How to Prepare Your House for the Renting Market

With the opportunity of becoming a landlord just a click away, it seems that most home owners find a rather consistent revenue stream in the renting market. We already have successful business models such as AirBnB which work great with short-term rentals, and that’s not all. We all thought young families and couples, singles and millennials prefer to rent rather than to own a place. However, real estate trends in 2016 showed that rents were stagnating in less popular cities, while going up in startup-nest cities such as San Francisco, where a two-bedroom apartment would go up to $5000/month. This had a double impact: on one hand, it made buying houses more attractive to the young generation in the big cities; on the other hand, it really reminded millennials that they aren’t limited to a certain location and can very well move to places where payment is high and rent is low. This motivated the young landlords to rent their homes at an affordable price, enough to cover the mortgage costs. Below is a series of factors that motivated people to buy a house in 2016, top 3 being credit history improvement, promotion/raise and saving for a down payment.

Things to Keep in Mind When Buying a Property

13 steps into buying a new property:

  • Offer and Acceptance;
  • Deposits;
  • Appointment to Act;
  • Financial approval;
  • Signing of Mortgage papers;
  • Transfer of Land;
  • Stamps (Stamp duty in some cases);
  • Special Conditions (to be met);
  • Insurance;
  • Financial Inspection;
  • Arranging Settlement;
  • Effective of Settlement;
  • Keys (access) to the new property.

Once all the steps are completed and the new landlord acquires ownership of the new home, they can proceed with the legal documentation to rent short-term or long-term.

Preparing Your House for Renting

Just like with every new acquisition, a house needs improvement and is considered a lifelong investment. Every new buyer wants to add a touch of their personality and preferences in terms of interior and exterior design. Home owners usually do not make improvements if the house is either a historical heritage property or the landlord never plans on living there, so renovation costs aren’t fully justified. The downside of not investing any money in your purchased property is you could never ask for a fair rent price. The more benefits and home improvements a house has, the better for nailing down a decent price on the renting market.

Adding a Pool to Your Yard

Everybody loves being near water. Even when it’s not possible to have a nearby lake or small spring, if you are lucky enough to get a house with a generous yard, the best immediate addition would be an outdoor pool. This can raise the rent prices by a few thousand USD per year with just a one-time investment. You can play with light effects for a quiet evening experience or for pool parties. Outdoor pools usually have water filtering systems that make it easy to clean the water or keep the pool covered during cold season.

Indoor Functionality: Elevators and Residential Lifts

People need to simplify their lives as much as possible, because the stress of everyday life will eventually weigh down on them. In this regard, architects have found the answer. Bringing technology into homes, will not only increase the value of the interior, but also bring more comfort.  We know that it might sound a little outrageous, but in the next few years, cars will also become an essential part of home design. And not only cars: imagine keeping your lovely motorcycle in the living room – a prized possession that friends dropping by will constantly admire. And why not go further by clicking a button and in a couple of seconds, the lift brings your motorcycle from the living room to the front porch of your building? Take it for a ride, go to the office or just take it for a spin. With everything within reach, the modern man will no longer have to worry about house chores or exhausting earthly tasks.

Architects anticipate an alleviation of menial problems which will lead to a better concentration on career and a more relaxed lifestyle.

Luxury Sells… and Rents Easily

If your aim is not long-term, but rather short-term rentals, think big. We already see offers to rent homes for the holidays, so there is an active market. Nomads are looking to get a mix of comfort and unique in terms of rent experiences. The best way to justify higher prices is either to provide a genuine local experience or a deep-dive into luxury for the time being.

With these aspects in mind, what are your plans for financial prosperity in the housing market? Will you buy a house in 2017 and keep it or rent it?

 

Didn’t yo momma raise you better than that?

Don’t be “that” guy. You know, the guy that no one likes. I was out to lunch with some people yesterday when one of them pulled an unconscionable, but all to familiar, move. Any guesses as to what they did?

I dread dining out with a large group at a restaurant that doesn’t allow bill splitting.  It always makes paying the bill a mess. At the conclusion of yesterday’s lunch, I watched the bill be passed around from person to person. When it got to one particular individual I heard her say to another friend “Mine was $9.50? So $10 should be good, right?” To which the friend said “Yeah, that’s good.”

WTF!? No that’s not good. That’s the opposite of good. IT”S RUDE! Tax here is 8.75%. That mean’s the absolute least amount she should have paid was $10.33. But let’s not forget tip. Basically, homegirl should have contributed about $12 to cover her portion of the bill.I  didn’t have the nerve to tell her she was being a stingy jerk-face, so I just bit the bullet and threw in an extra two bucks on my portion. Didn’t they take bill splitting 101?! I’m left wondering: How can some people can be so stupid inconsiderate?

That’s not the only financially frustrating story I have…

A few years back, I was looking for a place to live and came across an awesome house  with two rooms for rent. My current roommate and I were interested. We met with our future landlord and told him we wanted a month-to-month lease option. Good news. He was totally fine with it. We ended up agreeing to each pay $700/month in rent (which would include all of our basic utilities: water, garbage, and electricity). We moved in a few days later, without ever actually signing a lease.

After about two months of awesomeness the landlord came by and asked me and my roommate to pay the utility bill. I looked at him confused like “Hey, man we already discussed this before we moved in.” He wasn’t having it and claimed he never agreed to cover our utilities. Since their was no lease, I had no way to prove it (yeah I know, I learned my lesson that leases are CRUCIAL in a landlord/tenant relationship). My roomie and I ended up paying the utility bill and moving out a month later. Boo for crappy landlords.

This last one really gets under my skin. I am actively involved in a high school outreach program. Each year we take about 50 high school kids to summer camp so they can have the best week of their life. About half of these kids come from pretty affluent families and the other half come from families on welfare (no joke). Camp is pretty costly and honestly too expensive for the poorer kids to afford.

A few years back, an anonymous donor gave $30,000 to our area so we could take all 50 kids to camp for free. PRETTY FREAKIN’ AWESOME, RIGHT?! A few weeks after camp, I learned all the low income kids went for free, but the kids that came from wealthy families still had to pay their way. Whoa, not cool. I was really frustrated. The money was donated so ALL kids could go to camp for free, but a lot of the “rich” kids had to pay simply because they could afford to do so.

Let’s just say, I had a very serious conversation with the person in charge expressing my disgust for the way the situation was handled. Everyone should have gone to camp for free and I hate knowing some parents had to pay for their kids for no reason other than “they could afford it.” Ahhh, ANGRY FACE!!!!!!!

I can’t be the only one that has run in to things like this. Can you think of some times you’ve dealth with some SERIOUSLY FRUSTRATING money situations? Anyone ever try and screw you out of a buck? Ever thought to yourself “Didn’t yo momma raise you better than that?” Vent with me people!

What’s your housing allowance?

So, I was browsing Craigslist last night and came to the realization that I hate California. Okay, that might not be in entirely true, but I sure do hate how much a one bedroom apartment costs.

I have been researching “nicer” apartment complexes and it appears that one bedrooms go for no cheaper than $1,300, but usually hover more around the $1,500-$1,700 mark. Girl Ninja and I want to have some luxuries in our first place and don’t mind paying a little extra for some tennis courts, a workout room, or a pool, but I’m just not sure these benefits are inside of our price range.

I currently live in a two bedroom apartment in a very small 8 complex building. It is in the ghettoest part of a nice area and runs $1,200/month (split between me and the roomie). I wouldn’t feel good about Girl Ninja being in this complex if I had to go on a business trip. It’s a little too shady for someone as smoking hot as she is 🙂

I was keeping my fingers crossed that we could get a one bedroom in a large complex for $1,200. Sadly that’s not gonna happen. Girl Ninja and I are going to have to make one of the following sacrifices….

1) We sacrifice a larger apartment complex with amenities/security.

2) We sacrifice our paychecks

Seriously there is no happy medium. We either pay $1,200 for a quasi-ghetto place or fork over $1,500 for a place we would love.

Here’s two pictures of a $1,200 San Diego apartment on craigslist…

and here is what a $1,500 apartment looks like…

Quite a bit of difference in my opinion. I bring home $3,600/month after tax. If we find something for $1,200 that is 33% of my take home pay going to housing. If we pay $1,500/month that puts us up at 41%. I never thought I would even consider putting more than 35% of my pay in to housing…especially when it’s rent.

If you are wondering why Girl Ninja’s income isn’t accounted for, it’s because we decided to pretend like she makes NO money. Primarily because she doesn’t plan to work forever so we don’t want to get use to having her income and then take a huge financial hit when she quits. And secondly, she is substitute teaching and has made anywhere from $0/month (in the summer months) to $2,000/month (if she is able to get a job every single day). Her income varies greatly and I’d feel more comfortable pretending like any money she makes is just a bonus.

So now I query you..

What percentage of your income do you put towards your housing? (To figure it out, take your monthly mortgage or rent obligation and divide it by your monthly take home pay).

What is the maximum you would allow towards housing?

What’s more important to you, quality or price?

p.s. My share of the rent is currently 16% of my net income. This marriage thing is going to be expensive 🙂