crannies.

You may already be at the top of your rental price capacity, but that doesn’t mean you are getting all the income you can out of your properties. Are there any storage sheds, broom closets, garages or simply vacant land that you can rent out to increase your income? Mini-storage is a multimillion dollar industry, and you probably have more space to rent out than you realize. As happens when you raise the rent, additional income often means more value.

6. Increase your fees.

In addition to capitalizing on all the physical ways you can increase the income in your investments, how about the fees? Are you charging for background checks, late-rent fees, missed maintenance appointments or parking violations? How about your laundry facilities or paid parking? Are you getting all the fees you deserve?

7. Lower your expenses.

You are probably paying too much for too many things. As an investor, one of the “hats” you wear is auditor for your business. Perhaps you can negotiate a better rate for garbage pick-up. Perhaps you can transfer the water/sewer/garbage expense to your tenant. Perhaps spending a few hundred dollars getting all those dripping faucets can cut down your annual water bill by thousands of dollars. Whatever your strategy is, if you decrease expenses, you will be able to increase the value of a property.

8. Add a bathroom.

In the old days, one bathroom was standard in most homes. If you are remodeling a home and find this is the case, take note of where the plumbing is located and what extra space there is around, above, or below that plumbing. Oftentimes, you can add a small half bath for several thousand dollars and add tens of thousands in value in the process.

9. Tear down those walls.

As long as a wall is not “load bearing” (and sometimes even if it is), you can take down a wall (or half of one) in a matter of hours and create a much more “open concept” feel. This can help increase the desirability of a home and thus improve the value as well.

10. Paint the neighborhood.

One of the biggest detriments to your property’s value is not your property at all — it’s your neighbor’s home. A quick paint job, landscaping or simply a run to the dump can often be the best money you’ll spend, trying to increase the value on your own property. Obviously some tact is needed and many people are opposed to getting “charity,” but it’s hard to turn down a free paint job or yard clean-up.

So, that’s it: These are just ten of perhaps hundreds of ways you can use to quickly add value to any property you own. Don’t use the “I’m waiting for the market to improve” excuse. You can buy great deals — even in today’s market — if you take the previous steps to add immediate value.

Post courtesy of entrepreneur.com.

6 Reasons To Invest In Multifamily Real Estate

With interest rates at historic lows and a strong rental market encompassing much of the country, people are investing in real estate. Many investors automatically think “single-family home” when they set out to buy a property, and while this may be a smart move in cities where the rental market is hot, like Austin, TX, or Provo, UT, there are definite advantages to buying multifamily real estate that should not be overlooked.

Here are six tips from real estate pros on why buying a condo, duplex, or townhouse can be a wise decision.

1. There’s less maintenance with condos and townhouses

If you’re buying a property with a homeowners’ association (HOA) that takes care of the exterior, you’ll have fewer landlord responsibilities on your plate. With condos and townhouses, everything outside your own walls is typically considered a common area, which your HOA takes care of using the dues you pay. These common areas usually include the landscaping around the building, the roof, parking garage, and amenities such as a pool and clubhouse.

Remember to factor in the monthly HOA dues before you invest: Dues in condo and townhouse communities could run you hundreds of dollars per month. “HOA fees often cause rental property to be a net loss every month,” says Lucas Machado, president of House Heroes in Florida. If you can still come out ahead after crunching the numbers, the next step is to make sure the HOA has adequate reserves. Do this by “requesting financial statements from the HOA,” says Machado. If the HOA is poorly run, you could be charged a special assessment fee to pay for a major expense. Finally, make sure you even can rent out the unit. “Renting out a condo or townhouse may not be possible under HOA rules,” says Machado.

2. You can save on taxes and insurance with a duplex

Think of buying a duplex as snagging a deal at a BOGO sale. A duplex is really one structure, but one that has been divided into two apartments, either side by side or upstairs/downstairs. As such, when you buy a duplex as an investment property, you can rent out one of the units and live in the other, or you can rent out both units. Maryland resident Maria Moser owns a duplex and reaps the benefits. “It is deeded together, so I have a single county/state tax payment and a single city payment as well as a single insurance payment,” she says. And there’s another bonus: “With two rents coming in, one [unit] can be vacant without any issues.”

3. It’s easier to get started in investing with a duplex

You typically need a bigger down payment to buy investment property than you do when buying a property you will live in. “When buying as an owner-occupant, a buyer may only have to put 3% or less down, while investors usually have to put at least 20% down,” says Mark Ferguson, a Colorado real estate agent and creator of InvestFourMore, a real estate investment website.

If you don’t have the down payment funds to buy investment property, you can still get in the game by buying a single-family home and living in it for at least a year (or whatever the lender requires) and then renting it out. “But most banks will not count rental income right away,” says Ferguson. “This can make it tough for investors to buy another house right away — their debt-to-income ratios will be high due to two house payments.”

To put this owner-occupant practice to work for a duplex purchase, you’d live in one half of your duplex and rent out the other. “When buying multifamily, rent is coming in while the buyer lives in the property, which will cause the rental income to be counted sooner and make it easier to buy another home,” says Ferguson.

4. You could make more money with a multifamily unit

The potential to earn more money — otherwise known as having “greater cash flow” in investor lingo — can be greater when you buy multifamily homes for sale. “The rent-to-purchase price ratio is almost always much better with multiunit investments,” says Casey Fleming, author of The Loan Guide: How to Get the Best Possible Mortgage. “I own a four-plex in Albuquerque [NM] and a condo in Rio Rancho, a suburb. They provide cash flow much better than a similarly priced single-family would have.”

5. Your odds of being on the “corner of Main and Main” are greater with a condo

To be successful in the landlord business, you need to own property in an area where people want to be. “Proximity to universities, colleges, and urban areas will always provide a steady stream of people who want to rent,” says Shawn Felker, a New York, NY, agent. Typically, you can get the best location, particularly in a big city, when you’re buying real estate in a building. By being in a building or complex, you may also be able to snag a condo with unique views or other appealing amenities, like a community pool, that will attract potential renters. This is where buying a condo can be a great choice — and the home’s value can appreciate significantly over time.

6. You’re looking for retirement income

Baby boomers have always broken new ground, so as this group approaches (or is in) their retirement years, they’re redefining the way they live. Many boomers choose to live in age-55-plus retirement communities. Others prefer to rent, so a shared-housing arrangement can present a great investment opportunity for homeowners. Empty nesters who have plenty of spare bedrooms can rent out one or all of them to fellow retirees, creating a sort of Golden Girls situation. If you do this, make sure you have a lease and specify house rules, such as a laundry schedule, which food will be shared, and who pays for which utilities.

 

Post courtesy of trulia.com