Friday, March 16, 2018

What To Understand About Real Estate Appraisals

When purchasing or selling a property, real estate appraisals are often necessary, especially if the buyer is using a mortgage loan to purchase the property. The appraisal value of a property often influences the buyer to purchase the property or move on. If the buyer is seeking a mortgage loan to purchase the property, an appraisal is often ordered by the lender. The lender will want to obtain an appraisal to determine the true value of the property, independent of it's listed or negotiated price, to measure against what the buyer has agreed to pay. Appraisers will use their knowledge and experience to deliver an accurate home appraisal report.

As a buyer or seller, it is essential to understand the appraisal process. Continue reading our blog to discover the 7 most commonly asked questions about appraisals, and the truth behind the appraisal process.

1. Are Appraisals Really Necessary? 

Appraisals are highly suggested for all property transactions, however appraisals are only necessary when the buyer is seeking to obtain a mortgage. Since sellers want to obtain as much money as possible for their property, and buyers only want to spend what is deserved and necessary, professional appraisals make senses for both parties involved. 

Lenders always order appraisals to protect themselves. If the buyer defaults on the loan for any reason, the lender wants to know that they can sell the property to obtain the money back. Lenders never want to receive low appraisals before handing out home mortgages.

2. Who Hires the Appraiser? 

The appraiser is hired through the lender giving the mortgage, through a third-party company. Appraisers and lenders are forbidden from being in direct communication. The appraiser is a licensed professional that successfully completes licensing coursework and internship hours. The appraiser is also required to be an objective third party with no connections to anyone involved in the transaction. 

3. What Does a Real Estate Appraisal Report Contain? 

The real estate appraisal will contain specific details concerning the subject property. Included in the report, will be comparisons between similar properties that have recently sold or are for sale. The appraiser will also provide a detailed evaluation summarizing how the real estate market is performing in that specific area. Any issues or potential issues the appraiser is concerned over will be highlighted in the appraisal report. There will also be flagged descriptions of any important issues such as water penetration through the roof, or cracked walls. The appraisal will also include an estimate of the average sales price for other comparable homes.

4. Are There Multiple Types of Appraisals?

The most common and frequently used type of appraisal is a full appraisal, which includes the appraiser carefully inspecting both the inside and outside of the property. Exterior-only appraisals are sometimes performed, and are referred to as "drive-by appraisal". Drive-by appraisals are not as compressive as a full appraisal, and are often used by lenders who do not possess much doubt concerning the property being appraised.

5. What Does the Appraisal Process Really Involve? 

The appraiser will go throughout the house and inspect its state of repair, square footage, and features. The appraiser will mainly be looking for features which help determine the property market value. The appraiser will go through each room, taking careful notes of all details, big and small, which are required to accurately compare and contract nearby homes that have sold in the area. Once all details of the house are carefully inspected and recorded, the appraisor will look over the sales of recent homes in the area, and summarize a comparison before delivering the final appraisal report.

6. What is the Difference Between an Appraisal and a Home Inspection? 

Although often confused with each other, home appraisals and home inspections are two very different operations. An appraisal simply focuses on generating an accurate market value of the home, while a home inspection focuses on identifying problems associated with the home. While appraisals look for obvious defects, home inspections go much deeper and intrusive. Home inspections aim to discover faults with the property that are not discoverable by simply looking at the property.

7. Is the Appraisal Information Available to the Public?

No, home appraisal reports are not available to the public. The appraisal report belongs exclusively to the party who ordered it, not necessarily the party who paid for it. If the lender orders the appraisals, the lender have full access to the appraisal, and is responsible for sharing that information with the appropriate parties. Usually, the buyer is responsible for paying for the appraisal. The lender or mortgage holder is required to give the buyer a copy of the appraisal report by law.

Sunday, February 25, 2018

Top 7 Reasons Landlords Should Hire Property Management Companies

When you become a landlord, you are faced with the options of hiring a property management company to handle your properties, or self-managing your real estate. If you decide to take on the task alone, you will be faced with all tasks related to rent, tenants, property maintenance and repairs, business operations, and more. When you hire a property management company, you will pay a monthly percentage of your rental income to someone else responsible for filling vacancies, responding to maintenance requests, collecting rent, responsibly managing and cleaning the property, and preparing the property for new tenants.

If you decide to take the self-management route, most of your time will be consumed with the difficult aspects of rental management, including late night maintenance phone calls, missed rent payments, and challenging property repairs. Finding peaceful quiet time to yourself will become difficult. In order to diligently manage rental properties and keep tenants satisfied, you will need someone available 24 hours a day, 7 days a week. Middle-of-the-night maintenance calls, problem tenants, and missed rental payments will become frequent. If you own large properties, hiring a property manager will make business operations uncomplicated and smooth. Property management companies specialize in the day-to-day operations of rental property management, and are diligently equipped to handle rental requests and maintenance problems. Before making the decision to hire a property management company, there are numerous considerations you should contemplate to decide whether employing property managers is the correct business decision for you.

Here are the primary 7 reasons hiring a property management company is beneficial for landlords.

1. Travel Distance

When weighing the decision between enlisting a property management company to handle your properties, or self-managing your properties, consider the travel distance between your home and rental properties. Tenant and property management issues do not follow a specific time schedule. You may face multiple rental and maintenance requests in one day. Consider whether the travel distance between your home and rental properties, are worth the time and effort to constantly travel back and forth. Many rental and maintenance requests will be short-notice. Therefore, traveling or going on vacations will become stressful, considering you cannot predict when you will be required to visit your rental properties. If you value freedom, and possess other important family and work commitments, hiring a property management company will be a valuable decision. Professional property managers can take major stress from your life and allow you to unwind without the fear of maintenance emergencies and short-notice rental requests.

2. Maintenance Requests

Unless you can afford to purchase a newly built property in pristine condition, you will most likely settle on purchasing a property in need of a considerable amount of maintenance and upgrades. As your rental properties become worn down by constant tenants, the amount of maintenance requests received will skyrocket. Many landlords find constant repairs overwhelming and time-consuming, preventing them from handling other important business and marketing operations. Day-to-day maintenance requests such as lightbulb changes, leaking faucets, and broken appliances, can end up taking up your whole entire work day. Furthermore, maintenance requests come at all hours of the day, and tenants expect fast repairs. Waiting a few hours to have a leaking ceiling or broken appliance can cause major dissatisfaction in tenants, causing them to discontinue their lease renewal and/or spread negative publicity about your rental properties. Employing a property management company will give your rental property tenants an overall smoother and supreme rental experience, increasing the probability of repeat tenants and lease renewals.

3. Tenant Screening and Rental Requests

If you decide to self-manage your properties, you will quickly discover how time-consuming and frustrating the rental process can be. Missed property showings, incomplete paperwork, and tedious rental screenings will take up the majority of your time. Conducting adequate rental screenings will be a tedious and time-consuming process, that will take patience and persistence before seeing successful results. Rental screenings are necessary in order to find tenants who are responsible, reliable, and able to always pay their rent on time. 

Property management companies will handle the rental requests and entire rental process, allowing you to spend time committed to other important business operations. Furthermore, property managements companies are trained and skilled in rental operation matters, and know the exact qualities to look for in potential tenants. They will take away the pressure of filling vacancies quickly, and time spent on arduous paperwork and tenant screening protocols. Since property management companies are paid by accepting a fixed percentage of your monthly rental income, you will not feel financially pressured or constrained if vacancies are not filling quickly enough.

4. Tenant Evictions and Difficult Tenants

Employing the right property management company can save you the money, headaches, and stress it takes evicting a difficult and problematic tenant. Property managers also have the time and experience necessary to properly screen tenants and only find responsible and courteous tenants, preventing the frequency of tenant evictions and burdensome issues. Managing evictions, problem tenants, and late rent payments are some of the most important tasks property managers take on which will ease your stress and workload.

5. Personal Responsibilities

Managing rental properties is often time-consuming and arduous, making personal responsibilies harder for landlords who decide to take the self-management route. In order to properly and diligently manage your rental properties, you need to evaluate what parts of life take up considerable amounts of time. If you are a full-time employee, you will not be able to devote enough time on your own to properly manage rental properties and satisfy the needs of your tenants. Hiring a property management company allows you focus on expanding your real estate portfolio rather than handling the time-draining duties associated with managing your own rental properties. 

Furthermore, whether you have a large and busy family will reasonably affect your decision in hiring property managers. Making time for family is difficult when you are constantly bombarded with rental requests and maintenance requests at all hours of the day and night. Tenants expect quick responses, and not responding in a reasonably timely manner will damage your profitability and lower your lease renewal frequency. Having children or managing a successful relationship will be immensely difficult if you decide to self-manage your properties. 

6. Ethics and Legal Issues

Many landlords are former homeowners who are not completely familiar with state and local laws, including fair housing laws, eviction laws, and proper lease terms. By making one small error, you can find yourself in a long and arduous legal battle. Hiring a professional property management company ensures that your rental property will be adaquately and properly handled by experienced property management professionals. You will feel more peaceful and at ease knowing your property is being cared for by seasoned property management experts, who will handle showings, evictions, and lease terms legally and correctly.  

7. Property Maintenance 

To successfully and properly manage a property, requires extreme diligence, hard work, and time. Property maintenance is considered the most expensive and time-consuming part of home ownership. Rental properties are even more expensive to maintain due to potential turnover rates and the occasional reckless tenant. Every time a tenant moves out, there are costs associated with the process, including cleaning, repairs, marketing and advertising, re-keying locks, screening, and more. By properly maintaining your property, you can retain quality tenants and fill vacancies quickly. 

Property management companies will handle small maintenance issues quickly, ensuring your property is correctly repaired, and tenants are satisfied. You will not have to worry about canceled vacations or canceled personal commitments to fix leaky ceilings and broken appliances. Overall, hiring a property management company takes away the stress and pressure of maintaining renal properties. Furthermore, hiring a property management company to maintain your rental property financially pays off, due to your properties always looking pristine and rarely experiencing vacancies. 

Sunday, January 28, 2018

7 Tips to Taking Better Rental Property Photographs

You never get a second chance at a first impression. As technology grows, potential tenants are checking out your property online before considering even stepping foot onto your property. By amping up your rental property photographs, you can powerfully increase the chances of potential tenants visiting your property. Stand out from thousands of others Boston rentals by incorporating professional photography and staging into your real estate marketing approach. Before hiring a professional photographer, consider adopting these 7 photography practices.

1. Upgrade Your Camera

It is vital to take the best quality property photographs possible, in order to attract serious and high quality tenants. Consider purchasing a DSLR camera to capture professional, crisp images. The Nikon D800 and D7000 are excellent for full-frame real estate photographs, and are affordable options for property managers on a budget. These models are easy to use, and do not require any professional photography training to successfully operate. Also consider purchasing a tripod to capture level and full-frame photographs. 

2. Staging is Key

Assemble furniture and props to provide tenants with a realistic view of how their rental property could look. Clear clutter and unattractive furnishings to provide a clean and clear view of your property. Only include the basic furniture essentials, and keep decorations minimal and timeless.

3. Create Good Lighting 

Before taking photographs, ensure the space is properly lit. When shooting interior photographs, open nearby blinds and windows to take advantage of natural light. Even if it is an extremely bright and sunny day outside, the sun can create harsh shadows on your furniture. Switch on the flash even during the day, the extra lighting will fill in unsightly shadows and create a more balanced exposure. 

4.  Properly Adjust ISO Settings

Properly measuring ISO is essential when taking professional photographs. ISO measures the sensitivity of the image sensor. The lower the ISO number is, the more sensitive your camera will be to light and the photographs produced will possess more grain. Higher ISO settings are generally used in darker situations to attain fast shutter speeds. If you are taking your exterior real estate photographs outdoors during the day, you will need to utilize a lower ISO such as 100 or 200. If you are shooting indoors in the afternoon or evening, you will have to increase the ISO to a higher number to record the light on the camera's sensor. If the natural lighting is very dark indoors, you will need to use much higher ISO such as 800 or 1600. Keep in mind, increasing your ISO also increases the grain or pixel size of your photographs, so try to incorporate natural lighting as much as possible in order to keep your ISO balanced.

5. Use Landscape Orientation for Optimal Viewing

Always shoot your real estate photographs in the horizontal or landscape orientation whenever possible. Humans find the horizontal and landscape viewing more aesthetically pleasing, and horizontal images capture the full essence of a space. This allows a wider shot which produces a true sense of depth and detail.

6. Utilize a Wide Angle Camera Lens

Avoid using poor quality fisheye lenses, and instead invest in a wide angle camera lens. The trend in real estate of using a fisheye lens dramatically distorts property images and is deceiving to the potential property tenant. Making a space look larger than it is by distorting the area is not going to increase a renter's interest. Invest in a wide angle camera lens to realistically advertise your property and capture the whole space.

7. Edit Photographs Carefully

Ensure when editing your property photographs to not seriously distort the true image. Keep editing very minimal and avoid unnatural filters. If the lighting needs to be adjusted in the editing stages, slightly adjust the brightness balance until the image looks crisp, clear, and realistic. 

Wednesday, January 17, 2018

5 Tips To Improve Your Rental Property

As 2018 commences, rental property owners should assess their rental portfolio to attract a steady stream of quality and serious rental tenants. Potential tenants will be checking out your website and property photographs before ever even stepping foot on your property. These relatively inexpensive tips will drastically improve your rental property, while maximizing its income potential.

1. Amp Up Your Rental Property Photos

One way to improve your rental property marketing approach is through high quality photographs, which highlight the spectacular features of your property. Many potential property renters will quickly skim through online rental portfolios, and immediatly reject any properties with low resolution and poor quality photographs. 

Consider purchasing a professional DSLR camera to capture high quality, crisp images. If your photography skills are lacking, look into hiring a professional photographer to capture your rental properties in a positive and professional manner. Posting professional photographs of your rental properties online shows potential tentants a clear impression of your property. Furthermore, taking the time and effort to post professional photographs shows potential tenants that the property managers are diligent, professional, and organized. 

If you plan on taking professional images yourself, ensure that the lighting is adequate and not too dark. For interior shots, open nearby blinds and windows to capture natural light. Furthermore, staging is key when taking professional property photographs. Clear rooms of all clutter, and incorporate furniture and props to provide potential tenants with a realistic idea of how their new rental property could look.

2. Modernize Kitchens and Bathrooms

Providing tenants with modern and squeaky clean kitchen and bathrooms will powerfully improve your rental properties. Before upgrading any room, focus on the kitchen and bathrooms first. Beautiful and modern kitchen and bathrooms will attract high quality tenants. Replace outdated kitchen appliances with modern, stainless steel alternatives. Upgrade dated bathroom tiles, toilets, and showers with sleek and modern options. By upgrading the bathrooms and kitchen, the monthly rent of your rental property will highly increase. Furthermore,  undergoing a kitchen renovation can also solve many mechanical issues and lower maintenance requests, as many old appliances tend to falter and fail. 

3. Replace Dated Light Fixtures

Replace outdated light fixtures with modern, elegant alternatives that will appeal to potential rental tenants. This inexpensive fix can immediately improve the ambiance of any room, and impress potential tenants. Modern chandeliers will give small apartments a boost in appeal and style. Other examples of fixtures that need replacing are:
  • Door handles that stick
  • Mini-binds with missing slats
  • Faucets or tubs that drip 
  • Cabinet hardware that has lost it's finish

4. Maintain Landscaping 

The exterior of your rental property provides potential tenants with their first impression of your property. Ensure the exterior of your property is always properly maintained and cared for.

Always mow the grass before potential showings. If you have flowerbeds and bushes, spread fresh mulch down to give the exterior a healthy glow. Finally, ensure your property is safe and secured by checking all gate hinges, removing any broken concrete from sidewalks, and confirm the pathways are sturdy.

5. Increase Storage Room

Storage is an overlooked yet highly important priority for renters. Property managers can boost the value of their property by increasing storage options. Some simple ways to increase storage include adding hooks to main areas like entryways and bathrooms, installing closet organizing systems, and adding additional shelving in pantries. More elaborate storage upgrades include installing permanent shelving in the garage, creating built-in shelves, framing in a new closet, and adding a shed on the property.  

Wednesday, December 27, 2017

6 Simple Ways to Increase Your Home's Resale Value

When it comes time to selling your home, attaining the highest sale price possible is usually at the top of your priority list. Spending large monetary amounts on expensive home upgrades can end up backfiring and taking large portions from your savings. The good news is, there are surprisingly small and cost-effective ways to dramatically increase your home's resale value. Making your home positively stand out in Boston's competitive real estate market should be prioritized. The following minor home improvements have the power to powerfully maximize property resale value.

1. Refinish Hardwood Floors

Freshly refinished hardwood floors can give any home the pleasant feeling of luxury and cleanliness. Potential buyers are often more inclined to purchase a home with newly renovated hardwood floors,  and are willing to pay extra to experience pristine flooring.

2. Replace Old Light Fixtures

Although a relatively inexpensive purchase, light fixtures have the power to completely change the ambiance of any room. Chunky, outdated, and worn light fixtures appear unattractive and dismal to potential buyers, and negatively affects the atmosphere of your property. Such a small home decor purchase has the power to alter the ambiance of any room, and sellers should utilize this knowledge to their advantage. Replace worn and chunky light fixtures with modern, elegant alternatives, and watch the room's entire appearance improve. 

3. Modernize Your Kitchen

Updating your kitchen is another relatively inexpensive purchase that has the power to beautifully transform any home and dramatically increase resale value.  Potential buyers are highly attracted to homes that lack any worn or outdated appliances. Replace outdated and shoddy kitchen appliances with modern, stainless steel appliances to give your home a touch of elegance and newness. Also consider installing a modern kitchen backsplash, with timeless, neutral tile colors.

4.  Add a Fresh Coat of Paint

Repainting your home is one of the most lucrative ways to make your home appear modern and fresh, which instantly boosts appeal and value. Most people prefer neutral paint tones, which is important to keep in mind before embarking on this home improvement. 

5.  Cut Energy Costs 

Possessing an energy-efficient home is a highly marketable advantage, which can save potential home buyers on utility bills. Start by having your local utility company inspect and audit your home's energy consumption. Their utility experts will show you how to increase the overall energy efficiency of your home, and how to decrease rising utility expenses.

6. Replace Old Kitchen Appliances

When renovating your home, it is important to keep in mind that kitchen updates instantly maximize value. Even minor kitchen updates can highly increase the value of your home. For those homeowners on a budget, try starting with small kitchen improvements. Replace stained sinks and outdated, dingy microwaves with modern, stainless steel appliances. For homeowners unconstrained to home improvement budgets, consider replacing all outdated kitchen appliances with modern stainless steel appliances. Furthermore, consider replacing outdated and stained kitchen countertops with modern, elegant granite countertops. 

Monday, December 11, 2017

How to Prevent Property Damage in Colder Temperatures

According to national statistics published by the Insurance Information Institute, property losses procured by snow, ice, and freezing temperatures appear third on the list of serious losses caused by weather, behind hurricanes and tornadoes. As temperatures drop lower in New England, it is important to stay educated on how to properly protect and maintain properties amid harsh winters. Read these tips to avoid catastrophic property losses and damages this winter.

1. Protect Your Pipes

As temperatures drop in New England, it is important to be mindful of protecting your pipes from bursting. The average burst pipe insurance claim stands around $18,000. The damage to your pipes is not the only headache you will be facing. You will also have to deal with floor replacement, sheet-rock replacement, re-painting the room the accident took place in, and possible mold removal and prevention expenses in order to maintain an orderly rental property. Losses can be even worse if the property is occupied and tenant property loss results from the incident.

Luckily, preventing pipes from bursting is a fairly simple project. First, ensure your pipes are properly insulated. Also, remember to occasionally turn on the heat in occupied homes to prevent pipes from freezing up and eventually bursting. Before the first big snowstorm of the year, consider sending a reminder to tenants on preventative measures for bursting pipes. Encourage tenants to open cabinet doors, which allows heat to reach pipes. Additionally, remind them to leave their faucets slightly dripping overnight as a preventative step.

2. Roof Maintenance 

Heavy snow can severely damage a roof that was weak to begin with. In preparation for harsh New England Winters, you should have your roof inspected yearly, preferably before the weather turns icy.  The seal around vents, skylights, and other protrusions should be checked and replaced if necessary. Any loose tiles or shingles should also be replaced before the winter begins. Maintaining your roof yearly can save you thousands of dollars in the long run. 

Gutter maintenance is also highly important for snow drainage. Walk the roof's edge to ensure all downspouts and gutters are secured tightly and free of any debris which may block the drainage of melting snow. 

Contemplate shoveling your roof after a heavy snow, not just your sidewalk and driveway. Heavy snow can create structural damage to your property. Furthermore, when snow melts and refreezes on your roof multiple times, snow can turn into ice dams along your roof which can bring about water damage along your walls.

3. Landscape Concerns 

Trimming trees before New England's harsh winter approaches is necessary. Large tree limbs can crash under heavy snowfalls, and demolish cars and roofs. Now is also the time to bring in outdoor patio furniture and outdoor decorative items which will become damaged as temperatures drop and snowfalls approach. 

4. Formulate an Emergency Plan

The most important step in protecting and maintaining property through New England's harsh winters, is formulating an emergency plan. Property managers should outline an emergency plan for their residents, so they are properly prepared if an emergency occurs. If the power goes out, encourage tenants to use flashlights and lanterns, rather than candles and open flames. Candles and open flames introduce an unnecessary fire hazard that can easily be avoided. An efficient property manager should create a small and affordable emergency safety bag for tenants, with instructions on how to proceed when an emergency strikes. The safety bag should contain battery operated flashlights, a lantern, and detailed instructions with emergency phone numbers to utilize during emergencies. This small amount of effort and money will ensure tenants feel safe, protected, and at peace living in your rental properties.

Although not all property damage is avoidable, by taking these necessary steps and precautions, you can lower your probability of facing catastrophic damage this winter. 

Sunday, December 10, 2017

Top Market Trends Impacting Your Boston Real Estate Business

As the final month of the year is reaching an end, it's time to regroup and strategize your company's business objectives and strategy for 2018. Before strategizing an updated business approach, it is imperative to study and understand the latest market trends in Boston real estate. By taking market trends into consideration when constructing marketing and management approaches, you will fare exceedingly better than real estate companies that did not apply researching methods to their own business approach. Here are the latest regional and national real estate trends for rental and job growth, occupancy, and more.

1. The Millennial Take Over

Millennials continue to make up the largest portion of the population, and are most likely the largest demographic of renters. Consider changing your company's technology and marketing plans to target millennials, who value efficiency and flexibility. Our previous blog post, "6 Ways To Attract College Students To Fill Your Apartment Vacancy", holds detailed and valuable information on both attracting, satisfying, and retaining millennial renters.

2. Mobile Technology is Here to Stay

Mobile technology has powerfully revolutionized the real estate industry, allowing potential renters to quickly locate properties and schedule apartment showings instantaneously. Mobile technology has become standard in the rental industry, and continues to hold power: studies show 84% of renters use mobile phones during their apartment search process. Taking the time and resources to properly integrate mobile-friendly features on your real estate company's website has the power to attract renters, and fill vacancies swiftly.

3. U.S Job Growth Continues to Soar

As U.S job growth continues to soar, the demand for rentals continues to climb. Property managers should remain aware that the U.S economy has added more than 150,000 jobs for the second month in December, and the employment rate has dropped to 4.3%.

While numerous market trends exist, property managers should especially take these specific trends into consideration when adjusting their market strategy for 2018. As the millennial generation continues to grow and seek out rentals, tweak your strategy to specifically target the millennial generation, with specific amenities and features marketed towards them. Furthermore, carefully study the job growth and Boston's rental property supply. Retaining this knowledge and applying these marketing trends to your 2018 strategy will open up successful business opportunities for 2018.