Tag Archives: landlord

Investment Property: Where to Start

Buying Investment PropertyOne of the biggest misconceptions I’ve heard from clients who are interested in buying investment property, is they are going to make livable income from their investment right away. More people have the desire to take advantage of the low mortgage rates and feel buying investment property is a safer investment than buying stocks. This is can be true, however, investing in real estate should be thought of as a long term commitment and must be done wisely.

Depending on what type of property you invest in you may be able to start a steady cash flow, but when you buy investment property, you should think of it as a way to build wealth not get rich quick.

If you buy an investment property in an established neighborhood, this would be considered a low risk investment. In Boston an example would be Back Bay or Beacon Hill. A possible drawback would be the prices would be higher to buy an investment property. However, the positive side is in Boston, where the rents are only going up, the tenant’s rent would cover most is not all of your operating costs, which include mortgage, condo fees, maintenance, and taxes. Little to nothing will be left over for shopping, but after your mortgage is paid off (by someone else), the investment property is now worth a lot more than you originally paid. The goal in these established areas is a safe investment with appreciation and key metric is appreciation rate.

If you buy an investment property in an area that doesn’t have the demand as the established neighborhoods, the risk is higher. In Boston an example could be areas of Roxbury or areas of Dorchester. The drawback would be that you wouldn’t be able to charge as high for rent but the buy in would be less and the money you do collect from rent would more than cover your mortgage and leave some extra cash on hand. Your investment property may not be worth much more than you paid for but the capital of your mortgage would be paid off quicker and you would be able to generate a profit quicker. The goal in riskier areas that do not offer the same appreciation rate as the most established areas is cash flow and the key metric in determining cash flow potential is cap rate (or capitalization rate if you aren’t into the whole brevity thing).

Buying either type of investment property should not be rushed into. Once you buy a property, you are still responsible for maintaining it. If your only experience with how to be a landlord comes from The Ropers on reruns of Three’s Company, we can help. For more information about buying investment property, contact the Realtors of Matthew and Alisa Group Real Estate.

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How Clean is Clean? Real Estate Etiquette for Those Moving Out

Sellers and renters, by law, are only responsible to broom sweep their old home. This is another instance where you have to let your conscience be your guide. Ask yourself, “When I’m exhausted from packing and moving everything I own into a truck, do I really want to clean my new home that I just purchased or rented before I can put any of my things down?” I’m sure the answer would be “no.”

Clean Your Old Home Yourself and Save Money

I understand the last thing you want to do after a long day of packing and moving all of your belongings into a truck is to clean a place that is no longer yours. Here are a few ways you can motivate yourself to do it.

One : it’s good karma (if you believe in that)! But bottom line it is the right thing to do. Always leave a home the way you would want to walk into your new one.

Two : for the security deposit. The last thing you want is to have to pay for someone else to clean a place you no longer live in. If you are selling, the last thing you want is for your deal to go south at the final moments or have the buyer come after you.

Three : your old landlord will think well of you, which is key if you ever need a landlord reference in the future.

Cleaning your old place doesn’t have to take hours, but hit the important areas:

  • Remove all stains in the bathroom (hint: bleach takes care of about everything in the bathroom).
  • Make sure you leave nothing behind in the cupboards since not everyone will want your leftovers.
  • It’s amazing what a difference clean floors make, so vacuum and/or mop the floors.
  • Thoroughly clean the fridge. This task should take the longest. Many people are very particular about their food and what is near it. I am not one to judge, everyone has their eccentricities and since this is now someone else’s home it should be respected as such.

Even though you may not be legally obligated to professionally clean your old home, proper real estate etiquette is to clean it throughly whether you are renting or selling real estate.

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