Is an Income Property Right for you?

The appeal of income properties and the potential for what may seem like easy money and early retirement have likely crossed the mind of anyone who has heard of this business venture. There is a lot more to consider before entering the income property game, however, than simply purchasing a property and watching the dollars roll in. Here are a few things to consider before launching into your new career.

Can You Recognize An Income Property When You See It?

There are a lot of features that make a good income property. Whether you are considering flipping it for a profit or renting it out to potential tenants, knowing what to look for is more than half the job. Can you realistically estimate what the cost of renovations to the property will be? Do you know what the value of the home will be after the renovations, based on its size, location, etc.? Do you know what the market rent would be for the property? If you can’t answer any of these questions you either have a lot of work to do, or you may want to reconsider.

Not Scared Off?

So you think you can reasonably identify an income property and are still interested in making your first purchase. Here are a few tips for making that a success!

Know Your Intent-Whether it’s flipping or renting the property, you should have a clear picture before you make the purchase. Have an estimate of what the renovations will cost as well as the profit margin of the investment, both in the short and long term.

Consider Splitting The Costs-Many people who enter the income property market reduce the risk by having partners. Whether it’s a friend, relative, or business partner, this may be the right decision to minimize your risk in your first venture.

Make It Your Business-Whether you plan on doing this as an additional source of income or you are going into it full time, realizing that this is now a business will prevent you from losing a fortune. You will spend a lot of time getting to know both the real estate and the home renovation industries, and the more you know, the more successful you will be.

Deciding to get into the income property business can be a time consuming, but ultimately very rewarding, venture. Like any business, the effort you put in and the knowledge you have will determine the success you achieve.

Negotiating Contract Contingencies From The Seller

When the housing market is up and sales seem to favor sellers rather than buyers, negotiation contract contingencies may seem like a lost cause. But there are always cases where you as the buyer can effectively negotiate purchase protection into the contract of your home, and you may even be able to convince your seller to throw in a few perks. Here are some tips to negotiating contract contingencies from the seller.

Common Contract Contingencies

Knowing what contingencies are often included in home purchase contracts is the first step in getting what you want from the seller. There are a number of contingencies that are commonly included in contracts, and while this list is not exhaustive, it can give you a good idea of what you may want to consider.

Appraisal-This is usually required by your lender, and while traditionally it is the responsibility of the buyer, you can get it covered by the seller.

Home Inspection-This important step can find any major problems with the house or property that could cause a decrease in value, or make it an unwise investment.

Loan Contingency-This is a term in the purchase contract that allows a buyer to back out of the contract if, after making a good faith effort to obtain a loan, the buyer is unable to obtain the loan. The buyer must remove the loan contingency (agree to proceed with the transaction) within the stated amount of time or withdraw from the contract. If a buyer withdraws from a contract because of failure to obtain a loan, generally the buyer is entitled to a refund of his or her earnest money deposit, less any costs actually incurred.

Early Occupancy Agreement-This agreement can speed up the usual 60-day closing period by allowing you to move in faster.

Existing Home Selling Clause-This clause makes the purchase of your new home contingent on your selling your existing home. This prevents you from being in a situation where you may be paying two mortgages at once.

How To Negotiate Contract Contingencies

In most cases if the seller is happy with your offer, and is looking to sell their home hassle free, they are likely to offer at least a few contingencies to a buyer. The best approach is to inform your agent of any contingencies that are an absolute necessity for you, such as an existing home selling clause, so they can clearly express this to the seller and the agent representing them.

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Buying A Foreclosed Property: What You Should Know

Given the recent state of the economy and the rising rate of mortgage foreclosures, the number of properties available at rock bottom prices is at an all time high. While purchasing one of these homes may seem like a sound investment and a great way to get more house for your dollar, there are some issues to consider before purchasing a foreclosed property. Depending on your financial situation, your experience as a homeowner, and your access to information about the foreclosure market in your area, there are some risks involved.

Finances Of Foreclosure

The financial considerations of purchasing a foreclosed home can sometimes be overlooked. Often foreclosed homes can be in need of considerable maintenance and repair to make them habitable. You need to know this cost when making the purchase, or you may end up with a considerable amount of debt in bringing your home back to its original shape. Also, even though the price of the property is right, there are other financial considerations you may not have considered. The cost of maintaining a home, property taxes, and utilities are all expenses that may be greater than your budget will allow, especially if you are purchasing a home that is much larger than your existing home or if you are unfamiliar with the costs associated with home ownership. There is also the consideration of your ability to pay for the purchase. Often foreclosed properties must be paid for in cash, so be sure you have the available credit.

Knowing The Facts

The process of purchasing a foreclosed home can be much more time consuming and complicated than a normal real estate transaction. If the sale is occurring because an eviction notice has been served or if you are purchasing the property at auction, you may not be able to inspect the house before purchasing it or you may have to deal with some issues to get the current homeowners out. There is also the issue of not knowing the condition in which they have left the home. You will want to be sure you get the advice of both a real estate agent and a banker to ensure that your purchase is both a good investment and will increase in value over time.

Overall, purchasing a foreclosed home can be a great way to enter the income property market or find yourself a great investment opportunity, but being sure you have all the facts can prevent you from making a poor investment decision.

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Buying a Home with Bad Credit

When it comes to buying a home, having bad credit is not the end of the world. Your future doesn’t have to be defined by your past. Whether you have suffered from a bankruptcy, foreclosure or some type of financial hardship that resulted in late or missed payments, there are lenders who specialize in financing for those with less-than-perfect credit. You will likely have to produce a larger down payment and/or pay higher interest rates than someone who has good credit, but the important thing to know is that buying a home is an option for you.

Bankruptcy & Foreclosure

If either a bankruptcy or foreclosure is on your credit report, it could take some time before you can qualify for a good interest rate on a mortgage. FHA loans, which are especially desirable for those with past credit problems and first-time home buyers, are backed by the government and offer a low down payment and interest rate option for those who qualify. Although the notation remains for up to 10 years, individuals with a bankruptcy or foreclosure on their credit report may qualify for an FHA loan after two years. Some mortgage lenders may approve a loan sooner, but the interest rates will be higher and the required down payment may be as much as 35 percent of the purchase price of the home.

Cleaning Up Your Credit

Even if you have bad credit, it’s important to check your credit report from each of the three major credit reporting agencies – TransUnion, Equifax and Experian – before applying for a loan. If anything is inaccurate, file a dispute with the reporting agency and request a correction. You can request a free copy of your credit report every 12 months.

In addition to correcting any inaccuracies on your credit report, it’s important that you know what can help or hurt your chances of obtaining a loan. You can start improving your credit by avoiding the temptation to apply for new credit right before submitting a mortgage application. Multiple inquiries will cause your FICO score to drop, and lenders will rely on this information when deciding whether or not to issue your loan and how to calculate your interest rates. With past credit problems, most lenders will want to see that you have rebuilt your credit history with 1-3 major credit cards and timely payments over a two-year period.

Money Matters

When it comes to obtaining a home loan, a healthy bottom line will help the lender to see you as being creditworthy. It’s important that you have sufficient income, along with the ability to prove steady employment for at least one year (longer is better) preceding your loan application. Most lenders will request a copy of your tax returns for the two most recent years, along with current pay stubs. If you have money for a down payment, this will also work in your favor.

Creative Financing

In some cases, a conventional mortgage loan may not be available no matter how hard you try. Owner financing is one way that individuals, who may not otherwise qualify for a traditional mortgage loan, can purchase a home. This type of financing is offered by the owner and may include interest rates comparable to other loans, flexible down payment options and no credit check. Your agent can assist you in finding homes that offer alternative financing options.

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What’s Your Home Worth

So as most of you know I am a Real Estate Agent with The Russell Realty Group. The team here at RRG has been working hard to provide our clients with the best service, representation, and powerful tools. RRG has rolled out a new website to help home owners determine their current home value. Check Here to see where your property stands in todays market.

Also feel free to peruse my websites

Both very helpful whether you’re buying a home, or selling a property.

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Home Affordability by Monthly Payment

This is a bare bones break down of how much home you can afford by monthly payment. Keep in mind that factors such as your credit score, percentage of down payment, fluctuating interest rates, property tax, home owners insurance, and a whole host of additional factors can vastly change these figures. We will assume for purposes of this post that the interest rate is 4.25%, that property taxes are 1.125% a year, and home owners insurance is $800.00 a year. Also PMI is included in these figures.

Monthly Payment                                                                                     Purchase Price

$1000.00                                                                                                        $139,012.00

$2000.00                                                                                                       $287,954.00

$3000.00                                                                                                       $436,895.00


In order to calculate a more accurate mortgage you need to contact a mortgage broker, or bank. The lenders will pour through your finances and establish an amount that is within your financial ability to pay.


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List With Sean Paul

I have put up another site to check out if your interested in selling your property. There is some helpful information along with useful tools to assist you through out the process.

List With Sean Paul

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Boston MLS

We have been working hard at Russell Realty Group to provide a easily utilized product to assist clients in there search for a home. If you haven’t already I would encourage you to use the search widget to the right of the page. Also you can visit our site to search active MLS listings in your area free of charge.

The Boston MLS

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Pricing your Home to Sell

Pricing Your Home To Sell

In addition to location and condition, the asking price of a home is at the top of the list of important considerations. When a potential buyer is looking for a property, they want to get the best possible value for their dollar. This doesn’t mean that a home should be priced too low, but it does mean that knowing how to price your home is a must.

Know The Value

Regardless of whether you are in a buyer’s market or seller’s market, it’s important for every seller to know the actual value of their home with the help of an appraisal. With this information, you will be able to choose a listing price that does not exceed the home’s value. At the same time, you will know how to react to various offers that a potential buyer may make. If you can select a price that is affordable to a range of buyers, you may receive multiple offers thereby sparking a possible competition among the interested parties.

Do Your Homework

The asking price that you choose should not be based on an appraisal alone, but rather a combination of factors. One such factor is that of recent selling prices for comparable homes in the area known as “comps.” Important comparisons include construction year, square footage, views (if applicable), interior upgrades and additional features that make the home unique. While you’re doing research, check out current listings and the asking price for each home available in your area.

Set A Realistic Timetable

In researching the sale price for other comparable homes in the area, you should also note the length of time a particular house has been on the market. Some homes practically sell overnight, while others may remain on the market for months without being sold. If you want to sell your home quickly, you should consider this when setting a price. A bargain will obviously move quicker, but it’s important to make enough from the sale to feel good about your choice. If you aren’t in a hurry to close, talk with your realtor about a fair starting price that’s at or near the appraised value of your home.

Ask Your Agent For Advice

While you hold the key, so to speak, to your house’s actual asking price, most sellers will ask their Agent for their opinion. After all, real estate is their business and they will be working with you through every step of the process. If you choose a Agent that you trust, give great consideration to the advice they offer.

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The Home Remodels That Will Most Increase Your Selling Price

The Home Remodels That Will Most Increase Your Selling Price

So you are ready to sell, but you know that there are a few things in the home that could stand some updating in order to increase your selling price. Your remodel budget is limited, and you are wondering where to spend it. The good news is that there are some solid answers. But there are certain remodeling jobs that can increase your selling price more than others.

Whether you are getting ready to sell or simply want to remodel now for the best value when you do sell later, these are the remodels that give you the best return on investment.

The Kitchen

Remodeling the kitchen is one of the most important things you can do in your home, especially if the kitchen is dated. It is often one of the first rooms a potential buyer will see, and it should make an impression. The kitchen is often considered the soul of the home, and most people spend a good deal of time here. Upgrades to countertops, cabinets, and appliances are one of the wisest investments you can make in your home.

The Bathrooms

Second only to the kitchen, the bathroom is the room in the house where dated fixtures or flooring can cost you a sale. People want a bathroom that is clean, comfortable, and modern, a place of privacy and peace. Spending money on a bathroom remodel will almost always be the best way to spend your money, and you will see it in your selling price.

Curb Appeal

Getting people in to look at your house is the first step. Spending some of your remodel money on the exterior of the house and the landscaping is the best way to do that. Improving the look of the house from the outside means you can bring more people in to look and to buy. There is no underestimating the importance of curb appeal.

An Addition

With a small house, adding on square footage can mean adding a lot to the selling price. If you can swing it, an addition is a smart way to make your house worth a lot more money.

Remodeling your house now for a better sale price later is a smart move. The sooner you do it, the more you will be able to enjoy it before it is time to sell and move on. With these smart remodels, you will make maximum profit.

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Mortgage Law Changes

Interesting article on changes to the Federal rules governing mortgages. Changes to take effect January 2014.

New federal rule: Make sure borrower can pay loan

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