As a rental property owner, I am always looking for ways to maximize the rental income and keep my units marketable without having to do any major renovations. I am always keeping my eye out for potential properties that I can buy, and easily rent out that will cover the mortgage and a little more. That being said, one of the biggest mistakes that I see other landlords and rental property owners make is that they are reluctant to or just flat out won’t put any money into their properties because they don’t think they will see a return for that investment. When I tell some of my counterparts that I put new kitchens and bathrooms into all of my rental units they think I am nuts. To quote one of my friends who has some properties, “Why would you spend $4,000 on an apartment that is just going to get destroyed by the next people that rent it?”. To answer his question, I thought I would write this article.
First, let’s think about the mathematics behind it. Granted each market or city is going to have a different result, but for where I live in the Philadelphia area this holds true. By doing a little research and finding comparable apartments in your market, you can find out what the magic number is. What are the three features that are going to stick out about any apartment? The condition of the rugs, the bathrooms, and the kitchens. If any of these items look worn or beat up, it is going to be harder to rent and you won’t be able to get as much for it… that is just a fact of life. So let’s say you spend $3,000 to upgrade the kitchen and bathroom(s). Yes, it is possible to spend that little on upgrades and I will show you how later on. Assuming the rest of your unit/building is in good condition, that $3,000 investment can produce an extra $200 a month in rent for me per unit. At $200 a month, you made your investment back in just over a year and you are now making more money per unit. Think about it. If a prospective renter is looking at two apartments: one with a dated kitchen and one with a modern kitchen and bathroom, which one is he/she going to choose? Not only that, but a nicer apartment is going to command a higher rent which in turn brings in a higher income renter who is less likely to abuse and destroy the apartment.
For some of you, I am sure that $3,000 to renovate a kitchen and bathroom(s) probably made you chuckle. If you are still shopping at the big box stores for your supplies, then you have a reason to laugh. To update both the kitchen and the bathroom in an apartment using their cabinets could easily cost you double if not triple. After doing a lot of research, I found a source for cabinets that saves me at least 30-40% per apartment. I started buying my cabinets on-line. If you do a search for RTA Kitchen Cabinets, you will find my secret. Not only are they cheaper, but they are also made of stronger materials and easier to assemble and install. By buying cabinets on-line, direct from the importer/manufacturer you can get them much cheaper because they don’t have the high overhead cost of a retail store. I have been using them for years now in my apartments, and you wouldn’t be able to tell the difference if you put them side-by-side with store bought or store ordered cabinets. The biggest benefit is that you don’t have to wait 6-7 weeks for cabinets like you do if you go to Home Depot or Lowes. These are delivered straight to your office or property in around 2 weeks.
So the next time you are trying to figure out why you empty units, or the guy across the street is renting his units for hundreds more, take a look at your kitchens and bathrooms. I simple upgrade will not only get you a quick return on your investment, but it will also continue to generate more revenue for years to come.
This Article was provided by ArticleGold: Article Directory
Wednesday, 2 March 2011
Smart Home Mortgage Tips
Refinancing a home mortgage is a very serious conclusion in a person's life. It is an enormous amount of money and the options achievable during coming to choice of le a certain mortgage product should be appropriated earnestly. There are many different types of mortgages one can select from, and not eextremely one of them is for ereally person. One person might want to refinance their home on an interest only loan by cause of they want to have control of cash issue. Another person might want to refinance their home with a fixed rate loan so they lock in a low benefit rate. Another mortgage is an adjustagile rate loan where a person will involve a low profit rate anywhere from 1 to 5 years, and it is liagile to be adjusted. Usually body politic will refinance their home by cause of of an impending upward mortgage make upment. The reason for doing that is by cause of the interest rate is set to increase.
The reason several loans are not for eextremelyone is as certain unseen events be able occur. Say for example one person refinances their home on an benefit only loan. He is not refinancing into that loan as he needs lower payments, but because he is low on money and that type of loan will cut his monthly bills. Even though his goal is to eventually earn more money and refinance back into a fixed loan, he should not do this loan if he is strapped on cash. Say for an example, this individual ends up getting a bad credit score and couldnot refinance the mortgage back to a fixed rate loan. Unless he pays extra money each month on his interest only loan, his principal will not be paid down. The Principal of a loan is the amount of money that is quiet owed on the loan. A lot of unseen disappointments be able occur although dealing with great loans, especially during they are agree upon to be paid in 30 years, 30 years is a long time and a lot of things can occur. If you are decreased on cash it is smart to not engage with complicated mortgage loans.
The preferred thing for a person to do during refinancing a loan, is to do build up his or her credit score and refinance although there are excelling benefit rates available. Bodies who earn significantly more money and their mortgage payment does not eat up 25% of their income can use different finance products to control their cash issue. The last thing a person wants to experience is having their benefit rate on their mortgage arrange on them and they cannot make their payment. That is what occured with a lot of body politic although they refinanced their mortgage with an adjustable rate loan. Although body politic are earning an income that gives them a cushion, they are more flexible during unseen things occur. So the cautious and reliable way to refinance your home is to get a fix rate loan, and only refinance when you can get an excelling profit rate.
A little people may decide to refinance their country in order to obtain things like a car, a boat, or maybe some motorcycles. One important thing to know is that it might seem cheap to buy toys with the equity from your house, except it is a bad idea. The money you will pay in interest above 30 years will equal the same quantity the toy cost you. So as an example if you paid 25 thousand for a car, you will pay an extra 25 thousand from the profit on the loan. So if you are thinking of refinancing your home to pay for things that depreciate like cars and such, don't do it. One thing that is a good idea, is using that money on an investment like real estate or a business. But do not use all of your equity that you built up to spend on one investment, by cause of if it goes bad you will be sorry.
In order to be conservative and vigorous, if you do not involve a large cushion of income to rely on, stick to refinancing your home mortgage during you can make up a lower fixed interest rate.
Article Source: http://www.abcarticledirectory.com
The reason several loans are not for eextremelyone is as certain unseen events be able occur. Say for example one person refinances their home on an benefit only loan. He is not refinancing into that loan as he needs lower payments, but because he is low on money and that type of loan will cut his monthly bills. Even though his goal is to eventually earn more money and refinance back into a fixed loan, he should not do this loan if he is strapped on cash. Say for an example, this individual ends up getting a bad credit score and couldnot refinance the mortgage back to a fixed rate loan. Unless he pays extra money each month on his interest only loan, his principal will not be paid down. The Principal of a loan is the amount of money that is quiet owed on the loan. A lot of unseen disappointments be able occur although dealing with great loans, especially during they are agree upon to be paid in 30 years, 30 years is a long time and a lot of things can occur. If you are decreased on cash it is smart to not engage with complicated mortgage loans.
The preferred thing for a person to do during refinancing a loan, is to do build up his or her credit score and refinance although there are excelling benefit rates available. Bodies who earn significantly more money and their mortgage payment does not eat up 25% of their income can use different finance products to control their cash issue. The last thing a person wants to experience is having their benefit rate on their mortgage arrange on them and they cannot make their payment. That is what occured with a lot of body politic although they refinanced their mortgage with an adjustable rate loan. Although body politic are earning an income that gives them a cushion, they are more flexible during unseen things occur. So the cautious and reliable way to refinance your home is to get a fix rate loan, and only refinance when you can get an excelling profit rate.
A little people may decide to refinance their country in order to obtain things like a car, a boat, or maybe some motorcycles. One important thing to know is that it might seem cheap to buy toys with the equity from your house, except it is a bad idea. The money you will pay in interest above 30 years will equal the same quantity the toy cost you. So as an example if you paid 25 thousand for a car, you will pay an extra 25 thousand from the profit on the loan. So if you are thinking of refinancing your home to pay for things that depreciate like cars and such, don't do it. One thing that is a good idea, is using that money on an investment like real estate or a business. But do not use all of your equity that you built up to spend on one investment, by cause of if it goes bad you will be sorry.
In order to be conservative and vigorous, if you do not involve a large cushion of income to rely on, stick to refinancing your home mortgage during you can make up a lower fixed interest rate.
Article Source: http://www.abcarticledirectory.com
It's Never Too Late to Get a Better Rate on Your Mortgage
Perhaps you are a first time homebuyer, or maybe you have been in your current mortgage for years; whatever the case may be you should realize that it is never too late to get a better rate on your mortgage. Many people believe that mortgage interest rates are set in stone once they sign the papers - yet, today, hundreds of thousands of people negotiate better rates each year. The smart homeowner knows that by paying attention to the marketplace and their credit profile they can potentially save thousands over the life of their mortgage.
Most people tend to think of the purchase price of their home as the magic number which they are paying on every month. They think to themselves that they paid $150,000 for their house without realizing that over a 30-year note they have actually ended up paying well over $400,000! As anyone who has been involved with mortgages for any amount of time will tell you - it's all about the interest! Interest rates will eat up the majority of your monthly payment for many of the early years. It is not unheard of for you to only be paying a few dollars against your principal (the actual loan amount) while the other 99% of the monthly payment is going towards interest. Yes, you are basically paying for someone else to make money off of your money. The interest rate you pay for your mortgage not only determines your minimum monthly payment over the life of the loan, but it also determines how much money you will pay towards interest over the life of the loan. Of course, the mortgage companies want to make as much of a profit as they can - after all, they are taking on a 30 year risk in some cases.
So what is the smart home buyer to do? There are actually several ways you can get a better rate on your mortgage. Whether you are just buying your house, or have been paying for years, here are some tips to help you nip the interest rate on your loan in the bud: " Shop around. Never go to only one mortgage provider when buying a new home or looking to refinance. Shop around with at least 3 mortgage companies and make sure they know that you are looking elsewhere. If they know you are looking at other mortgage providers, they know you are serious about getting the best deal possible and will be competitive in their offer.
" As your credit profile changes, make sure your mortgage changes with it. Ten years ago you may have been a struggling newcomer to the workforce with a lower credit score. Today, you are a highly successful professional. So why pay the same rates you were 10 years ago? As your credit and personal finances rise, consider refinancing to take advantage of lower rates. Even cutting your rate by as little as half a point can save you thousands of dollars over the life of the loan.
" Pay a few points up front, get a better rate. Often times you can purchase points up front to help reduce the rate. If you plan to stay in your house for years to come this often makes sense as the price you pay upfront is more than offset by the interest savings over the life of the mortgage.
" When interest rates fall, fall with them! During times when the prime rate set by the Federal Reserve goes down, interest rates tend to follow (though not as much). If you bought your house during a period of high rates you may find that current conditions allow you to refinance to take advantage of a full percentage point or more in rate reductions.
This Article was provided by ArticleGold: Article Directory
Most people tend to think of the purchase price of their home as the magic number which they are paying on every month. They think to themselves that they paid $150,000 for their house without realizing that over a 30-year note they have actually ended up paying well over $400,000! As anyone who has been involved with mortgages for any amount of time will tell you - it's all about the interest! Interest rates will eat up the majority of your monthly payment for many of the early years. It is not unheard of for you to only be paying a few dollars against your principal (the actual loan amount) while the other 99% of the monthly payment is going towards interest. Yes, you are basically paying for someone else to make money off of your money. The interest rate you pay for your mortgage not only determines your minimum monthly payment over the life of the loan, but it also determines how much money you will pay towards interest over the life of the loan. Of course, the mortgage companies want to make as much of a profit as they can - after all, they are taking on a 30 year risk in some cases.
So what is the smart home buyer to do? There are actually several ways you can get a better rate on your mortgage. Whether you are just buying your house, or have been paying for years, here are some tips to help you nip the interest rate on your loan in the bud: " Shop around. Never go to only one mortgage provider when buying a new home or looking to refinance. Shop around with at least 3 mortgage companies and make sure they know that you are looking elsewhere. If they know you are looking at other mortgage providers, they know you are serious about getting the best deal possible and will be competitive in their offer.
" As your credit profile changes, make sure your mortgage changes with it. Ten years ago you may have been a struggling newcomer to the workforce with a lower credit score. Today, you are a highly successful professional. So why pay the same rates you were 10 years ago? As your credit and personal finances rise, consider refinancing to take advantage of lower rates. Even cutting your rate by as little as half a point can save you thousands of dollars over the life of the loan.
" Pay a few points up front, get a better rate. Often times you can purchase points up front to help reduce the rate. If you plan to stay in your house for years to come this often makes sense as the price you pay upfront is more than offset by the interest savings over the life of the mortgage.
" When interest rates fall, fall with them! During times when the prime rate set by the Federal Reserve goes down, interest rates tend to follow (though not as much). If you bought your house during a period of high rates you may find that current conditions allow you to refinance to take advantage of a full percentage point or more in rate reductions.
This Article was provided by ArticleGold: Article Directory
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