rent (10)

Looking for a Rent-to-Own, Lease-Option or Land Contract in Wisconsin? We may have the perfect option for you! It's called the Alternative Mortgage Program. Please read the details below and visit the link for further information.

Alternative Mortgage Program

As you can see, this is much different than any other Wisconsin Rent to Own (RTO) or Land Contract program out there that we have seen. This could be the perfect conduit for you to get the home you want now, and be able to then purchase the house down the road when you can qualify for a traditional mortgage. If you are interested in hearing more about the program from the lender, please visit the link below and submit your contact information via the short form.

Rent to Own

Blog.RockRealtyWI.com/Rent-To-Own

Feel free to also visit our Rock Realty Wisconsin home listings websites below to help with your home search! You can search through all available MLS listings in your area.

Janesville Area Homes for Sale
(http://www.JanesvilleRealtor.com)

Madison Area Homes for Sale
(http://www.MadisonWIForSale.com)

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Top Renting Out Tips for First Time Landlords

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Deciding on renting out your home or condo is no easy task. It requires patience and perseverance, and a lot of responsibility. You do not just find a tenant and let it be. You need to ensure that you obtain the right person to rent out your place at a rate you specify. However, if you play your cards right, renting out your place and becoming a landlord can be rewarding and a good way to make money without selling your real estate property. For first time landlords, coming prepared requires that you do your homework before renting out your property. To get your wheels turning, here are some important renting-out tips to guide you by.
Tip #1 – A Well-Prepared Property Attracts Numerous Renters
It is important to comply with required standards as prescribed by the law such as structural repairs, adequate ventilation and heating, safe electrical system, and other stipulations. Keep in mind that well-kept properties often get the highest nod among potential renters and, often, earn huge respect, too.
Tip #2 – Learn Your Landlord Obligations Properly
There are stipulated obligations required from landlords. In most states, the need to register your property for tenancy is essential for tax requirements. One of your main responsibilities, however, is to ensure that your tenant have a safe and functional living space. This means your rental property must have passed the specified standards stated by the federal and local housing code. This means plumbing, electrical and structural system, lighting, ventilation, and security systems must be in place. Repairs and maintenance must be shouldered by you, thus, when reimbursable when paid by your tenant. Keep in mind to give adequate notice of termination when you plan to cut-off the lease on your property.
Tip #3 – Learn About Your Rights
Never go to war uninformed of the terrain. As important as your obligations, you need to also know about your rights. This means receiving correct rent on stipulated due date, receiving added charges according to lease contract, annual review of rental contract, be informed of damage or any problems in the property, and subsequently, be given due notice on any planned repairs or home improvement.  Protect your rights by putting this into writing. As a rule, make sure to have a valid contract before setting out a lease on your property.                                                   
Tip #4 – Always Check Tenant’s Payment Ability
Of course, your priority is to gain substantial income from your hard-earned investment. It is wise to check if your tenant can pay-up your rental rate. A reference from previous landlords or employers is a wise move. If you plan to accept students, call in the attention of parents or guardians as guarantors for the lease.
Tip #5 – Better Be Insured
Consider having a rental home insurance. This ensures that your home’s structure, medical expenses, legal fees and loss of rental income is covered when needed. Encourage your tenants to buy an insurance suited for them as renters, too.
Tip #6 – DIY or Professional Real Estate Agent
Advertising a rental property on your own may sound a noteworthy job but it can also be quicksand if not handled right. For first-time landlords, having the assistance of professional real estate agent can help cut down cost involved while increasing your chances of finding a tenant quickly and efficiently. Most real estate firms or independent agents usually do background checks on potential tenants to protect their reputation in the market. If possible, choose one which can also perform managerial functions for your property.
Renting out your home for the first time can be both exciting and overwhelming. This, however, is one lucrative deal that you should not miss if you have a house, a condo, an apartment or even a room to spare. In all these, having a professional (attorney, accountant and real estate agent) to give you sound advice and point you to the right direction will ensure great rewards.
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Future is Certain, REO to Rent to Become Stable Market Segment

A recent article by Amilda Dymi published on 9/12/2013 @ 2:24pm ET titled “The Single-Family REO Asset Class is Here to Stay” brings up a very interesting set of questions for the REO industry.

Amilda’s article sources are Jade Rahmani of Keefe Bruyette & Woods believes foreclosure to rent properties are growing and perhaps are already considered a growing segment of the REO market which will be with us for the long haul.

Jade reports that the next 12-24 months will see growth in this market so, as a REO agent, I stop and ask myself, what does that mean to my REO listing inventory? Well, I can safely assume we will see more of the same. More specifically, we will see more and more REO agent portfolios shrink and in many cases, become non-existent. This will further weed out the REO agent specialization and further teaches agents that keeping their ear to the pulse of the industry and being able to change focus will remain paramount to the success of high producing agents.

Before 2007, agents were all a buzz with certifications, designations, training courses, etc.. to sale new homes, stage homes, learn about new home green features, etc… After 2007, agents started seeing classes, certifications, designations, training courses for REO and foreclosures. In 2009, we saw a huge emphasis on foreclosure prevention, avoid foreclosure, modify, refinance, etc… 2012’ish, we saw the huge push for short sales and all kinds of seminars, certifications, designations, training courses, seminars, etc… were on every corner. Now, with this whole REO-Rent segment, guess what we are seeing, all kinds of courses, certifications, designations, seminars on how to be a REO Property Manager.

The big push of this “new” type of segment is due to positive cash flow. The truth of the matter is, unemployment is forecasted be high for the foreseeable future and with high unemployment, comes high distressed homeowners. These homeowners will be forced into the rental market, one way or another and if they can stay in the home and just rent it….at least the asset is performing and in most cases, the bank can still get a positive cash flow, even if it’s considerably less if the occupant was paying their mortgage. In other words, it’s not going anywhere, anytime soon and per the article, it’s going to grow like gang busters the next 12-24 months.

So, what do we REO Agents do? We endure, as we always have. The only thing now is, we need to ensure we are diversifying our own business to ensure we continue to endure. We all know NAR has done little to nothing to address our REO woes and therefore, it’s on us to ensure our business survives and if God willing, thrives and the name of that game is diversification.

Yeah, that means we are likely going to be jumping on and off the “education” wagon for all kinds of new certifications, designations, etc… but, we also should be looking closely at our revenue streams and ensuring that REO…in all it’s forms….isn’t the sole majority of our income. Truth be told, in this political climate, it’s just too risky.

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Financial Gurus Still Believe Rental Property Is a Safe Investment

(Investment Properties: Part 3 of 5)

The record low interest rates for mortgages have helped the real estate market to slowly improve month by month for the last several quarters. Thanks to these low rates real estate has continued to be a sound investment for people who wish to diversify their portfolio. For those people that are considering buying their first investment property here are some considerations to keep in mind.

Neighborhood History

It is wise to pick areas that are accustomed to rental homes. One of the most obvious choices would be neighborhoods close to a major university or college. If there are no colleges or universities in your area then look for certain neighborhoods close to quality schools. Schools often attract stable, hardworking tenants that will likely pay on time.

Understanding the Role of Landlord

There are two major ways to prosper from owning rental property. The first is to buy the home at a significant discount and then sell the place at a profit after the home has appreciated. The second way is to have positive cash flow. The second method takes considerable planning. Just because the tenant is willing to pay more per month than the actual mortgage payment, it does not mean that the home is profitable. There are other items to consider such as regular maintenance and repairs.

Determining What to Charge in Rent

Appraisers and real estate agents can provide information about rental rates for a certain area. This gives the investor some idea of what can be charged per month. The monthly mortgage amount and allotted figures for maintenance should be subtracted from the rent. There should be at least 15% left over after subtracting the payments and expenses. Otherwise, you run the risk of losing money.

Choosing Tenants

Once you have some interested parties and they seem capable of paying the rent it is time to begin the screening process. Experienced landlords hold fast to the rule of checking out prior landlord references as well as the tenant’s credit file and even a criminal check. The criminal check could spare you from inadvertently leasing to a felon and finding major damage to your home due to a police raid.

Research the Possibility of Using a Rental Management Firm

Some companies specialize in managing properties for investors. These firms will review applications from potential tenants, handle collecting rent payments and, most importantly, take care of the maintenance issues that pop up at the most inopportune times.

For instance, if you get a call in the middle of the day that a toilet is leaking, can you leave work and fix it? If you get a call at 2 am on Saturday morning notifying you of a sudden hole in the roof, are you capable of fixing that problem? Some people have the skills and time to manage these issues, but most people do not. In these instances it is a good idea to use the service of a reputable management firm.

Investment/Rental Properties (5 Part Series)

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Things to Consider Before You Add "Landlord" by Your Name

(Investment Properties: Part 2 of 5)

Owning investment property has been a proven means of gaining wealth. However, it is not as passive as some information marketers would have you to believe. Here are some items to think about before jumping in to the world of landlords.

Handling Repairs

All homes need maintenance and repairs. It does not really matter how old the home is, whether it is brick or wood or even a modular home. To protect tenants most states have adopted laws that favor the renter when repairs are not made in a timely manner. If you are handy with tools and have a knack for being able to fix anything that breaks then this may not be a major issue.

However, if you have a full time job, a family and you are not comfortable with most repairs then you will need to decide how to handle the roof leaks, toilet overflows and broken appliances that come from owning a home. You can choose to use a property management company that will handle all the repairs for you and simply bill you. Or you can contract with your own handyman service.

Managing Tenants

The majority of tenants will pay the monthly rent and treat the place as if they actually owned it. However, a small percentage of people can cause a large number of problems. Lack of maintenance can lead to mold and mildew throughout the property. However, major problems like parties that attract police, illegal activities that end up on the news and major damage to floors, ceilings and walls can cause a nightmare for even the most patient person. Some people have the personality to handle this kind of stress while others want no part of the problems.

Collecting Money

It is highly likely that at some point you will have to call on your tenants, either on the phone or in person, and get them to pay for their past due rent. This is just a fact of being a landlord. With these situations comes a need for good judgment. Some people really do run in to bad luck and simply need a few more days to pay the rent. Others are either poor money managers or simply lazy and refuse to pay their obligations on time.

Evictions

It may seem on the surface that evictions favor the landlord. Once the renter has stopped making payments then the landlord simply makes a plea to the local court to have the person(s) removed.

However, things are not that simple. First, you will lose a month’s rent waiting on the tenant to pay. If the court system is backed up then you may have to wait another month to get a hearing date. In the meantime the renter can leave a major mess behind that requires extensive cleanup and possibly new paint and carpet. Once again, as stated before, the majority of tenants will pay on time and not cause problems. But an eviction can be problematic and expensive and you need to be prepared for it.

Investment/Rental Properties (5 Part Series)

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Rent Vs Buy Today

NAR Existing Home Sales

Existing home sales which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 5.6% to a seasonally adjusted annual rate of 4.68 million in November, but are 27.9% below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit. Median existing single-family home prices rose year-over-year in 77 of 155 metropolitan areas and fell in 76 metro areas.

NAR Pending Sales

A forward-looking indicator, rose 10.4% based on contracts signed in October from in September. The index remains 20.5% below a surge to a cyclical peak in October 2009, which was the highest level since May 2006.

Rent Vs Buy

The argument for affordability has a few key components. Price, cost of money and a comparison to a similar property rental.

Price
Home prices are running about 22% less than five years ago. Its hard to know when price has reached a point where willing buyers step up, but pending sales clearly point to a slowing trend. The Commerce Dept. report showed that new home sales rose 5.5 percent to an annual rate of 290,000 in November from the revised October rate of 275,000.

Price will continue to decline and increase affordability. There are some that think a double dip is in progress and we will see continuede price declines through 2011 or 2012.

Cost of Money
Lower tax rates just extended for another two years may boost growth. Mortgage rates responded by increasing to a six month high with rates up more than half a point in just the past month. NAR President Vicki Golder, points out: A decade ago, mortgage rates were almost double what they are today, and they’re about 1.5% lower than the peak of the housing boom....So still historically low.

Rates remain low and are still well below where they began the year. Low mortgage rates are an important factor affordability, which in October was the highest on record

Rent Comps
Rents increased for the second quarter in a row. Asking and effective rents increased by 0.5% and 0.6% respectively in the third quarter and vacancy rates dropped from 7.8% to 7.1% nationally.To summarize, price is dropping but cost of money is rising and so are rents. Most areas havent reached a balance between the cost of renting and the cost of buyi ng, probably the main arguement for home prices continuing to descend to meet a willing buyer.

Rule of thumb: Homes are probably fairly valued at about 15 times a year's rent. So, for example, if you're paying $15,000 a year to rent a place, think twice about buying a home that costs more than $225,000. Fifteen times is the historic average.

Your home is not a growth stock. You should look to justify multiples higher than 15 to 20 by considering personal needs, proximity to schools and transportation, your own cash flow situation and job security.

It would also be advisable to get a sense of what the property would likely rent for and see how far that rent would go towards paying the mortgage should you have to move. Home sales are slowing and if you find yourself a reluctant landlord, be sure you can carry the mortgage.

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Rent Vs Buy Today

Mind The Gap

Marcus & Millichap just completed a study and found the gap between monthly rents and mortgage payments are at their lowest level in 20 years. Years of declining prices and mortgage rates have created a buyer's market. In 45 metro areas studied, Marcus & Millichap found the
difference between mortgage payment on a median-priced home and the rental option is down to $256. The smallest gap since 1993 as price to rent ratios come down to their historical mean, except in the priciest markets.

Rent Vs Buy Comparisons
The Real Deal

The rent vs. buy comparison is a lot like any financial planning, the outcome is a guess on the future direction of rents, equity growth and carrying costs. In other words, predicting multiple variables in an uncertain future. A rent or buy comparison can never secure the best financial move, but it can point the buyer to how future equity increases and cost cap assumptions work in tandem to cover the costs of owning: including the down payment, property taxes, insurance and maintenance.

The Rule Of Twenty
A simple way to look at the rent ratio is to take the purchase price and divide by the annual cost of renting a similar property. 20 is considered a useful rule of thumb. If you do the math, a ratio above 20 means you should at least consider renting. When the ratio is well below 20, the case for buying becomes a lot stronger. Of course, these are simplified tools to help you make a decision. you should never use the online buy Vs rent calculators to rest your decision on. Best to use them to understand what cost parameters and equity assumptions you need to make it work. Think of these financial variables as levers and toggle them to tease out an understanding of how your assumptions work impact the purchase decision.

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When Hiring a Property Management Company

The longer term outlook for apartments remains good.



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Multi Family Outlook

The longer term outlook for apartments remains good.

In 2008 sales was down by more than 60% over 2007 peak with sales volume dropping by 77% over same period a year earlier. The big banks are beginning to loosen up and the insurance companies have become active lenders again, but at a fraction of the earlier activity. Investment homes constituted 17 percent of all home sales in 2009 compared to 21 percent in 2008.

The apartment sector is optimistic, partly because of capital provided by Fannie Mae and Freddie Mac. Its political. Congress has been concerned that multi family housing going into foreclosure makes victims of renters. They didnt borrow or speculate and yet they are losing their home. So ,Fannie Mae and Freddie Mac have been directed to keep the spigots open for multi family. Price Waterhouse Coopers annual survey points to investor expectations that rents will climb on average of 2.41% annually for the next eight years, in spite of the dismal vacancy rates we are seeing today.

What Drives Apartment Occupancy
Favorable Trends

Jobs: Full recovery of occupancy and rents requires job growth. Now that we are beginning to create jobs and consumer confidence is stronger we should see above average rent growth.

Sales Volume: This quarter saw a continued uptick in sales volume and equity financing, which
represent another step, albeit a small one, toward a more normal transactions market, after 2009 recorded the lowest number of transactions of the decade, said NMHC Chief Economist Mark Obrinsky. (Via NMHC web site)

Demographic: trends are favorable for the apartment market over the next decade. The number of renters has increased to one-third of all households. In 2008 renters accounted for 63% of all new households, echo boomers are expected to boost that number to 67 million new renters by 2015.

Retirees are moving into city complexes where everything is close by and more accessible coupled with low housing supply all point to increasing rent rates. The apartment industry maintains that multifamily delinquency and default rates for Fannie Mae and Freddie Mac remain under .05%.

REsourced from www.yourpropertypath.com
You may republish this article, as long as you do not edit and you agree to preserve all links to the author and www.yourpropertypath.com

Related Articles
NAR and The Commerce Dept Feb Figures
What Does the Stock Market Have to Say About Housing Multifamily
Apartments: Get Higher Rents and Lower Your Vacancy

Read more…

Multi Family Outlook

The longer term outlook for apartments remains good.

In 2008 sales was down by more than 60% over 2007 peak with sales volume dropping by 77% over same period a year earlier. The big banks are beginning to loosen up and the insurance companies have become active lenders again, but at a fraction of the earlier activity. Investment homes constituted 17 percent of all home sales in 2009 compared to 21 percent in 2008.

The apartment sector is optimistic, partly because of capital provided by Fannie Mae and Freddie Mac. Its political. Congress has been concerned that multi family housing going into foreclosure makes victims of renters. They didnt borrow or speculate and yet they are losing their home. So ,Fannie Mae and Freddie Mac have been directed to keep the spigots open for multi family. Price Waterhouse Coopers annual survey points to investor expectations that rents will climb on average of 2.41% annually for the next eight years, in spite of the dismal vacancy rates we are seeing today.

What Drives Apartment Occupancy
Favorable Trends

Jobs: Full recovery of occupancy and rents requires job growth. Now that we are beginning to create jobs and consumer confidence is stronger we should see above average rent growth.

Sales Volume: This quarter saw a continued uptick in sales volume and equity financing, which
represent another step, albeit a small one, toward a more normal transactions market, after 2009 recorded the lowest number of transactions of the decade, said NMHC Chief Economist Mark Obrinsky. (Via NMHC web site)

Demographic: trends are favorable for the apartment market over the next decade. The number of renters has increased to one-third of all households. In 2008 renters accounted for 63% of all new households, echo boomers are expected to boost that number to 67 million new renters by 2015.

Retirees are moving into city complexes where everything is close by and more accessible coupled with low housing supply all point to increasing rent rates. The apartment industry maintains that multifamily delinquency and default rates for Fannie Mae and Freddie Mac remain under .05%.

REsourced from www.yourpropertypath.com
You may republish this article, as long as you do not edit and you agree to preserve all links to the author and www.yourpropertypath.com

Related Articles
NAR and The Commerce Dept Feb Figures
What Does the Stock Market Have to Say About Housing Multifamily
Apartments: Get Higher Rents and Lower Your Vacancy

Read more…

Fannie Mae Gets Into The Home Rental Business

Good News for foreclosure victims. Some homeowners will get an option to rent the home that they just lost. Its possible to stay in your home as a renter. Fannie Mae will give borrowers facing foreclosure an option to rent their homes for a year.Foreclosed home owners will be able to sign a one year lease, with possible month to month extensions with Fannie Mae. Good for everybody.Homeowners get a little relief and are able to remain in their homes for a year or more. This will buy them the time they need to regroup. It will also help keep neighborhoods from going missing. Rather than rows of abandoned homes with all the crime and destruction that vandals create.. Neighbors that have not lost their homes will not see more equity loss as squatters and criminals move into vacant homes. The banks are reluctant landlords and they are allowing property to decline.It will keep supply off the market for at least another year and that is good for all the handlers, Fanne Mae because it can put off the expense of a foreclosure, the banks because less supply will protect equity in homes they are off loading and everyone one because it will help stabilize home prices. I dont think we can have a strong recovery without real estate.To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. In many cases, rents will be less than the mortgage because properties that are now worth far less than they originally paid.The downside is seems to be that homes that might normally have been foreclosed and sold will now remain owned by taxpayers. Homes, according to Dr Shiller have risen faster in the last few months than he has ever seen. Perhaps Fannie will profit a little while doing a good thing for families that must be a little traumatized by it all.And even if prices don't rebound quickly. Fannie Mae gets rental income, avoids foreclosure expenses gets to helps people.Thanks for Readingwww.yourpropertypath.comRelated ArticlesThe Fed and The Housing RecoveryBanks and the Housing RecoveryFHA has New Rules
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