Tips for Buying Your First Rental Property From the Pros

Buying your first rental property is a major investment and can be a lucrative one. However, take it from the professionals that some precautions should be taken. Do your research, take your time, and read the tips we have provided from nationwide pros in the real estate industry on buying your first rental property.

1. Use Leverage to Buy the Property

Potential real estate investors should make sure to understand the mortgage market. If you get the right mortgage, it could help keep your costs low and reduce uncertainty about the property’s cash flow. Using the leverage of a mortgage will free up some of your cash so you can save it for repairs or a future investment. However, a mortgage can be a double-edged sword since there will be financing costs associated with it, so it’s always best to consult with a professional.

2. Line Up Your Financing Early

If you’ll be using a mortgage when buying your first rental property, it’s important to weigh all your financing options carefully. Should you choose a 15-or 30-year mortgage? A fixed or adjustable rate? To better weigh the true cost of your financing options, first-time investors can fill out a short form on LendingTree and let multiple lenders compete for your loan. Its online marketplace enables you to compare rates and offers quickly to find a good fit.

3. Invest in Single-family Homes First

Invest in single-family homes first since it’s the simplest way to get started as a new real estate investor. The upkeep is easier than multifamily or commercial properties. With only a single tenant, there doesn’t tend to be as much wear and tear on the property and, when something breaks, you’ll only need to fix one thing.

4. Invest Enough to Be Cash Flow Positive

First-time rental property buyers should only buy a property that cash flows. The best way to limit your risk and increase your odds of success is to make sure you are putting enough money down to be cash flow positive. There will be unexpected expenses so leave a margin for error. It also enables you to weather tough economic times. If the property cash flows, the fluctuations of the market are less relevant, and you can hold it for the long term.

5. Invest in Turnkey Real Estate

Finding and screening tenants is often an investor’s least favorite thing to do, and managing rentals can be lots of work. Investing in turnkey properties can solve both these problems. Turnkey real estate comes with existing tenants and property managers. That means immediate rental income and a manager to deal with those 2 a.m. phone calls instead of you. At Roofstock, you can browse properties in up to 40 different rental markets at a wide range of price points and invest in the rental that right for you.

https://fitsmallbusiness.com/buying-your-first-rental-property-tips/

Why Invest in Real Estate?

Real estate is a great investment for many reasons. You can enjoy an excellent rate of returns, amazing tax advantages and leverage real estate to build your wealth. Here are the top five reasons why real estate is a great investment.

Real estate provides better returns than the stock market without as much volatility.

Historically in real estate, your risk of loss is minimized by the length of time you hold on to your property. When the market improves, so does the value of your home, and as a result, you build equity. The risk never changes in the stock market and there are numerous factors beyond your control that can negatively impact your investment. Real estate gives you more control of your investment because your property is a tangible asset that you can leverage to capitalize on numerous revenue streams, while enjoying capital appreciation. Real estate is a great investment for many reasons. You can enjoy an excellent rate of returns, amazing tax advantages and leverage real estate to build your wealth. Here are the top five reasons why real estate is a great investment.

Real estate provides better returns than the stock market without as much volatility.

Historically in real estate, your risk of loss is minimized by the length of time you hold on to your property. When the market improves, so does the value of your home, and as a result, you build equity. The risk never changes in the stock market and there are numerous factors beyond your control that can negatively impact your investment. Real estate gives you more control of your investment because your property is a tangible asset that you can leverage to capitalize on numerous revenue streams, while enjoying capital appreciation.

An investment in real estate can also diversify your portfolio.

If you've ever spoken to a financial planner about investing, then you are very aware of the importance of diversification. When you diversify your portfolio, you spread out the risk. Real estate will always serve as a safe tangible asset to mitigate the risk in your portfolio. Many have amassed wealth by solely investing in real estate.

Last but not least, real estate investing comes with numerous tax benefits.

You can get tax deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance and depreciation (even if the property gains value) and other benefits. The end of the year is a very busy time for real estate because people want to take advantage of the numerous tax benefits before the end of the year!

https://www.entrepreneur.com/article/304860

Best-Kept Secrets for Selling Your Home

Find out what your home is worth, then shave 15 to 20 percent off the price. You’ll be stampeded by buyers with multiple bids — even in the worst markets — and they’ll bid up the price over what it’s worth. It takes real courage and most sellers just don’t want to risk it, but it’s the single best strategy to sell a home in today’s market.

Storage is something every buyer is looking for and can never have enough of. Take half the stuff out of your closets then neatly organize what’s left in there. Buyers will snoop, so be sure to keep all your closets and cabinets clean and tidy.

Maximize the light in your home. After location, good light is the one thing that every buyer cites that they want in a home. Take down the drapes, clean the windows, change the lampshades, increase the wattage of your light bulbs and cut the bushes outside to let in sunshine. Do what you have to do make your house bright and cheery – it will make it more sellable.

Maximize the light in your home. After location, good light is the one thing that every buyer cites that they want in a home. Take down the drapes, clean the windows, change the lampshades, increase the wattage of your light bulbs and cut the bushes outside to let in sunshine. Do what you have to do make your house bright and cheery – it will make it more sellable.

Maximize the light in your home. After location, good light is the one thing that every buyer cites that they want in a home. Take down the drapes, clean the windows, change the lampshades, increase the wattage of your light bulbs and cut the bushes outside to let in sunshine. Do what you have to do make your house bright and cheery – it will make it more sellable.

https://www.hgtv.com/design/decorating/design-101/10-best-kept-secrets-for-selling-your-home

What Millennial Homebuyers Need to Know

1. Pay Off Student Loans and Other Debt

What’s the biggest challenge facing millennial homebuyers? Student loans. Over 44.2 million Americans are paying off a national student loan debt of $1.48 trillion—and, in 2016 alone, the average student loan debt was $37,172 per graduate!(2)

As if student loans weren’t enough, consumer debt has postponed the home-buying dream of many millennials.(3) In fact NAR reports that, second to student loans, the two expenses that delayed saving for a down payment were credit card debt (32%) and car loans (32%).(4)

Since buying a house is the most expensive purchase you’ll make, you need to be debt-free before you buy one. If you have any debt, get on budget and use the debt snowball to pay off those loans. Only then will you be ready for the next challenge: the down payment.

2. Save for the Down Payment

Most of us don’t pay cash for our first home. In fact, 98% of millennials buy with a mortgage.(5)That’s why it’s important to have a strong down payment—not only to lower your interest rate, but also to help you pay off your mortgage even faster. We recommend putting down 10–20%. If you have 20% tucked away, you’d bypass private mortgage insurance (PMI)—additional insurance lenders make you have that protects them if you stop making mortgage payments.

If you’re struggling to save for the down payment, you’re not alone. One fourth of millennial home buyers couldn’t do it alone, accepting a money gift from a friend or relative.(6) And because of high rents and student loans, some millennials need more than seven years to save for a down payment, according to one study by Builders Online.(7)

That’s why, if you’re still saving, you must be patient and stay the course. Keep saving! Start with a clear plan. Know how much house you can afford. Stay motivated with a goal tracker. And with a smart plan like this in place, it can take less time than you think.

3. Stand Out in a Competitive Market

If you’ve already paid off your student loans and saved for your down payment, good work! The next step is to get into the housing market. In the past few years, the housing market has had a shortage of sellers, which has not only raised the prices of homes, but also has caused competition among buyers. Gen Xers are typically buying more established homes instead of starter homes, so your competition is other millennials—and your parents.

Yep, that’s right. Just as millennials are finally moving out, empty-nesting baby boomers are downsizing into the very starter homes that millennials are trying to buy. You might find yourself in bidding wars with buyers who have a bigger budget and more home-buying experience.

While you should expect competition—especially in hot housing markets such as Seattle, Nashville and San Francisco—that doesn’t have to derail your home-buying budget. Download our free first-time homebuyer's guide to walk you through the process and stay in the game with these tips:

First, get preapproved for a home loan before you make an offer. A preapproved loan means that your lender has looked over your finances and decided that you can cover the down payment and the mortgage payments. Though it can take some time to get, a preapproval letter sends a powerful message to the seller that you’re a serious buyer.

Second, act decisively. Do everything to keep the process moving. For example, tighten the timeline of your home inspector. Most inspectors can inspect a house within five days of your request. Never ask a motivated seller to wait weeks for a home inspection if you can get it done in days.

Lastly, be human with the seller. Send a handwritten letter, explaining why you and your family like the home. Selling a home can be emotional for homeowners, so you never know how far a personal letter can go.

4. Find an Affordable House in a Seller’s Market

Another challenge facing millennials is the rising value of homes. For many of us—especially those that have just managed to pay off student loans and land a stable job—rising market prices could be the most frustrating hurdle we face.

Fortunately, the housing market is beginning to slow down. NAR predicts a 1 to 3% growth in housing prices this year, which is far less compared to the 5 to 7% annual growth over the last five years.(8)

My best advice, then, is patience. Once you start shopping, don’t give in to the temptation to stretch your dollars and buy a home that’s out of your price range. Keep your monthly housing payment (which includes mortgage, taxes, insurance, HOA dues, etc.) to no more than 25 to 30% of your take-home pay on a 15-year, fixed-rate conventional mortgage. No home is worth sacrificing your retirement or your kid’s college fund.

5. Gain Experience With the Buying Process

One of the best things you can do as a first-time homebuyer is familiarizing yourself with the buying process.

That’s why it’s extra important for millennials to work with experts who know what they’re doing. Look for an agent who brings at least four years of experience to the table, one who knows the market well enough to find a great deal on the home that’s right for the buyer.

Partner with a real estate pro who has the heart of a teacher and takes time to listen to your needs and answer your questions. A good agent is more concerned about your bank account, not theirs.

If you’re looking for an agent to guide you to a smart first home purchase, we can help! Our Endorsed Local Providers (ELPs) are real estate experts with top-notch customer service. They can help you find a home you love in your budget!

Tips for Renting a House

1. Understand the Landlord-Tenant laws in your area. It's important to research the Landlord-Tenant laws to ensure that you, as the tenant, understand your rights and responsibilities.

2. Inspect the property. You should inspect the water system, air conditioning unit, locks for doors and windows, plumbing (make sure the toilets flush), and etc. Make sure to ask the realtor or landlord about house maintenance and when the house was last maintained. You don't want to rent a home with plumbing issues or heating problems during the winter.

3. Read your lease carefully. Your lease is a legal contract between you and the landlord for use of the landlord's property. A lease may contain extra clauses that aren't legally required by Landlord-Tenant laws, but the clauses are legally binding when the lease is signed by both parties. If you are concerned that your lease might be unfair to you (e.g. the landlord requiring you to have property inspections every week), you can seek legal counsel and retain an attorney specializing in Landlord-Tenant relations.

4. Inspect the property again. Once the lease is finalized and agreed upon by both the landlord and tenant, you can request to see the property again. When you're at the property, take photos and document any form of damage you see. If you see small holes in the walls caused by a wall-mounted television screen, take a photo and inform the landlord in writing. Your landlord may or may not fix the damage before you move in. However it's important to inform the landlord prior to moving into home, otherwise the landlord may accuse you of the damage and take money from your deposit to repair it.

5. Pay your rent on time. Once you move into your new home, you need to pay your rent on time. Rent can be paid with cash, checks, or electronic transfers. Paying in cash is not recommended because there's no paper trail to track your money. If you decide to pay in cash, make sure you ask for a receipt that documents the date and what the cash is for.

6. Make sure your landlord has been paid. When mailing a check to your landlord, make sure your landlord deposits the check. If your landlord hasn't deposited or cashed your check, inform your landlord that you've mailed the rent check. It's better to inform your landlord in writing, such as email or text message. You don't want your landlord to accuse you of failing to pay rent on time.

7. Establish a good relationship with you and your landlord. This doesn't mean that you need to be best friends with your landlord. However, you don't want your landlord to outright hate you. A disgruntled landlord can be difficult to deal with during the duration of your lease. Be kind and respectful to your landlord. If you want to go the extra mile, you can send greetings cards during the holidays. A happy landlord may respond quicker to any emergency repairs. If you only communicate with your landlord's property manager, then establish a good relationship with that property manager.

https://toughnickel.com/real-estate/15-Tips-For-Renting-A-House

Tips to Increase Your Home's Value

Increasing the value of your home is easier than you think. Follow these tips, and your home will be worth more before you know it.

Plan your remodel.

Whether you just bought a house or you have lived there for a while, the fastest way to increase your home's value is by making a plan.

You will fare better if upgrades are made intentionally and not on impulse. Home improvement projects cost about 20 to 25 cents on the dollar. The other 75 to 80 cents spent go directly back into the home through increased value.

Tackle one room at a time.

How can you harness the energy that comes from new ideas and still be smart when you make those improvements? Make the commitment to tackle one room at a time. Whether it's a simple coat of paint or knocking down a wall, by tackling one room at a time you keep projects achievable.

Make a list of all the things you dream about doing, break your list down into categories based on cost and write down how much time each project may take. What this does is help you get results. If you only have a day or a weekend, choose a project that fits within your timeframe, comfort level and financial commitment.

Small improvements can really pay off.

Are you torn between improving your home's decor, versus making upgrades you know will increase your home's resale value? Many homeowners are surprised to hear that doing a little bit of both will actually pay off.

Start by making two lists — upgrades for your home value and upgrades just for you. Upgrades for your home may consist of replacing old faucets, permanent lighting and doors. Upgrades for you are furniture, artwork and window treatments. Gone is the dartboard approach to picking projects and wondering if what you are doing is really making a difference. With this plan, you will see real progress.

Clean your house now for profits later.

If your house is on the market, a bright and sparkly home can attract buyers like a magnet. A house can never be too clean. If you were a buyer, would you choose the house that is slightly dingy or the home down the street that is clean and welcoming?

Curb appeal counts.

Want a fresh perspective on the value of your home? Walk across the street, turn around and ask yourself, "Does my house have curb appeal?" Does your home look attractive, welcoming and structurally sound at first glance?

Make a list of ways to enhance the positive and eliminate the negative. If you have a nice curvy walkway, accentuate it with flowers or lanterns. If the first thing a visitor sees is your big wide garage, try to guide their eyes into a beautiful front yard, or paint your front door red to guide the eye there. These things add value.

Take a digital photo and look at your home in black and white. When the color is removed, the truth comes out. That is where you see the cracks in the walls and the glaring flaws.

https://www.hgtv.com/design/decorating/design-101/10-tips-to-increase-your-homes-value

Western Slope Nonprofits

In 2017, the Western Colorado Community Foundation distributed more than $3.4 million in grants and scholarships from its charitable funds.

Grantmaking is one of the Western Colorado Community Foundation’s community-building strategies. WCCF also administers scholarships, provides training and support to nonprofits through its NSTAR program and manages Agency Endowments for organizations.

The work of local nonprofit organizations impacts the quality of life for everyone in western Colorado. Recognizing the essential role they play in the economy and health of our communities, the Western Colorado Community Foundation is committed to sharing knowledge about the nonprofit sector with our larger community and strengthening our nonprofit organizations through grants and training.

http://wc-cf.org/nonprofits/