Archive for September, 2017

5 Tips on How to Successfully Select a Tenant

Monday, September 25th, 2017

Many landlords, despite how long they’ve been in the real estate rental business face similar issues of choosing the correct tenant. One wrong move can make the difference between a fantastic relationship or having to deal with a damaged property or disputes. Platforms such as HousingAnywhere.com make it convenient for landlords to find student tenants safely and securely. Nevertheless, landlords still receive many requests on their property and here are some useful tips in selecting the correct tenant!

Check references

Humans are habitual beings, as much as they say that they will change, it takes perseverance to do so. That’s why references are a vital tool that many landlords need to use to their advantage. Only collecting and storing references is not helpful. If you are going to take references, you need to check them! A simple call to the tenant’s previous landlord or boss will help you better understand the prospective tenant before you accept them into your property. If they’d set the previous landlords house on fire, surely that’s something you’d want to know!

Choose a tenant who is consistent

Consistency is key for any landlord who is looking for a reliable tenant who will not disappear after a few months. The best thing for this is to check the application form. Pay close attention to the employment history and prior address. How often do they change jobs or move around? If you can see a pattern of short-term jobs, then this tenant might not be the right one for you. If they have not shown consistent employment, they may not be able to afford the apartment in three months, and you will be left to start the tenancy search all over again.

Choose a tenant with financial stability

The primary focus is to find a tenant who is financially responsible. If they are responsible for paying other bills on time (phone bills etc.), they will most likely pay their rent on time and be accountable with your apartment. Here is a two-step process of checking:

A) Check their income: Ideally, you will want to find a tenant whose monthly income is at least two/three times the monthly rent. You can get this information by asking for a copy of their pay stubs/payslips

Or

B) Calling their employer directly and confirming their employment and their monthly earnings.

If you are still concerned about your tenant’s ability to pay, consider asking for a credit check. Remember to handle this with care as it can be a sensitive topic for a lot of people. Some tenants will be uneasy about getting a credit check. However, you will need to be discrete about this subject, remembering that a refusal to provide these documents doesn’t necessarily mean that the tenant cannot pay. Also keep in mind that if you’re looking to rent out to students, you can also ask their parents or guarantor for a credit check.

Interview your candidates

Face to face meetings gives you the opportunity to properly speak to the tenant and decide if this is the correct person for you. You can ask as many questions as you need to, remembering not to ask any questions that will violate the fair housing laws.

Some questions you can ask:

‘Do you have any previous convictions?’ or ‘Where do you work? and much more.

During the interview, it is essential to listen to your gut feeling. The tenant’s behavior during the interview and the viewing can tell you a lot. For instance, if they show up late, or they’re rude. These are visible indications that this tenant might not be the right one for you.

Remember it’s not all about the money!

Selecting a tenant simply on money may be one of the biggest mistakes that many landlords face. For instance, during the interview or the viewing, a tenant is extremely picky over the smallest things about your property, then this is a good indicator that they’re going to be quite a difficult tenant. Another indicator is if they litter once they are on the property. This can also be a sign that they will not take care of the property. Make sure you are very observant and pick up on the smallest signs.

Selecting a tenant can be a time-consuming process but if you rush you may be left with a tenant who may not be a good fit. So remember to take your time, ask questions and go with your gut instinct. If something doesn’t feel right, it probably isn’t.

Protecting your Retirement from a Financial Crisis

Monday, September 18th, 2017

So first thing’s first, I’m not the fear-mongering type. I personally really hate it when pundits prey on people’s worst instincts. But there is, unfortunately, something to be said for financial forecasting, right? It’s more (at least somewhat) more science-based, and less I’ve-got-a-feeling-something-bad-is-gonna-happen. There are patterns and signs for what’s to come, and we know this because we, as in our country, tend to fall into these patterns again and again.

Pay off all credit card debt

Regardless of how much credit card debt you have at the moment, it should be your number one priority to pay off. And do it somewhat aggressively. Ideally, you shouldn’t be carrying a balance over month to month, but realistically, it’s bound to happen to some of us, especially if a big purchase was made. After paying off your debt, treat your credit cards as a debit card, in that you have the actual cash to pay off what you’re buying on your credit card.

Emergency savings

It’s a basic rule of thumb to have three to six months’ worth of living expenses saved up. The idea is that it will cushion you if you lose your job, and won’t have to tap into your retirement savings. It’s hard to see the other side of an economic crisis, but when you have that cushioning, and your finances are in tact, getting back to normal will come easier.

Find a financial planner

Ask your friends, family, or read all the reviews and testimonials you can, and interview prospective retirement financial planners. Essentially, find someone you would trust with the keys to your house. Work with your adviser to create a customized financial plan that meets your specific needs. That will determine your asset allocation. Make sure you have a diversified portfolio containing assets that hedge against each other. 

Self-Directed IRA Rules and IRS Regulations

Monday, September 11th, 2017

If you’re new to the retirement world, you may be feeling overwhelmed by the amount of jargon and rules. If you familiarize yourself with the essential rules, you can avoid penalties, and reach your retirement goals.

Disqualified persons

One of the easier ways someone can violate self-directed IRA rules is by not understanding who exactly is a disqualified person. These people include the IRA owner’s parents, spouse, their children, and grandchildren. These people are excluded from benefitting from the IRA owner’s investments, for example, if the IRA owner’s adult child needs a home to rent, and the IRA owner has property in their IRA, their child cannot stay in that investment property.

Investment Types

The first thing you learn about self-directed IRA rules is that you, as the owner, are allowed to invest in pretty much anything you’d like. For the most part, that’s true, but there are limitations and exclusions to keep in mind. The IRS has a handful of basic assets that aren’t allowed:

  • Life insurance
  • Collectible items (like paintings, antiques)
  • Gems and coins

Borrowing and lending money

Borrowing and lending in a self-directed IRA gives the owner the ability to loan their IRA money to non-disqualified persons. How it works is that if pre-agreed to, an IRA can receive a certain amount of principal and interest, just like a bank would. What’s appealing is that the IRA holder chooses who to lend to, the interest rate, the principal amount, length of the loan, payment amount, and frequency, and whether the loan is secured by collateral or not.

What Alternative Investment Asset Types are for you?

Monday, September 4th, 2017

When most people think of investing, they might think of the stock market. Some people may even think of stocks AND bonds. All in all, most think of something that’s inaccessible to them, and that only the professionals can dabble in.

Owning an alternative investment can be a way to diversify a portfolio because they are non-correlated assets to most other assets. These types of assets are also commonly invested using a self-directed IRA. Let’s go over a handful of our favorites.

Real estate

The range of types of real estate you can invest in is wide. Most will automatically think of either single family homes or commercial real estate, but it goes beyond that. To name a couple, raw land, apartment complexes, farmland, storefronts, storage units, and many, many more.

Private placements

Simply put, a private placement is an offering of a company’s securities that is not registered with the SEC (Securities and Exchange Commission), and is not offered publicly for purchase. Only a few select individuals are offered private placements, so they’re difficult to find in that regard.

Precious metals

The reason that gold, silver, platinum, and palladium are considered precious metals is because they’re rare. Their value is intrinsically tied to their rarity, and in turn, is tied to how they’re priced.  Investors hold precious metals as an alternative investment and to, ideally, hedge against inflation and financial turmoil.