GARYANDLANA

When buying or selling a property, it always helps to have a basic understanding of real estate terms. In this on going series of articles, we take a look at definitions starting with “home inspection.”

1) Home Inspection – an inspection of the condition of a home. They are done item by item, from roof to foundation, and include looking closely at things like plumbing, heating, air conditioning, sinks, tubs, and faucets, and any appliances which convey. The general concept is that the home inspector is trained to spot problems that typical Susie and Sammy Homebuyer are likely to miss. They are not usually intended to bring up discussion about items Susie and Sammy can easily see for themselves like the color of the wall paint or what the carpets look like. (more…)

Selling real estate rentals isn’t like selling houses. You can paint a house, and get a little more because it looks nice. Rental properties, especially larger ones, are different, because they’re bought by investors, who look at income more than new paint. Raise the income, and you increase value to investors.

Time to learn about capitalization rates. If investors in your area expect a capitalization rate of .08 it means they want a net return (before loan payments and taxes) of 8% on the purchase price. So if your three-plex generates $12,000 net income annually, they’ll value it around $150,000 ($12,000 divided by .08). If you can make it generate $16,000, you make it worth $200,000.

More Income From Real Estate Rentals
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1) First, do your homework. Find out the local market conditions for your neighborhood. Depending on your area, there may be better/worse times to sell. Once you’ve decided to sell, there are three different levels of service that you may want to consider:

• Sell the home yourself (FSBO)
• List your with a Discount / Flat fee broker
• Utilize a full service real estate agent/brokerage

If you are inclined to sell the home yourself, note that you will bear the responsibility for marketing your property, along with full legal disclosures, inspections, appraisals and the like. You should be very comfortable with real estate related documents, and comfortable with the legal implications resulting from the transaction.
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