Today's guest blog post is brought to you by George Miller of securabilities.com
Embarking on the journey of property investment is a thrilling endeavor, filled with opportunities for growth and learning. It's a pathway that demands careful consideration and strategic
planning. This guide aims to illuminate the key steps in purchasing and managing your inaugural investment property, ensuring a well-informed and successful venture.
Analyzing Real Estate Markets and Properties
Delving into the real estate world necessitates a deep understanding of various markets and property types. This involves scrutinizing different neighborhoods, assessing the demand
for various property styles, and understanding the nuances of residential versus commercial spaces. A thorough market analysis lays the groundwork for identifying properties that align with your investment objectives. A real estate appraiser can analyze a
potential property and provide you with a fair value to offer for the property that takes into account marketability and past rental history.
Assessing Local Vacancy Trends
Analyzing vacancy rates in your chosen area is essential for successful property investment. These rates provide valuable information about potential income and the frequency of tenant
turnover in rental properties. A clear understanding of vacancy rates enables you to tailor your rental insurance and maintenance plans more effectively. Adjusting these strategies based on vacancy data can lead to improved financial outcomes. This analysis
is fundamental in optimizing the financial performance of your property investment.
Navigating Property Financing
Exploring the financial aspects is a critical component of property investment. You must assess different financing options, including mortgages, loans, and other credit solutions.
It's important to comprehend the specifics, such as terms and interest rates, of these financial products. Grasping their long-term effects is vital for making an informed choice. Selecting the right financing method is key to ensuring both the advantage and
sustainability of your property investment. If you choose to use bank financing the bank will order a real estate appraisal as part of the financing process.
Establishing Asset Protection with an LLC
Safeguarding your personal assets is a key consideration in property investment. Protect yourself and your assets from litigation by establishing a limited liability company for your
investment property business. In order to form an LLC in Delaware, you can hire a lawyer or use a formation service like ZenBusiness which is considerably less expensive. An LLC offers numerous benefits, including legal protection and potential tax advantages.
Setting Clear Investment Objectives
It's crucial to have well-defined investment goals to effectively navigate your property selection. These goals might center on long-term capital growth, immediate rental earnings,
or a combination of both. Clear objectives serve as a compass in your decision-making process, ensuring informed choices. This alignment between your goals and property selections is key to a coherent investment strategy. Such precision in goal-setting underpins
the success of your overall investment approach.
Providing Tenant-Friendly Lease Options
The current dynamic rental market values the flexibility of lease terms, making it a major draw for prospective tenants. By accommodating the diverse needs of renters, flexible leasing
options increase the attractiveness of your property. Such adaptability often results in higher occupancy rates. This approach plays a crucial role in securing a continuous and reliable rental income stream.
Implementing Effective Tenant Screening
Your investment's success hinges largely on the caliber of your tenants, making a thorough tenant screening process essential. This process should encompass checks on credit history,
previous rental experiences, and personal references. Selecting tenants who are both reliable and responsible significantly reduces the likelihood of issues like non-payment and property damage. Careful tenant selection is instrumental in ensuring a steady
and stable rental income.
Coordinating Tenant Move-In
Designating a move-in day and meticulously preparing your property are key to ensuring a seamless transition for tenants. It's important to make sure the property is not only clean
and functional but also adheres to all necessary safety standards. The effectiveness of a well-coordinated move-in process can significantly influence a tenant's initial impression. Such thorough preparation forms the basis of a strong and positive landlord-tenant
Embarking on your initial property investment venture is both challenging and fulfilling. Adhering to strategic guidelines like forming an LLC and checking vacancy rates sets the stage
for a prosperous and lucrative endeavor. The cornerstone of a successful investment is thorough planning and judicious decision-making, ensuring alignment with your investment objectives. Prioritizing both your goals and tenant contentment is essential for
a thriving property investment journey. Get the most accurate and fair property valuation with Appraising in Delaware. Don't wait, visit our website today and let our experts guide you through your real estate appraisal needs.
In the world today it is all about planning. We see it from the smallest parts of our lives to
the biggest choices we have to make - such as selling our homes. From when to sell and when to let the listing go live it all affects the ability to make the best sale.
Studies have shown that the best time to sell your home is in the spring
and early summer. The specific dates will change from state to state but you typically see a faster turnaround time and more money being spent starting around April 1st all the way up to June 15th. You can see trends for 2019 here:
. Not only are you going to have better weather during this timeframe and more daylight hours to spend to go out and tour homes for the buyers of these homes, your sellers will have plenty of time to do small but impactful updates to home during the winter
hours when people like to stay home anyway.
The day you list your home can also influence the number of people who
will see your home. Listing your home on a Sunday vs a Tuesday could get you up to 20% more views which means you will have a higher chance of these people coming to take a look at your home.
Two things to look for (aka keep your fingers crossed to see) is local
job growth and low mortgage rates! These two things are a sellers dream. Job growth means people are going to be looking for homes closer to their jobs, which in turn means they are going to be willing to pay more for the right home with the right conditions
to make things easier for them. Low mortgage rates are a no brainer and will get anyone looking for a home.
It’s truly about research and knowing your market. Your realtors are there
to help you with these thing, it’s their job but as we always like to say it's never a bad idea to do some of your own research so you can make your wants and needs known.
If you're a home seller or a real estate agent and haven't been able to sell your home, consider getting an appraisal!
1. Get Accurate Square Footage For an Accurate Price
If you don't know what the accurate heated and unheated living area of the home is, you will not be able to determine the most accurate value for it. So getting an appraisal will help.
2. Take Into Consideration Solds and Listings That Have Occurred Since the Listing
If you want to sell your home, then getting a more accurate list price that reflects the current market will help you. If there are other similar homes for sale that are priced more competitively than yours, they're probably going to sell more quickly.
3. Get a Fresh Set of Eyes From an Unbiased Third Party
Bringing in an appraiser who has a fresh and unbiased perspective on your home could result in arriving at a price that is based on the market rather than what you think your house may be worth.
4. Use a Floor Plan as a Selling Tool
Knowing where rooms are located and the flow of the home can help buyers envision where their stuff will go, which can help sell your home quicker!
5. Market it as a "Pre-appraised" Home
A home seller will have peace of mind knowing that the likelihood of their deal falling through due to a low appraisal will be decreased by getting a pre-listing appraisal.
5 Reasons Your Real Estate Appraisal Matters
Getting an appraisal back within a reasonable time frame can make or break a deal. If you’re in a rural area or in an area where the real estate market is booming, you could wait up to 3 weeks or more just to get the appraisal results. This can
be even more frustrating if the appraised value comes in low or repairs are needed.
Right now there are even some areas in the country where appraisers are flat out declining appraisal orders because they know they do not have the capacity to turn the appraisal report around in a timely manner.
When the purchase contract states that the deal needs to close within 45 days, and it takes 40 days to get appraisal results, expect an extension to the purchase agreement.
If you’re getting a mortgage, the property needs to meet some basic standards for the lender to give the thumbs up on acceptable property condition.
Common property condition issues that pop up on appraisals and cause issues: mold in the attic or basement, peeling paint on the outside of the home or garage, trip hazards, broken windows, and missing fixtures.
Anything noticeably wrong with the property is likely to be pointed out on the appraisal report including photos. When there are repairs noted on the appraisal the seller will need to complete those repairs prior to closing, and the property needs
to be reinspected by the same appraiser to confirm the requested repairs have been made.
When coming up with an opinion of value, the appraiser selects recently sold homes within the market that are similar in size/condition/location/amenities.
The appraiser then compares those homes with the subject property and makes adjustments based on differences and similarities between the homes.
For example: if the subject property is a 3 bed, 2 bath ranch on .5 acre, the appraiser would look to include 3 bed, 2 bath ranches that sit on a .5 acre lot. The appraiser would not be including a 3 bed, 2 bath condominium.
It doesn’t have to be identical and size and condition, but it does need to be the same property type. Unique properties can be very difficult to finance. If there are no similar properties sold within a reasonable distance and time frame (underwriter
discretion) the deal could be dead. There is also a limit to how much an appraiser can make adjustments on value based on the differences in homes.
If the adjustments made are too high, the comparable property used could be considered irrelevant or unacceptable and would need to be replaced by a better comparable if possible.
For some buyers the appraised value can have an impact on their ego.
Let’s say you get under contract on a house for $300,000 and it appraises for $380,000. There might be an increased warm and fuzzy feeling knowing you got a good deal. Another confidence booster in a case like this is that if you’re going to be
paying private mortgage insurance (PMI) due to a low down payment, you may be able to refinance in a year and then use the new appraised value to drop your PMI (which could save you hundreds of dollars a month).
Knowing that you have instant equity in the home that you already loved to begin with can really add a nice cherry on top.
The collateral (the house) used to secure the mortgage must comply with lender guidelines.
One of the biggest issues when talking about compliance has to do with finding out if the home is a non-warrantable condo (does not apply to single family homes). If the property is a condominium the appraiser will reveal information pertaining
to the number of units that are owned by 1 entity, number of units that are not complete, and other important information about the condo that could cause issues. [more on non-warrantable condos here]
Another fairly common issue that can come up as a compliance issue is number of acres the property sits on. Depending on what type of loan program you’re seeking, there may be an issue with giving any value to acreage beyond 10-20 acres. For someone
buying a 50 acre property, this can be a deal breaker if most of the value is in the land.
If the appraisal states subject property was recently was sold, there could also be flipping restrictions depending on what type of loan you’re seeking.
The appraisal can clearly make or break the deal in several unique ways other than home value.
Question: How do appraisers account for a difference in year built? Do appraisers give an adjustment when to comps there is an age difference?
Read more here ...
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