Q: My wife and I have had our rental property for a while. Our tenant moved out so I think it’s a good time to do renovations. Do you think we should renovate the entire place? Henry, Hackensack, NJ A: Paying for renovations and repairs is appropriate to maintain your rental property and to attract the best tenants. However, your return on investment (ROI) as a landlord is a function not just of the rent you collect but also the money you spend. The more money you spend, the lower your ROI will be. Over renovating a property (spending too much money on renovations) is the biggest mistake that landlords, particularly new landlords make. Many people mistakenly believe that every […]
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When you buy rental property, treat being a landlord as a business not a pastime.
continue reading Conduct a thorough local rental demand analysis before you sign a contract to buy a rental property.
continue reading When you rent a property, set up all appointments to show the property at the same time. This saves you time and creates more urgency for tenant applicants to make a decision.
continue reading Despite what many real estate novices mistakenly believe, The Grinch would not be a successful landlord. Here are 3 landlord myths that the Grinch might employ that are financially counterproductive to landlords in the long run. Myth#1: To be a successful landlord, you have to squeeze every last dollar out of rents. Greedy landlords have vacant apartments. The market decides how much rent you’ll get as a landlord not you—the person with the money (in this case, the tenant) always decides the price. Being greedy as a landlord exacerbates vacancy. One extra month of vacancy resulting from holding out for slightly higher rent will often wipe out any additional rent you could collect for the year. The most successful landlords […]
continue reading Q: Gerald, you often mention how important it is to keep track of demographic changes and trends. What changes do you see on the horizon and how can I take advantage of them? Kirsten, Philadelphia, PA A: You can and should profit from recognizing population and demographic trends. There are around 80 million baby boomers in the US now and almost a quarter of them have no savings. As thousands of baby boomers retire and exit the workforce every day with insufficient savings many will have no choice but to downsize and rent. You can profit from this trend by investing directly or indirectly in rental property. You can invest directly in rental property where Boomers want to live, or […]
continue reading Q: Gerald, my wife and I want to buy a rental property. Expensive neighborhoods, middle class neighborhoods or blighted neighborhoods: which neighborhood type is best to buy rentals? Clayton, Cliffside Park, NJ A: Clayton, the key to success as a landlord does not necessarily lie in the economic landscape of the neighborhood you choose to buy your rental property in. Success lies in the specific strategy you execute and implement as a landlord which should at least in part be based on the economic character of the neighborhood where your rental property is located. There are successful landlords in expensive high-end neighborhoods, working class areas and blighted neighborhoods and there are unsuccessful landlords in expensive, working class and blighted neighborhoods […]
continue reading Before you rent a property look at other rental ads online for similar properties so you can see what your prospective tenants are seeing.
continue reading In order to reduce rental property expenses, tighten up your rental lease to make tenants responsible, in writing, for property damage that occurs while they occupy your property.
continue reading Buy a personal liability insurance policy if you own rental property to protect yourself from lawsuits.
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Hoping to attract bigger, creditworthy tenants, landlords with big traditional office buildings are putting tech start-ups in small chunks of space to give their buildings a cool vibe.
continue reading If you own rental property, monitor market rents where your property is located by looking at rental ads online so you can see what your prospective tenants or current tenants are seeing.
continue reading When you rent a property, set up all appointments to show the property at the same time–this saves you time and creates more urgency for tenant applicants to make a decision.
continue reading Q: Gerald, I’m about to buy a rental property and I was wondering if students make good tenants? Julian, King Of Prussia, PA A: Great question, Julian. First and foremost, you should always screen potential tenants regardless of what your general strategy is as a landlord. Your strategy as a landlord should be guided by the specifics in your local real estate market where your rental property is. If your rental property is in a college town, students may be the ideal tenants, however, since students tend to be more transitory, you’ll need to budget for higher turnover costs (painting, carpeting, wear and tear) and since younger students often don’t have credit history, you should consider requiring co-signers with established […]
continue readingDemand for rental apartments remains strong in NJ with statewide occupancy rates being amongst the highest in the US.
continue readingQ: Gerald, I remember you mentioning the #1 trick bad tenants use to trick landlords into renting to them but I forgot what it was. What was it? Chelsea, Sea Bright, NJ A: Great question, Chelsea. The #1 trick bad tenants use to trick a landlord to rent to them is….showing up with a big wad of cash and asking to move in right away. Now the reason, this is the #1 trick that bad tenants use is because a landlord’s main goal is to collect rental income and it’s very tempting to take money when someone is waving it in your face. The potential problem for landlords is that when someone shows up suddenly with a bunch of money […]
continue readingA real estate variance is a request to deviate from current zoning requirements. If granted, it permits the owner to use the land in a manner not otherwise permitted by the zoning ordinance. It is not a change in the zoning law. Instead, it is a specific waiver of requirements of the zoning ordinance.
continue readingBefore you make an offer to purchase, estimate a property’s monthly rent roll by examining and ideally visiting comparable rental properties in the same neighborhood.
continue readingLand does not depreciate for tax purposes because it is considered to have an infinite useful life. Land improvements like buildings, furnishings, equipment, etc. have limited useful lives and can be depreciated.
continue readingQ: Trulia or Zillo? Which is better at estimating property values? Rich, Lakewood, NJ A: The amount of information, resources and tools available on Trulia and Zillow is enormous. Regrettably, the accuracy of the information on Zillow & Trulia often leaves much to be desired. Trulia & Zillow use algorithms, to approximate property values. Algorithms are mathematical formulas used for solving problems. Unfortunately, the property values that these algorithms produce are not consistently accurate. Here are three major difficulties with Trulia, Zillow and other public property search portals: 1. Their information Is Inconsistent Trulia and Zillow, by their own admission acknowledge that their estimates are wrong a large percentage of the time. So the risk is that a home buyer […]
continue readingConsider deferring capital gains taxes using a 1031 exchange when you sell real estate and reinvest the proceeds to purchase like-kind investment property.
continue readingRiparian rights are the rights of land owners bordering waterways that relate to the water and its use.
continue readingI have seen many unfortunate homeowners who are behind on their mortgage payments lose thousands of dollars, in some cases tens of thousands of dollars to unscrupulous attorneys. The main way attorneys steal from people in foreclosure is by charging exorbitant upfront fees and then stringing them along charging more and more fees as time goes on. The attorneys then don’t deliver on promises that they made to homeowners. Often, people who find themselves in foreclosure are understandably afraid and sometimes desperate and are looking for honest help–many unethical attorneys exploit homeowners in this situation for their own financial gain. The best way for homeowners in foreclosure to avoid losing money to swindler attorneys is to never agree to pay […]
continue readingShop for a mortgage or funding source before shopping for a home or property.
continue readingAlthough short term rentals can produce higher income for property owners, they normally result in higher management, maintenance and advertising costs for owners than long term property rentals.
continue readingQ: Rock Salt Or Calcium Chloride: Which Is the Best snow/ice remover? Candy, Arlington, MA A: The 2 main snow and ice removal agents people use are rock salt (aka sodium chloride) and calcium chloride. The only real advantage of using rock salt over calcium chloride to remove snow and ice is that rock salt is a little cheaper. However, calcium chloride offers several advantages over rock salt: One of the most obvious advantages is that calcium can be effective at much colder temperatures than sodium chloride/rock salt. In fact, calcium chloride can be effective at temperatures as low as -25 degrees Fahrenheit, while rock salt loses its effectiveness at temperatures below 15 degrees Fahrenheit. Also, rock salt poisons soil, damages […]
continue readingNever sign a purchase contract as a buyer with an inspection contingency period less than 7 days.
continue readingA property purchased with nothing down is unlikely to have much, if any, cash flow.
continue readingQ: Gerald, I saw a bank-owned property that I want to try to buy. How much earnest money do I need to pay to buy a bank property? Rich, Hazlet, NJ A: That’s a great question, Rich. Bank-owned property transactions also known as REOs (which stands for real estate owned) are often more intimidating for the uninitiated than typical real estate purchases. There is no all-encompassing rule etched in stone when it comes to earnest money on REOs or any real estate transaction for that matter. Let’s first identify the purpose of an earnest money deposit, which is to show a seller that a buyer is serious about purchasing a property. When the transaction is finalized, the earnest money deposit […]
continue readingNever lend more money on a property than you would be willing to pay for the property yourself.
continue readingHypothecate: To pledge (property) as security or collateral for a debt.
continue readingPeople with aspirations can, in general, be split into two groups: 1. Doers 2. Dreamers Doers make the world go ‘round. That said, dreaming isn’t all bad … and the truth is, most doers are also big dreamers. But the key is turning dreams into real-world action. You’ll never have the life you want — the career you want — the real estate business you want — if you spend your whole life just dreaming. You’re on my list and get my newsletter because you have dreams. You want to be a better real estate investor. You want to build a bigger real estate business. You want to grow your personal fortune. You want to live a better life. These […]
continue readingGood tenants are worth keeping. Keep rents for good tenants slightly below market–this limits service calls and reduces your property management and maintenance costs over time.
continue readingA moderately priced house built on a great lot will appreciate more and yield higher income on average than a larger, expensive house will on the same lot.
continue readingWhether you’re planning on buying a property short term or long term, there are costs of homeownership you should prepare yourself for ahead of time. In addition to mortgage payments if you borrow money to buy the property, there are additional costs that property owners often don’t expect. Here are 5 additional costs of homeownership you should expect to pay when you buy property. 1. Property Taxes When you rent, you are not responsible for the property taxes on the property, but when you become a homeowner, you’re expected to pay property taxes, so when you’re trying to determine what your property payments will be for the year, the quarter or monthly, don’t forget to factor in property taxes. 2. […]
continue readingNever loan money on a property you wouldn’t mind owning yourself.
continue readingIf someone has a claim against a property in foreclosure and does not receive proper notice that the claim is about to be erased by the sale, their claim is not extinguished.
continue readingWith a new year comes another set of New Year’s Resolutions You know, classics like •“This year, I’m going to get out of debt and save money.” •“This year, I’m going to lose 25 pounds and get in shape.” •“This year, I’m going to finally make some money in real estate.” The problem with New Year’s resolutions is that they rarely have a real plan behind them. The important question to ask yourself is HOW are you going to lose 25 pounds or finally make some money in real estate? Do you have a written plan to get those things done? Without a plan with tangible, measurable goals that you can work toward every day, it’s easy to fall victim […]
continue readingDo all your homework BEFORE you make your first offer to purchase a property.
continue readingGerald Lucas here, with part 2 of my end of year real estate tax tips. Let’s first recap the 1st three end of year real estate tax tips I’ve already provided to you in my last episode: 1) Consider deferring income 2) Take some last minute tax deductions 3) Account for refinancings Tax Tip #4. Prepay quarterly estimated state tax payments. Consider paying your fourth-quarter estimated state income taxes and any outstanding balance by December 31. Your payments will be tax deductible for this tax year if you’re not subject to the alternative minimum tax (AMT). Tax Tip #5. Contribute the maximum to retirement accounts There may be no better investment than tax-deferred retirement accounts because they compound over time […]
continue readingProvide multiple comparable sales, with photos, addresses and detailed information when you present a real estate deal to an investor, lender or JV partner.
continue readingFew days bring as much anticipation as Christmas Eve, especially for children who lie awake at night, waiting to get up at the crack of dawn to tear open their presents under the Christmas tree. The truth is that anticipation is a big part of fun for everyone. Pleasant anticipation is an important source of happiness. Having something to look forward to makes us feel good and creates a healthy atmosphere based on positive expectations. There are four key stages we experience when we enjoy an event: 1. Looking forward to the moment 2. Enjoying the moment 3. Sharing the moment with others 4. Looking back on the moment Having something to look forward to brings happiness into our lives […]
continue readingBefore you make a written offer to buy a rehab property, learn what real estate repairs cost (labor and materials), be conservative with your estimates and make a detailed list that you can show to potential lenders, investors and joint venture partners.
continue readingGarages and basements are cheap spaces that typically add more value to a property than their cost.
continue readingMany of you have been asking me for real estate tax tips as we get closer to the end of the year, So here are a few helpful end of year real estate tax tips: Tip #1. Consider deferring your income Income is taxed in the year it is received – so it may be advantageous to delay paying tax until tomorrow rather than paying it today particularly if you expect to be in the same or lower tax bracket next year. Your situation may vary depending on if you are an employee or if you are self-employed. If you are an employee, for tax purposes, you may want to consider deferring a year-end bonus until next year. If you […]
continue readingReal estate wholesalers should first build a comprehensive list of potential buyers before they present deals to flip to a mass audience.
continue readingEasing mortgage standards are allowing first-time homebuyers to finally jump into the housing market after a rough start to the year held a lot of them back. The share of mortgages going to first-time buyers has risen sharply since the start of the year.
continue readingQ: Gerald, I just bought my first vacant rehab property. How should I protect the property from thieves while I do the renovation? Phil, Mahwah, NJ A: That’s a good question, Phil. What I’m going to do right now is give you 3 ways to protect a vacant property: Alarms: Install an electronic alarm security system. Alarms will deter individuals from attempting to enter your building and will quickly alert authorities if someone does break in. Live Security: this can be a security company that patrols the area around your property or an intimidating Dog you put in the property or having someone like a handyman live temporarily in the property. Lighting: Motion-activated lights and general lighting can help protect […]
continue readingWhen interest rates are low always borrow for the longest term you can negotiate.
continue readingNew Jersey’s industrial real estate market continued to shine in the third quarter, bringing vacancy down to levels not seen since before the recession.
continue readingIn spite of our many blessings, it’s easy to fall victim to negative thinking. Unfortunately, negative thoughts distract you, drain you of energy and keep you from being in the present moment. The more you give into your negative thoughts, the stronger they become. On the flip side, a small positive thought can have the opposite effect, blossoming into a positive and profitable outcome. When you start to have negative thoughts, it’s often hard to stop them. Shifting your focus from negative to positive thoughts is easier said than done, but it’s the only way to avoid going down an unnecessarily painful path. When you find your thoughts tumbling down a negative slippery slope, here are 5 tips to turn […]
continue readingConfirm contractor availability to work before you commit to buying a property that needs extensive renovations.
continue readingI want to wish you and my entire Real Estate Insider Family a warm message of Thanksgiving. I cannot tell you enough how much I appreciate YOU. A single expression of gratitude is never really sufficient, so Thank You, Thank You, Thank You … that’s Thank You to the power of three for all you math aficionados! In our fast-paced world, it’s easy to take things for granted, but I have so many things to be thankful and grateful for … including a happy, healthy and loving family, supportive friends, amazing coaching students, consulting clients, and business partners. I’m grateful for the lifestyle that real estate has afforded me over the last 15 years I’ve been actively investing. I’m thankful […]
continue readingThe mortgage delinquency rate in New Jersey is currently 8.3%. The national average is 3.5%.
continue readingQ: Gerald, there was a fire in one of my rental properties. I have insurance, but I’ve heard terrible stories about insurance companies ripping off homeowners. How do I get the most money for my property insurance claim? Stacy, Toms River, NJ A: Stacy, I hear you loud and clear. One of my first jobs was working as an actuary at an insurance company. Insurance companies unfortunately do rip insureds off sometimes–their goal is to collect as much money in insurance premiums as possible and then pay out the lowest amount in claims. Here are 3 tips to help you get the most money from a property insurance claim: 1) carefully review your coverage 2) document damage with photos and […]
continue readingLine up multiple potential funding sources beforehand as you plan a property rehab or renovation.
continue readingThe average New Jersey home prices are currently increasing at a 3% annual rate.
continue readingQ: Gerald, I have a property under contract to buy. I looked at all the numbers and I’m confident that it’s a good deal, but I’m not sure whether I should wholesale the property for a quick profit or rehab and then sell the property. Billy, Columbus, Ohio A: That’s a great question, Billy–this is something that I grapple with all the time myself as a full time investor–should I flip a property as is or take the time and money to rehab it and ideally make a bigger profit? When I make that decision, here are 3 factors I consider: 1) time of year 2) how many other rehab projects I have going on & most importantly 3) how much […]
continue readingWhen you file a property insurance claim, document damage with both photos and video.
continue readingNew Jersey Home Sales in 2015 are the highest since 2005.
continue readingQ: Gerald, I’m doing my first rehab and it’s costing me more money than I initially thought. What should I do if I run out of money in the middle of the rehab? Sunny, Garwood, NJ A: Sunny, rehabs normally end up costing more money than you initially expect, which is why it’s always a good idea to build in a cushion when you do your planning for cost overages. In your case, since you’re already in the middle of rehabbing, the best thing to do is take an honest look at all the additional renovations that you were planning to do and prioritize them. In other words, determine the most important items that need to be repaired or replaced to make your property marketable and […]
continue readingWhen you estimate holding costs for a property rehab, consider estimated renovation time as well as the time required to sell the property.
continue readingA survey commissioned by online brokerage Redfin of 2,134 Americans finds one in five buyers made an offer on a home without having visited it in person.
continue readingQ: Gerald, I’m trying to raise private money to fund my first rehab project. One of the questions one of my private lender prospects asked me was how long it will take to do the renovation. How long should it take to rehab a house? Josh, Garfield, NJ A: That’s a great question, Josh. The amount of time it will take the renovate your property will depend on a number of factors including how much work needs to be done to bring the property up to the standards of the neighborhood where it’s located. The time of year may play a role in how long it will take to renovate because renovations can be more problematic and time-consuming during winter […]
continue readingOnly make small payments to contractors as they satisfactorily complete mutually agreed upon milestones.
continue readingInvestor interest in the seniors housing sector is strong and growing. Transaction volumes are at record high levels, pricing is close to a cyclical peak, and auctions are active and often fully priced.
continue readingQ: Gerald, I’m trying to wholesale a property I have under contract to buy. I want to protect my deal from other investors who may try to go around me and steal it from me. Got any advice for me? Carmen, Reading, PA A: Hi Carmen, this is one of the most frequent questions I get from investors working on their first wholesale real estate deal . What I’m going to do is give you the #1 sign that another investor may be trying to steal your wholesale deal. Before I give that to you I want to make sure you are on solid ground yourself. The first question to ask yourself is: do you really have a good real […]
continue readingDemand an itemized breakdown of renovation costs from a general contractor rather just an overall estimate for an entire home rehab project.
continue readingFor the seventh consecutive month,the gap has widened between what home owners say their home is worth compared to what appraisers say, according to Quicken Loans’ Home Price Perception Index. Home owner estimates now stand 2.65 percent higher than appraiser opinions, the largest gap in more than a year, according to the index.
continue readingQ: Gerald, I hired a contractor to renovate our kitchen and bathroom. The first 2 guys I spoke with wanted half of the money upfront. How much upfront money should I give a contractor before he starts working? Robbie, Passaic, NJ A: That’s a great question, Robbie and as a full time real estate investor myself, it’s an issue that I deal with all the time. So, how much money should you give a real estate contractor before he starts working? The answer is as little money as possible. If you’ve been burned by contractors in past like most of us investors have who’ve been in the business for a while, you’ll understand why. As investors, we ideally would like […]
continue readingWhen you value a property, consider highest and best use as well as sales comparables.
continue readingThe nation’s biggest banks are loosening their underwriting criteria for big mortgages, as lenders ramp up competition to grab a bigger share of the high-end housing market.
continue readingFind out how many jobs a real estate contractor is working on before you hire him. If he has too many jobs running concurrently, the job you hire him to do will unlikely be completed on time.
continue readingYou may still qualify for a mortgage loan even if you have a lower credit score if you pay a big down payment and don’t have much other personal debt in your name.
continue readingQ: My mortgage broker told me that it would be easier for me to qualify for an adjustable-rate mortgage. Should I get an adjustable-rate mortgage? Monica, Peekskill, NY A: Monica, your mortgage broker is correct that it will probably be easier for you to qualify for an adjustable-rate mortgage than a fixed rate mortgage, but just because it’s easier to qualify doesn’t mean that it’s a good idea. Just for the record, the mortgage payments on a fixed-rate mortgage stay flat and consistent throughout the life of your loan whereas the interest rate is subject to change on an adjustable-rate mortgage–therein lies the potential danger. When you get an adjustable-rate mortgage, you are gambling on your ability to pay a […]
continue readingOnly hire real estate contractors that have established trade lines (credit accounts that allow them to buy supplies and materials themselves).
continue readingFHA mortgage loan credit requirements tend to be more relaxed than the credit requirements for conventional loans.
continue readingQ: I’m at the point in my life where I want to buy a home. Is my credit score good enough to get a mortgage? Caroline, Tinton Falls, NJ A: Caroline, your correct that your credit score is the number that lenders use to estimate the risk of lending you money and is a key factor in determining whether you will get approved for a mortgage. However, many lenders view your credit score as just one piece in the puzzle, so a low score won’t necessarily prevent you from getting a mortgage. You can be approved for a mortgage with a lower credit score if, for example, you pay a big down payment and don’t have much other debt in […]
continue readingDo a thorough local rental demand analysis before you sign a contract to buy a rental property.
continue readingProperty tax appeals continue to rise in New Jersey as property owners seek to have their property taxes reduced to align them with lower property values since the housing peak of 2006.
continue readingQ: Gerald, my company is relocating. We’re moving, so should we rent our home or just sell it? Brenda, Livingston, NJ A: That’s a great question, Brenda. I want you to consider 3 factors in making your decision on whether to try to rent or to sell your home: 1. What’s the rental demand for your home? You need to make sure there’s adequate demand to rent your place. If there isn’t, then renting isn’t a viable option. 2. Will rental income realistically cover and ideally exceed all the expenses on your current home (property taxes, mortgage payments, insurance cost, repairs etc.)? If you’re losing money every month, then it probably doesn’t make sense to rent and deal with all […]
continue readingInvestigate and correct mistakes on your credit report before you apply for a mortgage.
continue readingAverage home prices in New Jersey are still down about 20 percent statewide from 2006 peak prices, which is twice as much as the national average.
continue readingQ: I recently got a mortgage loan quote, it’s higher than the national mortgage rate I saw posted everywhere. What gives? How do I get the lowest mortgage rate? Jeff, Hillsdale, NJ A: Good question, Jeff. When you see a very low loan offers or hear about the latest movement in interest rates in the media, take it with a grain of salt. Lenders price your loan with adjustments based on certain risk factors including: Your middle credit score Your loan size (how much money you’re borrowing) The loan product you qualify for The purpose of your loan (i.e. whether you are buying or refinancing) Whether you plan to live in the property or not So, the the riskier your […]
continue readingThe best way to avoid paying too much for a property is to never offer too much.
continue readingFannie Mae starts a program this year that lets lenders include income from non-borrowers within a household (i.e. extended family members) toward qualifying for a loan.
continue readingQ: My husband and I are debating whether to buy a timeshare or vacation home? Which is a better investment? Beth, Riverdale, NY A: That’s an interesting question, Beth. When we compare a vacation home to a timeshare, the difference is essentially full time versus part-time ownership. A vacation home requires full-time ownership which includes maintenance and upkeep year round but gives you more flexibility than a timeshare to use whenever you want rather than just on a particular week when you may not be available. Although a timeshare has limits on when you can use it, timeshares tend to be more affordable than buying a vacation home and work best for you if you know exactly when you’ll take […]
continue readingIf you hire a property management company to manage your real estate, make sure your property management agreement has the following 3 items: 1. roles & responsibilities 2. payment terms 3. termination clause
continue readingCommunity banks are filling the gaps in the residential mortgage market left by an exodus of big banks in the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
continue readingQ: I’m looking for a good real estate attorney because I’m buying a home. I’ve met with several attorneys so far, but they all kind of seem the same. I know there are some really bad attorneys out there-what signs should I look for to eliminate the bad apples? Jackie, Hagerstown, MD A: Jackie, I understand your challenge in trying to separate out the bad real estate attorneys. What I’m going to do is give you 3 signs a real estate attorney is no good: Attorney promises positive results in advance. Unless the real estate attorney you are talking to is Nostradamus, he cannot foretell the future, which means that he or she can’t promise you specific results in advance. […]
continue readingDon’t rent to tenants who have been previously evicted.
continue readingNew Jersey foreclosure filings spiked 24% in the first half of 2015 fueled largely by trouble in South Jersey housing markets including Atlantic City as well as Cape May, Ocean and Cumberland Counties.
continue readingQ: Gerald, my wife and I are looking for a good Realtor to sell our home. Our next door neighbor had a bad experience with a realtor when they sold their home–how can we avoid that happening to us? James & Susan, Morristown, NJ A: James & Susan, I hear you loud and clear. To help you avoid working with losers, I’m going to give you 3 signs that a realtor is incompetent: Realtor lacks experience. Having prior experience is important particularly if and when a real estate transaction doesn’t go according to plan. If you can, you and your wife should avoid being guinea pigs and allowing your realtor learn their craft while they’re working with you. The Realtor […]
continue readingProperty Depreciation Allowance = (Depreciable Basis)/(Useful Life); Useful life=27.5 years for residential property, 39 years for non-residential property.
continue readingQ: I’m selling my house now. What repairs should I do now before I sell? Sam, Rockville, MD A: Sam, capital improvements in general only add about 50% of their cost to the value of your home, which means that they are normally a waste of money unless the repair issue is so important that it could scare away buyers. A roof leak so bad that when it rains outside, it rains inside your house or a bathroom or kitchen that hasn’t been updated since the 1970s may be good examples of repairs that you’ll need to do in order to make your property salable. However, if your home is livable and presentable, then unless you are a contractor, it’s […]
continue readingIf you allow the seller to stay in a property you are buying after the closing, make sure you have an airtight occupancy agreement that clearly spells out the dates of occupancy and the consequences of failure to abide by those dates.
continue readingIdentify Things You Can And Cannot Control Do you ever worry about things that are beyond your control? Unfortunately, worrying creates physical and mental problems without providing any benefits. People often worry about both the past and the future instead of focusing what they can do in the present. There’s nothing you can do about the past—the clock can’t be turned back. Worrying about what might happen in the future is equally futile and creates mental monsters that can paralyze you. The truth is that there are some things that you have no control over and others that you have complete and total control over—knowing the difference and then acting on that realization is one of the keys to personal […]
continue readingWhen you buy a property, make sure that all the property owners sign the purchase contract.
continue readingBidding wars and sales concessions can distort property values in a local real estate market.
continue readingQ: If something is wrong with my home when I sell, what should I do? Tim, Teaneck, NJ A: Tim, normally when you sell your home, you are obligated to disclose problems that could affect the property’s market value. In most states it’s illegal to conceal major physical defects in your property. For the most part, you’re only responsible for disclosing information that you are aware of. The extent to which you are responsible for finding defects in your home when you sell varies from state to state, so I strongly suggest you consult an experienced local real estate attorney and your state’s real estate commission or board to confirm disclosures you’re responsible for making. Thanks for your question, Tim, […]
continue readingIf you find an abandoned property, check the local tax records or enlist a skip-tracing service to locate the owner.
continue readingQ: We’re about to sell our house. What price should we sell our home for? David & Danielle, Knoxville, TN A: Great question, David & Danielle. Everyone wants to get the highest price possible for their property when they sell it. Few people know how critical the way you price your property is to getting the highest price when you sell it. Here are 3 tips that will help you price your home so you can get top dollar for it when you sell it: Go out and look at similar properties for sale in your neighborhood. This will allow you to see what the eventual buyer of your house will see when they are out looking for properties to […]
continue readingDrive an alternative route to and from work to look for abandoned property that can be purchased & renovated–piles of unread mail & newspapers on the front stoop is a tell-tale sign.
continue readingLower interest rates push housing demand by expanding a buyer’s purchasing power
continue readingQ: My mortgage application was denied. What can I do? Lloyd, Union, NJ A: Lloyd, it’s not the end of the world just because your mortgage application was denied. Lenders reject about 50% of refinance applications and about 30 percent of buyers who apply for a mortgage loan. Keep in mind that different lenders have different requirements, so you can apply with another lender or mortgage broker. It probably makes sense to try to find out why your mortgage application was denied—so ask. Also, the denial may not be based on you as a borrower, it may be the property itself, so go back to the lender or broker and find out why your application was denied, then take concrete […]
continue readingDon’t take on a home renovation project yourself unless you have prior experience-1st time home renovators often end up wasting both time and money.
continue readingWhen you overprice your home, you give the buyer too much power, leverage and control in the negotiation.
continue readingQ: Our local real estate market is really hot. We keep getting outbid for homes we want to buy. Do you have any advice on winning a home bidding war? Kate, Summit, NJ A: Hi Kate, I’m sure it’s frustrating to pick a house you like only to lose it to someone else. As far as bidding wars go, the first and most important piece of advice I’ll offer you is 1) set your financial boundaries before you start making offers to purchase—this will protect you from paying too much in the heat of the moment. 2) The second tip is to start strong & serious—you do not want to look like a tire-kicker in a home bidding war 3) […]
continue readingTo find good real estate deals, have an investor-friendly Realtor check the multiple listing service for properties that have been on the market for over 180 days.
continue readingSummer is finally here! From backyard barbecues to beach trips, we associate summertime with having fun. Special summer moments remind us how important it is to have fun and play. When we reach a certain age, we often begin to starve ourselves of play. This comes at a huge cost, given the many important ways our brain and senses benefit from play. Play provides nourishment for both our body and our spirit. Recent Japanese research found that spending as little as two hours a month laughing or listening to your favorite music has as big an impact on blood pressure as eliminating salty foods, or even losing 10 pounds. Having fun is also a great creative engine that boosts our […]
continue readingBefore you buy rental property in another state, check to see if that state requires a real estate license to manage the real estate of another person or entity.
continue readingWhen short sales and foreclosures represent less than 30% of real estate market sales, they should be deemed outliers and not be considered in determining home values.
continue readingOne of the main excuses people use for putting off decision-making is the fear of making a mistake. The problem with that logic is successful people make more mistakes than everyone else, precisely because they make more decisions than everyone else—they learn from their decisions regardless of how things ultimately turn out. You shouldn’t be afraid of making a mistake—you should be afraid of standing still and letting the world pass you by. Make it a point to cultivate decisiveness. Putting off decisions creates a cluttered mind. Decision-making creates order. Your life will be much more organized if you make decisions as they come. Rather than obsessing forever about decisions you’ve put off, your mind will be free to concentrate […]
continue readingA property owner must manage his property manager–regardless of how much responsibility you choose to delegate, when you own property, the buck ultimately stops with you.
continue readingQ: I’ve been paying rent for years now and have nothing to show for it. Real estate prices in my area seem to be going up, so should I buy now or keep renting? Kelly, Hoboken, NJ A: That’s a great question, Kelly. Although there are many tax benefits and wealth-building benefits to owning property, it’s important that you make financial decisions that are best for you based on your individual goals and your personal financial situation. With that in mind, here are 3 key factors that you should consider in deciding whether to buy now or continue renting: 1) What you can reasonably afford (this trumps all other factors and concerns) 2) How long you plan to stay—there are […]
continue readingFind out if your homeowners insurance uses “actual cash value” method rather than “cost to replace” method to calculate a claim–if so, depreciation will be deducted from your settlement amount, resulting in lower compensation to you in the event of a claim.
continue readingWhen you rent a property, set up group appointments so all the prospective tenants come at the same time-the prospective tenants may bid up the price of your rental and allow you to rent for a higher price.
continue readingBuy a personal liability insurance policy if you own rental property to protect yourself from lawsuits.
continue readingIn order to maximize return on investment (ROI), getting a property rented fast to a good tenant is more important than getting the highest rent because just 1 month of vacancy can destroy your ROI and cash flow for the year.
continue readingQ: I gave my contractor money to buy materials for a job he was going to do for me on my rental property—he won’t return my phone calls and seems to be avoiding me. What should I do? (3 Ways Contractors Can Steal From You) Elliott, Deer Valley, NY A: Elliott, unfortunately, if you are a real estate investor and employ contractors to work on property for you, there will probably come a time when you get ripped off by a contractor. I definitely have been ripped off before, so I know the painful feeling. Here are 3 ways that contractors can steal from you: 1. The first way is what seems to have happened to you—the contractor collects money […]
continue readingIf you own rental property, monitor market rents where your property is located by looking at rental ads online so you can see what your prospective tenants or current tenants are seeing.
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