The Importance of Credit
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By following these simple steps can ensure, you can be less likely to have tenant issues with your new rental property.
1) PRESENT A GREAT MAINTENANCE FREE PROPERTY
Prior to listing your property for lease, be sure you have addressed all issues no matter how small it may seem. First time landlords, sometimes think that they can address the smaller issues once the property has been rented. This is not the good idea, as the new tenant will see the property as problematic and issues that may not have otherwise been of concern become a bigger deal. Use Professional Photos for Listing; this helps to bring a higher level of client/tenant. If they see it is well taken care of they will also take good care.
2) MAINTAIN PROFESSIONAL DISTANCE (FROM TENANT)
First time Landlords often feel they need to be friends with tenant. This doesn’t always work out well. When a “Friend” non “Professional” relation develops, most times without meaning malice or intent, The tenants can assume that because of the friendship they can do things that were not permitted by lease, or they will use the friendship to get more than was provided or offered in lease. It is always best to maintain a friendly but “Professional Distance”. 1) Setup separate email address for correspondence with tenants. 2) State the best way to be contacted contact is via email, phone or text, whichever you feel most comfortable.
3) BE PROACTIVE WITH MAINTENANCE
Regular maintenance (ie: landscape/spa maintenance, etc) should be done at regular scheduled times, without the need to be called by tenants. This sends a clear signal that you know what is going on and they will be carful to also maintain good behaviors.
4) SET CLEAR GUIDELINES FOR USE OF PROPERTY
Set clear guidelines for use of the property that is presented to tenant with lease signing. Ie: no smoking on premises, now loud noise or gatherings after a certain time, do not paint or make any physical changes to property without prior landlord approval, no pets, etc.
5) BE RESPONSIVE TO QUESTIONS
Should maintenance issues or other concerns occur, address promptly and clearly. This establishes a trust and responsible relationship with tenants.
6) SCREEN TENANTS THOROUGHLY
With any online listing system, landlords have a built in background and credit screen system that can help to weed out potential problems. Be aware of red flags such as multiple moves with a year, low credit score, etc. These systems are built into Zillow, Realtor.com Apartments.com, Westside Rentals.com and are generally free to landlords or for minimal cost $20 or so.. They will also provide Applications, and Lease Agreements. (I can also provide these)
1) You can’t buy or sell a house in fall/winter
False: Although in some harsher climate regions listings and sales slow down, in fall winter months, properties that do get listed, on average sell just as well as in warmer months. Slow down is usually due to holiday season and family commitments rather than weather.
2) I don’t need to fix anything before listing for a sale, It’s the next guy’s problem.
False: Attending to minor repairs or deferred maintain items will make you home more appealing to buyer. As they will not see it as a “project”. Tending to cleanup, paint and little fixes will pay for themselves in faster sale at a higher price.
3) Before listing my home for sale i need to empty everything out, leaving it totally empty a blank slate for potential buyer to use their imagination.
False: Well sort of false, you do need to remove overly personal items, (ie: family photos, memorabilia, etc) but leave just enough for people to see how the spaces are used. Professionally “Staging” a home has become common practice in the current real estate market and helps achieve both a higher sales price and faster sale. Buyers require enough furnishings so they are able see how spaces are used. They need to be able to imagine themselves living in the space. but nothing so personal as prevent them from imagining themselves living in the space.
4) It doesn’t matter what my front yard looks like, when buyers get inside they will see how awesome the home is.
False: Home buyer will make a judgment of whether or not they like a home upon the first 30 seconds of driving up or seeing photos online.. FIRST IMPRESSIONS ARE EVERYTHING. In this digital age of “instant gratification” people are quick scanners of info so you need to GRAB THEIR ATTENTION. Good Curb Appeal will DEFINITELY get more buyers in the door and lead to higher exposures.
5) I am gonna list my home at a really high price, and just come down till it sells.
FALSE!!!: This is a common misconception when selling a home.. Simply listing it HIGH will not guarantee the highest sales price. In FACT, it can have the opposite result. All other factor being equal, the home needs to be prices within the “comparable sales price” for you area. Today’s buyers are very informed and have a lot of price comparison resources at their disposal, from Zillow to Redfin To Homes.com. So they will know instantly if you home is priced too high for the area, and will simply pass you over. The longer a property sits on the market there is a “psychological” perception that there is “something the matter” with it. Once this has occurred, the property can become “Stale/Broken” and offers that do come in will be well below the comparable sales prices as it is now viewed as “not as good” since it has taken so long to sell.. Accurate Listing Price will make all the difference!.
source: nar.org, realtor.com, car.org, dre.ca.gov
1) Save $100’s of Thousands on Purchase Price (see below examples source data: themls)
2) Increase Equity (value) Faster. The above renovations took place over a 6 to 12 month period and averaged an 32.67% Increase in value. Compare this to the “Historical Average Stock Market Return” is 10% according to S&P 500 as reported by NerdWallet
3) Get a Home in a Neighborhood/City that may otherwise be out of reach.
4) Use increased equity for further updates with specialized financing;
Renovation loans are mortgages that let you finance a house and improvements at the same time. With a renovation loan, you can pay off improvements over a longer period of time and at a lower interest rate than other types of financing. Options include:
FHA 203(k): Offered through the Federal Housing Administration, FHA 203(k) loans allow lower income and credit scores than conventional mortgages. They can be used for most improvement projects.
VA renovation loan: The Department of Veterans Affairs recently updated its VA loan guidelines to include the purchase and renovation of a home. A VA-approved contractor is required, eligible projects are somewhat limited and your lender may charge a construction fee.
HomeStyle: Guaranteed by Fannie Mae, HomeStyle mortgages require higher credit scores than FHA 203(k) loans. But almost any improvements are eligible, including “luxuries” like a pool or landscaping.
CHOICERenovation loan: Guaranteed by Freddie Mac, this mortgage allows improvements that help homes withstand natural disasters, among other upgrades. And borrowers can make repairs themselves, prior to closing, to earn a down payment credit.
A fixer-upper mortgage may also help cover your mortgage payments if you have to live elsewhere while improvements are in progress, and may include extra funds in case projects exceed the estimated cost.
5) You get a home EXACTLY as you want style, finishes, features. Be it Modern, Traditional, Classic or Transitional. You get to choose.