Selling a Property with Tenant Still Inside? Here’s What You Need to Know!

Selling tenant-occupied home

Selling tenant-occupied homeSelling a property for a profit can sometimes be a tall order that involves costly renovations, marketing, and real estate savvy. But if you are trying to list a home with tenants still living inside, it can be even more challenging.

While selling a tenant-occupied property is completely legal, the new buyer must honor any existing rental agreement that had been signed by the previous owner. If your tenants have six more months on the contract when the property is transferred, that means the tenants should be allowed to stay for the remainder of time stipulated in the lease.

Communicate With Your Tenants

Be upfront with your tenants about your intention to put the property on the market and what that will entail. Explain the legal obligations of the new owner to honor the existing rental agreement and let them know about the possibility that the new owner may not want to re-up the lease or charge more once the rental agreement ends.

The sooner you disclose the information and the more open you are about the process, the more time your tenants will have to make necessary arrangements and the more likely it is they will be accommodating about showings.

Give Your Tenants Advance Notice

If no written lease exists (for example, when tenants pay the rent month by month), most states require a landlord to give tenants at least one month’s notice of the sale so they have time to relocate if needed. When it comes to longer-term rentals, landlords will typically be required to notify tenants that they do not intend to renew their lease no less than 60 days prior to the lease end date.

Schedule Showings

If you have been transparent with your tenants and cultivated a good relationship, viewings will likely be much easier to set up. Be considerate about the tenants’ schedule and tactful in your approach as they may have the right to refuse viewings. In addition, landlords must inform tenants of a visitor with at least 24 hours in advance.

Get an Inspection Done

It is a good idea to get a fresh inspection done before you start scheduling showings. As tenants rotate in and out, the property might not be in the same condition as before. An inspector can identify problems that need to be addressed prior to listing, so you can save time during the contingency period.

Are you interested in learning more about real estate investing? RLG would love to help you find a suitable investment strategy for your goals! Call us today to learn more!

6 Essential Things to Know About Insurance Policies

Insurance

InsuranceIf you are in the market for home insurance, there are a few things to consider beyond price and affordability. Factors such as the type of dwelling you own and coverage you need are equally important when shopping around for the best policy.

Most commonly, you will find three types of property policies: comprehensive, named perils, and broad policies. Following is an overview of each of these policies.

Comprehensive: a comprehensive policy will cover all risks to your home and possessions, except those specifically excluded from the list. Frequently excluded perils from a comprehensive policy include earthquake, flooding, pollution, and other natural disasters.

Named Perils: contrary to a comprehensive insurance, a named perils insurance contract only covers the perils specifically named in the policy. An example may be an insurance contract that specifies losses due to fire or theft.

Broad Policy: in essence, a broad policy is a combination of the comprehensive and named perils policies.

When it comes to coverage, there are basically three different levels:

Actual Cash Value: Actual cash value covers the cost of the house plus the value of your belongings after deducting depreciation. Under this option, if you were to put in a claim for a used item, you would receive an amount in return equal to the value in its current condition, and not how much you paid for it.

Replacement Cost: Replacement cost covers the actual cash value of your home and possessions without the deduction for depreciation, so you would be able to repair or rebuild your home up to the original value.

Guaranteed Replacement Value: A guaranteed (or extended) replacement value policy covers whatever the cost is to rebuild or repair your home – even if it’s more than your policy limit. This is the most comprehensive coverage as it accounts for increased replacement costs and provides homeowners with wiggle room in case construction prices rise.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and not waste a moment of your time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

How to Conduct Due Diligence on Out-of-State Properties

Due diligence

Due diligenceEvery seasoned real estate investor will tell you that performing due diligence is key to making a sound financial investment. If you are adding out-of-state properties to your portfolio, doing an effective due diligence can be all the more challenging. But first, what is due diligence?

In real estate, the period of time known as due diligence is the opportunity to investigate facts about the physical and financial conditions of the property and area the property is located in. Put simply, it is the time to do your homework before deciding to move forward with the purchase.

While the time window is negotiated prior to the execution of the contract, it typically ranges from 14 to 30 days. As for when the clock starts ticking, that will vary from state to state, which is why it’s important to consult with a local real estate expert. In some states, you enter the so-called due diligence period as soon as both parties sign the contract.

Deciding on a time frame will require factoring in the amount of time needed to schedule appointments with inspectors and to review the paperwork such as HOA rules and regulations. Note that, unless negotiated otherwise, all inspections are paid for by the buyer.

We gathered some helpful tips if you are eyeing a property outside of your state:

Talk to the local county assessor: though an exact figure isn’t possible unless the property sells, the county assessor can provide ballpark estimate of the tax values of properties you are considering as well as surrounding homes.

Check pro-forma numbers: make sure to verify every number you are provided, such as insurance, rental values, and taxes. For example, if the property is in a disaster-prone area, this can significantly add to insurance costs.

Use online resources: use online platforms such as Zillow and Google Maps to your advantage. In addition to getting a better grasp of average rental values and asking prices, sources such as Google Street View may give you a good sense of the neighborhood where the property is located. Some websites will also allow you to check prices of nearby homes – just keep in mind that renovations and square footage will all affect the home’s value, so it’s important to compare similar homes.

Inquire about renovations: if the property you are considering needs repairs or a remodel, ask contractors to give you an idea of the scope of work, completion dates, and pricing.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and save you time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

Making Your Investment Home Disaster-Proof

Disaster proof shutters

Disaster proof shuttersSuccessful real estate investors know the importance of staying on top of landlord-tenant law. Just as you may have some expectations from your tenants, such as paying the rent on time, tenants expect landlords to meet certain conditions before and during the tenancy.

Providing a safe and well-maintained property is a requirement you will find in a standard lease and rental agreement. If your investment home is located in a hazard-prone area, it means preparing it for natural disasters ahead of time. That said, protecting your investment property from the elements doesn’t have to be a pain. Following are some tips to help property owners keep their houses safe.

  1. Speak to Your Insurance Agent

Whether it is floodwaters, hurricane-force winds, or hail, investors should be mindful of potential disasters that may affect the area so they can secure the right insurance policy. For example, flood insurance is a separate policy from homeowners’ insurance that doesn’t typically cover damage or destruction by floods.

Flood insurance is available through the federal National Flood Insurance Program (NFIP) for homeowners in high-risk areas and other participating communities.

  1. Invest in Disaster-Proof Materials

Some cities and counties are more vulnerable than others to high winds from storms, tornadoes, and hurricanes. If your investment home is in area where bad weather is common, you may want to implement wind-resistant features, such as hurricanes shutters, storm windows with double panes and airtight seals, and even impact-resistant shingles.

Other important additions include fortified garage doors or clips and straps to secure your roof. For earthquake-prone areas, consider strapping water heaters and large appliances to the walls or bolting them to the floor.

  1. Cut Back the Tree

While most mature trees are appealing to buyers and renters, some may become diseased or severely damaged and pose serious risk to those living in the home. First and foremost, go around your property and identify suspicious-looking trees. Just make sure to check local regulations around removing trees as some ordinances may prohibit tree removal on private property without a permit. If the tree is outside your property, you’ll most likely need to get your town or city involved.

There are a number of tree removal services that can safely trim or cut down decaying trees. Make sure to get a handful of estimates to save money as this can be expensive.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.

Can a New Roof Increase Your Investment Home’s Value?

Roof

RoofHome improvements are a great way to boost your home’s value, rent income as well as the quality of life for potential tenants and homebuyers. But not every home renovation will bring in revenue, so it’s important for real estate investors to know which ones offer more bang for their buck. Replacing an old roof, for one, is a renovation project with a potentially high return on investment (ROI).

New roofing can be very appealing to homebuyers because home roofs should be replaced around every 20 years. Adding a new roof on your investment home can provide a return of 107% on average, according to data released by the National Association of the Remodeling Industry (NARI). What’s more, Remodeling Magazine’s Cost vs. Value Report found that a new roof with asphalt shingles can increase the property’s resale value by a national average of $17,147 in 2021.

If you are flipping houses, this could be a worthwhile investment that could increase the chances of selling them faster and with higher profit margins. Apart from aesthetic gains, a new roof is a feature that improves the home’s overall energy efficiency. Because it reflects heat and acts as an insulator, homebuyers stand to benefit from lower utility costs.

Signs Your Investment Property Needs a New Roof

Generally, the roof should be replaced every 20 years, but it may need to be done sooner if any of these signs become apparent:

  • Curled, cracked or bubbled shingles
  • Missing shingles
  • Shingles covered with moss or algae
  • Shingles granules in your gutter

Best Roofing Materials

Roofing materials come in a variety of textures and colors, giving homeowners an opportunity to better complement their siding and landscaping. The most common (and more affordable) material is asphalt shingles. In addition to their affordability, asphalt shingles are relatively easy to install and highly durable.

To determine whether replacing your property’s roof makes sense from a financial standpoint, make sure to factor in things such as the price of comparable homes with new roofs in the area and costs associated with the renovation. Not only will the materials affect the final price, but also the size of the roof, number of shingles layers, and other system components.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and not waste a moment of your time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

What to Know About Solar Power for Your Investment Home

Solar Power, Investment Property, Solar Panels

Solar Power, Solar Panels, Solar ElectricityAs more people start taking action to counter climate change and reduce dependence on nonrenewable energy sources, residential solar power has become increasingly popular. With more than a million solar installations across the country, the benefits of switching to this form of green energy are numerous.

First and foremost, solar panels are considered an upgrade that will likely increase your investment home’s value in the same way a renovated kitchen or bathroom would. In fact, many eco-conscious buyers are willing to pay a premium for a solar home. In addition to reducing greenhouse gas emissions and other pollutants, a solar system may lower your electric bill, provide tax credits on federal income taxes as well as state taxes, and even allow you to earn money with SREC (solar renewable energy certificates).

But before you invest in solar power for your investment home, there are a number of steps you will need to follow and consider.

Examine Your Property

Homeowners should first assess their energy use by conducting a home energy audit to identify areas of improvement. Oftentimes, huge savings can be made on electricity costs by simply switching your light bulbs to LED ones, replacing dated appliances with energy-efficient ones, and weatherizing the property.

Because installing solar panels requires ideal roof conditions to work at full capacity, make sure your roof is up to scratch. Consider the age of your roof and how long until it needs to be replaced. If your roof is old or in any way damaged, you’ll want to address these issues before going any further.

Remember to take into account nearby shade trees that can block the sun and diminish your home’s solar potential. Though most roofing materials are compatible, the ideal roof will face south with a tilt between 15 to 40 degrees.

Work with Your Installer

Installing a solar power system involves numerous steps, including preparing the roof for mounting panels, wiring the panels to a power grid, obtaining permits, and testing. The timeline for the installation will range from one to three days, depending on the size of the system you are installing.

Be sure to find qualified and insured professionals with the proper certification and request at least three bids based on the same metrics. Bids should state the maximum generating capacity of the system measured in Watts or kilowatts, an estimate of the amount of energy produced on a monthly or yearly basis, and the total cost of installation (including hardware, labor, permitting, sales taxes and warranty).

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!

Attracting High-Quality Tenants to Your Rental Property

Rental PropertyRental properties are a tried-and-true investment strategy that provides passive income while giving you the option to sell when the time is right. Additionally, owning a rental property allows you to diversify your portfolio. That said, any real estate investment comes with risks, and your profitability is contingent on being able to attract and retain high-quality, dependable tenants.

To mitigate vacancy losses, bolster new tenant applications, and keep good tenants, make sure you follow some of these tips:

Pick the Right Neighborhood

Most tenants will look for areas that have low crimes and good schools as well as easy access to shopping, dining, and parks. If your rental property is located in a desired neighborhood, chances are you won’t run short of prospective tenants.

Upgrade the Kitchen

Updating appliances will not only catch the eye of potential tenants, but also increase your investment home’s value when the time comes to sell it. Alternatively, kitchen upgrades that include new cabinets and modern finishes are sometimes all that is needed to impress sellers and regain some of the original investment.

Invest in Curb Appeal

Curb appeal is vital to making a great first impression on prospective tenants. In addition, home landscape upgrades can offer homeowners over 100% returns on their investments when it comes time to sell. A lawn service, fresh mulch, planted flowers, and clean edges will all help to wow tenants.

Add Amenities

Adding in new amenities and conveniences can help close the deal. Consider things that can make the tenant’s life easier, such as including utilities in the cost of rent, providing extra parking or storage spaces, furnishing in-unit washer and dryer, and installing smart home features.

Show It Off

Once you’ve put in the work to spruce up your rental property, you’ll want to market it right. Having quality photos in a home listing is crucial to that listing’s success. When photographing a home for a listing, make the most of what you have by staging, utilizing natural light, and working angles to your advantage. A professional photographer with experience in real estate should be able to produce beautiful imagery that highlights the aesthetic of the house.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.

When Is It Best to Sell a Rental Property?

One of the biggest challenges in real estate investing is figuring out how to maximize revenue. While the decision to offload a rental property shouldn’t be taken lightly, in some instances hanging on to a property may not be in your best interest. Here are some signs that you should sell your real estate investment.

Asset Diversification

If your portfolio isn’t diverse enough, it might be a good idea to sell one of your properties to experiment with different investment types. Asset diversification helps to minimize an investor’s overall risk and offset losses in the event that a particular area performs poorly.

Having said that, focusing your investment property strategy on a niche market can bring many benefits.

Appreciation

There’s no doubt that rental properties are great sources of passive income. But if your rental property has significantly appreciated due to improvements or the area’s growth, it is possible that it may have reached peak value. In this case, it might make sense to sell the property while prices are high.

You can then use the money to reinvest in other up-and-coming real estate markets and expand your portfolio further.

Negative Cash Flow

When assessing the value of your portfolio, consider each property individually. There are several metrics available to help you measure the success of your portfolio, including net cash flow. It may be that the cost of taxes, utilities, and insurance have risen while rents stagnated or dropped. Whatever the reason, if your rental property is not providing a positive cash flow, you should seriously consider cutting your losses and selling it off.

Would you like to speak with a member of the RLG team to discuss the value of your current investment property portfolio and determine areas for improvement? Give us a call today! We would love to help you work with the properties you currently have and multiply your investment portfolio.

Picking the Right Neighborhood for Your Investment Property

Neighborhood for real estate investment propertyKnowing well the area of town or neighborhood for your investment property plays a big part in a sound financial decision. While factors such as your investment goals and price range can help you winnow out some neighborhoods right off the bat, there will likely be hundreds of cities and neighborhoods that may pass muster – each with its cons and pros.

To make sure you pick the best neighborhood for your investing dollars, you may want to consider the following additional factors.

Safety

Lower crime rates are at the top of real estate investors and homebuyers’ must-have lists. Luckily, there is a wealth of online tools out there to help you research a neighborhood’s safety levels, such as ADT Crime, Neighborhood Scout, and SpotCrime.

A neighborhood that ranks high for safety not only provides peace of mind to buyers and tenants, but it can also keep property values high.

Convenience and Amenities

Convenience and amenities are valuable attractions for homebuyers. A convenient neighborhood is reasonably walkable and located in close proximity to schools, shopping areas, parks, gym, public transport, and more.

When it comes to amenities, consider neighborhoods that boast facilities such as swimming pools, play fields, tennis courts, club houses, community docks, and lakes. Other outside features that can pique homebuyers’ interest are nearby parks, open play meadows, and direct access to water bodies.

Growth

The expectation that the value of the property will continue to appreciate over time should inform investors’ decision when purchasing a home, hence the importance of market dynamics and macroeconomic factors. Look for neighborhoods that display attributes such as higher-than-average population growth rates, job growth rates, rental growth rates as well as low unemployment rates.

More broadly, the tax environment has been a key factor driving investments in the country, as seen in places such as Austin, TX and South Florida.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and not waste a moment of your time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

6 Cost-Effective Ways to Boost Your Investment Home’s Curb Appeal

Curb AppealWhether you are planning to list a fix-and-flip house soon or prep it for rental, it is important to know which curb appeal improvements will add the most value to the property. To make sure your investment home’s curb appeal is up to snuff, we put together a list of six home improvements projects to take a stab at this summer.

Upgrade the Garage Door

Replacing your garage door is an item that is high on the list of desired home renovations. According to Renovation Magazine, home sellers recoup 84% of the investment of replacing a garage door. A whiter, cleaner door will help with curb appeal or give a more modern look.

Try a Front Door Facelift

Consider painting or staining your front door to give it a fresh new look. Summer is an excellent time to make a bold color choice that will help your investment home stand out.

Keep Up with Your Lawn Care

It may seem simple, but basic lawn care and a well-kept yard can add significant value to your property’s curb appeal. Make sure to keep your lawn and shrubbery well-manicured and water your plants and flowers to keep them lively.

Pressure-Wash Your Driveway

Over time, concrete driveways and sidewalks can collect mildew and stains, making them unsightly and decreasing the curb appeal of your investment home. These stains can also weaken the concrete, making it more susceptible to cracking. You can rid your sidewalks and driveway of stains quickly and efficiently by using a pressure washer while using less water than a traditional garden hose.

Upgrade Your Walkways

In addition to power-washing the driveway and walkways around your investment home, replace any chipped or broken stones and trim away weeds and grass along the edges to give them a more refined look. There are several types of lawn edging tools for every budget, from manual to electric to gasoline-powered ones.

Update the Lighting

Exterior lighting is a simple and inexpensive way to add gorgeous curb appeal as well as security to your home. To create a dynamic impact for your home, there are few more cost-effective options than lighting. A simple spotlight can accent your landscaping and showcase your home’s façade, while floodlights can provide additional safety. Even inexpensive solar lights along walkways and gardens can make a big difference.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!