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Monthly Archives: June 2018

Payment for Expert Property Management Services

How much ought to one buy skilled property management services? it is a smart question. and therefore the answer is… It depends, however hopefully it does not price not an excessive amount of. a minimum of that is what the general public would suppose.

There are three basic services for which most property managers charge a fee:

1. A leasing or often called a listing fee. (This is also sometimes called a procurement fee.) In any case this has to do with the tenant placement function.
2. Monthly management fee. This covers the cost of periodic interaction with the tenant (sometimes daily).
3. Annual lease renewal fee. Usually only charged when the management company is successful in negotiating a renewal at the end of the lease term.

Look at these incrementally, but also consider them collectively over a year’s time. These fees can be easily compared among competing agencies. You can be the judge of what’s reasonable. Keep in mind that such fees do vary from market to market. Be careful not to get hoodwinked into selecting the cheapest solution simply because it is less. Cut-rate management services may be just that, cut rate. The poor quality of services that you receive may explain the discount. A quality property manager can save you tons of money on the back end.

What you need to look for, and maybe even specifically contract for, is that there are no undeclared fees. Those are the ones that pop up and bite you when you least expect it. Read your management agreement carefully. Don’t get surprised!

Probably the fee that is most often hidden, or perhaps not fully disclosed, is the cost of home maintenance services arranged for by the management company. It is not uncommon for companies to add a surcharge to maintenance and repair invoices. For many property management companies this becomes a secondary or even primary source of profitability. The landlord is oftentimes completely unaware of these costs at the time they agree to work with the management company, and they may never become aware of what’s happening. Sometimes, even when such fees are disclosed, the disclosure language is so heavily couched in legalese that one would need a law degree simply to understand.

Get your prospective property manager to fully explain all aspects of the arrangement and make sure that what they say is also what’s printed in the management agreement. If the manager cannot explain everything to your satisfaction, move on to another manager that can. Don’t get caught paying for services your neither want nor need.

If you are determined to go for the least expensive service, keep these wise words of Benjamin Franklin in mind: “The bitter taste of poor quality outlasts the sweet taste of a discount.” You usually get what you pay for. Please be diligent!

Why Note Buyers Can Help Grabbing Homeowners

“I’m from the national and i am here to assist.” chilling words for several, however there’s a little-known program that has helped virtually a quarter-million troubled householders keep in their homes.

The Hardest Hit Fund was established in 2010 to provide $7.6 billion in targeted aid to 18 states and the District of Columbia. These unlucky 19 were hardest hit by the collapse of the housing bubble and the ensuing Great Recession.

Each state (and D.C.) created its own program to administer the funds, which were targeted to help their residents avoid foreclosure, stabilize neighborhoods and eliminate blight.

So how is this related to the note business? Well, these distressed homeowners have been skipping payments for in some cases years and have a huge debt to repay with interest. The fund will pay off all the arrearages (up to a maximum of $30K) and in some states it can pay for as many as 12 future payments. The money is paid directly to the bank, the lender, or in our case, the note holder.

The delinquent promissory notes that were signed to buy the houses are now called non-performing notes (NPNs). Since they’re currently not producing a reliable income stream, they are sold at a deep discount to their face value.

If you can buy an NPN in one of the Hardest Hit Fund states, there’s a chance the borrower could qualify for these funds. If they do, it’s a big win for them to get that huge financial burden off their backs. And of course it’s a win for us to finally receive free money from the Feds.

The problem is getting the borrower to even apply for the grant (if they’ll return your calls). You’d think that anyone would be willing to fill out a few pages in order to get relief from thousands of dollars in debt, but you’d be wrong. And then, not all applications are accepted, so there are no guarantees even if they do apply.

In spite of that, I target Hardest Hit Fund states when looking for NPNs in the off chance I can give someone a boost and get paid for it besides.

Even if we can’t use the Hardest Hit Fund, we can still help the homeowner in at least two ways. First of all, we can just forgive all the debt they accumulated from the original note. That will help them sleep at night again and it wasn’t our money to begin with. Then we can write up a new note that they can actually pay on a monthly basis. That way they get to stay in their home, and we’ve just created a cash flow for ourselves. Once they’ve made twelve payments we can easily sell it as a performing note if that’s our model.

Even performing note investors may need this information one day. People are still getting laid off or sick or divorced, so there’s always a chance a note that’s been providing regular payments could become non-performing in a hurry.

Feel Like a Real Estate Agents When Selling Home

Luxury assets development has flooded new housing inventory across the country, significantly in major cities admire the big apple, LA and San Francisco.

These upmarket homes haven’t solely reworked wherever folks reside and who’s shopping for, however they need conjointly modified the method several assets agents do business. For Jared Seligman, a accredited associate assets broker and leader of the Seligman Team at Stephen A. Douglas Elliman assets in the big apple, new development has taken the $64000 estate market to new heights – and buyers’ expectations have up together with it.

As the luxury real estate market evolves, more buyers at all price points expectmove-in ready homes, or a fair enough price cut to make up for needed updates and changes. Seligman offers insight into how he does business – and how a luxury broker’s approach can serve you well when selling your home.

Create a profile of the buyer. With any home sale, you want to appeal to as wide a market as possible, but it’s natural that you can rule out certain homebuyers because the home simply wouldn’t fit into their lifestyle. Maybe the location isn’t close enough to desired schools for their children, or for an individual who works long hours, a space might not be conducive to a focused working environment.

For the penthouse at 10 Sullivan, a new development nearing completion in Manhattan’s SoHo district, Seligman worked with a team to determine the buyer demographic most likely to be attracted to the price range, number of bedrooms, prime location and other details about the space, building and neighborhood.

“We felt the buyer would either be a single or young trophy-asset buyer and/or someone with a large family and/or staff,” Seligman says. “So we found it almost not being anywhere in between, so what we wanted to do is create a floor plan that would work for both, which is the hardest thing.”

He notes there are neighborhoods in New York that are attractive to such a specific type of individual or family that it allows agents to determine the most likely buyers, down to which preschool their children attend and which stores they frequent.

For your own home, consider staging and renovations that may cater best to a buyer likely to look in your neighborhood and the price point for the market value of your home. A home just down the block from an elementary school, for example, could easily appeal to buyers with young children who could walk to and from school. Staging additional bedrooms as kids’ rooms and the finished basement as a playroom will help buyers to see the space’s potential.

For a home centrally located near nightlife hot spots, single buyers or small families may be more likely to show interest in the area. Staging a spare room as a home office or home gym could paint the picture for the most likely buyer, without ruling out the possibility that it could be used as a child’s bedroom or guest room.

Understand what your home offers compared to others. As high-end development continues to enter the market in New York, pricey penthouses are no longer a rarity.Buyers have options, and they may not be pressed to relocate right away.

“When you’re dealing with luxury and trophy assets, these are people who do not need to move. They are fine,” Seligman says. “The buyer has a lot of power because now we’re in market where instead of four properties in that price point, there’s 12.”

Negotiations can get complicated and drawn out as buyers see no need to make a purchase until they have everything they want out of the deal. Seligman says the key to a successful sale at top dollar is to offer something the buyer can’t get anywhere else.

The penthouse at 10 Sullivan, for example, has extensive views of the city, including a glimpse of the Empire State Building from the tub in the master bathroom. “That’s when buyers will bite the bullet and be willing to sign,” Seligman says.

Adding something to an otherwise standard property could provide the distinction your home needs to stand out among others on the market. In Chicago’s luxury market, Sheldon Salnick, a real estate agent for Dream Town Realty, says many high-end buyers are drawn to large lots – more than 3,000 square feet plus an outdoor space. Sellers who may not have the yard space are furnishing roof space above the garage. “One of my clients did a pizza [oven] up there, and another landscaped it with plants and a tree,” Salnick says.

If you’re putting your home on the market, consider what features set your home apart from others nearby – be it a functioning fireplace, solar panels or that it’s walking distance to shops and restaurants – and highlight those in the marketing materials.

Be a perfectionist when you can. Especially if you live in an area with a lot of new condos or housing developments or where many sellers are flipping homes, pay close attention to the competition as you prepare your own home for the market.

“In resale it’s not uncommon you have paint chips everywhere. For a new development apartment, it’s an entirely different story,” Seligman says.

You won’t always have the same buyers looking at both new development and existing homes on the market, but it can be fruitful to view your home with the same eye a person would in new construction: Nothing can be out of place. Salnick notes a seller should make the property look its best, highlighting the unique features that set it apart from competing homes on the market. “Lighting plays a big role in this,” Salnick says.

Salnick adds that staging will help ensure that a buyer’s list of must-haves, like a media room for many luxury buyers, doesn’t have to be imagined when they tour the home.

Compromise where it makes sense. Depending on your ability to make changes or renovations and the state of your local market, it may be more beneficial to expect a lower price for your home rather than spend additional time and money to prepare it for the market.

Seligman recently closed on the sale of a triplex in Tribeca where the seller chose to dominimal staging rather than overhaul the space, as it would have ultimately been more expensive and inconvenient to move everything to storage and live in a fully staged property while the space was on the market.

“If it had been fully staged, the price point would have been significantly different than what we got,” he says.

Have to You Bought College Student a Condo or House

You’re not the primary parent WHO has had this idea. whereas it’s not the proper move for each parent, some really do purchase their kids a domicile or home to measure in whereas they’re faculty students.

“On paper, it’s a beautiful strategy,” says letter of the alphabet V. Walker, a licensed faculty coming up with specialist with the faculty Funding Coaches and a money planner with The Wealth Consulting cluster in Colorado. however Walker says the strategy has several unknowns.

For one, she says, what happens if your student doesn’t like the school and drops out or transfers after a year? That happens to as many as 1 in 3 freshman students, according to U.S. News Best Colleges data.

Four (or six) years is a short time frame for a real estate investment. For example, if you had bought your son or daughter a property at the height of the real estate boom in 2005 then you expected to sell it in 2009, after the market crashed, you would have been looking at a significant loss of value in many cities. “I think the runway may be too short,” Walker says. “You’re talking about a lot of capital in a four-year period of time, or today’s world maybe six.”

Buying a home for a college student to live in, for many parents, would make financial sense only if it were part of a long-term real estate investment strategy – for example, the parents planned to keep the property and continue to rent it out long after their child graduates and leaves town.

“It’s not inexpensive to get into the real market and get out,” says Allen J. Falke, of counsel to the Mirick O’Connell law firm in Worcester, Massachusetts. “If it’s a market that appreciates, it might make sense to invest in the market. But you’re taking a market risk.”

Andrew Vallejo, a Redfin real estate agent in Austin, Texas, has worked with a number of parents buying places for their students to live, even though the cost of a modest condo near campus can be $250,000 to $500,000. In Austin, home to the main campus of the University of Texas, a studio condo near campus can rent for $1,500 to $1,800 a month, he says.

While most of those buyers look for small condos, some have sought single-family homes near the city center where they would be allowed to add a second living unit to rent out. “Resale’s usually excellent when you’re closer to the core of the city,” he says. “A lot of buyers plan on keeping their properties as part of their portfolio.”

If rental property is part of your overall investment plan, Walker suggests an alternative strategy: Buy rental property wherever you want (perhaps in your current city) and pay your son or daughter to manage it for you.

Because added income may affect a student’s financial aid, this is usually a better strategy for families who don’t qualify for need-based aid or tax credits. “It’s a tax scholarship,” she says. “I now shift income into my student’s 15 percent tax bracket.” She cautions that it’s important to set the rental up as a business and follow all the laws scrupulously, including making sure your child makes a tax contribution commensurate with what he or she is paid.

“You need to do it right. You need to do this to the letter of the law,” Walker says. “If you do it, the benefits are huge.” You may also need to consult an accountant who knows your family’s financial situation, as well as a financial advisor or financial aid expert to set up the business to best benefit all involved.

Here are eight questions to ask before you buy a house or condo for your college student to live in:

What’s your time frame? Four years is a short time to expect to make a profit, or just break even, on a real estate investment. Are you willing to sell for less than you paid or hold onto the property longer if the market changes?

Do you want to be a landlord? You may plan for your son or daughter to take care of the property, but few 18-year-olds have experience with tasks even so basic as using a plunger on a stopped-up drain or calling a plumber. Will your 18-year-old know when to repair and when to replace the washer or dryer, and is he responsible enough to handle even such basic tasks as changing furnace filters and smoke detector batteries? That means you’ll need to be involved with property maintenance, as well as pay for repairs and upgrades.

Will your child need roommates? Finding and dealing with roommates is a challenge for any young person, and the dynamic changes when one party’s parents own the house. How will disputes be handled? What will your child do if the roommate fails to pay rent or his share of expenses?

Are freshmen allowed to live off campus? Some colleges and universities require freshmen students to live in the dorms. Even if it’s not required, will your son or daughter suffer from missing out on this experience?

Will you charge your son or daughter rent? Tax treatment is different for rental property than it is for second homes. If your child pays rent, that may become income to you, though it will also give you some additional deductions for expenses. You will probably need to consult your accountant to make sure you’re doing everything right.

Will whatever arrangement you make affect your child’s financial aid? Financial aid is based on the entire family’s financial picture. If your child has no room and board expenses, does she lose part of her financial aid? If you pay her to manage a property, does that affect her grants?

What happens if your student drops out or transfers to another school? Even the most responsible young person may discover his initial college choice is not a good fit. Or, he may change his focus to a field of study he can better pursue elsewhere. What will you do with the property if that happens?

Does the place you’re buying allow the type of rentals you want to do?Condo and homeowners associations usually have rules for rentals. Tenants, including roommates, may need to be screened (for which you’ll pay a fee), and there also may be rules on how often a place can be rented each year, for how long and to how many people. Many condos ban short-term rentals, and some cities do, too, plus restrict how many unrelated people can share a dwelling. Read the rules and ordinances carefully before you buy.