Frequently Asked Questions
Question about selling
Before you worry, understand that every home depreciates, whether they are older homes or brand-new homes. Also, real estate depreciates much slower than other personal property, like a new car, which can lose up to 20% of its total value in the first year. It’s important to note that depreciation is just one factor that influences a home’s selling price. To counteract the effects of depreciation, homeowners can improve the property’s market value by maintaining and improving it.
Older homes are typically located closer to the center of towns, and in more walkable areas near more amenities. If you want a really central location, you may need to buy an older home. If you’re buying a new home, particularly one that’s currently being constructed, you might face construction delays or supply-chain issues that slow down the process. With an old home, that isn’t a concern. Unique architectural details and flourishes give an older home personality that might be lacking in a newer, less quirky build. Newer homes are often designed with energy efficiency and upkeep costs in mind. They are usually much cheaper to keep heated or cooled. Newer homes can also take advantage of modern technology. That means they tend to already have conveniences like central air and dishwashers, for instance, whereas older homes might have to be retrofitted for this equipment. If you’re buying a new-construction home, many builders offer the opportunity to customize it to your specific desires.
A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members. A broker facilitates trades between individuals/companies and the exchanges where the broker is licensed. Depending on the nature of the trade and marketplace, a broker can either be a human being who is processing the trade themselves or a computer program that is only monitored by a human.
- If you are getting, or have an FHA loan you have to set up an escrow account for taxes and insurance with your lender / mortgage company. In an FHA loan you have to include your taxes and insurance even if you are putting 20% down, or if you have 20% equity in your home.
- Taxes and insurance will be paid promptly when they have to be paid, and usually any penalty resulting from a late payment at the fault of the lender will be paid by the lender.
- You don’t have to keep track of when school, general, village, and county taxes are due – you make your monthly mortgage payment, and your mortgage company takes care of the rest.
- If you are putting less than 20% down on a conventional loan (Fannie Mae or Freddie Mac) – most lenders will require that you set up an escrow account to include your taxes, and insurance in your mortgage payment.
- The time to get a personal loan can vary depending on factors such as whether the lender uses automated or manual underwriting, your credit score and the accuracy of your application information.
- Preparing your documents in advance, maintaining a solid credit score, and providing accurate information can help speed up the personal loan process.
- It’s important to avoid certain types of fast loans, such as payday loans and car title loans, due to their high interest rates and potential for leading to a debt spiral.
Question about renting
When you buy a property to use as a rental—an investment property—you’ll inherit all the costs of maintaining, improving, and managing it. Owning and renting property is considered a business endeavor because you’re generating income from it. You’ll also have to include any income you generate in your taxes.
There are several factors you need to consider when you’re depreciating rental property. You’ll have to know which system to use, whether the property is depreciable or not, when you start depreciating it, and what the tax consequences are.
There are some clear benefits to buying older homes as single-family rental properties. Perhaps the most obvious benefit is location; older homes are often found in neighborhoods closer to the city center and all of the amenities of downtown. Because they are in established neighborhoods, the market rates tend to be more predictable, making determining rental rates a bit easier.
Another benefit is that older properties may feature higher quality construction and materials. While this is certainly not true in every case, more often than not older homes might come with bigger yards and more space between the houses. On the other hand, older rental properties may need a lot more work upfront than a newer home does.
A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members. A broker facilitates trades between individuals/companies and the exchanges where the broker is licensed. Depending on the nature of the trade and marketplace, a broker can either be a human being who is processing the trade themselves or a computer program that is only monitored by a human.
As the landlord, these expenses are your responsibility. Good business practice says these should be structured into the rent you charge.
To estimate the amount you should be charging for rent, you should add the total yearly expenses for owning the house. This includes taxes, mortgage, insurance, snow removal, and general maintenance. Then, divide that total cost by 12. This will give you a sense of the amount of money it will cost you to operate the rental.
Always remember, the above formula gives you a ““break-even”” price. You won’t realise a profit unless you charge more in rent than you spend in upkeep.
- The time to get a personal loan can vary depending on factors such as whether the lender uses automated or manual underwriting, your credit score and the accuracy of your application information.
- Preparing your documents in advance, maintaining a solid credit score, and providing accurate information can help speed up the personal loan process.
- It’s important to avoid certain types of fast loans, such as payday loans and car title loans, due to their high interest rates and potential for leading to a debt spiral.