Is It Time To Sell Your “Upside Down” Rental Property

You had the perfect home, then the bubble burst. All of a sudden your perfect home was an upside down home that had Is It Time To Sell Your "Upside Down" Rental Propertyyou so far underwater you were drowning, and unable to sell. So you moved out and rented it out in order to pay the mortgage. Now the market is rebounding and your upside down home is finally righting itself. So is it time to sell?

The answer is easy, but complicated

The easy answer is yes, if the value of your home now exceeds the mortgage balance. The complicated answer is with tenants there you may not want to or be able to sell right away. Not right away because you probably have a lease in place that requires notice. Notice requirements won’t stop listing the home, but will add time to when you can sell. That aside, your tenants saved your butt when values tanked and made it possible to keep your property instead of losing it and your credit rating to foreclosure. Just throwing them out would be rude.

So what can you do?

If you’ve decided to sell you can sell with the tenant in place. For a buyer looking for an investment property, that’s a huge plus. They don’t have to find a tenant. No down time, income immediately. If you don’t want to sell it as an investment property then you’ll need to move your tenant out. You’ll need to work with your tenant to help them find another place to live. This is especially true if your tenant was a good one. Work with your Realtor to help them out.

Remember that this sale isn’t all about you

Another person or family is affected as well. If you alienate them they can make your sale particularly difficult, long and expensive. So, be kind to your tenants. Help them and you can finally be out from under your upside down home.

Want more info? Give Denver Realty and Rentals a call today! 303-452-5853

Can You Rent a Home You Have Lived In?

Can You Rent a Home You Have Lived In? Sometimes the idea of not selling your home and moving is a possibility. How? By renting your home and paying that mortgage while you move to a new home. Sounds great on paper, but can you rent a home in which you have lived?Sometimes the idea of not selling your home and moving is a possibility. How? By renting your home and paying that mortgage while you move to a new home. Sounds great on paper, but can you rent a home in which you have lived?

We’re not talking legally. Legally you probably can (although a quick call to the county or municipality about what you may need to do is in order), but can you rent it to someone else and be ok emotionally?

First ask yourself an important question: can you detach yourself from the home?

Can you remove your emotional attachment to a place that has been home for years? It’s harder than you think. Every room has memories attached.

If you raised your children in that home every wall has precious memories infused into them. Can you stand the thought of owning it and having other people living there, changing things and making it theirs?

One thing you shouldn’t do to make it easier to rent it is “awful-ize” it

Don’t redecorate to make it look worse to make you feel better. Don’t remove things from the home, such as expensive upgrades you made to it, and put in less expensive ones.

Yes, a tenant might damage your property, but that’s the chance you take. Keep it in great condition. You wouldn’t do that to sell it, so don’t do it to rent it either.

Access to the property

Once you sign that lease you no longer have unlimited access rights to the property. That lease provides for your tenants a right to “quiet use and enjoyment” of the property.

That means that you can’t drop by whenever you want. It means that they can do what they would like, within reason and lease restrictions, with the property. It’s not your home any longer, so just walking in when you want is not allowed.

Rental Property Owners – Get Over Perfect

When you live in a home, your own home, you can have it as Rental Property Owners - Get Over Perfectperfect as you want it. From the décor to furnishings to landscaping to cleanliness, your home is yours. When your home becomes an income property and you have tenants, you need to get over perfect.

Do you have control?

When you have a rental property there are some things you can control. You can screen your prospective tenants. You can set certain types of rules. You can’t control the day to day lives and choices of your tenants. Here’s what we mean by that.

Parameters tenants must follow

Your tenants will have certain parameters they must follow. You can decide that you won’t allow pets in your property. Tenants must follow that rule. If you live in a community with a homeowner’s association your tenants must follow their rules about use of the property, what they can and can’t keep on it and so forth. You can limit the number of people who live there. These are big issues that you do have some control over.

What you can’t dictate to your tenants is what they do in your home

What is meant by this is you can’t dictate the amount or type of furniture used. You can’t dictate how they decorate. You can’t even dictate whether they paint, only that they have to repaint it back to how you left it. You can’t tell them how and when they can entertain. You can’t tell them how often they must clean and what shape they have to keep the property.

In short, unless they are destroying your property, hoarding or doing something illegal, how they decide to live is up to them. Your idea of perfect and their idea of perfect may be totally different and you cannot dictate these kinds of things as long as they are paying rent.

So get over perfect and allow your tenants quiet use and enjoyment of what is now their home.

5 Ways To Get Financing For Your Investment Property

5 Ways To Get Financing For Your Investment Property

You’ve decided to get into the investment property business and need to get financing to help you buy your first property. Here are some tips to help you get in the right shape to make your investment the best it can be.

Down payment

First, you will need to have a sizable down payment. When buying a home you can get around the down payment issue by agreeing to pay mortgage insurance for a specific period of time. For investment properties there is no option for mortgage insurance. That means that you will need at least 20% down for a traditional mortgage. Higher amounts for down payments can actually help in the long run since you may qualify for better, lower interest rates.

Credit score

You will also need to be what lenders call a strong borrower. That means a good credit score. Your credit score has the biggest impact not just on getting a loan, but also better loan terms. If your credit score is below a 740 you will be less likely to get better terms, such as interest rates.

Have money in the bank

To keep that better interest rate, you’ll probably need to pay a fee that will probably range from a quarter of a point to two points. That can be a substantial fee. A “strong borrower” also will have money in the bank besides the down payment. Money for things like personal and investment related expenses for at least six months is recommended and will be something banks will look at in their decision making process.

Use a smaller bank

Look at smaller banks as opposed to big ones, especially if your down payment isn’t quite where it should be. Smaller banks will have a bit more flexibility in lending terms and will most likely know the local markets better. They may also be happier to invest locally.

Private loan financing

Financing can also be found through private loans. Some private sources are peer-to-peer lending sites like Prosper.com and LendingClub.com, which connects investors with individual lenders. If you don’t have a long track record with investment properties prepare for some push back from these sources. Individuals may just be a bit more conservative in lending their own money and have more requirements to do so.

Investing in real estate can be a solid way to make money. Just get yourself in the best financial place in order to do so.

The Colorado Investment Property Outlook

If you’re looking for Colorado investment property, hop to it. The rental market is hot and if you snooze, you’ll definitely lose!

The Colorado Investment Property OutlookThough many find it hard to believe, the real estate market in many areas in the US, including Colorado, have become seller’s markets. A seller’s market is when properties have multiple bidders and the advantage is with the seller, not the buyer. This advantage in Colorado isn’t just for people selling homes to live in, but also for those looking to sell rental properties. So if you’re looking for an investment property, now is the time to find one and buy. Housing prices aren’t a roller coaster by any means, they have remained steady. Steady isn’t slow and things are definitely not on the side of the “let’s wait and see” buyer or investor.

Not sure if you want to be a landlord? It is a big responsibility and depending on whether you do things yourself or hire a property management company or Realtor to help, it’s a lot of work, but this might change your mind. The rental market is hot. Homes for rent in Colorado are being rented out the first day they are listed. Not only that, but the norm is multiple people coming to see them. That means you, the landlord, if you have a quality property, will not have it empty for long, and you have your choice of tenant. You can find the perfect fit for your property and a great tenant to value and care for it.

Good investment properties for sale are hard to find, but not impossible. Contact a reputable Realtor to help you through the process and help you rent the property once it is ready to go.

Looking for great investment property in the Denver Colorado area call Tena Deutenhofer today! 303-452-5853