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Tips for Decorating a Rental Home

Many times when you are renting, you’re not sure how long you’ll be in the same location. But you can still personalize your space without breaking the bank, or house! We’ve compiled this list of tips for decorating a rental home to take advantage of what your rental has and to add to what it doesn’t.

If your rental has molding think about adding a glossy finish to it just to add a fun look but make sure your walls compliment the molding and style of the place. Some rentals come with great storage but most probably need more so adding custom storage might not be an option but Ikea bookshelves might just save you. You can also give your rental a new and modern look with something other than paint. By adding new hardware in the kitchen and bathrooms you can add your own style.  Just remember to keep the original for when you do end up moving out. You can also add a fresh new look by adding a lumber look with your furniture, like a coffee table.

To make your space appear bigger than it actually is, ditch those horizontal blinds and invest in some long drapes. The vertical lines will make the space seem taller. Remember not to throw those blinds away though because you do want your security deposit back.  You can add some personal accents with fun throw pillows, temporary peel and stick wallpaper, and chalkboard paint on furniture.  Art has the power to transform so make it a statement piece in your rental. Flea markets are a great way to find some interesting art and furniture but still be affordable. Statement pieces are a creative way to make your rental feel more personal.

Sometimes there will be flaws and that just comes in any home really but you can easily fix that. By using rugs you can hide anything you don’t like, like the weird carpet or that one stain you don’t really know how it got there. You can also use artwork and pictures to hide unwanted things on the wall like holes or cracks.  Make a focal point in your rental with little cost. By getting some painter’s tape and creating a cool graphic look on the wall near the fireplace you can create a fun look and have a cool focal point. You can also make a fun focal point by switching out your light fixtures for a more modern look or whatever you style is.

Basics of a 1031 Exchange

What is a 1031 exchange?

A proper 1031 exchange allows an investor to use the proceeds from the sale of one property to buy another property and defer all capital gain taxes.   This can help the investor accelerate substantial portfolio growth and increased return on investment because the exchange allows for 100% preservation of equity.

Who can qualify for a 1031 exchange?

Investment and business property owners may qualify for a Section 1031 deferral.  Under Section 1031, individuals, C & S corporations, general or limited partnerships, LLCs, trusts and any other taxpaying entity have the ability set up an exchange of business or investment properties for business or investment properties.

What type of property can be exchanged?

Both the property you sell and the replacement property you buy must meet certain requirements.  Both of the properties used in the exchange must be held for use in a trade, business, or for investment, it will not qualify if the property is used primarily for personal use (primary residence, second home, or vacation home).  To qualify, they must be like-kind as well, meaning they have to be of same nature, character or class even if they differ in grade or quality.  For instance, real property that is improved with a residential rental house is like-kind to vacant land.  Property in the United States is not like-kind with property outside the United States.

Is there a time limit to complete an exchange?

The swap of properties in the exchange does not have to be simultaneous but does have to meet two time limits or you will face taxes on your entire gain.  It is important to note that with the exception of presidentially declared disasters, these limits cannot be extended for any reason.  You have 45 days from the date you sell the relinquished property to find potential replacement properties.  You must provide identification of the property with proper description in writing, signed by you, to the seller or qualified intermediary of the property involved.  The replacement property must be received and exchange completed within 180 days of the sale of the relinquished property or their tax filing date, whichever is earlier.

It is vital to have a comprehensive knowledge of the exchange process and the Section 1031 code if you wish to take advantage of the full potential of these benefits.

Rent or Buy? How to Make a Decision

Rent or Buy?

No matter where you live, how much you earn, or how much you’ve saved, you’ve probably asked yourself at some point: Should I Rent or Buy a Home?

Home ownership has been on the decline for many reasons – the economy, downsizing, elevated housing prices in some areas.  But regardless of your means, home ownership is still a great way to earn wealth.  You need to ask yourself a few simple questions to determine if you should rent or buy.

    1. Do you have savings for a down payment and closing costs?
      • Although there are some programs that offer no money down, it’s typical to have 3.5% to 20% of a price range as your down payment.
    2. How long do you plan on living in the home?
      • The longer you live or hold onto a property, the more likely it will increase in value.  But if you don’t plan on staying long or you are unsure of your future plans, it may be safer to rent.
    3. How much home do you qualify for?
      • Depending on your credit and income, you may qualify for a low interest rate and good mortgage terms.  Talking with a lender will help you understand how much house you can afford. If you need to work on your credit, renting may be the short term option for you.
    4. Are you prepared for home ownership costs?
      • Many people like renting because there are no responsibilities that come along with it.  But with buying a home, you can expect routine maintenance, property taxes, insurance, home owner association fees, repairs, etc.

There are some additional benefits to buying a home including tax exemptions and deductions.  And you may want to consider purchasing an investment property that you can then turn into a source of income.

Property Management 101

As a property manager, less turnover with tenants means happier owners and better relationships.  But getting to that point takes some work.  You need to educate yourself about property management and be prepared to become a jack of all trades!

Know the Rental Laws

You will need to have knowledge on current real estate laws that involve property management. It will be your job to have answers to specific questions regarding tenant and landlord rights.  You will also need to know the proper procedures for evictions and other legal disagreements.

Search for Good Tenants

The right tenant can make all the difference in retaining low turnover.  Ask for references, check credit, criminal and eviction history, and verify income.  Always ask for an application fee when a tenant is applying for a property.

Create a Handbook or Procedures

You’ll need to be consistent and clear on your office policies and procedures with both tenants and landlords.  Make sure they know how to access maintenance requests, payment portals, and statements.  You’ll also need to set up an emergency phone and procedure.

Build Relationships

This is a relationship business.  It’s important to have open and honest communication between your tenants and your owners.

If you are looking for a property manager around the Austin metro area, contact us today.  We’d love to work with you!

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Austin Real Estate Market Update February 2017

In the latest Central Texas Housing Market Report released by the Austin Board of REALTORS® showed the single-family home market slowing down, creating more stable conditions. Single-family home sales in the Austin-Round Rock metro area remained flat last month, increasing 0.9 percent year-over-year.

Here are some of the highlights:

  • 1,829 – Single-family homes sold, 1% more than February 2016
  • $287,000 – Median price for single-family homes, 7% more than February 2016
  • $368,259 – Average price for single-family homes, 9.3% more than February 2016
  • 61 – Average number of cumulative days single-family homes spent on the market, 4 days less than February 2016
  • $652,000,000 – Total dollar volume of single-family properties sold, 9% more than February 2016

Steps to Finding the Perfect Rental Home

We’ve compiled this list of steps to finding the perfect rental home.

Step 1 – Determine Your Price Range

The most common income requirement for renting is for your gross monthly income to be 3x the monthly rent.  Of course, there are exceptions and ways to verify your income if you are self-employed.

Step 2 – Check Your Credit

Credit issues are worth checking before you apply.  Everyone is entitled to one free credit report from each credit agency every 12 months.  This will help you ensure your information is accurate and up-to-date.

Step 3 – Contact a Professional Real Estate Agent

A real estate agent can help you narrow down your search, find properties you may not be aware of, and guide you through a smooth transaction.  Whether you are looking for an apartment, condo, town home or other residential property, contact our team when you are ready to start your search.  Our services are paid for by landlords/apartment complexes, so it doesn’t cost you anything to get help!

Step 4 – Begin Your Search

Whether you start your search on your own or with the aid of an agent, you’ll want to narrow down a few criteria.  What area or areas of town are you looking? What are your specific needs and wants? Do you want a single-family home or apartment?

Step 5 – Complete an Application 

Once you find your perfect rental property, complete an application.  You may fill out a paper app or an online one.  Be prepared to pay an application fee and in some cases, a deposit to hold the property.

Step 6 – Sign Your Lease

When you do get approved, you will need to sign a lease.  Be sure to go through the lease and ask questions if you do not understand something.  Things to look for include the deposit amount, terms for breaking a lease early, and the renewal notice required.

 

Things You Should Know Before Signing Your First Lease

Things You Should Know Before Signing Your First Lease

Tips for Lease Signing

1. It’s Important to Get Renter’s Insurance
You may think it’s not worth the extra cost, but it can be a lifesaver if your home is damaged by natural disaster or burglarized. Don’t assume your landlord’s policy will cover your belongings. A few extra dollars a week may save you thousands in the end.

2. You May Rent for More or Less than 12 Months
A one-year lease may be the most popular to sign, but some landlords may offer 18 months, 24 months or even 36 months. Wanting a shorter stay? Ask if a shorter lease is available, or maybe a month-to-month one. For people relocating, a shorter lease may be desired.

3. Know the Rules Before You Sign
Make sure you understand the community and property rules before signing your lease. If you have a pet, you’ll want a pet-friendly property. Ask about visitors and restrictions because it’s always best to know before issues arise.

4. How Much Will it Cost to Break the Lease
Life happens and although no landlord wants you to terminate a lease early, it does occur. Find out what fees you’ll incur if you do break your lease. Ask if the landlord will allow subletting, where another tenant will assume your lease but the legal responsibility remains yours.

Rental Property Renovations that are Worth the Money

One of the biggest mistakes a landlord can make when renovating a rental property is to over improve it.   Some landlords want to make the property look perfect, but the truth is that market rate will usually dictate the lease price.  However, there are some rental property renovations that are worth the money.  We’ve compiled a list of those improvements that will give a landlord the most bang for the buck.

  1. Swap Out Hardware and Fixtures

With a visit to the Home Depot and a screwdriver, this is one that is easy to do yourself.  Update light fixtures and match handles throughout the house.  It’s easy to add new wall plate covers for just a few dollars and the impact will make the home appear newer.

  1. Make Sure the Fence is Functional

Replace missing pickets, secure the fence line and make sure its sturdy.  If you plan on allowing pets, this is one of the areas that potential tenants will look at.

  1. Remodel the Kitchen (On a Budget)

It is usually not cost effective to remodel the entire kitchen, but replacing hardware and handles can make a big difference.  Consider painting cabinets – it’s definitely less expensive than installing new ones.  Appliances should look good as new.  Clean or replace any dirty stove tops or oven racks.  If appliances are at the end of their shelf life, consider replacing them.

  1. Invest in Soaker Hoses

If the property does not have a sprinkler system, invest in soaker hoses especially if you are depending on the tenants to maintain the landscaping.  Soaker hoses make it easier to water landscaping and have an added benefit of hydrating the foundation during the hot Texas summers.

Most renovations will offer a return on the investment in the long run.  To be a smart landlord and investor, don’t waste money on improvements that aren’t needed or won’t give you a payoff.  If you are looking for property management in Austin, give us a call to find out what we can do for you.  We’d also be happy to help with the search for investment properties in and around the Austin area.

Current Housing Forecast for 2017

Current Housing Forecast 2017

Many experts, including the National Association of Realtors®, are  predicting a strong year for housing in 2017.  With low mortgage rates and employment gains, there will be a continued drive on demand in housing throughout the country.  Home prices also rose steady year-over-year and most areas are back to near pre-recession highs.  That figure is based on 90.6 million U.S. single-family homes and condos tracked by real estate data firm ATTOM Data Solutions.

Although inventory may still be an issue for existing-home sales, buyer traffic has been strong in a lot of markets, including the Austin-area.  The Texas Association of REALTORS® reported  recently that the home sales volume and median price continued to rise for the third quarter of the year.

Should you buy or sell right now?  It depends on what your goals are, where you plan on living the next few years, and your buying power.  There is no guarantee of what the conditions will be like for buying and selling in the months ahead. However, if you are curious about your current home’s value, contact us today for a complimentary comparative market analysis.  If you are on the fence about buying, now is still a great time with near historical lows for mortgage rates.  Contact us to find out how much home you can afford in today’s market.

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How to Buy a Rental Property

How to Buy a Rental Property

Before you buy any rental property, you should carefully consider a few things so that you know what you are getting into.  Things to think about include what you expect to collect in rental income, the annual expenses you will incur, and the risks that may come along with owning a rental property.

You also need to make sure you are ready with financing unless you plan on paying cash for your rental property because finding a good rental property isn’t as simple as it sounds, and neither is getting financing to buy it.  If you do need to obtain a mortgage, be prepared to put down a larger down payment and pay higher interest rates.

With that said, buying a rental property can be rewarding and valuable.  Here are tips on how to buy a rental property:

Gain Knowledge – Ask other investors and real estate agents about the market.  Read books or articles about what it’s like to be a landlord/investor.  Being prepared will assist you in deciding if buying and managing property is right for you.

Run the Numbers – You will want your property to not only appreciate in value but also cash flow. Run the data and make sure you are making a wise business decision.  You will also want to make sure you also have enough cash on hand to cover any unexpected repairs and to cover maintenance.

Plan for Management – You’ll need to consider if you plan on being a hands-on manager or hire a property manager to help run things.  Being a landlord includes screening and dealing with tenants, handling repairs, maintaining the property, collecting rent, etc.

If you do decide to hire a property manager, we would love the chance to earn your business.  TCP Property Group will market your property, work directly with tenants, collect rent, handle maintenance and repair issues, and much more! We eliminate the hassles so you can enjoy your investment.  Contact us today! 512-420-9222 or info@tcppropertygroup.com

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