Archive for Real Estate

How Much Money You Can Save With A Home Warranty?

April 9, 2020 Real Estate, Saving No comments
home products

A home warranty is a smart solution that will make every homeowner feel more peaceful. Important appliances and systems can fail anytime, which brings huge costs for you. A home warranty is here to have you protected from unexpected costs. If you haven?t obtained your plan, you might have to face costs that can range from a few hundred to a few thousand dollars. We know that it can save you a lot of money on costly repairs, but really how much?

Average repair costs

Unexpected malfunctions are very common. Without a home warranty, you will face high repair costs for your home systems and appliances. And you can?t postpone the repair for later. Imagine finding out that your fridge isn?t working. For individual repair, you can pay around $600. If your fridge is too old and needs to be replaced, you will need to divide about $1,500 from your budget. If the dishwasher fails, then you will need around $200 for a repair or around $600 for replacement. But, the madness doesn?t stop here. You are expected to pay even more if crucial home systems fail. For example, a replacement for a water heater can cost as much as $850. If you find out that the furnace isn?t working, you can pay around $500 for a repair. If the system needs to be changed, then it can climb up to $6,000. 

We know that not every household has an emergency budget specially dedicated for home repairs. Another thing that you should have on your mind is the fact that a few appliances or systems can fail during the year. When you add the costs up, you will get to a high sum of money.?

The cost of a home warranty

The average cost for a home warranty plan ranges between $350 and $600 for a year, depending on the coverage. Basic plans will cost around $350, while advanced plans have extended coverage. Some will include the roof, spa, pool, or septic systems. These bring high costs for repairs, so it is better to have them included in your home warranty plan. Having the costs for individual repairs in mind, this is a feasible option.

The best home warranty plan for you is the one that offers proper coverage. Keep in mind that a plan that covers only cheap appliances is not feasible. Check and compare different plans to find the most convenient one for you.?

 Keep in mind that each service call is starting from $75. Despite paying the yearly or monthly fee, you will pay for each service call too. But when you do the math, it is feasible. Even if you include the service call, you will save money for the whole year. Another thing that you should have in mind is that you can experience a few fails of different appliances and systems during the year. When you sum it all up, a home warranty will definitely pay off. 

How to Start Investing in Real Estate

February 18, 2020 Investing, Real Estate No comments
real estate

Do you wish to invest in real estate but lack the knowledge needed to begin the process? Billionaire Andrew Carnegie is famously quoted as saying that 90 percent of millionaires got their fortunes from investing in real estate. It?s no secret that investing in real estate is a viable way to generate wealth. If you are interested in profiting from real estate investing, the following tips will help you get started.

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Research Your Local Market

The main objective is to locate properties that are priced below the value of the market and are in need of repairs. In the real estate industry, they refer to these properties as ?handyman specials.?

Determine Funding Options

If you are looking to invest, you are unable to get approved for a conventional loan. If you are not going to purchase the property with your own cash, you will have to find what is referred to as a ?hard money lender.? Hard money lenders typically charge higher interest rates and have shorter pay-back terms. Use a mortgage estimator to figure out what your potential monthly payments will be.

In regards to the down payment, ten percent is usually the lowest down payment that you will pay as an investor. There are times when you will find a seller that will allow you to purchase a property with no money down.

Enter Into a Purchase Agreement

Once you figure out your funding solution, you are ready to enter into a purchase agreement for the subject property. Once you and the seller agree upon terms and a sales price, you can execute the sales contract with your signatures. The next phase in the process is the appraisal and title search.

Appraisal and Title Work

The appraisal determines if the property is indeed worth the price it is being sold for?or the after-repair value (ARV). An appraiser is paid to visit the property and conduct a thorough evaluation. The appraisal report is based primarily on the condition of the property, and the comparison of similar properties recently sold in the area.?

A title search is performed by a real estate attorney or a title company (depending on the state). The title search assures that the property is free of encumbrances and solely owned by the seller.

Closing

Once the property is appraised and the title work is completed, the attorney or title company will schedule the closing. At the closing, you will sign the closing documentation and receive the keys to your new home. After taking possession of the property, dedicate your nights and weekends to rehabbing the home.

Conclusion

Now that you have a more profound understanding of the real estate investment process, you can proceed with confidence. You now possess the information needed to begin your life as a real estate investor. Once you successfully complete your first deal, you can repeat the process. By multiplying your efforts, you will be able to quickly begin generating wealth as a real estate investor.

Five Tips for Financing Investment Property

January 8, 2020 Investing, Real Estate No comments
real estate

In today?s financial climate, many investors are exploring the real estate market and considering it a welcome addition to their portfolios. Investment properties can provide a steady, reliable source of income as well as lucrative returns. Most people, however, don?t have enough cash on hand to purchase these rental properties outright. In this article, we will explore five tips to keep in mind when financing your investment properties.

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  • Plan on Making a Significant Down Payment ? Mortgage insurance does not cover investment or rental properties, so you will usually need to put down at least 20 percent if you plan on getting traditional financing from a lender. If you are apt to consider an even heftier down payment, it could help you qualify for the best interest rates.??
  • Look for Creative Options ? You?ve found the perfect investment property, but perhaps traditional financing options may not yet be available to you in your current situation. If this is the case, there are creative options out there you can use to finance your investment property (or to get the funds you need for your down payment). Credit cards, home equity lines of credit, and even life insurance policies can all help you get the cash you need to appear more attractive to lenders.????
  • Consider Owner Financing ? Since stellar credit scores are not as easy to come by as they used to be, and lending terms are increasingly strict, owner financing is becoming an acceptable alternative to traditional funding for investment properties. In this type of financing, the seller accepts your down payment; then, they extend credit to you for the rest of the purchase price. If you decide to explore this route, make sure to have a good game plan in place before approaching the seller ? they need to be sold on accepting both owner financing and you.?
  • Check Your Credit Score and Put Some Extra Money Away ? Having a good credit score is helpful in all types of financing situations, and investment properties are no exception. Therefore, you will want to check your credit score before trying to secure the financing of an investment property. If your credit score is under 740, you will be required to pay additional fees (or points) to get the interest rate you want.?

Additionally, make sure you have some extra money put aside in the bank. When making a loan decision, lenders will look to see if you have at least six months of reserves to pay not only for investment properties but for your personal expenses as well. Showing that you have a good debt-to-income ratio helps ensure to the lender that you will be okay should you encounter any rental vacancies. Hiring a rental property management company can help you fill these vacancies should they occur.? ? ? ? ? ? ?

  • Try Different Banks ? If you have extenuating circumstances, or if you have a small down payment for your rental property, try going to a local bank instead of a large financial institution. Typically, these smaller ?neighborhood? banks have more flexibility, understand the surrounding area well, and they also are more prone to invest locally.

Now, first things first, it?s time to find that perfect investment property. Get started today and use these tips to help guide you through the process. 

Finding the Best Home Warranty Company: A Guide for Homeowners Seeking Peace of Mind

January 6, 2020 Real Estate No comments
home buyer

Your home is your castle. It?s also filled with appliances and systems that help make modern life more comfortable and enjoyable. We?re talking about your air conditioning, heater, oven, dishwasher, and the like. Those are big-ticket items and most Americans can?t afford to just replace one if it fails without going into a great deal of debt. 

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Home warranty companies offer the ability to protect those assets, but given the number of companies out there and the bad reputation some of them have, it?s vital that you make an informed choice. In this guide, we?ll help you understand what goes into making the best home warranties, rating metrics, and more.

What Do Home Warranty Companies Offer?

First, let?s explore what it is that home warranty companies offer in the first place. Really, they?re selling peace of mind. A home warranty is similar to an insurance plan, but it covers things that your homeowner?s insurance won?t. For instance, let?s say you spent $5,000 on a brand new stove. It works great for a couple of years, but then it fails. You?re outside the manufacturer?s warranty, and your homeowner?s policy offers you no recourse.

In most situations, your only option would be to foot the bill for repairs or replacement on your own, but if you have a home warranty with stove coverage (which most offer), you just need to pay your deductible and the warranty company will send a technician out to repair or replace the stove, saving you potentially thousands of dollars.

However, not all home warranty companies offer the same level of coverage or the same optional covered items. You?ll need to compare each plan and each provider to make sure that you?re getting the protection that you need and deserve.

Which Are the Biggest Home Warranty Companies in the Industry?

While there are hundreds of different home warranty companies operating in the US, there are a few that stand out from the crowd due to their size, coverage options, reliability, and ratings. The biggest companies include the following:

Home Warranty Company
AHS
Home Warranty of America
Select Home Warranty
Choice Home Warranty
First American Home Warranty
2-10 Home Buyers Warranty
American Home Guard

Why Do Some Home Warranty Companies Have Bad Reputations?

It takes only a little digging on the Internet to unearth news stories concerning disreputable home warranty companies, consumer unease, and serious problems. Why do some companies have bad reputations? Actually, there are several factors at play here, some of the most important of which include the following:

  • Additional Fees: With some home warranty companies, you?re on the hook not just for your deductible, but also additional fees. That drives up the cost of the repair or replacement.
  • Service Technicians: Many companies do not have their own service technicians. Instead, they work with local providers to handle repairs and replacements. In some cases, a lack of due diligence means that these service providers are subpar, and the experience reflects on the warranty company.
  • Re-upping Costs: A home warranty is an annual service contract and in most cases you?ll need to renew it every year. Some companies do not make this clear to customers, who are surprised when they need to re-up at the end of the year.
  • Exclusions: Some homeowners think they have coverage for specific appliances or systems, only to find out that those are excluded from their policy.
  • Coverage Clauses: All home warranty companies include coverage clauses in the contract to limit their liability, but some try to use those clauses to prevent having to pay out in the event of a failure that should actually be covered.

How to Find a Good Home Warranty Company

There?s no denying the fact that a home warranty can be of very real benefit. It can help protect you from the costs of replacing an expensive home appliance, save you time, and more. However, it?s just as true that not all home warranty companies are on the up and up. So, how do you ensure that you are able to find a trustworthy company?

  • Reliability: Check into the company?s reliability rating from their current customers. Do they cover what they say they will? Are their techs professional? Do they arrive on time? If the company is not reliable, you should avoid them. Even low-cost service contracts don?t provide enough return to make this a worthwhile decision.
  • Complaints: Consumer feedback is a great yardstick by which to judge a home warranty company. In general, the fewer complaints from customers, the better the company will be. However, remember that all companies will have a few complaints, as there is simply no way to satisfy everyone all the time. So, it?s important to look at the number of complaints, rather than judging based on the presence of complaints at all.
  • Terms and Conditions: Read the terms and conditions of the contract. Are they beneficial to you? Or do they favor the company?
  • Cancellation/Termination Fees: Is there an early termination fee for cancelling the contract? Can you cancel without a fee for a certain period of time?
  • Contract Language: Is the contract written so that you can easily understand it, or is it in legalese? A reputable home warranty company will provide you with a clear, easy-to-understand contract, and will also answer any questions you have before you sign.
  • Pushiness: How pushy are the sales people? Are they happy to explain your coverage options to you, or do they try to make an add-on sale and act aggressively? A good company will employ sales professionals who are happy to provide you with information, but will never push to close a sale.

In Conclusion

In the end, a home warranty can provide you with financial protection and peace of mind. However, not all warranty companies are worth your time and money. It?s essential that you make an informed comparison and choose a company that stands behind its word.

How to Make Money by Investing in Ranch Land

August 5, 2019 Investing, Real Estate No comments
investment

When most people think of investing in real estate, they think of multi-family homes or commercial properties. But there is another property class which you might want to consider adding to your property portfolio ? ranch land.

Just as the name implies, ranch lands are wide open vistas used by grazing animals such as cows. These days investors are not only buying up these properties for ranching, but they are also converting properties into mixed-use developments, some of which are ultra-luxurious.

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But as a budding investor, you need to crawl before you and walk and this article will give you some of the insights, you?ll need to know about how to make money in ranch land ? or any other undeveloped property for that matter.

Why Should You Invest in Ranch Land?

For starters, they are not making any more. But unlike other limited resources ranch lands on a per-acre price are often less expensive than other parcels on offer. This is because ranch lands are often in remote locations, but this shouldn?t dissuade you.

In fact, investors can either choose to keep their investment properties as working ranches, bring on others to develop a resort, or just bank the land until another developer makes you an offer you can refuse.

Beyond this, the land is a hard asset which you can use with banks as collateral when needed.? Note, this is not meant to advocate taking on bank debt but having available assets which you can pledge for a loan are useful when you are trying to ensure your financial independence.

Yet another reason to invest in ranch land is that is often less expensive and thus you can acquire more property for less. From there you could even subdivide the property to make back some of the money you invested in the land ? thus ensuring your return.

This approach can be very profitable as it means that you are acquiring the land for a discount, but you also don?t need to worry about the cost of capital improvements and ongoing maintenance.? If this interests you, then you might want to check out Land Broker MLS, which has a database of undeveloped land and ranch land available throughout the country.

Just keep in mind that no investment is without risk and if you do decide to acquire a property, then you will want to make sure you have a plan for it and have conducted your due diligence.

Common Investment Strategies

As outlined, investment in ranch land can be profitable but did you know that there are several strategies buyers use to make money. These include a buy and hold strategy, leasing the property back to a farmer or a rancher (known as a leaseback), and even donating the property as a nature reserve.

The latter is not only good for the environment as it allows the land to return to its natural state, but it can also be used to offset a tax liability from another investment. Just make sure that the structure used to hand over the land aligns with recently updated tax rules as this will make sure that you can maximize your deduction.

No matter your investment strategy, you will want to keep in mind that bank loans for vacant land often has different criteria compared to purchasing a home. As such, many buyers opt for what is known as seller financing. This is when the seller will offer the financing to acquire the property ? though keep in mind that the interest rate might be slightly higher than standard bank rates.

However, the advantage of this approach is that it allows for the transaction to be completed to quicker than waiting for a bank to approve a loan application. Just keep in mind that a default will mean the seller will not only retake possession of the property, but you will not be eligible for any payments made to that point. The exception being when a sale of the land for more than the amount owed might net you a small profit.

What Else to Think About?

Investing in ranch land or other vacant lands might not be for everyone and before acquiring these types of properties you should know why this investment works for you. In some cases, you might just want to bank the land, while in other cases you might have a plan to develop the property in the future.

Either way, you will want to make sure you have a plan for your investment, or you?ll end up with a property and no idea how to make money from it. Remember, investing is about managing risk to maximize your returns and if you want to make money from any investment, then you should make sure you have done your homework first.

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