Rental Strategies - 5 Basics to Remember When Renting Out a House

RISMEDIA, March 10, 2008—Renting out a house isn’t rocket science, but there are some basic rules that should be followed to increase your chances of success: Continued >

Richard says...

I receive many inquiries from investors and home sellers who for one reason or another can not sell their homes right now by the usual means of cashing out and moving on. Renting can be a very good money making strategy if done right and getting all of the ducks in a row.

If you keep your present house as a rental, you may still be able to finance and buy your next home. The rental property income is considered when obtaining financing on your next home. If it is rented out at the same price as your payments, it is a wash. If for more than your expenses, then it is added income on your financial statement. There are additional benefits to owning rental properties but I won't get into them at this time.

Most horror stories I have heard about rentals is related to not following sound practices as outlined in this article and taking short cuts. These "time and money saving" short cuts can ultimately be a very costly financial and legal disaster to the novice landlord.

Some things to consider are...

1. Proper cleaning of the property is very important. Have you gone to rent or buy a home with dirty bathrooms and an oven with crusted food in it? "Next" is what most reasonable people would say.
2. Know what the rents are for similar properties in your area. This is business. Get your numbers. Your property is competing with others in the area. Make sure you are priced right. Buyers of any product or service look for value in what they are paying their hard earned money for just as you do.
3. Do some creative marketing and get the word out that you have a nice property for rent. There are many creative and inexpensive ways to do this.
4. How about not screening prospective tenants properly? This is a big one. Yes, it costs a few bucks but....would you like to trust your home (expensive investment) to a deadbeat or have it turned into a meth lab ? Have a non-refundable application fee cover this expense. Large apartment complexes do, so why not you?
5. Know and follow the laws relating to landlord and tenant rights. Have a well written lease agreement in place. Yes they are renting your property, but you can not do anything you want to tenants. Treat your tenants with fairness and respect. They are putting money in your pocket. They are not the enemy. They may be the perfect buyer for your property in the future.

If you have any questions on any real estate subject matter, feel free to "Ask a Real Estate Expert".

Have a profitable day,

Richard Pomisel

New Tax Breaks a Relief to Homeowners

New Tax Breaks a Relief to Homeowners -- Three tax laws enacted in December promise help for homeowners. Homeowners found three attractive tax breaks among their holiday presents, thanks to the federal Mortgage Forgiveness Debt Relief Act of 2007, which was enacted in December.

Richard says....

If you think you fall within the catagories of the three tax laws, consult with your legal and financial advisors ASAP. The sooner you work the numbers and take appropriate action, the better your outcome usually is. If you are facing foreclosure....OPEN YOUR MAIL from your mortgage lender and contact them. They DO NOT WANT TO OWN YOUR HOME in many instances and may work with you to keep your home. If they say no, then you know where you stand. Find out how to sell your home fast and for top dollar.

If you have any questions about the article, feel free to call or email me and my group of Real Estate experts.

Have a Great Day :)

Richard Pomisel GRI, e-Pro
Dan Schwartz Realty Inc
Richard@Pomisel.com
Toll free 24 hrs 1(800)474-2841

First Time Home Buyer Guide to Taxes

First Time Home Buyers Guide to Taxes -- If you bought your first home last year, you'll need to know about all the deductions you can use as you prepare your first tax bill as a homeowner.

My Commentary

Read this article for more details and consult your financial advisor. Home ownership has tax advantages that are very valuable. Do you know anyone thinking of buying a home that can benefit from this information?

A new free special report entitled "How To Stop Paying Rent and Own Your Own Home" has already helped dozens of local renters get out from under their landlord's finger and move into a wonderful home they can truly call their own. It doesn't matter how long one has been renting, or how insurmountable the financial situation may seem. With the help of this report, it will become suddenly clear how you really can save for the down payment and stop wasting thousands of dollars on rent.

Have a Great Day,

Richard Pomisel, e-Pro, GRI

Toll Free- 1(800) 474-2841

Richard@Pomisel.com

Bernanke: Fed ready to act aggressively

Bernanke: Fed ready to act aggressively

January 10, 2008 1:21 PM ET

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Thursday the U.S. economy's prospects were worsening because of a weak housing sector and credit market turmoil and said the central bank was ready to act aggressively to bolster it.

"In light of recent changes in the outlook for and the risks to growth, additional policy easing may be necessary," Bernanke said in remarks to a housing and finance group.

"We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks," he said.

Analysts welcomed Bernanke's forthright acknowledgment of the dangers faced by the economy, which many fear could fall into recession.

"I think he's come to terms with the fact that while inflation may be a concern down the road, he has to take care of the train that's coming at him right now, which is the fear of a recession," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

Bernanke cited several factors including higher oil prices as well as lower stock prices and falling home values that he said was bound to hurt consumer spending this year.

"Incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and the downside risks to growth have become more pronounced," Bernanke said.

U.S. stock markets surged after Bernanke's comments, while the dollar remained weaker against a basket of currencies as investors concluded that the Fed would aggressively lower interest rates at its end-of-month policy-setting meeting.

The Fed's policy-setting Federal Open Market Committee holds a two-day meeting January 29-30. Bernanke's comments reinforced market expectations that it will cut interest rates a half percentage point.

He said last Friday's employment report, which showed only 18,000 jobs were created in December, was a clear sign of mounting economic risks. "Should the labor market deteriorate, the risks to consumer spending would rise," Bernanke said.

(Additional reporting by Emily Kaiser in Washington and Caroline Valetkevitch in New York, Editing by Andrea Ricci)

Copyright 2008 Reuters

My Commentary:

For those people who are thinking of purchasing their first home or those desperate to refinance out of an adjustable rate mortgage, interest rates are likely to improve. Recent development since the release of this article (see above) strongly suggests that the Fed’s will lower interest rates by 50 basis points later this month. Currently, the prime rate (Wall Street Journal) is at 7.25%, which would decrease to 6.75% if implemented this month.
It is important for me to point out that with lower interest rates on the rise, borrowers may still find it difficult for loan approvals. Fannie Mae/Freddie Mac has tightened up the guidelines over the last several months due to an increase of foreclosures/short sales.
A person looking for loan options can expect a bank/lender to determine interest rates and approval mostly on credit scores and monthly debt income. If your average credit score is 620 to 680, you are likely to have a higher interest rate on a conforming conventional loan. However, the expected rate reduction would still look attractive for anyone who is in that situation.
The good news is that government sponsored loans (non-conventional) such as FHA are starting to be more recognizable to the public. The FHA loan offers excellent interest rates and terms to those who may not have the best or lack of credit profile. The FHA loans limits are expected to increase to the maximum conforming loan amount, which is $417,000.00.
The bottom line is that Mr. Bernanke must continue to act aggressively with the real estate industry to prevent a potential danger of a recession. We must continue to be positive in 2008 and be smart with our decisions whether it is in real estate, retirement, or monthly spending.

Aaron S Brown Loan Advisor - Flagstar Bank Aaron.S.Brown@flagstar.com
888-760-8383 Ext: 130

Is Hiring a Buyer's Agent Important?

Watching Out for You, the Buyer

By Mary Ellen SlayterWashington Post Staff Writer Sunday, November 11, 2007; Page F07

If you're thinking of buying a home, one of your first decisions is whether to work with a buyer's agent.
As the name suggests, a buyer's agent is a real estate agent who represents the buyer in a home sale, as opposed to the listing agent who represents the seller. It's important to understand that just because an agent shows you a house doesn't mean she works on your behalf....read more.

My commentary

If you've read the article you probably reached the conclusion that it is a good move, provided the Realtor(r) has your best interest at heart. It is important that you are in control of the process and have the most complete information possible.

Many agents check the MLS and pick a few homes they think you want. They drive you over to each one and try to sell you one of them. The wrong person is in control.

Many buyers become frustrated by the difficulty in getting the information needed to make an informed decision about buying a home. They drive for hours on weekends through neighborhoods, scan the newspapers and go through the hassle of listening to endless sales pitches from agents over the phone. Some just quit in disgust due to the time and hassle of it all.

My VIP Buyer Profile System takes the hassle factor out of home buying. You receive complete listing information with addresses, maps, pictures, and background data via e-mail that is easy to use. You can pick through the homes that meet your needs, drive by the ones that interest you, and call me when you want to see one on the inside. You are in charge of the homes you want to see. And you are never obligated to buy a home.

Do you think it would help you to have inside information on the house you want to buy?

• Would it be helpful to know what the present owner paid for the home?
• When they bought it? What other homes in the area sold for?
• What about other home-owners in the area not on the MLS that may need to sell?
• What about good deals in Foreclosures or other distress sales?

I'm looking forward to helping you get a good deal on your next home.

For more information call 1(800) 474-2841 toll-free/ 24 hrs. or email me at Richard@Pomisel.com

Living Near Light Rail Can Be Shrewd Investment

Living near ( within 3 blocks) on either side of the Light Rail System may be a shrewd investment even in the current market downturn. The negative sales statistics in the media have disheartened many home sellers and buyers alike. The stats are a very broad survey of a very large area, this "Valley of the Sun".

There are neighborhoods that are holding and even increasing in value. This is one area that is attracting hugh investment. Why not buy a home or condo within 2 to 3 blocks of the Light Rail System in an upwardly moving neighborhood? That's the way people make money in Real Estate.

It is important to research your market position if you are planning to sell. It must be a specific study of your neighborhood. You may be in one of the good areas. If not, then you definately know where you stand and what effective strategies may get you the most money for your area.

For buyer's, they too must do their homework. A home may be very low priced. Why is that? What are the prices in the neighborhood? Is it a desirable place to live? Are the schools good? Even if you do not have children, the school's quality is very important. A good school system will improve your future sale position if you sell later on down the road. Where do you want to live?

Read more about the impact of the Light Rail System on business and Real Estate in a recent article in the AZ Republic.

Post your comment in this issue?

Best regards,
Richard Pomisel, e-Pro, GRI
Richard@Pomisel.com
1(800)474-2841 Toll-Free

Smaller Home Price Spread Suggests Rebound

The shrinking spread between buyers' and sellers' expectations is a sign the housing market is correcting, and a rebound almost always follows a correction, particularly in the Valley. AZ Republic, Catherine Reagor. Read more...

As I have said in the past, Phoenix is a different market than anywhere else in the USA. We still have a large influx of people into this State. For every 2.5 people, one home is needed. The surplus will burn off faster than anywhere else. If you are buying, now is the time to make your move ahead of the pack. You will get a GREAT DEAL especially if you are planning to live in your new home for 4 or more years.

Financing is still relatively easily obtainable for good rates on fixed interest loans. Now is the time to have your credit checked by a lender. You will then know absolutely where you stand with no surprizes. This goes for everyone, even those that think they have no credit issues. There have been many instances of negative entries on the wrong person. When this occurs, it takes time to correct. The time to get your ducks in a row is now.
Get your FREE report " The Three Point Plan to Getting the Best Financing"

Best regards,

Richard