 When tenants are asked why they don't just buy a home, the answers often include, "my credit is bad." Improving your credit is not as hard as most people believe but it does take some action. Credit is established by a payment history. It is important to know what kind of payments are used to create a credit score. Some payments are not reported to the credit bureaus, but can be used as "non-traditional" forms of credit. These payments include cell phone, utilities and rent payments. If you have no credit score, these "non-traditional" payments can be used to prove your credit worthiness and are acceptable for certain home loan products. Keeping good records of these payments are important and can be the proof you need to qualify for financing.
In the case of having poor credit due to slow payments on past loans such as a car payment or bills that were turned in for collection or repossession, that can still be overcome. The first step comes from learning what shows up on your credit report by having a bank pull a report and is willing to show you the results. If there are outstanding balances or collections, they must be addressed. It is possible that the creditors are willing to negotiate a payoff that is less than the actual amount you owe. Using a tax refund, for example, to pay off old debt would be a smart way to use those "extra dollars." A phone call to the creditor requesting a discount, in most cases, will result in a payoff that may be affordable and will be a step in improving your credit score. In any case, clearing any bad history is critical before any "good credit" can be obtained. If credit report shows only limited use of credit and the score is low, there is another way to correct this problem. Of course, the answer is to obtain recent payment history to show you now have the ability and willingness to make timely payments. One way to make this happen is to go to a bank or credit union and tell them what you are trying to do. Request a small loan of $1,000 or whatever the lender's minimum loan is. Use the loan proceeds to open a savings account or Certificate of Deposit to be held by the bank as security for the loan. The bank is 100% guaranteed that the loan will be repaid since they are holding the money to apply to the loan if you don't make the payments. Once the loan is in place, be sure to make timely payments until the loan is paid in full. The bank will then release the hold on the funds in your savings account. You will have accomplished two things: you improved your credit score, and you have money in the bank! Plus, the bank is now more willing to consider you as a risk for future loans. Building credit, or repairing credit is not an overnight thing, but is vital to making the leap from paying off someone else's mortgage to paying off your own. Renters beware Caveat Emptor. That is a Latin phrase that is used in the real estate field which means "let the buyer beware." While much has been done for prospective home buyers to protect them from scams, the same cannot be said for prospective tenants. Anyone in the market for an apartment or house to rent should beware of some of the scams being promoted to separate them from their money. Fake ads Most of us can recognize fake ads by misspellings or abnormal use of the English language. Those that run fake ads have nothing to rent. Their goal is to obtain information that will give them access to your bank account, credit card or other assets in your name. Demand for upfront fees Recently a landlord was contacted by several different people claiming they had paid a deposit for a vacant unit and wanted to know when they could move in. The landlord had not had contact with any of them. The prospects had called on an ad posted at a local laundromat and had actually met someone at the apartment that claimed to be the manager. The scammer collected deposits from several prospects promising that they could move in at the beginning of the next month. Of course the scammer was long gone by then and the prospective tenants were out their deposit. Too good to be true If something sounds like it's too good to be true, it probably isn't true. If a rental unit is offered at below market rents or includes incentives that are excessive, most likely the offering is a scam. No application Any legitimate rental agency will require a completed application before agreeing to a lease. If the party claiming to be the owner or manager is more interested in getting a deposit than learning about your rental or job history, beware! It could be a scam. The best way to avoid scams is to work with a reputable property management firm that has a real office and real property managers available to assist you in finding an apartment that fits your needs and fits your budget.   A lot of challenges come with owning and renting properties. From remembering to bill your renters to staying on top of maintenance needs for every property, there is no shortage of things to do.
If you own many properties that you rent out or even just one property, there are a lot of headaches and challenges you can face along the way. One thing you must do as a landlord is make sure the property stays in shape. Amanda Hinson, who rents out a property of her own, says that she must “call on tree trimmers, painters, construction workers, the plumber, and electrician for help with maintenance. If there's something I can manage myself, I will do the work such as cleaning gutters.” However, when you don’t live near your rented property, it is not easy to find the best options to keep up the maintenance, let alone to do the work yourself. You also can’t check if your renters are following the rules, such as not having more people than agreed upon, or taking on another pet. So how can you live with peace of mind while managing your property? By using a property management service! Reno Property Management Service with Clark Real Estate is a great solution for owners in the Reno/Sparks area. A family business run by Charles and Rick Clark, they will help you rent out your Reno or Sparks property without the usual stress and challenges. When asked why someone should use a property management service, Amanda Hinson said that it was “convenient, low stress, it provides me peace of mind and freedom to manage my personal house more. I can give time to what's really important.” Give time to what is important to you, such as your own home and family, while the professionals help you advertise, collect payments, do maintenance, find good renters, deal with emergencies, and more! And on the flip side, renters can find property more easily with the Clark Real Estate website. They can find what they are looking for among Clark Real Estate’s options, while you still get money as the property owner. As Real Estate’s brokers find the best tenants for your properties and find the best properties for tenants using their unique qualification process, start relaxing and doing what feels most important again.  Photo via Pxhere If you are fortunate enough to find yourself in a position where you think you can afford to own property, you then have to deal with making the biggest and most complicated purchase of your life. For some, adding to the complication of a major renovation seems like madness. But for others, fixer-upper homes are the most achievable way to get the house of their dreams. If you have been considering joining the fixer-upper club, here’s what you’ll need to think about.
The Buying Process The first thing you need to do is determine your budget. In the case of a fixer-upper, this has to include both the price of the house and the renovation costs, but it is easier for you to think of them together for the time being. Good indicators to establish a budget include your annual income, money saved for a down payment, monthly spending, loan type, and current average APR. Don’t forget that there are plenty of hidden ongoing costs to owning a home, so you also need to take things like insurance, taxes, and maintenance into account. The next step for most homeowners is to get to know their local market and see what kind of home they can buy in the area with said budget. Nolo.com suggests that the best way to know how much to offer on a fixer-upper is to figure out the value of the home if it was fixed, calculating the cost of the work, and then subtracting one from the other. Once you find the fixer-upper of your dreams (and budget), there are a few additional steps you need to cover before making an offer. Get a full home inspection, which will highlight any repair work you may have missed during your visit, and re-adjust your offer accordingly. If a house you love has severe structural issues that would cost a fortune to repair, it may not be worth it. As you look into financing your purchase, research the types of loans that will work best for your situation. For example, if you’re a veteran with so-so credit and not a lot socked away, you are eligible for a VA loan, which can help when it comes to finding decent interest rates, plus there won’t be any mortgage insurance. On the other hand, if the home needs serious work, you can look into an FHA 203(k) loan. These loans provide funding for the home and the necessary renovations, in addition for funding that covers the time you can’t live in the home. The Renovation When it comes to renovating your new home, planning is the most important thing you can do. It may be tempting to throw yourself headfirst into the first DIY project you can think of, but this is not the most efficient way to proceed. Make a full list of everything that needs to be done, and sort tasks by priority. At the top, place anything that is necessary to make the house livable, such as electrical work, plumbing, or structural issues. Then address changes needed to make the house attractive. Finally, finishing decorative touches go last. A full renovation schedule is important, but it is by no means the only thing you need to consider. Real Homes has a detailed checklist of things you need to do before you start renovating, covering everything from securing the building site to learning about your home’s architectural features. And if you haven’t already, invest some cash into some quality power tools such as drills or saws to make those DIY projects a little easier. The Resale There is an accepted idea in society that your first house is a “starter home” and that you will eventually trade up to a bigger and better one. National statistics say the average first-time buyer stays in that house for 11 years before moving on to another home. However, there is also evidence that many first-time buyers, particularly young millennials, are skipping the starter home altogether. Instead, they are choosing to wait longer and put in more effort to buy a home that is right for them for the long haul. Whether you choose to re-sell your fixer-upper will ultimately depend on two factors: firstly, whether you bought the house with the long-term in mind, and secondly, how much value you have added through your renovations. Do bear in mind, however, that experts recommend living in a home for a minimum of five years before selling. Buying a fixer-upper for your first home doesn’t have to be a terrifying and intimidating prospect. As long as you are reasonable with your budget and expectations and do your homework, your fixer-upper can either end up being your dream home or a great first step on your way up the property ladder.  If you’re about to put your house on the market, you should first consider a few updates that will make your home more attractive to potential buyers. In order to maximize your profit, stay away from big-ticket items unless they’re absolutely necessary. They key is to focus on smaller, quick wins that will make a big difference. Here are a few ideas to get you started.
Inspection First, consider paying an inspector to examine your house and report on any issues he finds. You probably already know of a few minor things that need to be fixed, but a certified inspector can give you peace of mind by letting you know if the big things are in good shape. If he does find a major problem, you’ll get a jump start on determining your strategy for fixing it. To ensure a quality inspection, only hire an inspector with an InterNACHI (International Association of Certified Home Inspectors) membership. Unclutter Your House When you’re preparing to sell your home, here’s a idea to add to your checklist that won’t cost anything — get rid of the clutter in your house! uncluttering can make your home feel larger, cleaner, and airier, all of which make it more attractive to buyers. Below are a few quick tips:
After you’ve uncluttered, you might notice all that open space looks a little grungy. Guess what? It’s time to start cleaning. Scrub areas that haven’t seen the light of day in a while, and use a handheld vacuum to easily reach those tricky corners without having to rely on your heavy-duty cleaner. Handhelds are also good for quick clean-ups and are easily stored away once you’ve finished tackling whatever problem fell into your lap. Fix or Replace Leaky Faucets Prospective buyers will instantly notice and be turned off by leaky faucets in your home. If your faucet is newer and just has a leaky valve or connection, take a few minutes and fix it. If, however, your faucet is older and needs to be replaced, it’s not a difficult project and will noticeably improve your bathroom or kitchen. You’ll likely want to replace the supply lines under the sink at the same time as the faucet. One quick tip: You will have cut-off valves under the sink to turn the water off, but make sure you know where the whole-house cut-off valve is in case of emergency. This could save you some water damage! Spruce Up Your Landscape and Yard Improving your curb appeal will add to the attractiveness of your home as well. Take a weekend to knock out several of these improvements.
These updates are inexpensive, quick fixes that will help you obtain a higher price as you sell your home. Take a few days to implement them and you’ll be surprised how different your house feels. Prospective buyers will be impressed as well, and that’s your goal — so get to it!  Whether they’re itching for something to do during colder months, motivated by the occasional Saturday when warmer weather prevails, or inspired by a marathon of a favorite DIY show, there always seems to be at least one improvement project on every homeowner’s to-do list.
DIY Doubts If you count yourself among that cadre, it might be tempting to cut costs by tackling every task yourself. But, unless you are a veteran do-it-yourself homeowner who’s had a lot of experience with complex and costly renovations, there are probably some projects that should be left to the pros. For instance, most renovations experts say sanding floors requires a special touch that takes lots of practice to develop. So, even if you are able to rent the necessary equipment at a reasonable price, inexperience may lead to ugly mistakes that can be costly to fix. And, while it might be possible for a handy homeowner to complete simple electrical projects, like installing a dimmer switch or replacing a light fixture, the risk of shock and fire outweighs any cost savings for more complicated wiring projects, according to experts quoted in Architectural Digest. Likewise, they recommend that installing bulky or heavy items, like granite countertops, should be left to those who have the tools and techniques to do so without hurting themselves or the materials they are working with. Easy Upgrades Still, there are plenty of projects that even novice DIY homeowners can handle with a minimal investment of time and money. For instance, you could install new cabinet hardware and faucets in the kitchen and bath to give the rooms an almost instant cosmetic upgrade. A fresh coat of paint on walls, cabinets, or even a single wall offers much the same effect. And, while you’re at it, consider replacing dingy switch plates and outlet covers to create a clean look throughout your home. Projects to improve energy efficiency also offer an excellent return on investment, with many resulting in savings right away. For instance, adding weatherstripping around doors and windows and installing a programmable thermostat can help you control heating and cooling costs. Replacing conventional light bulbs with environmentally-friendly LED bulbs can cut energy usage and save you time and trouble over the long haul, because they don’t need to be replaced as often. Plus, your local utility company might offer rebates and discounts to help you cover the costs of some of these items. Staying Safe Even easy do-it-yourself tasks can present some risks and challenges. After all, you may need to mount a ladder to repaint a room or replace a light bulb. And, while a power drill can come in handy for everyday projects like installing a towel rack or hanging pictures on a wall, it can also create homeowner hazards. Before you begin any project, experts recommend that you keep these safety tips in mind: ●Wear the right clothes. Avoid wearing jewelry, loose clothing, or shirts with loose or long sleeves that could get caught in equipment. Be sure to wear goggles when you might be exposed to airborne debris, and use earplugs when operating noisy equipment. ●Prep your workspace. For safety’s sake, you need to have a clear work area. Make sure you remove all clutter from the floor and any other spaces you’ll be working in, such as the front or back yard. If you’re doing a major project that spans multiple rooms for longer than a week, you’d be wise to move any belongings that will be in the way to an inexpensive storage unit until the work is complete. ●Practice precautions when using power tools. For instance, you should never leave a power tool unattended while it is on. In fact, before you leave your work area, unplug any tools and make sure they are out of children’s reach. Follow the owner’s manuals and any warnings when using, caring for, and storing power tools to ensure they’ll work safely for years to come. ●Keep an eye on your surroundings. Be conscious of sharp objects, power tools, and other equipment in your workspace. Remain aware of other adults who enter your area, and keep children and pets out of the vicinity while you work. ●Mind your ladder. Read and follow instruction labels before using the ladder, and make sure you’re using the right ladder for the job. For instance, it’s important to select a ladder that’s tall enough for you to comfortably access the project area and that can bear the weight of you and your equipment, according to its stated weight limits. Finally, be sure to place the bottom one foot from the surface it’s leaning against for every four feet in ladder height. ●Have easy access to a first-aid kit, and make sure it is well stocked. You won’t want to treat serious injuries yourself, but scrapes, scratches, bumps, and bruises are common even during successful renovation projects. ●Mind your ladder. Read and follow instruction labels before using the ladder, and make sure you’re using the right ladder for the job. For instance, it’s important to select a ladder that’s tall enough for you to comfortably access the project area and that can bear the weight of you and your equipment, according to its stated weight limits. Finally, be sure to place the bottom one foot from the surface it’s leaning against for every four feet in ladder height. Following these suggestions about tasks you should leave to professionals, manageable DIY projects, and safety precautions will hopefully help keep both you and your home in good working order for a long time to come.  While most folks are enjoying an increase in take home pay as a result of the TCJA (Tax Cuts and Jobs Act), understanding how the Act affects mortgage interest deductions is important. The legislation includes an increase of the standard deduction, which eliminates the need to claim the mortgage interest deduction at all for many tax payers. However, if your deductions exceed the standard amount ($12,000 for individuals and $24,000 for married couples filing jointly), you should be knowledgeable on what is allowable under the new rule. Here is a summary:
1. If your home loan was originated prior to January 1, 2018, and the loan was taken out to acquire, construct or substantially improve the home, the interest is still deductible. 2. Interest paid on Home Equity Loans are no longer deductible regardless of the origination date. 3. Interest on a mortgage taken out to refinance a previous loan will not be deductible. 4. The maximum mortgage amount allowed to deduct interest is $750,000. 5. If more than one house is owned and financed (for example; a lake home, ski home, country cabin, etc) only two can be used as mortgage interest deductions. So, if you have a primary residence with a mortgage and a second home with a mortgage and a third home with a mortgage, you can only count two of the properties as eligible for interest deduction. The properties selected can change from year to year which allows a home owner to choose the home loan with the highest interest rate to deduct. While this is not a comprehensive list of the changes, it should help in making a decision on whether to refinance or to purchase. There are different methods available for calculating the allowable deduction and it is advisable to consult a tax professional for specific advice regarding this issue.  Mortgage interest rates are on the rise. After enjoying a long break from higher rates, home buyers and homeowners are realizing the impact of even small changes in interest rates. True, rates are far from what could be considered high. (As a comparison, consider mortgage rates in 1982-83 being over 16%.)
Currently, every $1,000 of financing a 30 year mortgage costs only about $5 per month. Here's what that means: If your budget allows for a monthly mortgage payment of $1,000 (not counting escrows for property taxes or insurance, PMI or HOA dues) that equates to a $200,000 loan. If interest rates continue to rise as experts predict, even a 1% increase in rates reduces that $1,000 monthly payment to about $178,000 in financing. That's a difference of about 11% less buying power! That could mean the difference between the home of your dreams and one you will settle for. History shows that housing market activity actually goes up when rates increase. The reason? Buyers realize they may miss out on getting the house they want with the payment they can afford. That results in a higher number of buyers looking at the same time. This drives up prices as more homes are sold with multiple offers. There are some steps borrowers can take to improve their situation in a rising interest rate market: 1. Get pre-approved by a lender with competitive rates and a reputation of being able to move a loan from purchase to closing in a timely manner. 2. Pull together all the information your lender will need before you get together with them. This will include:
4. Be prepared to address any negative items that may be on your credit history. Having these items in advance will speed up the approval process significantly and give you an advantage in being able to move quickly when the right house becomes available. Finally, discuss "locking" the interest rate with your lender. In a rising rate market, it is critical to understand the lender's policy to lock in a rate to protect you from changes that could occur prior to the closing of your loan. Typically interest rates cannot be locked until you have a purchase agreement signed by all parties and you have confidence in the closing date as well as having resolved any contingencies such as house inspections. While rates are rising, it's still an excellent time to invest in real estate. Taking advantage of today's rates will make you look like a genius in the future and you will have locked in a stable payment for a long time to come.  First-time home buyers bought more than two million homes in the United States in 2017. Many of those homes were not new, which means quite a few people found themselves in possession of a fixer-upper. These houses can be a dream or a nightmare. If you get the house for a good price, you can make a considerable profit by fixing it up and selling it.
Of course, this may depend on your area of the country; the average price for a fixer-upper in Boston, Massachusetts, for example, is $420,000, but the average will be much lower in less-populated and rural areas. And if renovations head south, you could end up pouring a lot more money and resources than you intended into a money pit. Here are a few suggestions to keep your experience on the positive side. The Buying Process As a first-time home buyer, get prepared before you even begin looking. Check your credit score, know what kind of down payment you can afford, and get pre-approved for a loan so you can make an offer without having to wait. Looking beyond traditional real estate listings often yields results when you’re searching for a fixer-upper in your area. Check your local courthouse for foreclosure notices and attend auctions and estate sales. Because you’re willing to do some work on a house, you’re more likely to find a gem others will miss. The ideal fixer-upper is the worst house in the best neighborhood. Before you buy, make sure you get a home inspection so you know exactly what you’re facing in terms of repair work. You want to make sure you’re not missing something major that will spell disaster once the house is yours. Prepping for DIY Determine what projects you need to hire out and what projects you can handle. For the jobs you’ll be doing, make sure you have the appropriate tools. A few common power tools include a drill, circular saw, jigsaw, oscillating multi-tool, and an orbital sander. These will get you through most projects. If you’re not sure which models or brands to buy -- or which tool to use for which job -- do some research or ask your contractor or an experienced friend for recommendations. What Projects to Tackle First Deciding what projects to start with will depend on if you are living in the home. If you’re living there, you will likely remodel one room at a time so you can live in the other areas. If you have other living arrangements, you can work on the entire home at the same time. Major projects come first. Knocking down walls, tearing out old kitchens, ripping up flooring, and doing major plumbing and/or electrical work are large changes that should come before smaller cosmetic improvements such as paint. If you are working with a contractor, make sure he communicates his remodeling plan to you. If you’re doing everything on your own, create a timeline before you pick up the first hammer. Love It or List It? As a popular show on HGTV asks, once you have completed the fixing up process, should you love it or list it (stay or sell)? If you are emotionally invested in the property due to the blood, sweat, and tears you poured into it, it makes sense to stay. If the entire process is just a business transaction to you, you’ll be more willing to sell. Either way, you should have your house reappraised once repairs are finished. If the home value has increased significantly, you may be in a good position to sell quickly (make sure you research capital gains tax first). If you’re up for an adventure, buying a fixer-upper can be an exhilarating experience for first-time home buyers. Go into the process with your eyes open, and get lots of advice from people more experienced than you. Every fixer-upper process has moments when you’re not sure if things will work out, but the end result can be well worth your time, effort, and investment. Photo from Unsplash Guest contribution by Bret Engle. |
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