Helpful Tips to Increase Your Residential Real Estate Sales

Getting more sales is the goal of every real estate investor today. Unfortunately, there are a lot of people who are not aware of the things that they can do in order to get more sales. So how can you increase your residential real estate sales without spending a lot of money? Read on to find out how you can increase your sales without exerting too much effort on your side.

Here are the things that you need to do if you want to get better revenue in your property investments:

Get a great location – this is one of the most important things that you need to keep in mind if you want to get better revenue from your real estate property. The location will play a great role in the amount that you can generate, so you need to make sure that you are going to consider this factor.

Renovate your property – the most common mistake of real estate investors is they think that they don’t have to do anything once they already have people who are paying for the residential property. Keep in mind that these people are only paying because they are comfortable with their house, so you need to make sure that you are going to keep it that way if you want to generate more money.

Write a better contract – if you want to get longer terms, then you need to make sure that it is included in your contract. Some real estate investors would require a person to pay for the rent 3 months in advance, with a 12-month contract. However, you also need to make sure that this will be attractive to people, because there are some who won’t prefer a 12-month contract.

Invest continuously – another mistake of most investors is that they are already satisfied with what they have once they start to generate money. Keep in mind that you are building your own business, so you need to make sure that you have multiple streams of income. This will ensure that you will be successful with your business, and will help you succeed with it.

These are the things that you need to do if you want to get more sales and profits from your residential properties. If you were successful with implementing these things, it would be impossible for you not to get more sales from your real estate property.

Residential Real Estate and Water Damage Claims-What You Should Know

Homeowners’ insurance is a must for any owner of residential real estate. It has been around for many years, coming to the rescue of many real estate homeowners. Leaky pipes and their subsequent damage have been causing homeowners grief for an even longer time. Homeowners’ insurance has alleviated such problems by underwriting the cost for repairs.

I remember as a child my father making repairs with money from our homeowner’s insurance policy. He told me that there was never a claim too small, unless it was within the deductible range.

While my father’s information was correct for the times, the rules for small claims on residential real estate have changed. Submitting a small claim today, especially for water damage, could cost you multitudes more in the future.

A California Insurance Department study showed that 25 percent of insurance companies refused to renew policies for residential real estate owners, who made one or two non-water damage claims within the past three years. The figure rose to 32 percent, when the claims were water damage-related. This means the insurers are paying the legitimate claims but are apt to drop those real estate customers at policy renewal time.

Additionally, all insurers share claims information through the Comprehensive Loss Underwriting Exchange (CLUE) database. Not only are you apt to be dropped by your current residential real estate insurer, but others may not approve you. The study also showed that 62 percent of the top 13 insurers in the state of California refused applicants with only one-to-two claims in the past three years.

If another insurer does approve you, it will most definitely be at a much higher premium rate that will add up over the years to a much larger amount than the small water damage claim you made.

So, what has changed?

Toxic Mold

Litigators have jumped on the toxic mold lawsuit bandwagon. Toxic mold comes from water damage repairs that were incorrectly made or only partially cleaned up. It can literally make the real estate residents very ill. Some toxic mold is created by homes that were not quality built and allowed water to seep in between the outer and inside walls. There have been a few multimillion-dollar homes in California that had to be totally leveled due to toxic mold.

Insurance companies generally are expected to pick up the tab and then sue the repair contractor or original builder for reimbursement. This attitude has caused a lot of litigation — between insurers and residential real estate owners, as well as between insurers and parties assumed to be responsible for the toxic mold. They often lose court cases for reimbursement, as well as incurring attorney fees and court costs. Is it any wonder insurance companies have become gun-shy of small water damage claims that could lead to costly repairs and litigation later.

Administrative Costs

Another reason for the change in attitude toward water damage claims is the change in real estate insurers’ business practices. Since the early 90s, real estate insurers have looked for more practical ways to increase profits. Through studies, they found that small claims created the same large administrative costs as the larger claims, even though the payouts were small. They now weed out residential real estate customers who make small claims.

Alternative Game Plan for Real Estate Homeowners
Today, it is better not to make small damage claims of any type. Real estate homeowners should increase their deductibles to $1,000 or $2,500. This reduces their premium costs by as much as 30 percent. They are covered for large damages but not paying for services (small claims) that they are not receiving.

With the larger deductible, the premium savings can be placed into a savings account to pay for small claims that would earlier have been submitted to the insurer. Whenever used, the money should be replaced as soon as possible.

After seven-to-ten years of submitting no claims, most real estate insurers will qualify you for a claims-free discount, saving you even more money.

Is It Worth It?

In deciding if you should submit a claim (even a larger one), first determine if it is worth the possibility of losing your policy and/or paying higher rates. Add up all the repair costs. Determine how much the real estate insurer will pay, based on your policy. Subtract your deductible. Is the remainder only a couple hundred dollars or substantially more? Now, determine if it is worth it. Remember, even moving to another state will not escape the CLUE database.

What is Better – Commercial Real Estate Investing Or Residential Real Estate Investing?

My wife, Julie, and I often wonder if commercial real estate investing is the way to go. We’ve always focused on residential real estate – and it’s been very lucrative. But, my parents previously developed, owned, and managed a mobile home park along with owning a variety of residential properties. Julie’s parents have owned (and still own) a variety of commercial properties. And, we’ve watched them all make money, sometimes lots of money, from those investments.

We are often pulled towards the commercial side of things, not only because of what our parents have been involved with, but also due to our fascination with all things real estate. So, what’s better – commercial or residential investing? Below I have noted a far from exhaustive list of pros and cons for both types of real estate investment. One type of investment may be better suited towards your own objectives and goals.

For the sake of simplicity, we’ll consider commercial as office/retail/light industrial vs. residential which are smaller properties with less than 10 units used for the purposes of living only (not conducting business).

Residential Real Estate Investing – Pros

  • Simpler, easier to understand (we all have to live somewhere).
  • If it’s a quality property (especially single family home) that’s moderately priced, it will have a larger market of willing buyers when you do decide to sell it.
  • Generally, don’t require a large down payment to own.
  • Finding tenants is a simpler process than finding a commercial tenant.
  • Lots of tax write-offs.

Residential Real Estate Investing – Cons

  • Legislation in most places heavily favours the tenants not the landlords.
  • It takes months to evict problem or non-paying tenants.
  • Generally speaking, positive cash flow is limited when it comes to single family residential properties.
  • Cannot charge landlord expenses back to tenants including management, taxes, insurance, etc..
  • 1 year leases are the norm – but tenants can easily break them with little consequence.

Commercial Real Estate Investing – Pros

  • Can have Triple Net Rent – tenants pay rent plus landlord expenses (tax, insurance, management, etc.).
  • Long-term leases (3-5+ years) are common.
  • No rent increase restrictions.
  • Non-paying tenant, in many cases, can be locked out swiftly.
  • Less emphasis is placed on person to qualify for financing. More weight is placed on the building quality, tenants, and leases (revenue from the leases).

Commercial Real Estate Investing – Cons

  • Generally require a larger % towards down payment (25-35% of the purchase price down is fairly standard).
  • If financing a commercial property, there are many hoops to jump through, and with that, many associated costs.
  • Not dissimilar to residential properties, if a unit becomes available, you may need to spend considerable dollars renovating it to suit your new tenant – to a larger scale than with residential (in some cases).
  • Often takes much longer to fill a commercial unit than a residential (may take months vs. only weeks).
  • Vacancy rates are traditionally higher for commercial properties.

Unfortunately, the above lists have probably just left you with more questions and not enough answers. I know that’s what it does to me when I consider them!

Every investment vehicle has it’s good points and bad points. This goes for stocks, bonds, businesses and real estate. The thing to do is figure out what vehicles suit your objectives, and then do your research.

Residential Real Estate Economics 101

Boom, bust or treading water, shout the headlines. Buyers and sellers sit on the sidelines, attempting to figure out if it’s time to buy or to take profits. Has there really been a bust, or merely a slowdown? No, but we are seeing a return to the pre-frenzy days where buyers and sellers viewed residential real estate as housing and not a get-rich-quick investment. And, let’s clear up one parallel that seems ever-present, the bubble. The real estate bubble talk was filled with hype comparing the red-hot housing market with the tech stock market boom and bust at the millennium.

Unlike the stock market, housing markets are not centralized in New York, Chicago, London or Tokyo. Day-traders in stocks or small professional groups who trade for their own portfolio or others do not control home markets. Real estate markets are local, the United States is comprised of thousands of residential real estate markets, and with many having even smaller or micro sub-markets. Those who control these local markets are not listening to one national centralized voice. In the last year, statistics can illustrate that investors or buyers and sellers in Florida have determined it might be better to reevaluate strategies, while those in Houston are fueling the local housing market with record appreciation and sales volume.

Real estate investors are comprised of a larger independent-minded network than Wall Street. Builders, developers, individual investors as well as shelter-based buyers and sellers, look at fundamentals in a market to decide to participate. These fundamentals can cross a variety of business and personal decision factors. Land costs, individual needs, available land for new construction, current inventory levels, demand, new jobs, and affordability, over or under valued as compared to other markets, and perceptions of uniqueness.

Often over-looked by bubble-mongers is that each of the thousands of real estate markets has sub-markets that might be driven by a different type of investor. In areas where there is a glut of condominiums, single-family homes might be selling briskly. So, without doing a local market assessment, it’s difficult for any economist to state that the real estate market in general is boom or bust.

What You Need to Know About Buying Residential Real Estate

If you are considering investing in Florida residential real estate, you have chosen the ideal time for such an investment. The prices are now below market value, although most economists believe that the market has leveled off and the housing industry has turned around. There is already talk of the residential industry rebounding as the market has started to pick up in recent months. Investors who have been waiting for the ideal opportunity to invest in Florida property should not wait any longer.

Because Florida has an attractive climate all year long, it is the ideal location for both retirees who want to get out of the cold northern climates as well as those who want to have a vacation home for a few months of the year. Many of those who purchase residential property in Florida rent out the property to vacationers throughout the year. Many of these property owners purchase Florida residential properties so that they can have something to use for their retirement.

Those who are thinking of retiring to Florida can purchase residential property right now and lease it out to those who want to visit Florida on vacation. Over the years, the property will pay for itself so that by the time the owner is ready to retire, the property is paid for. A great deal of people who are currently purchasing Florida real estate today are doing so with this concept in mind. Because Florida is such a desirable state to visit, they can lease out the property for the short term and even the long term and cover any expenses for the property. Because the property is priced so low, they can get a bargain on the property and more than cover any expenses with leasing.

Anyone who is interested in purchasing residential real estate in Florida needs to be familiar with the different areas as well as the basic real estate market for the state. It is best for investors to work with Florida real estate brokers who have vast experience in the field and can help them obtain the best deals. Investors should seek out qualified residential real estate brokers in Florida to help them find the ideal real estate investment suited for them. These brokers can help the investor get the property at the best price and can even help them obtain financing, if needed, to secure the property.