When Should I Renovate My Garage?

Renovating your garage is often a great step for a homeowner who is looking for additional space and function in their home. The garage can be a great place to get that extra room that you have been looking for. Whether you need another complete room added to your home or are just looking for extra storage space, garages can be a great way to finish off your dream home. 

In this post, we will explore some scenarios that will allow you to finish your garage off in a way that completes your home and gives you exactly what you need in your newly renovated space: 

Extra Storage Space in Your Garage:

Storage space is probably the most common garage renovation out there. This renovation will typically allow you to continue to allow you to park your car(s) in the garage while also providing you with extra storage space for your excess stuff. There are a variety of ways you can store your stuff out in the garage from shelves to cabinets to storage cubbies; there is a way to make everything fit. Storing your outdoor gear here is usually the most common choice of what stays in the garage. From gardening supplies to outdoor tools or even sports equipment, bikes, or kids toys, there is a way to make your garage work for both storage and vehicle parking.

Create An At-Home Office Space:

For those who have run out of room in their main living quarters, the garage can be a great place to create an at-home office or studio. Whether you choose to do woodworking or other hands-on types of construction work or need space for a hair salon, a beauty parlor, a doggie daycare, etc. garages can serve as any amount of at-home office spaces for your small business at-home studio. The best part is that your garage provides a blank slate to let you make the room what you need it to be for your business and your needs. It's a big open space that you can design as you see fit! Getting innovative can allow you to turn your garage into the space that your business needs to continue to function, grow, and expand. 

Creates Additional Living Space:

If you are already maxed out on your indoor living space, yet have a need for more space for someone who needs to live with you such as adult children or elderly parents, adding onto your house through your garage can be a cheaper alternative to adding a whole addition on to your home. The structure is already in place which can save $10,000s over having to build additional space onto your home as a "guest suite" for anyone who may need to stay there temporarily or long-term. 

These are 3 common scenarios for reasons why people will renovate their garages. They can provide great space for someone who needs more from their home and cars can just be parked outside while the space inside is used to help your home meet other needs you have. 

Finally, others may have one final reason to finish their garages off: to avoid structural issues. 

Finishing Off Garages: The Benefits:

Even if you are not going to use the space for storage, living, or your business, finishing off the garage and keeping your car(s) there is another great alternative to helping preserve your home and its structure for years to come. The following are reasons to consider finishing off your garage (i.e., insulation, drywall, etc.) with the basics even if you are not going to use it for living space:

• Sealing your floors will prevent against water damage and other long-term damage, staining, etc. that can result from years of the wear and tear of your car's tires on the floor.
• You can store tools in your garage and allow it to double as a workshop when you wish to do home projects to build, craft, or design new things for your home.
• Drywall and insulation helps keep your air conditioning or heat from working overtime to heat your garage if it is a room you don't use for anything except parking vehicles
• Can help protect your garage from the growth of unwanted mildews and molds that may be damaging to your health, especially if you use your garage for secondary uses or purposes (spending a lot of time there).
• Finishing off your garage can provide another way to keep unwanted critters and creatures from calling your garage home during the hot or cold months of the year.

These are a few more great reasons to finish off a garage remodel in your home. Protecting your home helps you ensure that your home will be livable for many years to come. It can also help you ensure that you are getting the most out of the space that your home has to offer.

Ways to Save Energy

Properly insulating property can help you save money on both heating and cooling the property. Insulation allows the home to maintain a more steady temperature, which means that less energy will be required to heat the home in the winter or cool it in the summer. The money saved on energy bills makes proper insulation a worthwhile investment that will eventually pay for itself.

The following are 6 tips to help ensure that your property is properly insulated to help your tenants save on energy bills whenever possible: 

• Energy-Efficient Windows: Energy-efficient windows can cut about 10-25% off of your total heating bill upon their installation. This includes replacing your single-paned windows with their double-paned counterparts. Double-paned windows can help eliminate the issue of too much heat getting through the windows in warmer environments and too much cold air getting through the windows in colder environments. Either way, it requires less energy to cool or heat your home, which means you are saving money on your energy bill each month.
• Properly Insulate Your Walls: Properly insulating all walls of your home (including those that you do not use all the time) can help keep the heat in and the cold out during the winter and can help keep the cold in and heat out during the summer! Proper insulation for all rooms can keep the heat or air from all going to one or just a few certain rooms. It helps the entire home maintain a livable temperature without using extra energy. Soundproofing can be an additional bonus.
• Choosing the Proper Kind of Insulation: In a world where there are so many insulations choices, choosing which insulation is right for you can be tricky and confusing. Talking to a professional can help you understand which types of insulation are right for the spaces you are looking to insulate. For example, a fiberglass batt is a great option for virtually every home and it can be installed without the help or added expense of hiring a professional to assist you. 
• Focus on the Interior First: Focusing on insulating the interior or your property first helps ensure the core, center rooms of your home are kept at a livable temperature first. These are likely the rooms that you use the most frequently. It also helps save the most money on air conditioning and heating costs as these are likely the biggest rooms in your home and take up the most energy to heat. 
• Provide Outer Walls Extra Insulation: Providing your outermost walls with extra installation can help you ensure that you are keeping the heat or air inside your home. Heating/air conditioning the great outdoors (letting the heat or air escape your home) only wastes energy and forces you to spend more on your heating or cooling costs. Consider the extra investment of an additional layer of insulation on your outer walls now as it will more than pay for itself in the future when you save money on heating and cooling. 
• Get a Quality HVAC System: Upgrading your HVAC system including your heating and cooling units can allow you to save up to 40% on your energy bills. Ensuring that you are upgrading both the heating and the cooling systems ensures that you are being more energy efficient year-around. If you use one more than the other (living in a hot or cold environment) be sure to get regular "tune-ups" on that system and keep it serviced regularly. This can save costly breakdowns or exorbitant energy bills for your family later on when something with the unit might not be working quite right.

These are 6 great steps to take to help you ensure that your property is properly insulated. This also helps you save your tenants money on the heating and cooling costs they pay while they are living at your property. Passing that savings on to your tenant is something they will appreciate and that can help you justify charging top dollar for your rental property.

An added bonus?

The extra soundproofing that keeps sounds from traveling from room to room will be appreciated if someone is watching TV and someone is sleeping in the other room as well! 

Reasons why you Shouldn't Evict Your Own Tenants

An unfortunate part of being a landlord is the fact that sometimes tenants don't turn out as you hoped that they would. In some cases where you just can't work things out, this may mean that as a landlord, you need to evict tenants from a property. However, this is not something that it is recommended that you do yourself. Hiring a property management company to do things such as serve eviction notices is a highly recommended practice throughout the real estate industry.

Why?

Having a third-party such as a property management company do the actual eviction can save you as a landlord from getting into some sticky (possibly legal) situations. The following are 6 reasons that you should consider hiring a property management company (or other qualified third parties) to do the eviction of tenants:

• They May Find it Easier to Get Eviction Notices: You need an eviction notice to evict a tenant from a property legally. If you are to hire an eviction agency or a property management company, they often know how to obtain an eviction notice more quickly than you do as a traditional landlord. They know how to file the paperwork, speed up the process, and get a reply in a minimal amount of time. Knowing how to navigate the "red tape" of getting an eviction notice will help ensure that all of the appropriate steps are taken to ensure that the eviction gets completed in a lawful manner.
• Separates the Landlord & Eviction Responsibilities: If you can avoid being the one who evicts your tenants, you can successfully separate the roles of landlord and those who do the eviction. There is a reason eviction agencies or property management companies specialize in these roles. Letting them do the eviction work allows you to maintain a positive, professional relationship with your tenants and allows you to leave the "dirty work" to the trained professionals! 
• These Professionals Can Provide Guidance to Landlord: When a landlord thinks they have a legitimate reason to evict a tenant, an eviction agency or a property management company can either tell you if you have a case or get legal help involved to determine what you should do to ensure that you follow the laws in your area. Following the laws in your area can protect you from angry former tenants who wish to retaliate against you with legal action. 
• These Professionals Know When You Can Evict Tenants: Professional eviction agencies or a property management company will understand what exactly you can evict tenants for and what you cannot evict them for. While some behaviors may be annoying or irritating to you as a landlord, there are certain things you can evict for and others that you cannot evict a tenant for doing. Moreover, ensuring that you have a valid and legitimate reason to evict tenants can save you from retaliatory actions later on by the tenants who may feel they were treated badly.
• You Avoid Getting Injured: When served an eviction notice, some people will begin to act erratically. They may swing, punch, hit, etc. people who work for eviction agencies or are trained to do evictions for property management companies are trained in how to handle these situations and defend themselves. You may not have that training which means that violent tenants can result in serious injury to you or others that are with you while you serve the eviction notice.
• Ensure That You Aren't Going to Get Sued: While there is no hired eviction agency or property management company that is perfect, hiring a third party who specializes in evictions can ensure that you are not getting sued for wrongful evictions of tenants. They can consult their legal partners and understand what goes into evictions and ensure that you are doing evictions legally and correctly. This can save you big money in the future and helps you avoid unnecessary lawsuits. 

These are 6 great reasons that a professional eviction agency or a property management company that offers eviction services should be doing your evictions rather than you as a landlord. They can protect you both legally and physically as well as recommend the best ways to move forward with evictions that you must perform. Protecting yourself, your assets, and your business is in your best interest, so leave it to the professionals to do your eviction for you when the law permits you to do so.

Duplexes as Rental Properties: Pros and Cons

Looking to buy a new rental property? If so, then you may have seen some listings for duplexes and wondered if this could be a smart investment for you. Specifically, a duplex refers to a rental property where a house or building has two units--either side by side or one floor on top of the other.

By understanding the potential pros and cons of investing in a duplex, you can ultimately make the decision that's right for you.

Advantages of Buying a Duplex

For starters, duplexes offer the potential for larger rental income than a single-family home alone. That's because you have the ability to rent out to two sets of tenants at once. At the same time, duplexes generally have a great resale value--especially if you put money into the property with smart improvements, such as kitchen and bathroom updates.

For those just starting off in the world of real estate investing, a duplex can also be a wise choice. In fact, some beginning investors even choose to live in one of the duplex units and rent out the other unit, allowing them to stay close by and enjoy easier maintenance.

Drawbacks of Buying a Duplex

Of course, duplexes do come with some potential drawbacks as well. Most notably, a duplex could eliminate some of your potential renters who prefer the privacy of a single-family home. Since duplex units tend to share walls (or floors/ceilings), you may end up dealing with more noise complaints and other civil issues. Furthermore, duplexes are generally not as easy to find as single-family homes or other types of rental properties, so opportunities may be few and far between.

Overall, a duplex can be a sound real estate investment for many. This can be especially true in areas where the demand for this type of housing is high, such as near colleges and universities. Ultimately, it's important to consider your budget, the area, and your specific needs when deciding which type of rental property is best for you.

Rules for Selecting Tenants

Looking for new tenants at your residential rental property? If so, then of course you want to find tenants who are reliable and responsible. As you screen your applicants, there are a few key "rules" worth following to ensure you end up with the right tenants for your rental.

1. Follow Fair Housing Laws

Above all else, be aware of housing laws and how to abide by them. Landlords and property managers are required to follow the Federal Fair Housing Act, which protects tenants from discrimination based on things like religion, race, and familial status. The last thing you want is a discrimination lawsuit, so be aware of these (and related) laws and follow them strictly.

2. Set a Maximum Number

To avoid overcrowding (and the problems that come with it), set a maximum number of renters per unit in your lease agreement. You can also set a maximum number of occupants per bedroom. Just be sure you're in accordance with state and local laws, as well as Fair Housing laws in doing so.

3. Don't Allow Smoking

While you cannot refuse to rent to a smoker, you are within your legal rights to not allow smoking inside your rental unit. Not allowing smoking works to everybody's benefit by keeping adjacent/non-smoking tenants happy and protecting your walls, carpeting, and other parts of your rental unit from lingering odors and nicotine stains.

4. Run Background & Credit Checks

Running both criminal background checks and credit checks is another must when screening for tenants. A great credit score may indicate that a tenant will be more reliable when it comes to their rental payments. And of course, knowing an applicant's criminal history can help you make a decision as well.

These are just a few of the most important rules you should follow when selecting tenants for your property. When in doubt, remember that an experienced property management company can handle this (and much more!) on your behalf.

8 Signs that a Residential Property is a Bad Investment

When you are investing in residential properties, it's key to look for clues that ensure that your investment will be lucrative one in which you are only able to recoup your money but are also able to make a profit. While it can be hard to just walk into a residential property and determine if a deal is a "good deal" or not, looking deeper into the state of the property can help you determine if the property is one that you want to invest in. Otherwise, you might realize that some properties will be more of a headache and cost more to fix the problems than the property is worth or what you will be able to get back in rent when you put it on the market for a tenant.

The following are 8 signs that a residential property is probably not worth your time and that you should move on to seek other, smarter residential investments:

• Price of the Property: The property should be similarly priced to those in the surrounding neighborhoods.  The price is way above or way below the "standard" going rate in that neighborhood that's a sign that you might look for another property to invest.
• Age of the Property: The older the property, the more likely the property is to have problems. If you are considering older properties, ask which kinds of upgrades and remodels have been done to the home. The longer it's been since things like the roof has been replaced, the more issues that the property is likely to have and the more you might spend fixing these issues before it can be rented out! 
• Consider Maintenance Issues: If the property has any glaring maintenance issues that you know will be a problem in the next few years, it will be more money out of your pocket to fix these issues. Consider that when making an offer on purchasing the property. For example, if the home will need a new roof, that's $10,000 to $20,000 out of your pocket. Exterior painting, new appliances, bathroom remodels, new flooring, etc. will all add to the price that it will cost you to maintain the property. 
• Study the Property's Equity History: If you are going to buy and hold the property for an extended period the property should be able to gain and retain value so that when you sell it, you make a profit and don't' lose money on your investment. 
• Listing Information is Incomplete: Seeing incomplete listings or sellers who are unwilling to provide complete listing information, that's a huge red flag that the seller wants to hide something. Hiding information from prospective buyers means that those buyers might be paying the price if they consider investing in that property. Hidden costs can eat away at your profit and make the property an expense rather than a way to help you invest in residential real estate to help you earn a living.
• Location, Location, Location: The location of a property is key to what kind of value the home will gain and retain. Renting you have to consider the amenities that the renters will want in the area. You need to find safe neighborhoods where people feel like their families are safe while they are living there. Consider a school district with quality academics and schools where parents know their children can excel. All of this is something to consider when purchasing an investment property that you will rent to a tenant.
• Length of Time on the Market: If the home has been on the market for months or longer, there is probably a reason for that. Do your homework and investigate why the property was not sold sooner. Others have steered away from it for a reason; maybe you need to also!
• Issues with the Property: A property can be available at a great discount, however, if the home has too many issues the headaches may not be worth the investment. Structural and foundational issues can be too much of a hassle to make it worthwhile. Intentionally or not, many homes like these wind up turning into money pits that cost you more than they are worth as an investor! 

These are eight key red flags to look for when you are investing in a property. If you are noticing these issues with a property and choose to do so anyway, then you might be putting out more money than you will be able to get back. Investing wisely is key when you are ensuring that you are you will make a profit back on the properties you invest in. 

Should I Flip or Renovate My Latest Investment?

Deciding whether to flip or rent out your latest home purchases can be a challenge, even for the most seasoned and experienced real estate experts, Successful flips can often mean heftier sums of money in your pocket ($10,000s+ or more) while rentals mean a steadier, long-term stream of income. Both options are viable options at different times and for different reasons.  It's important to know which investment style suits you and your needs the best. 

The following post will explore the difference between flipping and renting to help you determine which option is best for you and your investment and business style:

Passive vs. Active Income:

One big difference when it comes to flipping versus renting is the whole concept of passive versus active income. 

Passive income is income that is earned without you having to actively put effort into making the money. Essentially, no matter what you are doing, the checks will continue to come in. 

Active income will require you to work on a daily basis to keep the money coming in. If you become passive your active income will go away.

View Flipping as a Business:

It's important to understand that flipping houses do not constitute a business but rather it's a business. House flipping is considered a business because you earn the money through the act of continuous flipping. You are actively seeking properties and consistently flipping them to keep a steady paycheck or a stream of money coming in over the course of time. 

It includes the act of investing in the properties and flipping them to make money, however, considering that you must actively continue to do the investing and flipping in order to maintain a consistent paycheck and source of income.

Flipping has many characteristics of active income, therefore it is considered a business where you are constantly working in order to continue to maintain a steady rate of income.

Owning Rental Properties is Investing:

Owning rental properties is considered an investment. You are investing in that property and holding on to it for any period of time in order to rent it out and recoup the money you spent on the property.  

This investment is considered a passive source of income as once you rent out the property you can continue going about your daily life and you will continue to get rental income from the tenants living in that residence. 

This passive income could even be additional income if you choose to keep your day job while you are renting properties on the side for an additional source of income.

Business vs. Investment:

It's up to you to decide if running a business or having investments works better for you. It's all about preferences and how you choose to earn your income (in a passive or active manner). Both can help you make a healthy sum of money and can be a great way to work in real estate. 

For more advice on investing in residential real estate please feel free to visit Leaf Management's website for further advice and assistance as to which business or investment is right for you. 

How Much Money Per House Should Landlords Set Aside for Emergencies?

Inevitably emergencies happen and it's simply part of and parcel of doing the job. Some emergencies might not be too terribly expensive while others will hit your pocketbook hard. Therefore, it poses an issue to every landlord when they want to figure out how much money to put away for each rental property that they own. Many landlords are confused as to exactly how much they should be putting away annually for repairs to rental homes as well as other costs that may arise.

Following the 1% Rule:

One widely-followed recommendation is that landlords should be putting away a minimum of 1% of the value of the property away for maintenance and additional expenses for things that may break or need repairing. This would mean that if you have a $150,000 property on hand you would want to put a minimum of $1500 a year for repairs and unexpected expenses. On the other hand, if you had a property worth $300,000 you would want to put away $3000 annually for repairs and unexpected expenses. 

What Will This 1% Cover?:

The next question many landlords will ask is, "What will this 1% of the property value that I put away annually go to cover?" The answer to that is that it can go to cover a variety of different maintenance needs that the home will have over the course of being rented out to tenants on an annual basis. Some of that maintenance may include things like the following:

• Basic Ongoing Maintenance Needs: This 1% can help cover basic maintenance needs that properties have when there are tenants living in them. This includes mostly minor maintenance items like changing light bulbs or replacing the HVAC filters on a regular basis. They may seem like smaller expenses but they can certainly add up if the cost is not accounted for over time!
• Occasional Repairs: These repairs are necessary on a less frequent basis but generally a little more significant in costs. These repairs are things such as fixing things that may need to be addressed and are related to things like the roofing on a home or minor carpentry, window repairs/replacements, or needing to replace hardware fixtures that have given out due to use and wear.
• Unforeseen Emergencies: These are the expenses land landlords may not foresee but they are inevitably part of owning a property and will happen at some point. These unforeseen emergencies might be something like a water pipe bursting or the roof leaking or even the HVAC system need extensive repairs or even a complete replacement. 

Most repairs landlords have to make will fall into one of these categories. While these expenses may not occur every year, saving 1% of the property's value on an annual basis will ensure that when a problem does arise the money is there to cover the cost of it.

Conclusions:

In the end, the 1% of the property value is a common way that landlords budget to put enough money away to ensure that they are able to cover repairs for their property when the need arises. Saving this simple 1% every single year ensures that when something does need repair (it inevitably will at some point) the money is there to cover the expenses so that the landlord can continue to have the property occupied which provides them with their stream of revenue and source of income.