Tuesday, June 11, 2013

Dreaming Of Being a Landlord?

By: Lea France at Fannie Mae

With rental rates increasing, many people are now wanting to purchase rental properties and become a landlord. Below are some tips you may want to consider before you start investing in real estate.

1. Get Involved in the Landlord Association
This is one of the best ways to become involved with other Landlord's and to keep updated on new laws. Join the Landlord Association and Tenant Associations and go to meetings so you will be informed on "how to be a landlord" before you purchase any properties.

2. Do Your Homework
Read everything you can about real estate investing. You need to understand all the expenses and headaches that are involved in owning rental properties. Talk to other landlords about their experiences and what they would do different next time they buy a rental property.

3. Size of Property and Tenants
Find out what size of property that you can actually afford to purchase, and what location you want to purchase your property in. When you are making this decision, you will need to know what type of tenants you are going to target, (students, families, retirees, or young professionals). If your target is going to be students, then you need to consider purchasing your rental property in a close location to a college or university.

4. Profit, Rental Income and Rent Increases
Profit? There is profit in rental income properties. But you need to know how to generate it.
How much profit do you want to generate per month after all the expenses have been paid?  Ask yourself what the profit is going to be used for, (immediate spending or long-term pension plan)? Keep in mind that when you invest in real estate, your aim should be to put money to work today and make it grow so you have a lot more money in the future. Remember that you need to make enough profit to cover the risk you take, taxes you pay, and the costs of owning the real estate. Once you have reliable tenants, be reasonable on the rent increases. Raising the rent by a large sum, could drive your tenants away and  could cost you a lot more money in the long run. If you lose all the tenants, due to rental increases, or tenants decide to purchase a home, or move out of state, will you have the funds to pay the expenses for 6 months?

5. Repairs and Getting out your check book
You are going to continually be making one repair after another to the property. The repairs will maintain the value and some repairs will increase value. Repairs are something you will have to do through out the life of the property. And finally, be ready to get out your check book, once you become a landlord!


Written by:  Lea France, Sales Representative at Fannie Mae

Wednesday, May 29, 2013

5 Biggest Mistakes When Buying a Home

By: Lea France at Fannie Mae


If you are thinking seriously about buying a home, below are "5 biggest home buying mistakes" that some home buyers make. You may want to keep this list with you, when you are looking at homes.

Mistake #1
Keep your emotions out of the way. This means, don't buy a home that you cannot afford. And don't buy a house just to impress your friends and relatives. You will end up "house broke". Many times, all of us love homes that we cannot afford. Keeping your emotions out of the way, means using discipline. A home purchase is a "big decision".

Mistake #2
Many baby boomers are downsizing and selling their big house, and purchasing a smaller house for their retirement years. This is me, I am a baby boomer. Home improvements, such as "outdoor lighting" are important for resale. And it is important for security reasons. One buyer told me that she does not have to worry about resale, because the new house she and her husband just purchased, will be where she will live out the rest of her life. That statement is not always correct. Many times, people need to sell their home, because they have to move to a facility that offers assistant living. None of us knows what the future will bring. There is no crystal ball. So don't try to save money on home improvements that are needed for resale. You could end up not being able to sell your home and you could lose money.

Mistake #3
If you are paying cash for your new home, you still need to get a home inspection by a certified home inspector.

Mistake #4
Additionally, if you are paying cash for the house, because the house cannot qualify for financing, make sure that you can afford the repairs to make the house livable. This best way to do this is to create a budget, so you know what you can and cannot afford. Get estimates for each repair, before you purchase the house. So many home buyers think they can make all the repairs without a contractor, not realizing that many of the repairs may need a permit pulled and a certified contractor that can actually perform the work per code.

Mistake #5
Do not sign the "home purchase contract" or any other legal documents until you have read each one of the documents thoroughly and understand every word of the documents". Also to be reassured that you understand the contract, have your realtor or your attorney review each word in the document with you.

Finally, once you own the home, you will have a great time decorating it. Click Here for some good ideas.


Written by:  Lea France, Sales Representative at Fannie Mae

Saturday, May 18, 2013

Adding Life To The Basement

By: Lea France at Fannie Mae


The basement is the hardest part of the house to decorate, because they are dark and many times damp.

Get use out of your basement, your paying for it.

Many home buyers use the basement as a storage unit for anything they do not want seen in the rest of the house. If you only use your basement for a storage space, then you are spending a lot of money on storage.

Every room in your house, including the basement, should be fully lived in, and a home with a basement should be used as a living area. So think about this when you start to decorate the basement. Also basements are the safest place to go, when there are tornado warnings.

Before you start to decorate the basement, confirm that the area is dry. Inspect the exterior walls for moisture and make sure that the ground is sloping away from the foundation walls. The next thing you should do is find out whether you need to get a permit for the finish out work.
Basements need a lot of light.  Keep the walls painted a light color.  Recessed lighting is great since you don't want fixtures hanging from a low ceiling. 


However you decide to decorate your basement,  just be sure that you use your basement for living space.  Don't get discouraged, you will actually love this room once you get all the work completed and add some great furniture.

You may also press here for photos showing how your property should look when you are "adding life to the basement".

Written by:  Lea France, Sales Representative at Fannie Mae

Tuesday, May 14, 2013

10 Things to Avoid When Buying a Home

By: Lea France at Fannie Mae

Don't buy a new car on credit. I have seen, too many times, financing fall through because the buyer decided to purchase a new car on credit while waiting to close on your property. So now the loan amount you were once qualified for before you bought the car dries up, because you now have the car payments. Wait until the house belongs to you, then buy your car.

Don't apply for any new credit cards. Applying for new credit cards, will lower the amount you are qualified for.

Don't change jobs. You need to show job stability.

Don't make an offer on a home, until you know exactly how much you can afford. And the offer should be subject to a home inspection by a professional home inspector.

Don't make an offer on a house, until you are sure you can get out of your lease agreement without a stiff penalty.

Don't get excited and buy a home on an impulse. Make sure the home is right for you and your family.

Don't ever think that a late penalty will not show up on your credit report, because it will. So pay any late fees that you owe ASAP.

Don't purchase a home that will be hard for you to sell. Think about resale when you are looking to make an offer on the home.

Don't over extend yourself by the purchase of the home. No one wants to end up being house broke.

Don't look for a home alone.  You need to have someone with you and that could include your realtor.

Written by:  Lea France, Sales Representative at Fannie Mae

Friday, April 12, 2013

A Cut Above!

By: Lea France at Fannie Mae

Everyone has been asking, "which company makes the best lawn mower"? This is a good question, and there are many choices for a new lawn mower.

I don't have an opinion, because it all depends on what your needs are for you and your lawn. I do think that if you have a large yard, say an acre or even more, then it might be nice for you to buy a riding mower.

Make a list of what your mowing needs are, such as, do you want the lawn mower to mulch and bag grass for you? Check with your friends and neighbors to see what their thoughts are on different lawn mowers, and also be sure to check with "consumers on line" for lawn mowers, (the link is below).
The schedule for mowing is "mowing when the yard needs to be mowed" during the growing season. There is not a set pattern or day of the week, it may not always be a Saturday that you need to mow. So there is really no set schedule. Also, mowing at the correct height and frequency is important to keep your yard healthy for good curb appeal. Additionally, changing the direction of the cut each time you mow, creates a nice look. Don't cut the grass too short, if there is no reason.

Each season, there are a lot of people injured with power mowers. Be sure that before you mow, that you know the equipment thoroughly, and keep children and pets away from the mower. Be very careful and wear gloves when you are fueling up the mower. Read all the directions and safety issues before you ever use the lawn mower for the first time. 

You may also press here for photos showing how your property should look when you are trying to get "a cut above!".

For me, I always liked the "push mower", that is the mower that does not have an engine. I enjoyed bagging all the grass myself, even with a big back yard. Read my article below regarding "curb appeal" for additional tips.

http://lea-france-fannie-mae.blogspot.com/2013/02/how-important-is-curb-appeal.html

Written by:  Lea France, Sales Representative at Fannie Mae

Friday, April 5, 2013

The Sharpest Yard Around

By: Lea France at Fannie Mae

It's that time of the year again to get the yard cleaned up, and looking like "the sharpest yard around".  Below are a few tips and articles on how to get the best results. Don't buy any plants until you read this article.

The link just below, tells what actually happens to your yard in the wintertime? http://solutions.edf.org/2011/09/27/where-do-lawns-go-in-the-wintertime/

Now before you start on the yard work, make sure the roof is cleaned off and there are no tree branches or leaves left on the roof. The dead tree branches can also damage your roof if not removed. Also clean out all the gutters and make sure the gutters are secured.

Make a list of things that need to be done, then organize the task. Before you get started, I recommend wearing a mask, so you can try to avoid the fungal disease known as "snow mold" which is left on all the dead leaves and litter.

Rake all the litter from the yard and flower beds so you can actually see what is left. Please do not use a "leaf blower". The articles below tells how leaf blowers scour the earth stripping off the topsoil, desiccating roots, and killing vital soil dwelling organisms, while propelling into the air clouds of dirt, dust and dangerous contaminants, volatile compounds, mold and fungal spores, insect eggs, pollen, molecules of myriads of toxic chemicals that people spray and sprinkle on their yards. Not to mention bird and rodent feces. Yes, this is disgusting.
 
Trimming of all tree limbs and bushes will need to be done. Larger trees will need to be professionally trimmed.

Mow and edge the yard, before you add any new plants.

Before you purchase and plant any flowers or trees, you need to know where to place them. Will the new plants need direct sun, or shade? Knowing what the plants needs, will help you to know what you should purchase and what has the best change of growing in your yard. You do want to have the sharpest yard around, so this is going to take spending a little money on some new plants.

Mulch the ground before you replace flowers and bushes.

Fertilizing your grass? Avoid synthetic fertilizers, especially those that are nitrogen-based. Their manufacture produces large amounts of global warming pollution.

This work should be done in stages, not all in one day. It is a big job, especially if you have a big yard. Once you have the yard completely finished, then clean off your patio furniture and enjoy
having "the sharpest yard around".

You may also press here for photos showing how your property should look when you are working on making your property "the sharpest yard around".

Written by:  Lea France, Sales Representative at Fannie Mae



Wednesday, April 3, 2013

Mortgage Crisis? (Part 2)

By: Lea France at Fannie Mae

You might remember in my article "What About That Mortgage Crisis" I spoke of how the government abused enforcement of the Community Reinvestment Act (CRA) to force banks to give high risk and "impossible" loans on properties that could never be worth the debt that was being applied to them.

UPDATE: A study released from the National Bureau of Economic Research tells how CRA compliance resulted in loans being given that were an impossible risk, all to satisfy government regulators.

I am continually being asked by many real estate brokers that I work with, "did the government know what was going on"? As I said in my previous note:

"So how did all of these high risk and impossible loans get issued? The simple fact of the matter is that the government, at the behest of political pressure groups, at first forced banks to issue loans on these houses that were worth very little to high risk applicants. The government actually said that to not issue the kinds of loans described above was racism".

The simple truth is that "everyone" at the top knew. There was a small almost unknown agency that acted as a watchdog over Fannie Mae and Freddie Mac called OFHEO - the Office of Federal Housing Enterprise Oversight. While OFHEO had few enforcement powers, they report to committees in the House and Senate, and report to the administration. And report they did.

OFHEO had begged Congress year after year to have itself replaced by a new agency with real banking regulators and real enforcement power either under the Federal Reserve or the Treasury Department. Here is an OFHEO report from 2006 that warned of what was coming. http://www.fhfa.gov/webfiles/2095/52306fnmserelease.pdf

I cannot explain every facet of the mortgage collapse in just two articles, but this is generally how I understand the problems to have manifested.

For a larger perspective there is an excellent book on this subject written by James Hagerty of the Wall Street Journal "The Fateful History of Fannie Mae: New Deal Birth to Mortgage Crisis Fall".

Written by:  Lea France, Sales Representative at Fannie Mae