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5 Best Insurance Coverages for Your Rental Property

You’re probably familiar with getting homeowners’ insurance for your primary residence, but how are you covering your rental properties? Just because you got a great deal and paid cash doesn’t mean you should ignore the potential losses that could occur should something happen. These are the five coverages you need to make sure you have now.

Liability Coverage. The house itself isn’t the only thing you should be covering. You need to cover your liability for any accidents that occur on the premises. If someone trips and falls on that crack in the sidewalk that popped up this winter, you aren’t going to want to pay for a broken arm out of pocket. That’s only the beginning of things you could have happen on the property that you could be held accountable for.

Dwelling Coverage. This one is obvious. If you buy a house, you want to make sure you can pay to rebuild or repair it to the same like kind and quality. The perils that are covered in the policy typically depends on how much you’re willing to pay. You can choose to cover only major catastrophes, like fires and tornados, for a smaller price or you can opt for a more comprehensive coverage that covers many more issues.

Loss of Rental Income. Owning a rental property is a business, and hopefully, you’re making some money from that business. Coverage for the loss of rental income may help you if the home is damaged by a covered peril. If the home had enough damage from a tornado or fire that the tenant had to move out and rent stopped coming in, you could be reimbursed for your loss of rental income. If you depend on your rental income to maintain your lifestyle, it’s a handy coverage to have. Depending on the extent of damage, it could take months to make the property habitable again after a loss.

Landlord Personal Property Coverage. Did you agree to rent out your property furnished with some things from your grandma’s old house? Did you leave the refrigerator and washer/dryer combo since you’re renting to a friend? Even if the tenant has renter’s insurance, it’s not going to cover any personal property you may have left for their use inside of the home. You’ll want to make sure you have sufficient landlord personal property coverage for any items in the rental owned by you.

Vacancy Coverage. If you’re rental is going to be vacant for any period of time, it’s likely you’re going to need vacancy coverage. A vacant home presents many more unique risks than a home occupied by a tenant. Things to make sure you have coverage for when the property is vacant includes: vandalism, water damage, and burglary, in addition to the major perils like fire. If you already have a policy for your rental property, talk to your agent about limitations in your current policy and supplementing it with vacancy coverage until the home is occupied again.

Having a comprehensive landlord’s policy is key to protecting your investment. It can’t be replaced by a regular homeowner’s policy or the tenant’s insurance. (However, it’s still wise to require that your tenants provide proof of insurance for their personal contents and liability). Reading policy language can be difficult, but knowing the right coverages to look for and finding a great agent to service that policy can make all the difference.

Position Realty
Office: 480-213-5251

4 Real Estate Investor Tips For Buying Your First Property

By a virtual show of hands, how many of you are hunting and searching for your for investing deal this weekend? For those of you that raised your virtual hand as a “yes” to deal-hunting, do you feel anxiety about buying an investment property? Do you feel like you might not be able to keep up the payments, or afford the rehab necessary to get the property ready for resale, or afraid of any problems that might come up with inspection?

“Most people only buy a couple homes in their lifetime. This lack of experience leads many investor buyers to feel woefully unprepared. You’re not getting married. You don’t have to make a lifelong commitment to a property, and that you can always sell later. If you fall out of love with your long term investment, as long as you buy right.

There are a set of rules that to rely upon when buying an investment property, and that these same rules can be used by anyone buying a house. Here are some great tips:

Tip #1. Get the Facts:

The number one rule is “do not overpay for a property”, and says that he never buys on future value (and refers to that as an illusion that got many of us in trouble). Being realistic if estimating the cost of repairs the property will need. Conversely, we cautions you not to let a home inspection “scare you away from a good deal”, and here’s an example of someone who had the opportunity to purchase a $650,000 home at a short sale for just $520,000, but walked away after the inspector “found a laundry list of items that needed repairs”. Albeit a “scary” looking list, as he called it, it was about $20,000 of work, leaving the remainder as over $100,000 in equity. Remember: “Get the Facts!”

Tip #2. Don’t Fall Completely in Love:

“When remodeling a home for a resale flip and being faced with a decision to either improve the home’s insulation or make the home more beautiful, I’m almost always forced to beautify.” People who lack experience will rely on their emotions. Real Estate agents are well aware of this, and this is why they try to “decorate and stage a home so that people fall in love and forget the facts”. If you fall prey to your emotions, you can get into “bidding wars and overlook discrepancies that need more attention”. The final point to be made on this tip is that “It’s much easier to replace kitchen cabinets some time down the road than it is to reinsulate a home. But people aren’t concerned or willing to pay for what’s behind the walls. They should be.

Tip #3. Get Professional Help

Real Estate Agents, Home Inspectors, Appraisers, Lawyers, Surveyors and Contractors are all valuable resources but they’re no good if you disregard their advice., and the key here is “to trust but verify. In terms of a Real Estate Agent, speak with many different agents and ask for references, until you find one that you are comfortable with. Once you are working with an agent, ask your agent to go over comparable sales with you, and “not just spit out a value”, since this will “help you feel confident about your offer and reduce the risk of complications from a low appraisal.”

Tip #4. Don’t Be Afraid to Pull the Trigger or Walk Away:

OK, so you have all of the facts about an investing deal or property that you are incredibly fond of, and if the price is fair and affordable then don’t be afraid to seal the deal. On the flip side, if the price is above the market value or the price does not take into account the amount of work it needs, you remind yourself that there are plenty of other houses to choose from.

Certainly some great tips here, but sometimes, when in the heat of battle and bidding for a home; it’s easy to lose perspective. What your mindset should be during the process; Remember a house is just sticks and stones and there are plenty of them out there.

Position Realty
Office: 480-213-5251

5 Very Important Checklist Items Before Selling Your Home

Before selling your home, you’ll want to make sure it is ready to be seen by potential buyers. Follow the next five steps to ensure that your house sells for the maximum value.

First Step: Paint
First, make sure that the paint is up to date. You may need to skim coat your walls. Skim coat, also called mud, is a thin layer of seam compound that can be used to repair or smooth damaged walls. You may need a skim jacket if you want to repair cracks, fill in joints, or flatten the area with an existing flat surface. Use a spatula or drywall knife to lay a layer of skim coat on rough walls or ceilings to form a flat surface for painting or wallpaper. Usually, two to four layers need to be applied before the surface is smooth. Examine the walls and ceiling for damage. If there is a lot of damage (notches, cracks, large holes), you have to fix them first. You may only need to complete the connection between the new plasters, maybe you have to complete the broken plaster or plaster-gypsum board joints, or you have many years of settlement or vibration Plan to repair plaster that will begin to break down.

Skim coating is a texturing technique used to smooth walls. Drywallers use this technique to hide imperfect taping work and give the wall only a plaster-like appearance and the smoothest surface. Non-oiling coatings are the only way to achieve class 5 drywall completion and many industry groups, including painting contractors, recommend them.

Second Step: Repairs
Some of these tips are quite simple, while others may need more elbow grease. But once the buyers have begun to show up at your location, you will benefit. When you are ready to sell, check your home for damaged parts, broken equipment, and spaces that need cleaning or exhilaration. Our home maintenance checklist will guide you through common home repairs that may affect your family’s value, especially when you are examining each area. Taking an assessment can also help you decide what needs to be corrected. The total cost of repair depends on the condition of your home. Once you have listed the repairs you need, decide for yourself what you can do and where you need expert help. Compare quotes from multiple contractors so that you can consider the price range. Look at the whole house and consider if you need to make some improvements.

Third Step: Check the Foundation
Concrete is essentially a very porous material. It absorbs moisture naturally. Cracks in the concrete floor are completely expected and not a structural problem, but be sure to check the foundation with a specialist.

Fourth Step: Landscaping
Be sure that your yard looks good. Hire a professional to keep everything neatly trimmed. This includes mowing the lawn and keeping shrubs and trees manageable. Also, be sure to clean off your patio.

Fifth Step: Cleaning
Finish by sweeping, mopping, and dusting the whole house clean. This includes making sure that there are no signs of dirt or stains. Countertops, sinks, showers and toilets are the main places to keep clean. Roll up your sleeves and go to work. Save some money by using homemade cleaning products.

Next, plant the “for sale’ sign in your front yard and discuss with your realtor. Then, you’ll be all set to start showing your property.

Position Realty
Office: 480-213-5251

Why the Fall May be the Best Time to Buy a Home!

If you still think that the best time to buy a home is either spring or summer, you might miss out on what makes buying a home in fall such a great idea. While it is true that the buying frenzy is usually during spring and summer, taking advantage of the many holidays during fall can finally land you your dream home.

Best Time to Buy a Home
Are you aware that October is the best month for snagging home buying deals? This is backed by RealtyTrac’s data over a period of 15 years and 32 million home sales during that time period. More so, their data showed that those who purchased homes in October ended up paying 2.6% less than the estimated market value for the homes they purchased. That’s thousands upon thousands of savings!

Think about it, a home worth $500,000’s 2.6% is $13,000. You can use that $13,000 for purchasing really good appliances or have a vacation. Think this ‘discount’ is out there? Just wait until the 8th of October because homes purchased on that date averaged 10.8% less than their market value estimates. That’s beyond a good deal! That’s a steal!

Take Advantage of Less Competition
For those with kids, the start of fall is usually a very busy time as people get back to their daily lives after all the fun of summer. Those who were home hunting in spring and summer have either grown weary or already bought homes. Though it is true that sellers also typically drop out of the market during fall and usually resurface after the New Year, keeping an eye out for new listings can give you a beautiful new home before the holidays.

Make the Holidays Work for You
The holidays are just around the corner come fall and people are either hurrying to sell so they can move to another home or that they’ve taken a time out from buying as they get busy for the holidays. This factor can come in handy when you spot a new listing knowing that the owner would want to vacate their old home as soon as a deal is finalized.

Your Real Estate Broker Will Have More Time for You
Because there are generally less listings and less buyers in fall, your real estate broker will have more time to show you homes that fit what you are looking for plus answer all questions you may have. They’d also be more motivated to make lots of sales as the end of year nears and holidays approach.

Bargain Home Improvement Season
Fall is generally the time of the year when appliances are at their most affordable and new models are being launched. This is also the best time to purchase cookware, patio furniture, TVs, and sometimes, pay for home improvement services.

All of the above that point to why fall is the best time to buy a home are great, but year-end tax credits might be one of the best incentives for you. It is possible that you’ll be able to score quite a significant tax deduction come tax season.

Position Realty
Office: 480-213-5251

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