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Whether you are Working at Home, a salaried Professional, are Older and Wiser, or at any stage of your life, your credit can be good, or bad.

No matter what you think it is, i.e. you pay your bills on time so you think it’s really good, you should know as much as you can about it and how it can affect you.

Seventy percent of Americans have never seen their own credit report or credit score.

Do you know that you have a credit score?

It’s usually referred to as a FICO score.

Being a Mortgage Consultant, Mortgage Broker, I’ve seen many credit reports and I am often surprised by the fact that my clients either don’t really know they have a credit score, or they don’t realize how much it can hurt them if they were inattentive to the numerous factors that make up a Credit Score.

The FICO score is a summary of your credit history. In other words, it’s a financial history of your life.

That score impacts a surprising cross-section of life, in fact it impacts many things you knew about. Such as;

? Lenders use it to evaluate your eligibility for mortgages.

? Landlords use it to gauge the likelihood you’ll pay the rent.

? Car dealers utilize it in arrange financing for you.

? Credit cards are, or aren’t, given to you because of it.

Now, for some things you may not have been aware of,

? Insurance companies may base your premium on it.

? Potential employers often use it to assess your character and they may base there hiring decisions on it.

The FICO score reflects hundreds of parameters in one’s financial history.

? Score 700-850 – smooth loan process; best interest rates

? Score 550-699 -medium risk; higher interest rates

? Score 300-549 -sorry, no loans or credit cards

These hundred of variables are included in the calculation of your credit score, but I only mentioned the bigger ones here.

Just paying your bills on time, as important as that is, may not rescue you from other credit pitfalls.

Bills, mortgages, your monthly rent, credit cards, long overdue or overlooked, can show up as a blotch on your credit.

? A cable, or credit card bill, that didn’t make it to your new address, or you Read more…

Skimping on attorney fees could cost you more than you bargained for when investing in real estate. New real estate investors often save money on their rehabs by cutting corners, doing work themselves and trying not to spend any money to make money. When it comes to having a good real estate attorney though be prepared to spend away.

You have to ask yourselves what you are willing to pay for a piece of mind especially if you deal with tenants. A few good contracts written up by your attorney will easily be worth it after your first eviction or foreclosure.

You can find hundreds of template contracts and real estate forms on the Internet, but just how legal are they? Ask yourselves why they almost always recommend you have your own attorney look them over anyway.

There are hundreds of reasons to use a real estate attorney in your wealth building, but here are my three favorites:

Title opinions. In some states you are required to buy title insurance to guarantee the marketability of your property. In others it is recommended to get a title opinion. A title opinion is the opinion of an Attorney regarding the merchantability of title based upon the title examination and commonly is written to a lending institution who will rely on this title opinion for the validity and ranking of its mortgage. This process could get pretty complex especially when dealing with vacant, bank owned and estate property.

Tenant Forms. If you have rental units it is imperative that you have a real estate attorney look over your documents to make sure that the language is specific to your situation and state. Tenant law Read more…

Within the UK there has been a reduction in the overall number of properties in the rental sector however there has been an even greater reduction in the number of people in arrears with their rent. Recent research looked into how many people had been in arrears with their rent during the preceding 12 months. This research found the following reductions between 1993 and 2003.

Social sector tenants in arrears reduced from 17% to 12%

Private sector tenants in arrears with rent reduced from 9% to 6%

However there have been some notable exceptions to this trend, in particular 1996 to 1998 when tenants in arrears increased for two successive years and more recently the number of tenants in arrears for the private sector has started to increase again from 2003 to 2004 (the most recent data found).

The higher percentage of people in arrears with their rent in the social sector may be explained by the percentage of tenants in employment, for example recent research data identifies.

Social sector (reference person per household)

26% in full time employment

15% in part time employment

Private sector (reference person per household)

67% in full time employment

11% in part time employment

Given these differences is seems remarkable that so few social sector tenants are in arrears with their rent, however other factors to take into account are government benefits made available to those not in employment and in particular people classified as “economically inactive” which are reported to be 45% within the social sector and 17% within the private sector.

Another factor to consider is the typical income for people within the social and private rental sector, research for 2003/4 identifies some very significant differences.

Mean income for Read more…

Over the last 20 years there have been significant changes in the choices people are making in whether they wish to rent or own their house, flat or apartment. In the early 1980’s West European countries averaged between 50% and 60% of homes owner occupied as opposed to rented. However as years progress into the early 2000s there have been some very significant changes with most countries seeing a significant reduction in the number of properties rented. Some of the most significant changes in the percentage of properties rented in Western Europe are:

From 1980/81 to 2001/02

UK from 42% to 30%; Luxembourg from 39% to 26%; Netherlands from 58% to 46%; Spain from 21% to 11%.

One possibility for this trend is the increasing standards of living combined with market changes improving the choice and availability of financial products to purchase properties. However also to be considered is the very significant differences when comparisons are made across countries. Below is a summary of the most recent data found on the percentage of homes rented for each country.

Austria 40%; Belgium 31%; Denmark 51%; Finland 32%; France 40%; Germany (ex FRG) 55%; Germany (ex DDR) 66%; Greece 20%; Ireland 16%; Italy 25%; Luxembourg 26%; Netherlands 46%; Portugal 21%; Spain 11% Sweden 39%; United Kingdom 30%.

One possible conjecture is that countries with a higher percentage of properties in the rental sector may have higher workforce mobility. This would suggest that Germany may have significantly higher workforce mobility than other West European countries. In contrast Spain may have relatively low workforce mobility.

The data available on property to rent across Western Europe raises many more questions than it answers however one factor that is very evident is the definite trend for a shift from rental to owner occupied homes.

For landlords and real estate letting agents who have properties to rent this may also suggest that competition will increase to find tenants. However there are other factors to consider such as the type of rental property. For example the Read more…

Round 1 ? Finding a Tenant

Letting agents will have a number of marketing initiatives in place and tenants waiting for property, therefore it is likely that the letting agents will be able to get a tenant into the property quickly. A downfall, but this is not the case with all letting agents is that they may charge a finders fee. However in balance if you are a landlord then you will still need to either advertise the property to get the tenant or use the letting agents tenant finder scheme.

Letting Agents Win the Round

Round 2 ? Referencing a Tenant

All tenants that are housed with a letting agency will be referenced and credit checked, this should give the peace of mind that a tenant will pay their rent in a timely manner. If you are advertising your house for private rent then you will either have to pay to do the credit reference check or take the risk that you house a tenant that has not been checked, this is a big risk.

Round Drawn

Round 3 ? House Viewings

In order to get a tenant into the property they will have to view the house, this can be a task that takes sometime, it can be the case that it can take 2, 3 or 4 viewings before a house has tenants. If you are renting this out as a landlord the time taken can be fairly considerable, especially if you no longer live in the area where the property is being rented out. A positive as a landlord is that you can meet the tenants, this can still be done even if you are renting the property out via a letting agents, however often landlords do not attend the viewings.

Round Drawn

Round 4 ? Paper Work

Once a tenant has viewed the property then paper work needs to be drawn up a tenancy agreement needs to be made and a date that the tenants will move into the property needs to be arranged. If however you have never had a tenant in a property then the landlord will need to source the tenancy agreement and make sure that they are aware of what to include in the agreement and any legal side to the agreement.

Letting Agents Win the Round

Round 5 ? Safety Checks

Often a good letting agents will take care of the legal requirements of a house, this includes a gas safety certificate which should be done on a yearly basis, as well as this often an electrical safety check is completed too. These will need to be arranged if not in place already for when the tenants move into the house. This again takes time to arrange and cost, letting agents do normally charge for this (Not all do) and this will be included in the initial charges and could work out more expensive doing this through a letting agents, especially if they have a mark up on the work. Landlords can provide their own gas safety certificate as long as it is done via a Corgi registered gas company.

Landlords Win the Round

Round 6 ? General Maintenance

Over a period of time a house will pick up problems and require maintenance. Some of the more common issues include boilers, heating systems, water and general building maintenance. The letting agents will have emergency contact numbers in place for tenants should any urgent matters need attending too. If you are a landlord of a Read more…

Some Estate Agents double up as Letting Agencies too but there are also Letting Agencies that operate as nothing more. Like the Real Estate agents, the letting agencies of Bangkok and Thailand, do not focus too much on the lower priced dwellings due to the smaller commissions.

A lot of people stay clear of these agencies as they think the service will cost them more in the long run. This can actually be a bit of a misconception as their cut, commission, call it what you will, is not simply added to your monthly rent. Though they do make commission on their service, it?s quite often at the expense of the landlords as opposed to the tenants. Let me explain further.

Often, a private owner, especially an inexperienced one, will attempt to rent out his property using his own resources in order to save on agency fees. He is quite often over ambitious with his expectations for rent. After a few months without any luck he reluctantly seeks out the services of a letting agency to see if they can do any better. Here, they often inform him that to make his property desirable, he needs to spend a few thousand Baht on a bit of fresh paint, wash away the mildew from the bathroom, get rid of any tacky or broken furniture, fix the broken window, and sling a bit of bleach in the toilet prior showing people around etc.

They may also inform him that he?s asking well over the top for this property type. The greedy landlord may point out that he can?t afford to let it go any cheaper. The agent may reply to this by highlighting the amount of months his vacant property has already lost him by sitting empty, and if he doesn?t do something soon, it could remain in this unoccupied state indefinitely.

A plan is then drawn up, the agent takes over the management of his apartment, and the property soon reappears back on the market cleaner, smarter and cheaper than before.

As with the Real Estate Agencies, Read more…

With house prices rising faster than rental incomes, it is becoming more difficult to make a successful living from buy-to-let. We look at ways for landlords to maximise their profits and avoid financial difficulty.

Remortgage

Buy-to-let mortgage rates used to be charged at a premium compared to their residential equivalents. However, increased competition in the sector and other factors has led to a reduction in the cost of a buy-to-let loan. You may be able to save some money by remortgaging, provided there are no penalties for quitting your existing loan.

Manage the property yourself

Most letting agents will charge around 6 – 8% of your rental income for finding a tenant and a further 6 – 8% for managing the property.

If you are prepared to do the work yourself, you could make significant savings on your property costs. Consider advertising to potential tenants directly by listing your property on some of the property letting portals and taking on the management tasks yourself.

If you have a number of buy-to-lets and do not have the time to manage the properties yourself, make sure you negotiate a good discount with the agent in exchange for managing your full portfolio.

Cut your tax bill

You are required to pay tax on income earned Read more…

Landlords and tenants alike just want a pleasant relationship, so that each can live in peace. No landlord should ever allow a tenant to move into their rental property without first requiring the prospective tenant to completely fill out a rental application.

Among the important questions that should be answered on the application are:

- Place of current employment?
– Length of employment?
– Name of bank?
– Social Security number?
– Do they have pets, if so what kind?
– Number of vehicles?
– How many occupants will live on the property?
– Ages of occupants?
– Name and address of current and prior landlords?
– Have you been convicted of a felony?
– Have you ever been evicted?
– Are you currently engaged in criminal activity?
– Have you been arrested and charged with a crime, but not yet convicted?
– Are you in bankruptcy or plan to file for bankruptcy?

A bold notice on your rental application form should read: Falsification of this information is grounds for a ten day Notice to Move if discovered later by the landlord or management.

With the information found on the rental application the landlord can begin the screening process. It is the landlord’s responsibility to be sure the tenant is the right person to occupy the home or apartment… and that the home or apartment is right for the applicant.

A qualified tenant is one who can afford the rent and has the characteristics necessary to coexist with the neighbors or other tenants. On the other hand a landlord should not rent a one bedroom unit to a four member family.

The screening process includes checking the tenant’s credit rating. Someone who has a long list of late payments and unpaid debts could immediately become a problem tenant. Solve that problem before it begins by forthrightly explaining to the prospect why he or she is not eligible to occupy the property. The best eviction is one Read more…

When an investor owns and manages apartments he or she often has to make tough decisions.

Here’s an example of one:

Barry and Terri, husband and wife, are tenants in a four unit apartment building. They have a stormy relationship that one evening erupts into a violent domestic dispute. Terri calls police. The incident isn’t quite exciting enough to be included in an episode of “Cops”, but Barry is arrested and charged with domestic violence assault.

Directly after the arrest the couple separate and Barry lives elsewhere.

The next day the landlord serves Terri with an eviction notice for violating the quiet occupancy clause in the lease. This landlord gets more grey hair, because Barry, hoping to win his way back into Terri’s heart makes a return. He comes screaming into the landlord’s office demanding the eviction be cancelled. He says it was his entire fault, he was that one who was arrested and Terri shouldn’t be punished for his bad behavior.

What would you do in this situation?

The landlord’s best action is to calmly explain to Barry that owner/manager had nothing to do with the disturbance. When the lease was signed Barry and Terri had a joint responsibility to abide by the rules and the law. Either party is responsible for the other party.

This is Read more…