Many investment property owners do not put much thought into whether they’ll be able to pay the mortgage on their investment property each month.
After all, that’s why you have tenants, right?
However, it’s not just tenants failing to pay their rent each month that can cause your rental property business to go under. In fact, not being able to cover the mortgage each month has the potential to do far worse damage than a few missed payments by your tenants.
At least with tenants that don’t pay their rent, there is a remedy for collecting those payments.
If you don’t pay your rental property’s mortgage, you are in trouble with not only the tenants that are leasing from you, but also the lender that gave you money to finance the property in the first place.
Today, we are going to look at some great mortgage payment tips so you can avoid running into trouble paying up each month.
One of the biggest mortgage mistakes Minnesota property owners make when they get into the rental property business is not taking the purchasing of a property as seriously as they should.
You should make sure to reduce your debt, establish good credit, shop around for the right financing terms, and secure a good down payment before even thinking about investing.
You should also never buy a property you can’t actually afford, no matter what the market is projecting you can collect in rent each month.
Do your research and make sure that the property you are looking to buy is within your budget and can command the rent rates you expect. Consider how you will handle various situations, such as potential vacancies or tenants who are behind on rent payments. Will you still have enough money to cover your mortgage payments, regardless of tenant income?
Remember, you are ultimately responsible for paying the mortgage each month.
Your lender will not care that your tenant skipped town, rent rates took a dive, or that you didn’t understand the financing terms.
Lenders expect their money each month and you need to be able to provide that, regardless of what’s happening with your rental property business.
Once you secure the right financing for your Minnesota rental property, and you have finalized your purchase, it’s time to focus on avoiding the mortgage mistakes many property owners make while their properties are being leased.
As a property owner, it is tempting to want to keep your rental leased at all times, regardless of what kind of tenant is living there. However, this can cause you a lot of problems deep into the lease term if you didn’t properly screen your tenant.
Although we mentioned above that there is a remedy for handling tenants that don’t pay their rent, do not be tricked into thinking this works every time. Also, don’t be tricked into thinking that collecting missed rent payments is a fast process.
True, if your tenants fail to pay their rent, you or your property management company can evict the tenant and keep their security deposit to make up for lost rent payments. You might even be able to take them to court for the money they owe you for the remainder of the lease.
However, if your tenant decides to move out unexpectedly, and disappears without a trace, you are going to have trouble recovering that loss in rent, not to mention any damages you may have to take care of before moving another tenant in.
Meanwhile, you will still have to cover the mortgage payment each month until you get new tenants in place.
While you can never fully avoid a situation like this, the key to preventing it is thoroughly screening your tenants before choosing one to move into your rental. Make sure your potential tenant has enough income to cover the rent each month, that their references are legitimate, and that they have no prior evictions on their record.
You want to place tenants in your rental that will pay their rent each month, without fail, as well as care for your property so that you never have to worry about covering the mortgage in the middle of a nasty eviction proceeding.
Proper tenant screening can help you prevent placing tenants in your property that won’t pay their rent on time each month. However, the other half of the equation − and the key to being able to cover your mortgage each month − is to avoid vacancies.
After all, zero tenants mean you’ll be receiving zero rent payments, which means you have to cover your mortgage on your own.
If you find out your current tenants will not be renewing their lease come the end of their term, start advertising your rental as available well before they move out to minimize the time your property is vacant.
Begin the tenant screening process, get your maintenance crew on board to fix anything that may need fixing or replacing, and start working with your property manager to tweak your lease agreement if there is anything you want to change, such as the rent rate.
In addition, if your tenants don’t have a need to move elsewhere anytime soon, take it upon yourself to make sure they are happy with their stay during the entire lease term.
It is far easier to secure a lease renewal than it is to place a brand new tenant in your vacant property. And by renewing your tenant’s lease for another term, you are guaranteed that steady income that is covering your property’s mortgage.
Staying proactive and making sure your current tenants are happy and don’t want to leave, while also filling vacancies as soon as they happen, will help reduce the strain of having to cover the mortgage in between tenants.
This may seem counterintuitive, but putting some money into your rental property can actually help you save money in the long run.
Tenants want a beautiful place they can call home. They want their appliances to work, their yards to be well maintained, and if they run into any issues during their tenancy, they expect you or your property manager to handle maintenance and repairs efficiently.
Keeping your rental property maintained does a few things:
The more effort you put into caring for your tenants and the rental property they lease from you, the more inclined they will be to pay their rent on time each month and care for your property as though it was their own.
If you find yourself having trouble covering the mortgage on your Minnesota rental property, and are looking for a way out, how we can help.
Homestead Road is dedicated to helping people in trouble with their homes avoid foreclosure.
We pay for properties as is, meaning you won’t have to invest any money into your rental, even if your previous tenants did some damage, in order to sell it to Homestead Road.
You won’t have to invest in a real estate agent, and all the fees that come with selling a piece of real estate, which can make your financial troubles worse when you are seeking a way out of trouble.
With Homestead Road, you can receive up to 20% more for your property, no matter the condition it’s in, thanks to our unique business model. This means bailing yourself out of mortgage trouble becomes a reality, and you can move forward with the minimal amount of damage to your finances and credit.
Buying a rental property and covering the monthly mortgage is much like buying a home for yourself and paying the mortgage each month. It has to be done.
It doesn’t matter whether the property has tenants, what the monthly rent rate is, or whether the property has been sitting empty for months. It’s your responsibility to pay your mortgage, just like your tenants pay their rent.
Unfortunately, there are instances where your intentions were good, but the timing was off, and you find yourself in some financial hot water with your mortgage.
If you need help unloading your Minnesota rental property because you’re having mortgage trouble, and are looking for a fair cash offer, contact Homestead Road today and see how we can help.
10 Tricks to Buying a New Home in the Perfect Neighborhood
It happens many a time that the people don’t give much importance to the neighborhood while buying a new home. In the excitement of a new home, they forget to inspect the area they are buying a house in. But, there are also the smart buyers who give equal importance to the neighborhood as that of the house itself.
Neighborhood matters a lot; a good neighborhood not only ensures the availability of all the conveniences and facilities but also increases the value of your house. Also, the right neighborhood is different for all depending on the person’s requirements. However, here we are enlisting some tips that will help everyone to find a perfect neighborhood.
Know your requirements
As mentioned above, everyone has his own vision for the perfect neighborhood. So, know your requirements first, so that you can be clear about what to look for. It may be the trendy upscale locale, a quiet street near to the park, or a growing area where people from different localities will come. So, it is crucial to decide the features that you want in your neighborhood.
Have a look at the nearby business
The businesses in your house’s neighborhood affect your house values. Some businesses (like tattoo parlors, dive bars, payday loans, etc.) may bring an instant increase in your house’s value, while some (like coffee shops, tuition centers, etc.) may take years.
Visit the area many times ensuring different timings every time
You cannot know much about the area in a single visit. So, visit the area again and again at different timings to have the exact idea about it.
Talk to the people living there
It is a good idea to spend some time in the area and talk to the people living there. You can ask them about the specialties of the area, the ongoing problems or any other concern you are having in your mind. A single conversation will let you know a lot.
Check the area for crime
Though no community is totally free of crime, but you should look for the area where the crime rates are low.
The Homestead Road Process: Bringing Homes and Neighborhoods Back to Life
Check the recent/ongoing home improvements
Home sellers will make improvements to their homes to hide the red flags. So, check the extent and quality of the home improvement. If it looks extra than need, then chances are there that the homeowners are making big improvements only to sell their house.
No doubt that you should look for the facilities, but the highly convenient areas are much expensive. So, check your affordability and fix a budget accordingly.
Prepare yourself for the changes in the market trends
You should stand up to date with the current market rates and should prepare yourself for the changes. As changes can occur anytime, staying updated with the latest trends will make the process easy.
Check the friendliness of the area
If you are of friendly nature that you would definitely be interested in spending some time with your neighbors after coming from the office. So, look for the activities that take place in your neighborhood and check if the place is of your interest or not.
Distance from the market
There are some things that you need to buy on daily basis like milk, bread, etc. So, the market should be at walking distance from your house. At least there should be stores in the locality from where you can buy the necessities.
Always remember that it is not only the home that you are buying, you are also buying a neighborhood along with that. Take the help of the above-mentioned tips for finding a perfect neighborhood for you.
7 Reasons Why You Need Real Estate Agent to Buy your House
Are you going to buy a house? Then let us tell you that the process is much complex and consumes a lot of time. If you are interested in buying a house of your dreams without any hassle, then you must consider hiring a real estate agent. No doubt that the internet has made it easier to sell or buy properties on your own, but still the majority (about 93%) of transactions are carried out with the help of a real estate agent. Also, the fluctuating market trends can make the house buying process a headache for you, along with costing you more money and consuming more time. So, if you are want to buy your house fast then you must seek the help of a professional agent.
Are you still in a dilemma for hiring or not hiring a real estate agent? If yes, then keep on reading; you will get the answer.
Knowledge and expertise
Buying a house is not like buying a dress or a pair of shoes; it is a complicated process and you need to have detailed knowledge to carry it out successfully. There are lots of requirements that you need to complete for making a legal transaction. Being new to this field, you may not have the detailed knowledge about the process. It is the point where a property agent can help you as he has all the required knowledge.
You must agree with the fact that experience makes us perfect and let us become efficient in a task. As realtors are experienced with the process of buying and selling residential properties, they will guide to at every step of the house buying process.
Ease of house-finding process
Agents have the latest listings with them and thus, they can help you to find a house of your choice, quickly. Depending on your recommendations, he will narrow down the list and will inform you about the likely properties.
A real estate realtor will not only help you in the buying process, but he will also let you find the other people that you would need in the purchasing process. For an instance, you would need the home inspector, the money lender and more.
**Always try to avoind these things before you buy your home**
You can face many risks while buying a house; like your loan may be disapproved, you may be underestimating the repair costs, you may not get the house you are looking for and many others. Being experienced with all these things, an agent will provide you right guidance and thus, will help you to prevent the major risks.
You may need to negotiate the prices to get best deals and it is only the realtor who can help you with this. Being a mediator, your agent will set a price for which both the buyer and seller will agree.
Saves time and effort
Hiring a property agent can be highly beneficial for you in the case you are trying to buy your house fast. He will create a right schedule for the whole process and will help you save your precious time.
Now if you have planned to choose a real estate agent to buy your new house then you must consider these 10 Questions to Ask Before you Hire a Real Estate Agent
In short, if you want your house buying process go smooth and get completed at the time, then you must get the help from a real estate agent. He will not only help you find a house of your dreams but will also let you get access to best deals for the same.
A complete Guide for Rental Property Buyers
There is no doubt that rental properties are the best way to build fast and secure wealth, but making the first investment or finding a good deal is not that easy. Though the process of buying a rental property is not much different from buying a home or commercial property, but there are some differences in the process. Here, in this write-up, we are going to mention the tried and true steps that will guide property buyers to make their first investment in rental property.
The foremost thing that you need to do before even looking for the property is knowing your needs. There are some questions for which you must have clear answers in your mind. Like, what type of property you are looking for? How much are you willing to invest? In which area, you want to buy your property? What is the average rent in that area? And more. As all these things matter a lot, you must be clear about them.
Once you are clear about your needs, you can create a proper plan and set criteria for making your investment. Writing down your plans and referring back to them on a regular basis will help you to remain bound to your goals. For an instance, in the case you are looking for a house having a rate between $180000 and $200000, then you are likely to get distracted by a home which would cost you $220000. A proper plan and criteria would help you stick to your goals in such cases.
It is must arrange to finance before you start looking for the property as it will let you know that how much you can afford. Otherwise, you may need to go through the heartache to know that you cannot afford the property you have found or liked. Moreover, ensure to weigh all the financing options and then choose the best one.
Though there are many websites which you can refer to for searching the properties, but they do not contain the full details. So, you should consider consulting a real estate agent as they can provide you detailed information. Don’t forget to share your criteria with your agent because only then they will be able to find the properties as per your requirements.
Once you have found a property, make your offer. The main thing that you need to focus is not letting your emotions override the numbers. If the number is not agreeable to you, then don’t buy it. Having no deal is always better than making a bad deal. And in the case, you and the seller both agrees to the amount and other terms then you can sign an agreement.
Before closing the agreement, you should go through the due diligence phase like the house buyers go. You can hire the inspector to inspect the condition of the property and an insurance agent for doing insurance. You can go further with closing on the property once all is ensured.
Now, you are the landlord of the property. Start looking for the renters and ensure to rent it to the best tenants.
Guide about Buying and Selling a Home at the Same Time
When it comes to buying and selling a home at the same time, people just get confused that what they should do first- buy or sell? Though most of them are interested in buying a home and get settled first before dealing with the turmoil of selling, but it is difficult to do so in almost every type of market. It is not only the high cost that increases the difficulty, but there are many other factors which contribute to it. However, it does not mean that buying and selling a home at the same time is impossible; you just need to plan it in advance and do some preparations.
In this write-up, we are going to mention the pros and cons of both- buying a home first and selling a home first. Make sure to consider them while trying to buy or sell your home fast and doing both simultaneously.
Pros and cons of buying a home first
Pros and cons of selling your home first
In addition to these, there are many other facts that you need to focus on, like making your home market-ready, getting your finances in order and more. So, hiring an experienced real estate will be the best idea as he will give you the right advice.
Staging Tips to Sell your Home as Quickly as Possible
There comes the time when you need to sell your home as early as possible; but, finding a reliable buyer and getting the desired price for your home is not that easy, especially when you are looking to sell it fast. You are likely to
get frustrated with the process after trying it for few days. However, if you are going through the same situation then let us tell you some valuable tips that will help you to sell your home fast.
Undoubtedly, first impression is really important; so, work on it. As the first thing that any buyer will see is the outlooks of your house, so walk out of your house and check that how it looks. By doing this, you will be able to know that where your house lags behind in the looks. Also, keep your house’s outer area clean, like there should be no junk in any corner, your lawn should be well groomed, driveways and walkways should be clean and exteriors walls should be free of dust/visible fractures. Always remember that buyers will enter your house only if they find it appealing from outside.
Though you are not advised to rejuvenate your entire house, it is necessary to make some alterations. For an instance, you can replace the old water heater or can consider changing the kitchen sink faucet, any other item that do not work properly or is too much old. As buyers always look for the advanced facilities, try to include the ones that are feasible. In simple, ensure to do the necessary rejuvenations as it will prevent the buyers from finding shortcomings in your house.
Choosing a right price is the most important thing that you need to focus on for selling your home quickly. Choosing a low price will let you face loss and if you choose a high price, then you are likely to get few offers for your home. For selecting the right price for your home you should be well aware of its market value. However, chances are there that you will not be aware of the latest trends in the real estate market; so, consulting a professional real estate company will be a better idea.
What most of the people do is choosing a high price in the beginning to try their luck, but you should never do this when you are trying to sell your house quickly. Instead, try to choose a reasonable price and make it negotiable to some extent.
The most important thing that you can do for keeping your house ready for the show is depersonalizing it. As you are going to sell it within few days, remove all your family pictures and other personal items to create a soothing space. This will let the buyer visualize his own family in the house.
However, selling your home fast can be much tricky as there is the number of things that you need to take into consideration. So, it would be better to hire a professional real estate dealer to buy your house fast and without any need of compromising with the price.
A Complete Guide to Selecting a Company To Buy Your House “As Is”
Selling your house the first time can be a very difficult task. Hence, it is advisable to hire a reliable company that will buy your house. These companies will not only offer a reasonable price but also helps to buy your house fast. They will repair your home and resell it. Thus, you will have the capacity to offer your home and you will be fit for receiving in return at whatever point they need. There are many advantages of selling your home to this sort of an organization. You might not realize it, but once you are familiar with the benefits you will realize that it is time to move ahead.
These services will buy a wide range of homes be it a home town. Yes, it doesn’t make a difference what kind of property you are offering since it will be purchased in return for money. Waiting is the worst part of the whole selling process. By considering this choice you won’t need to hold up any more. With the help of this company, you will be able to move happiness in the rest of your life. In addition, with a conventional deal, you will be accused of various charges. When you save money on expenses you will feel better in regards to the exchanges that are made.
Although, it is imperative to ask certain questions before hiring a company to buy your house as is. Here we are going to discuss few them:
These are some questions that will help you to choose your desirable company. It is good to make a rough list of the qualities you are expecting from your real estate company. Also, read these 10 Questions to Ask Before you Hire a Real Estate Agent
You might know that selling to an individual will be a difficult process. They are choosy and so you don’t have to deal with them. So, whatever be the situation you should choose to go for the company that will buy your house. This kind of an organization will acquire your home in the shortest time possible so that you may move ahead with your life. Whether you require quick cash or simply need to deflect the issue of selling your home then with proper home buying company things will become simpler.
Your life is hectic and thus, you will never have the capacity to offer it in a week’s chance. Beside that, if you choose a reliable company, you will be able to sell your house in a week. With the required cash for your home, you can begin another life and pay off your debts. You should simply sign a few papers and you can get over with the whole procedure. So, what are you waiting for? Go ahead and find the right company now.