In This Month’s Edition Legal Tips For First Time Landlords
Seven Real Estate Investing Tips For Beginners
Eight Tips For Buying Homeowners Insurance
Why Is Tenant Screening So Important?
January 2022
Published by:
Table of Contents Publisher’s Message A Message From Bob DeCosmo, President Of CTPOA
News And Views From The Capitol New Laws Went Into Effect Jan. 1; Here’s What You Need To Know
Realtor Report New Laws Effective January 1 Concerning Real Estate
Insurance Insights Eight Tips For Buying Homeowners Insurance
Property Management Tips & Tricks 5 Property Management New Year Resolutions That Make Your Investments Worthwhile
Helping Property Owners Since 1994
Published by: CTPOA
Financially Speaking 4 Real Estate Trends Smart Investors Are Watching For 2022
Get Energy Efficient Energy Saving Tips For Winter
The Legal Corner Legal Tips For First Time Landlords
Vendor Spotlight
CTPOA’s Mission: Educate our members on the Best Practices.
Increase profitability. Provide access to Core Services. Advocate for Property Owner Rights.
Meet Our Team:
Let Us Bear Your Junk! Bob DeCosmo
The Intelligent Investor Seven Real Estate Investing Tips For Beginners
Carmine DeCosmo Melissa DeCosmo Paul Jenney
Chelsea Sayegh
Tenant Screening Tips & Tricks Why Is Tenant Screening Important?
PO Box 4795 Waterbury, CT 06704 800-369-6153 info@ctpoa.com
By Bob DeCosmo Advocate For Property Owner Rights Another year has come and gone. We’re excited to see what 2022 has to offer but we believe it will continue to be an uphill fight to be a landlord in Connecticut. Starting in January a new program will be starting in areas of our state with the highest eviction rates that will provide free legal representation for low-income renters facing evictions. Landlords will of course be forced to pay for their own legal council regardless of the circumstances of the eviction... It should be another interesting year and CTPOA looks forward to help
educate and bring together realtors, landlords and property owners alike. We hope everyone had a happy, healthy and safe holiday and we are excited to see you all at future events this year! Happy New Year! Bob DeCosmo
04 / Publisher’s Message
05 / Publisher’s Message
New Laws Went Into Effect Jan. 1; Here’s What You Need To Know By: Caitlin Burke, with wtnh.com A handful of new state laws went into effect on Jan. 1, starting with the paid family and medical leave law. With the start of the new year, workers can begin receiving up to 12 weeks of paid time off to care for their own health, a newborn, or a sick family member. Out-of-pocket costs for insulin will also now be limited to $25 a month. In the meantime, the out-of-pocket expenses for equipment and supplies, like glucose test strips and insulin syringes, will be limited to $100 a month. House Minority Leader Vin Candelora says there are many benefits to the new laws this year.
“We have a lot of different laws going into effect that might improve people’s lives. I think everyone is sort of looking forward and saying how do we function coming out of this pandemic and what services are we going to need to improve whether it be educational, behavioral health, or mental health services for our kids and our adults,” Candelora said. For a full list of new laws, click here.
06 / News & Views From The Capitol
New Laws Effective January 1 Concerning Real Estate From the CT State Website AN ACT CONCERNING LICENSING
Under the act, teams must register with DCP in a
REQUIREMENTS FOR REAL ESTATE
form and manner the commissioner prescribes.
BROKERS, SALESPERSONS AND TEAMS
Initial registrations are valid for one year and
SUMMARY: This act increases the minimum prior work experience required to apply for a real
estate broker’s license on or after January 1, 2022. Principally, it requires applicants to have a minimum number of hours worked and real estate transactions closed in the prior three years. The act also establishes a registration process for real estate “teams,” which are groups of at least two licensed real estate brokers, or salespeople affiliated with the same sponsoring broker, that advertise using a team name. It allows the Department of Consumer Protection (DCP) commissioner, in her discretion, to engage third parties to implement the team registration process; however, it prohibits her from spending state funds to hire consultants to make program changes to the licensing system.
08 / Realtor Report
cost $565. Teams may apply for one-year renewals for $375.
The act also makes technical changes. REAL ESTATE BROKER MINIMUM EXPERIENCE AND EDUCATION REQUIREMENTS The act requires a broker license applicant, before sitting for the written licensure exam, to meet the act’s expanded experience requirements in addition to existing law’s
education requirements. However, by law and unchanged by the act, the Connecticut Real Estate Commission or the DCP commissioner may waive all of these requirements if the applicant is found to have equivalent experience or education.
Under the act, in the three years prior to
estate salesperson who is a team member or
applying, an applicant must have:
(2) be immediately followed by “at/of” and the
1. been actively engaged as a licensed real estate salesperson under a Connecticutlicensed real estate broker’s supervision for at least 1,500 hours and
full name of the sponsoring real estate broker. The act prohibits team names from including (1) any abbreviation, term, or phrase that implies the team is a business entity (e.g., “LLC” or “company”) or (2) the name of anyone
2. represented a seller, buyer, lessor, or lessee who is not a licensed real estate broker or in at least four closed real estate transactions. salesperson. Under prior law, an applicant had to be actively The act requires teams to notify DCP about any engaged as a licensed real estate salesperson changes to registration information within 12 under the supervision of a Connecticut-licensed days after the date of the change in a form and real estate broker for at least two years. manner the commissioner prescribes. The act requires the supervising broker or his
Additionally, the act requires teams to pay DCP
or her authorized representative to certify
a $25 fee for any change made to, or transfer
whether an applicant’s active engagement
of, a team’s registration after the initial
meets the hourly experience requirement within registration is filed. 90 days after the applicant provides it to him or
The act requires teams to include the name of
her.
the team’s sponsoring real estate broker
REAL ESTATE TEAMS
prominently in all of their advertisements and
Under the act, real estate team registrations must include the name and contact information for each team member, including the name and contact information for the team’s sponsoring real estate broker. The sponsoring licensed
comply with all advertising requirements and standards that apply to real estate brokers. Among other things, these requirements and standards: 1. prohibit misrepresenting or concealing any
real estate broker serves as the team’s primary material facts in any transaction
contact and must ensure it (1) complies with all 2. prohibit misrepresenting the price of real existing real estate advertising laws and estate, and regulations and (2) accurately and timely files registration forms and updates. Registrations must also include the team’s
3. establish minimum disclosure requirements for advertising on websites (Conn. Agencies Regs. § 20-328-5a).
name, which must (1) include the full name of at least one licensed real estate broker or real
09 / Realtor Report
Eight Tips For Buying Homeowners Insurance By: Michele Lerner, with washingtonpost.com People purchasing their first homes represented 31
Buyers should start looking for a home insurance
percent of all buyers in September, according to the provider as soon as they have a contract accepted National Association of Realtors. Among the many steps in the process is purchasing homeowner’s insurance.
to buy a home. “Most mortgage companies require proof of insurance before closing,” wrote Bill Gatewood,
“Home buyers — especially first-time home buyers
corporate vice president at insurance
— often don’t think about budgeting for home
brokerage Burns & Wilcox in Detroit. “Homeowners
insurance when looking for their dream home, but
should begin shopping around at least 30 days prior
they should,” Sean Harper, co-founder and CEO
to closing — waiting until the last minute can delay
of Kin Insurance in Chicago wrote in an email.
the process.”
“Where you live can have an enormous impact on
Many first-time buyers will often go with whatever
your home insurance rates,” Harper added. “For
home insurance company their real estate agent
example, homeowners near open space in
recommends, but that isn’t the way to get the best
California and on the coast of Florida are more
price or necessarily the best coverage, Harper
exposed to extreme weather (like wildfires and
wrote. Try
hurricanes, respectively), and insurance in these
these tips to
areas will usually cost more because of it. Home
make a wise
buyers should also be aware of local flood
decision
disclosures laws when buying a house in a flood
about your
zone. You’ll want to know if flood insurance is required for the property and whether the home has experienced any flood damage in the past.”
10 / Insurance Insights
1. Go online and get some quotes. Make sure
according to Gatewood. “People in natural
you’re comparing apples to apples when
disaster catastrophe zones should also do all they
assessing your options — some policies may offer can to protect their homes before disaster strikes, substantially more coverage, Harper wrote.
2. Know what your policy does and doesn’t cover. Homeowners insurance protects against most common exposures like water damage, electrical fires and roof leaks, but maintenance issues like mold and pest infestations usually aren’t covered, according to Gatewood. “You may
such as clearing brush from around their property, installing impact-resistant doors and windows and using noncombustible landscaping,” Gatewood wrote. In addition, Harper wrote, insurance companies may give you a discount for making your home safer, such as investing in wind mitigation in Florida.
need special coverage for items like fine art, a
6. Look for discounts. While there are common
wine collection or antiques that typically aren’t
home insurance discounts, they aren’t
covered either,” Gatewood wrote.
standardized across the industry, Harper wrote.
3. Check the insurance company’s rating. A rating is an independent assessment, usually by AM Best or Demotech, of the company’s financial standing, according to Harper. “A good rating
Most companies offer at least a 5 percent discount for security systems. Water mitigation systems like automatic water shut-off valves and leak sensors can qualify for discounts, too.
means the company can meet its claim obligations 7. Add liability protection. Every homeowner even after a widespread disaster,” Harper wrote.
4. Pick a high enough deductible. When selecting an insurance policy, homeowners need to make sure they’re covered in the wake of a catastrophe that could fully wipe out their home and belongings, wrote Gatewood, but to save money, buyers should choose as a high a deductible as
should have at least $100,000 in personal liability coverage, enough to cover common claims like a slip and fall accident on the property. “If you have a swimming pool or have a high net worth and could be a target for frivolous lawsuits, it may make sense to increase your liability coverage above that minimum,” Harper wrote.
they can afford. Gatewood recommends choosing
8. Don’t forget to buy enough loss of use
a deductible of $2,500 and filing a claim only for
coverage. Coverage for your living expenses, if
something worth more than that amount. Harper
you must relocate while your home is being
wrote that buyers should make sure they budget
repaired, is part of most standard homeowner
for their deductible, in case they have a claim, and insurance policies. “We typically suggest that to have an emergency fund that also covers small
homeowners have about 20 percent of their
repairs that cost less than the deductible.
dwelling coverage in loss of use (also known as
5. Check out additional protections. Depending on their location, homeowners need to make sure they have adequate coverage for severe weather
additional living expenses) coverage,” Harper wrote. “So, if your home is insured for $300,000, you’d have $60,000 in loss of use coverage.”
disasters such as wildfires, hurricanes and floods, which sometimes require an additional policy,
11 / Insurance Insights
5 Property Management New Year Resolutions That Make Your Investments Worthwhile By: Classic Property Management It’s officially the time of the year where people
Even if you feel you aren’t tech-savvy enough
begin to make resolutions to improve their lives
to build out a portal on your own, there are
over the next 365 days. Although most
plenty of reliable Dallas-Fort Worth property
resolutions like weight loss and general life
management teams that come equipped with
organization are important, there are several
the technology you need to upgrade your rental
resolutions a property manager can make that
experience in 2022.
should be held up through the next year and future years to come. If you are an owner of one or more rental properties, here are 5 new year resolutions you should hold true to, in order to make your investment worthwhile in the end.
Create a Maintenance Schedule and Stick to It Emergency repairs due to lack of maintenance time can be costly on your budget and an inconvenience to your renters. This year, buck the trend of scrambling to manage
Don’t Be Afraid to Work With New
unmanageable maintenance. Create a
Technology for Rent
schedule that works for your team and stick to it
Online portals are the latest and greatest trend
all year long.
in the property management industry. If you are Something as simple as a regular maintenance a solo manager, don’t be afraid to upgrade to
schedule can keep your properties looking their
an online portal system that makes renter’s
best, reduce the chances of emergency repairs,
payments and your review of late payments as
and maintain renter happiness while living on
simple as the click of a button.
your property.
12 / Property Management Tools & Tips
Get Personal With Contractors
stone unturned
Even if you settle into an excellent
Once you put effort into a clear marketing
maintenance schedule, life happens, and
campaign, your desired renters will quickly
you’ll need the best contractors on your
see the value in renting on your property
side. If you know some of your vendors
and start sending in applications.
are moving on or no longer offer the quality services you deserve, spend some time this year researching the best
Communicate to Retain Your Best Renters
contractors in your area and creating
some professional relationships with the vendors you want to work with when an emergency arises. This can be a daunting task when managing alone. However, when you work with a local property management
Great renters don’t want a landlord that is
company to accomplish your goals,
only available when rent is due. Your
excellent vendor resources often fall right
renters may have questions or concerns
into your lap.
that arise throughout the year, and you
Maximize Your Marketing Potential
need to be there to address them, no
Make this the year that you reel in the best renters for your properties. Finding the
matter the severity. Whether you open yourself up to after-
right renters is all about the marketing that hour requests or team up with a property management company that can do the you put behind your search. personable communicating for you; as
Take some time this year to: •
long as your renters get the
Truly research your target audience’s
desires •
remain confident in your abilities as a
Schedule professional photos for your
landlord and are more likely to renew their lease for years to come.
marketing campaign •
communication they deserve, they’ll
Create a detailed listing that leaves no
13 / Property Management Tools & Tips
4 Real Estate Trends Smart Investors Are Watching For 2022 By: Courtney Carlsen, from fool.com The past couple of years have been anything
which recently came in at a 6.8% annual rate in
but ordinary for real estate investments. Last
November, the highest since 1982. At the same
year, in response to the COVID-19 pandemic
time, the unemployment rate has dropped
slowdown, the Federal Reserve slashed
drastically -- down to 4.2% as of November.
interest rates to record lows and mortgage rates followed. Many mortgage-finance companies felt the tailwinds from these low rates, and customers responded by refinancing their mortgages at a record pace.
Because of the recovery in jobs and accelerating inflation, the Fed has said it will taper its purchases of assets used to stimulate the economy sooner than it expected. Investors are also anticipating more rate increases than
Now, accelerating inflation has caused the Fed
previously thought earlier in the year. Bank of
to shift course, which could have a sizable
America forecasts two rate hikes in 2022 and
impact on real estate and mortgage-finance
three more in 2023 and 2024.
companies. Here are four trends in real estate that smart investors are keeping a close eye on going into 2022. 1. Mortgage rates will rise Economists expect mortgage rates to rise as the Fed tightens monetary policy. The Fed has decided it needs to respond to rising inflation,
14 / Financially Speaking
These expected rate increases will boost mortgage rates as a result. According to Fannie Mae's Economic and Strategic Research Group, mortgage rates will average 3.3% in 2022, up from today's rate of 2.99%. Meanwhile, Mortgage Bankers Association (MBA) researchers expect interest rates to rise to 4% on 30-year fixed loans next year.
2. Origination volume will decline
houses available to the lowest levels since the
drastically
1970s. Goldman says that a supply-demand
Mortgage lenders don't love rate hikes because they ultimately lead to a slump in
imbalance will lead to a multiyear boom for homebuilding.
business. When rates go down, people buy
The firm expects states to deregulate land
houses or refinance their current homes to
usage, which should help accelerate
lock in those low rates. That is what we saw
construction activity. It expects homebuilding
play out last year and into 2021.
to increase the housing supply by 1.65 million
When rates begin moving higher, mortgage
lending slows, which is what MBA is projecting for 2022. The MBA expects total loan originations to drop 33% next year from 2021, to $2.59 trillion. This decline will hit
annually. When considering demolitions, net
supply is forecast to increase by 1.4 million. The persistent demand-supply imbalance could prove favorable to homebuilder stocks such as D.R.
refinance originations the most, which the
4. Home prices will continue to rise, but at
MBA projects will decline 62% to $860
a slower pace
billion.
From August 2020 to August 2021, home
This will undoubtedly hurt lenders in 2022. In
prices rose nearly 20% -- a record one-year
an interview with CNBC, Marina Walsh, vice
increase. Experts expect robust demand to
president of industry analysis at the MBA, said continue to drive prices up still more, although "many lenders will rely more heavily on their servicing business to achieve financial goals." As a result, lenders who had a boom in revenue and net income when interest rates dropped will likely see a slowdown next year. 3. Demand for homes will outpace supply
Despite rising interest rates and declining
not at the same pace. Goldman forecasts a price increase of 16% from October 2021 through December 2022. This is in the same ballpark as Zillow's prediction; the online real estate giant expects home prices to rise 13.6% from October 2021 through October 2022.
mortgage origination, demand for housing
However, other researchers don't anticipate
should remain robust. According to
prices increasing quite as fast. Fannie Mae
researchers with Goldman Sachs, "of all the
and Freddie Mac project home prices to
shortages afflicting the U.S. economy, the
increase about 8% and 7%, respectively.
housing shortage might last the longest."
Meanwhile, the MBA is one of the few
Current demand has reduced the supply of
forecasting a decline, with prices falling 2.5% by the end of next year.
15 / Financially Speaking
Energy Saving Tips For Winter By: Eversource The average New England household
Heat water in a tea kettle instead of an
spends more than $1,500 a year on
open pot.
energy bills, half of which goes to heating and cooling. Here are some simple steps you can take today to keep costs down: Install Wi-Fi Thermostats. Wi-Fi thermostats allow you to control your home temperature settings from your smartphone or tablet, so you can adjust and save energy whenever, and
wherever, works best for you. You can save up to $145 per year on your heating and cooling costs with a properly programmed Wi-Fi thermostat, and we offer instant discounts on popular models.
16 / Get Energy Efficient
Looking to warm up with some tea? Boiling water in a tea kettle is faster than
using an open pot and uses less energy. Eliminate air-leaks and drafts by weatherstripping and air sealing. Sealing drafts in your home will help keep you comfortable, and seal warm in air so you do not must heat your home as much. Visit energy.gov for tips, safety advice and more. Or, let our professionals can address these areas for you through Home Energy Solutions.
Dry two or more loads in a row to
may be eligible for an incentive of up
take advantage of the heat from your to $15,000 for the installation of a heat dryer.
pump.
Get more done with less energy by
Make sure your home devices are
throwing in a second load of laundry
set to save power.
right after the first. Your dryer has already generated a wealth of heat
during your first cycle, so take advantage of that heat to save money, energy, and time. Reverse your ceiling fans. Normally, ceiling fans spin counterclockwise, allowing you to feel cooler in the warmer months. However,
most ceiling fans have a reverse switch that will force them to turn clockwise, producing an updraft and moving the warm air that collects near your ceiling down into the rest of the room.
Check your computer, monitor, TV and other electronics to make sure they are set to conserve energy. If you are looking for a new device, check for the ENERGY STAR® logo. Advanced power strips. Advanced power strips are an easy way to manage your energy usage when it comes to the electronics in your home. An advanced power strip only costs about $30 on average and can decrease your energy usage by 20-48 percent.
Consider installing a heat pump. Heat pumps are an all-in-one heating and cooling system that use electricity to efficiently heat (or cool) your home. During the chilly winter months, the unit collects heat from the outdoor air and transfers it to the inside your home. If you heat your home with electricity, you
17 / Get Energy Efficient
Legal Tips For First Time Landlords By: rocketlawyer.com Becoming a first-time landlord can be a lot of
gives you legal rights that would be more
work, but there’s also the promise of a lucrative
difficult to prove without documentation. It also
business (and regular rent checks). When
makes it clear that both parties have agreed to
you’re first starting out, beyond the basics of
specific terms that you can both reference later
getting the property purchased and ready to
if there is a dispute.
rent out, remember that setting yourself up for success also means having the proper legal
Get a security deposit.
protections in place—and being proactive with
Collecting a security deposit communicates to
legal issues could save you from big legal bills
the new tenant that you care about the condition
and hassles down the road. Here are some
in which the tenant keeps your property. It also
guidelines to help protect yourself when you’re
gives the tenant motivation to keep the property
starting out as a new landlord.
in the same condition in which it was first rented. If the tenant doesn’t keep the property in
Put it in writing.
good condition or damages it, you may be able
It seems simple but putting everything in writing
to keep a portion or all of the deposit to pay for
can be the smartest thing you ever do as a
repairs or additional cleaning. Make sure you
landlord.
have the tenant fill out a Renter’s Inspection
The most important item to put in writing is the Lease Agreement between you and the tenant. If you ever have problems with the tenant, the Lease Agreement protects you and
18 / The Legal Corner
Worksheet when the tenant first moves in to reduce disputes about the initial condition of the apartment.
Know the tenant financially.
Understand
It’s your responsibility to vet your potential
your rights
tenants. Start by having them complete
as a
a Rental Application, which will help you collect landlord. the information you need to screen your
Although the
potential tenants. Next, take the time to verify
renter has
their good credit and their employment, which
rights, so
will help you determine their ability to pay the
does the
rent. Keep in mind that it’s much easier to find
landlord. For
another potential tenant than it would be to
example, you should be able to enter the
evict a tenant who can’t pay the rent. Of
property when necessary for maintenance with
course, you also need to follow any laws that
the appropriate amount of notice given to the
protect tenants against housing discrimination, tenant. You also have the right to evict a but the inability to pay the rent generally can
tenant if they are not upholding their end of the
be used to disqualify a potential tenant. You
lease. You can use an Eviction Worksheet in
may also use a Letter to Request a Credit
this case, but before you get in this situation,
Reference to verify the prospective tenant's
it’s smart to understand the legal process for
good credit, and/or ask the tenant's employer
evicting a tenant in your city and state, since it
for a Salary Verification Letter.
varies by locality.
Understand key lease terms, like rent,
Understand the Tenant's rights, and your
maintenance, utilities, etc.
obligations to protect them.
Make sure you know and follow the terms of
Familiarize yourself with your state’s laws that
the lease you’ve signed. If you create a
protect the tenant’s rights, and any applicable
document and then flaunt the terms, your
city or county laws that might affect
tenant could take you to small claims court and you. Consult the Hud.gov Tenant Rights you could be found liable. You could also get
resources by state to find out more about the
in trouble with local housing authorities. In
laws in your area.
addition, if you don’t follow the lease terms (by not maintaining the property, for example), it makes it harder to enforce regulations of the lease that you do want the tenant to follow— like paying the rent on time.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
19 / The Legal Corner
Let Us Bear Your Junk! From: Rob Paradis, Owner of Junk Bear Hello, My name is Rob Paradis. I am the owner of a local Junk Removal company here in Southington, CT. I wanted to reach out to let you know about our services. If your company is looking for a reliable vendor with a great customer service track record. We are here for you!
Services we offer:
We are Licensed & Insured.
Lot clean ups
Junk removal/hauling
Dumpster area clean ups Property clean-outs/ Estate cleanouts Eviction clean ups
Give us a call (phone) 877-877-JUNK Appliance removal or (cell) 860-517-9872 Old furniture removal Email: junkbear2019@gmail.com Instagram: @junk.bear Facebook: @JunkBear Website: www.junk-bear.com Sincerely, Rob Paradis, Owner Operator 20 / Vendor Spotlight
Hot tub removal Light demolition and more! Have a tenant that has left a place trashed? Or left a large item next to the dumpster that waste management won’t take? Need a reliable service?
23 / Vendor Spotlight
Seven Real Estate Investing Tips For Beginners By: Greg Herlean, from forbes.com In today’s market, investing has grown beyond
yearly upkeep, upgrades, and expenses like
traditional assets. While stocks, bonds and
utilities and taxes.
mutual funds are still common portfolio inclusions, there are many other avenues that can also be rewarding in the long run, if you are willing to put in the time. One such avenue is real estate investment, which can be a lucrative way to build money for your retirement. However, it’s not for everyone. Real estate investment takes dedication, research and planning. If you are interested in investing in real estate, here are seven tips to guide you. 1. Know the costs involved. To be frank, real estate investment is not cheap. Properties cost quite a bit to purchase outright, but if you have the funds or are willing to take out a loan, it can be worth it. However, it’s not as simple as purchasing a property and watching it make money. There are additional costs to keep in mind: basic maintenance,
22 / The Intelligent Investor
If you decide to take out a loan, don’t forget to factor in real estate investment trusts. REITs
are companies that finance or own real estate property, based on specific requirements. They allow investors to invest in properties, and while REITs pay out most of their taxable income, investors are responsible for the income taxes. Everything has a cost, so be sure to factor everything. Know what you are getting into before jumping in. 2. Select the property type. So, you have enough set aside for real estate investment. Now, you must decide which type of property to invest in. You can purchase rentals, which could be either commercial or residential. You can become a landlord and rent out a home or apartment. You can use your property as an Airbnb or a vacation rental.
If keeping residential property isn’t something you’re interested in, you can opt for the commercial option. Or you can avoid renters and purchase property to flip for a quicker return. Before selecting a property, decide what your plans are for it and what goals you have in mind. 3. Check out the area.
When it comes to real estate investment, location is a key factor. You don’t want to buy in an area just because the price is right. Perform your due diligence: Check the market value, the neighborhood and what the location offers. The type of rental you’re interested in can help determine where to look.
occur on the property. It can also give “checkbook control,” which can help if time is a factor when accessing your retirement funds for real estate-related purchases. After opening an LLC using your self-directed individual retirement account, your account is the business, and you are the assigned business manager. This process allows you access to your funds whenever you need them; however, that doesn’t mean you don’t need a custodian, or that you can take the funds for other uses. All funds removed must be used on the property, and any withdrawal needs to be reported to your custodian. However, instead of being charged for multiple account changes, you only need
Research the competition, and determine
to report it once. This is especially useful for
whether the property you’ve chosen is in a
paying fewer fees.
prime spot for its purpose. For residential or vacation rentals, consider the community,
5. Decide terms.
proximity to popular attractions and way-of-life After selecting your property type and factors. For business rentals, check out the
location,
area’s population, parking and demographics. you can 4. Protect yourself.
come up with the
If you are thinking about investing in one or
terms
multiple properties, consider using an LLC to
regarding
purchase them. An LLC, or limited liability
your
company, can help you with risk
investment.
management. The LLC has ownership over
Calculate
the properties; if anything should happen on
rent, fees,
those properties, you are not held personally
yearly costs and emergency funds to keep a
responsible. Additionally, having an LLC can
running budget. Are utilities going to
protect your retirement fund should something
23 / The Intelligent Investor
be included? Keep in mind any fees and how
what you can do to the property yourself. Have
much funding you’ll need to maintain the quality a go-to list of people who you will need to assist of your investment. Consider hiring a property manager, especially if you plan on having properties in different locations. The key is to decide this ahead of time, so you aren’t blindsided when the bills
start to roll in.
you with your investment. Property managers, an attorney, a CPA, real estate agents and money lenders are all important resources. Also, keep in mind anyone you will need to keep your property in tip-top shape: an
inspector, plumbers/electricians, a handyman, pest control experts and contractors. While you
6. Buy property with growth in mind.
may not need all these people upfront, it’s good
When you invest in real estate, you may
to have a few reliable numbers to call.
eventually want to sell it. Whether you intend to Real estate investment can be an undertaking; flip it immediately or hold on to it for a while, however, when done properly, you can build a you’ll want to profit. The goal is to sell your
successful nest egg. Take your time and
property for more than you paid for it. Build your perform due diligence before deciding if real property value by making simple upgrades or estate investment is right for you. Be sure you additions. When you increase property value,
have the time and resources to dedicate to this
you can sell it for more, and your hard work will
investment strategy and build your retirement
pay off in a big way.
fund today.
7. Keep important numbers on hand.
The information provided here is not
Real estate investment takes a village. While
investment, tax or financial advice. You should
you may have the power, you are limited in
consult with a licensed professional for advice concerning your specific situation.
24 / The Intelligent Investor
For More Information Visit Our Website: landlordcollections.net Give Us A Call: (800)-369-6153
Why Is Tenant Screening Important? By: pendo.com One thing most landlords can agree on
Running a credit check is important for a
is the tedious task of searching for
multitude of reasons. A credit check
tenants. It’s grueling, time-consuming
reveals a person’s current financial
and if you’re not a property manager,
situation and their credit history going
overwhelming. The idea of ditching
back as far as 7-10 years. Do they have
tenant screening might seem like a good a history of paying bills on time or have idea in the heat of the moment but don’t
they had accounts sent to collections?
even think about it. There’s a reason
Are they currently in debt and if so, what
tenant screening is a standard industry
kind of debt? Have they gone bankrupt
practice.
before?
Searching for reliable, trustworthy
tenants is a short-term undertaking but with long-term returns. Part of a good screening includes a credit check, criminal check, and their previous tenant history. What do these things tell you about a potential tenant?
26 / Tenant Screening Tips & Tricks
This kind of information can give you
the phone and start calling. This is an
good insight into the type of tenant a
important step in figuring out whether
person can be. If their debt is
they’re in the habit of paying their rent
connected to a student loan rather than on time. Be forgiving, though — we’re a credit card, it may be easier to
all human and if they’ve paid their rent
overlook or forgive. If they have fully
late once or twice, know that no one is
maxed credit cards, this person may
perfect. It’s important to specify when
have problems paying rent on time.
asking previous landlords if they have a history of late payments. Also, do
Another important element of a background check is looking into their
they still owe money to them?
criminal history. A person with a
This is also the time to uncover any
criminal history could put you or your
previous evictions!
neighbors at risk. Not all criminal convictions carry the same weight, though. Anything in their youth or minor traffic violations may not be dealbreakers but it’s important to see if there’s a pattern to their behavior. Any serious or lengthy records could be a red flag you shouldn’t ignore. Not only is there a possibility of putting you, other tenants, and neighbors at risk,
you put your property at risk, too. No one wants to field calls from angry
When you conduct a thorough tenant screening, you’re taking time early on
in your tenant-landlord relationship to uncover what kind of person they are. By discovering their trustworthiness from the start, you can eliminate stress and headaches later on. Good tenants are likely to stay longer when treated well, and keep your investment (i.e. home) in good condition when they do decide to leave.
neighbors or periodically check your property to uncover serious damage. Have you contacted their previous landlords yet? Then it’s time to pick up
27 / Tenant Screening Tips & Tricks
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ecticut Property Owners Alliance is of experienced property managers, S and landlords working together to usiness conditions for rental property owners.
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About Us Advocates For Property Owners The Connecticut Property Owners Alliance is composed of experienced property managers, realtors and landlords working together to improve the business conditions for rental property owners. The Alliance saves its members money on essential real estate services, reviews and testifies on pending legislation & law changes and offers its members workshops and meetings on topics that impact landlords.
Why The Property Owners Alliance Was Formed The Alliance strives to ensure your success in real estate by: •
Saving you money on essential real estate services
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Informing you of law changes impacting your business
•
Providing workshops and meetings to help you become a better educated and prosperous rental property owner.