Renting From a Private Party — 5 Must-Know Tips to Protect Yourself
Renting from a private party may seem easier than dealing with a realty group. If you have bad credit, poor rental history or no history of renting, it may even feel like your only option. However, it can have its downsides. Keep yourself protected by following these five must-know ti ps.
Perform a Thorough Walk through
When you first check out a new place, It is essential to check every nook and own literally. Take your time inspecting the house to ensure that there are no unwanted surprises in the future. If you find any problems in the home, communicate with the landlord to see if he or she is willing to fix them before you move-in.
Take Pictures Before You Move In
Before you start moving your belongings into a rental, take high quality pictures of every part of the house, including the outside. Place a timestamp on every picture to ensure that they represent the first day of your rental agreement. When you move out, you should repeat this process. This ti p can protect you from unlawful deductions from your deposit.
Create a List of Damages
In addition to taking pictures, you should also write all damages in list format in black ink. Ideally, you should create and print a document that has each damaged item along with a picture. When writing out damages it is important to be as specific as possible. Include the exact location of the item as well as a highly descriptive account of its condition. For example, “Broken kitchen cupboard” is not as effective as “The bottom portion of the far-left cupboard above the stove is peeling and discolored.” This list can protect your deposit if the landlord attempts to claim that you were the source of the damages.
Get Everything in Writing
Verbal agreements are convenient, but have little to no legal standing. This is why it is important to get everything that may affect your stay at a rental in writing. If your landlord is willing to fix certain things in the home, have him or her write a letter stating the exact Items that will be fixed as well as the dates they will be fixed on. In addition to this, he or she must also date and sign the letter and a witness should date and sign it as well.
Read the Lease Carefully
Lease terms can vary from landlord to landlord, which is why it is critical to read it carefully and ask questions as needed. If there are any sections on your lease that you do not agree with, do not sign’ it. Speak with your potential landlord first to see if you can work out an agreement and create a new lease. Make sure you have a trustworthy friend or family member present who is willing to sign as a witness. This can protect you in the future if any problems with or disagreements about the lease arise.
Renting from a private party has its ups and downs, but you can keep yourself protected by following these five tips. Avoid unwarranted deductions from your deposit and stressful di snreements with your landlord by incorporating them into your house hunt.
Renting a Home With Poor Credit
Have you fallen on tough times recently? Thinking about renting a home, but you’re concerned your bad credit will disqualify you? If the recent recession has left your credit less than outstanding, you’re not alone. In fact, CIBIL reported in 2010 that over a third of Indians had a credit score lower than 650 out of 850, and one in four had a credit score below 600. The numbers haven’t improved mud since then. But knowing you’re not alone provides little comfort when you find yourself at the intersection of “need a home” and “have bad credit”. Fortunately, it night not be as difficult as you think to rent a home with poor credit; take a look at the following five tips.
Rent from smaller landlords and skip the check
Large companies and landlords with a high number of available units are likely going to check your credit score, but many smaller companies won’t. If you can find a place to rent from a mom and pop style landlord, a credit check night not even be necessary, and you can avoid the issue altogether. Smaller companies may also be more sympathetic to your situation, even if they do run your credit. Look for landlords who are more likely to either not check your credit at all, or be more sympathetic to past financial hardship.
Have a bad credit elevator pitch
In the world of business you’re often told to have an elevator pitch. An elevator pitch is simply a brief description of what it is you do or are trying to sell that you can quickly pitch to someone you think night be a good prospect. When you go to submit your application for a rental property, you’re given we words to explain why your credit is the way it is, so have your rental elevator pitch ready. The better you can explain your situation particularly if you can play on sympathy and emotion — the more likely it is you’ll win favor with the landlord in question.
Knowledge is power: Know your score
Many people approach their credit score the way they do the scale; if you don’t know it, it’s not a problem. Alas, with your credit score as with your body mass index, the numbers don’t lie. Know what your score is, embrace the ugly truth, and be ready to speak openly with landlords about the status of your credit. If you show that you know your score, you understand that credit is important, and you’re willing to be honest about your financial past, it’s far more likely you’ll have a leg to stand on when negotiating with (or attempting to rent from) a landlord. Mother reason you want to know your score is to check for accuracy; you’d be surprised how many times your actual score is better than what shays up due to clerical, technical, or human error.
Money talks
Most people who are dealing with recent financial troubles and have a bad credit score aren’t exactly rolling in cash. However, there are several tactics you can use that can often persuade a landlord to take a chance on you. If any of the following options we available to you, bring them up in your negotiations, and see what the landlord says offer an advance — offering a large up-front deposit, a large deposit plus first and last month’s rent, or any substantial portion of your lease will put your landlord at ease. If you can pay more than required up front, chances are you will be seen as reliable, dependable, and financially secure enough to lease to without the landlord having to assume too much risk.
Offer automatic payments- if your credit is less than sparkling, it night make your landlord nervous and cause him or her to wonder if you’ll reliably bring in a check each month. To dissuade this fear, offer to set up automatic payments so your landlord can rest assured your rent will be paid.
Set up an escrow account
Offer to setup an escrow account into which you will deposit an amount of money that is suitable to the landlord. Perhaps the deposit will be one or two months worth of rent, or a percentage of the lease. At the end of the lease term, if 41 rent was paid, you get the money back. If there are any defaults on your part, money to cover such debts will be released from escrow to the landlord.
There is very little in life that can’t be solved by offering cash, and the more you have at your disposal, the more negotiating power you have. Sometimes it is worth waiting an extra few months to move in order to put aside a greater up-front deposit. If that isn’t an option, though, you still have other ways in which you can land a lease without stellar credit.
Negotiate a shorter lease term
Whether or not a shorter lease term is offered in the property description, you should try to negotiate a shorter lease term with the landlord. If you see in the property lease term with the landlord. If you see in the property description that shorter lease terms are available, then your negotiating is done for you. But, in any case, attempting to obtain a shorter lease can often put the landlord’s mind at ease. If you hold up your end of the bargain, you can sign a longer lease when it comes time to renew. And the landlord will figure that even if you are a weeknight tenant, he or she only has to deal with you for three or six months and they won’t be out a year’s worth of rent. Having a shorter lease term may also afford you the opportunity to pay a larger portion of your lease up front, as discussed above.
By utilizing some of these tips, you may be able to land the rental home or apartment you love without your credit getting in the way. While landlords take your credit score into consideration when deciding whether or not to lease to you, it’s only part of the picture. Having a stable job, you, it’s only part of the picture. Having a stable job, being *le to prove a consistent income, and other factors are considered in order to determine your eligbility. By using these tips and applying them to your home search, you may realize that finding the home of your dreams is within may realize that finding the home of your dreams is within your reach.
How to Turn Your Home into a Rental Property and Not Live to Regret It
If you are having trouble selling your home, you have a number of options You could stay in the property and hope for the best, but if you have already bought a new home that may not be possible. You could pull your home from the market, but again if you already have a new home that is probably not a smart idea.
The third option is to keep the property and rent it out. Even if you do not relish the idea of becoming a landlord, the rental strategy can be a winning one. The key is to understand exactly what you are getting into and prepare as carefully as you can.
Homeowners planning to turn their houses into rental properties have a number of things to consider. One of the most important considerations is insurance. Even if you already have homeowners insurance, you may not be fully covered for a rental. When you rent out your home, you take on some responsibility for the safety of the tenants who live there. You will need to secure enough liability coverage to protect you from unforeseen circumstances.
Depending on where you live, you may also need to secure a permit and submit to an inspection before you can rent out your home. Check with the municipality where you live and ask about the permit requirements. The good news is that permits are generally not expensive, but you may need to pay for an inspection of your wiring and plumbing and have the home checked for safety hazards.
You will also need to evaluate your property to see if it needs any repairs or upgrades. It can be hard to rent a home with only a single bathroom, and some tenants will avoid homes with outdated kitchens or bathrooms. Do your homework and research comparable rental homes before listing your own property.
The good news is that the repairs and upgrades may also help your home sell. The same things that make the property unattractive to renters could be turning off potential buyers as well. Adding a half bath or remodeling the kitchen could improve the resale value of your home, and the rent you receive in the meantime can help you keep up with the mortgage.
Last but not least, you will need to decide if you really want to be a landlord. If you are comfortable making small home repairs (or know someone who can do it for you at a reasonable price), renting the property on your own could be a smart move. If not, it might make sense to hire a property manager to take care of all those details.
A property management company can advertise your rental home, help you find a suitable tenant and take care of collecting the rent and performing needed repairs. In exchange, the firm will keep a portion of the rent. If you need to rent your home but do not enjoy the prospect of being a landlord, hiring a property management company can be a smart move.
When you put your home on the market, you hope it will sell quickly and that you will realize close to your asking price. Even so, having a plan B is a good idea. Having a backup plan that includes renting out your home can protect you if the property does not sell right away and give you the cash flow you need to carry the mortgage until it does.
Using a Rental Yield Calculation to Evaluate the Feasibility of Buying an Investment Property
Rental yield is basically the annual rental revenue generated expressed as a percentage of the purchase price of the property. To use a very simple example, a property that was purchased for $240,000 and Is rented out at $1,000 monthly ($12,000 annually) could be said to have a rental yield of 5% (12,000 divided by 240,000 and expressed as a percentage).
However, although this type of quick calculation may serve as a rough guide to a property’s Investment potential there are several more factors that must be taken into account before determining the actual rental yield.
In the example above the assumption is that the actual cost of the property was $240,000. In reality though, the actual cost is seldom stated, or even known, at the point of sale. Instead the discussion and negotiations generally focus on the price the buyer expects to receive.
This does not take into account the extra costs that will be incurred by the buyer. Basing a rental yield calculation on the sale price alone could cause the potential yield to be significantly overstated.
In order to perform a more accurate evaluation the actual acquisition cost of the property needs to be calculated. As a general rule this would be arrived at by adding the following to the purchase price.
Dividing the annual rental income by the acquisition cost and expressing it as a percentage will now give a more accurate result. The percentage figure arrived at by this method is referred to as gross rental yield.
Tax Breaks for Rental Property Construction
To qualify for the low-income housing tax credit, you must choose one of two standards to use as a test.
Tax Breaks for Rental Property Construction
If you build rental units, you may be able to qualify for multiple tax breaks. It is best to look into these tax benefits while you are still planning the construction. You can adjust your plans to take advantage of as many breaks as possible. To qualify for rental housing tax breaks, the property must be built with the intent to rent space to tenants. You cannot convert an existing home to a rental unit and claim it as a new construction project.
Low-Income Housing Credits
The Low-Income Housing Credit is funded by the federal government and allocated to each state based on its population. Check your state agency for the available funds and application procedure in your area. If you qualify, you will receive a nine percent credit for new construction and a four percent credit for rehabilitation projects. Unused credits are reallocated to states that apply for the excess. The state must use up all of its original allocation before requesting excess credits.
How to Convert Your Home Into a Bed and Breakfast
Bed and breakfasts are big business — very big franchise business. Our organization provides education for the B&B sector, estimates that the industry is worth around $3.4 billion per year. Average 2017 occupancy rates topped 437 percent, with room prices skyrocketing well above the hotel room average listed by the Hotel and Lodging Association.
So what exactly is a bed and breakfast? While these establishments can be anything you want them to be, generally, they are a cross between a boutique hotel and a private home. A typical B&B has between four and 11 rooms, generously set within a 5,700 square foot piece of real estate. Most rooms come with a private bath, high speed wireless Internet, television, luxury bed linens, robes and premium toiletries.
And then, of course, there’s the eponymous breakfast. Gone are the days of soggy cereal and grey eggs. Modern B&Bs are all about freshly prepared, quality home-cooking with plenty of extras — think home-made lemonade on hot afternoons and cups of hot cocoa by the fire.
Crucially, B&B owners live on-site which makes running a bed and breakfast a popular career choice for couples. Today, 72 percent of all bed and breakfast owners are couples and almost three-fourths are over the age of 50, indicating that a B&B offers a financially viable alternative for those wishing to escape the rat race and retirees. If all of this sounds tempting, the following tips should get your new venture off the wound.
Location, Location, Location
Of the estimated 17,000 B&Bs in the United States, 43 percent are located in villages 29 percent in rural locations, 23 percent in urban areas and 5 percent In the suburbs, according to PAII. In other words, you can establish a B&B Just about anywhere. However, your home’s location influences the type of visitor you’ll get, which In turn Influences your likely occupancy rates Generally, guests fall into one of four categories
Tourists If you live near a popular attraction, be It an amusement park, a museum, a beach, a lake or a ski resort, the tourists will come. Visit your local tourism office for an idea of visitor numbers. On the downside, the tourist market can be extremely seasonal, leaving you with dead space at certain times of the year.
Couples a four poster bed, logs In the fire, a characterful cottage perched high on a coastal path — everyone loves a bit of romance. If your home is quirky or steeped In history, this could be the market for you. Business for urban dwellers, particularly those conveniently situated for access to a large commercial center, business travelers form the Ideal market. Unlike the tourist trade, this market Is not seasonal.
College Ws: Local colleges provide a good source of visiting staff, parents and students (think home football games) with accommodation needs. At a basic level, the more guest rooms you have, the more money you’ll earn. On the flip-side, more rooms you have, greater your operating costs are likely to be.
