Tag Archives: renovate or sell

It Just Makes Cents! 7 DIY Home Improvement Projects That Promise Serious ROI

Painting kitchen.
photoman/Getty Images

Source: By Lauren Sieben | Aug 20, 2020

Home improvements can be great feel-good projects. You get to learn a new skill, use your hands, and take pride in something you create yourself.

But let’s face it: Your DIY project doesn’t make sense if it won’t make cents. In other words, it needs to pay off when it comes time to sell your home.https://www.buzzsprout.com/214131/5055596-74-viola-davis-real-estate-snafu-and-how-the-internet-got-this-story-so-so-wrong?client_source=small_player&iframe=true&referrer=https://www.buzzsprout.com/214131/5055596-74-viola-davis-real-estate-snafu-and-how-the-internet-got-this-story-so-so-wrong.js?container_id=buzzsprout-player-5055596&player=small

“The key to winning the ROI game with home improvement is to take a less-is-more approach,” says Dan DiClerico, home expert at HomeAdvisor.

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If your goal is to earn a return on your DIY investment, DiClerico suggests taking on smaller improvements that will have a big impact on buyers.https://www.realtor.com/myhome/sellwidget

“Bells and whistles tend not to rank high on ROI,” DiClerico says. “The high-tech home theater might mean hours of fun for you and the family, but it’s probably not going to pay for itself when the time comes to sell.”

Of course, that doesn’t mean you can’t outfit your house with the latest technology—if you’re making an improvement that you’ll love and enjoy, go for it. But if you’re looking to roll up your sleeves and tackle a project that will offer serious bang for the buck, try one of these home improvement projects next weekend.

1. Refresh your kitchen cabinets

“If the cabinets are in good shape, adding a fresh coat of paint or stain will dramatically transform the feel of the entire kitchen,” DiClerico says.

Be warned: Even though painting isn’t very difficult, it’s still time-consuming. You’ll need to remove the doors and drawers to ensure a clean finish. “But in terms of skill level, it’s something even novice DIYers can handle,” DiClerico says.

And remember, slow and steady wins the race when it comes to any painting project.

“You could lose some buyers with a sloppy paint job,” says Scott W. Campbell, a real estate agent in Milwaukee. “If you truly want to increase ROI, a good paint job takes time and patience.”

2. Create curb appeal

Photo by David Morello Garden Enterprises, Inc.

Making a great first impression on home buyers is one of the quickest ways to boost your home’s value.

“Landscaping and gardening are the biggest ones that also are simple,” says Kendall Bonner, a real estate agent in Lutz, FL. “Curb appeal has a significant impact on buyer’s purchasing decisions.”

Aside from adding tasteful foliage and keeping your lawn manicured, a few strings of café lights can also improve your home’s outdoor space and curb appeal. Don’t forget to paint old fences and prune overgrown plants.

3. Give your front door a makeover

Want to boost your home’s curb appeal but don’t have a green thumb? Spruce up your front door instead. All it takes is a few coats of paint. (The same rules apply: Work slowly and carefully to avoid drips and roller marks.)

“A fresh pop of color at the front door is a great way to enhance your home’s curb appeal for not a lot of money or time,” DiClerico says.

4. Create a backyard deck

Photo by Boyce Design and Contracting 

“Outdoor living is hugely popular, even more so since the pandemic, since people are looking to expand their home’s usable living space,” DiClerico says.

Creating a new deck is possible to do yourself, but “it’s not for the faint of heart,” he adds, especially if you’re putting in concrete footings for the deck posts. This project is best for intermediate to advanced renovators, and it helps to have a few friends on board to assist.

Keep the design simple—avoid any tricky changes in elevation—and work with pressure-treated lumber instead of hardwoods that are tough to cut and screw into, DiClerico says.

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Watch: In Spite of It All, Summer 2020 Is a Great Time to Sell Your Homehttps://imasdk.googleapis.com/js/core/bridge3.402.1_en.html#goog_744807220about:blankabout:blankabout:blankhttps://imasdk.googleapis.com/js/core/bridge3.402.1_en.html#goog_1058458696Volume 0% 

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5. Brighten up the basement

You don’t need to spring for a fully finished basement to appeal to prospective buyers.

“Spraying the basement unfinished ceiling with flat black latex paint can make big difference to clean up a look, and spraying the walls,” Campbell says.

To take your project to the next level, you can add carpeting and adjustable lighting. By cleaning up the basement, you can help prospective buyers envision a space that will fit their needs, whether it’s as a rec room, play area, or home gym.

6. Add more storage

Photo by Shelf Confident 

“Anytime you add usable living space to the home, you increase its value,” DiClerico says. “That’s true now more so than ever given all the time we’re spending at home.”

Making an addition to your home might not be realistic. But smaller improvements, like adding a pantry in the kitchen, a new storage unit in the garage, or even closet organizers, add valuable storage space to your home and will pay off when you’re ready to sell.

7. Make small repairs and keep up with maintenance

It may not be as satisfying as tackling a big project, but staying on top of your home’s basic maintenance is just as important and promises serious ROI.

“Many of today’s buyers are staying away from fixer-uppers in favor of move-in ready homes that won’t require frequent repairs,” DiClerico says.

Seemingly small problems like a leaky faucet, loose gutter, or missing light fixture can be a red flag.

“When buyers see things like that, they think to themselves, ‘What else is wrong with this house that I can’t see?’” DiClerico says. “Spending a few hundred dollars on these small repairs will let the buyer know that this house has been cared for.”Looking to sell your home? Claim your home and get info on your home’s value.Lauren Sieben is a writer in Milwaukee. Her work has appeared in the Guardian, Washington Post, Milwaukee Magazine, and other outlets. Follow @laurensiebenThe realtor.com® editorial team highlights a curated selection of product recommendations for your consideration; clicking a link to the retailer that sells the product may earn us a commission.

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4 Tips for Flipping Houses Successfully

Here’s how to find the right house to flip — and know what sort of renovations will help you command top dollar.

One effective way to make money through real estate investing is to know how to buy and flip houses. Often, this involves buying homes that are priced under-market, such as foreclosures or short sales, renovating them, and then selling them shortly after the fact at a higher price.

But flipping houses isn’t for the faint of heart, and if you don’t know what you’re doing, you could wind up losing money. With that in mind, here are a few tips for flipping houses that will increase your chances of coming out ahead financially.

1. Find a house to flip in the right location

The purpose of flipping a house is to find a buyer who’s willing to pay a handsome price for your hard work. As such, there’s no sense in buying a home in a stagnant market, because that property is likely to sit for a while once your renovations are done. A better bet? Do your research to find areas where housing is in high demand. Some generally good bets include suburbs of major cities with highly-rated school districts, areas in close proximity to major attractions, or metro areas where housing inventory is generally limited.

2. Make sure you’re buying well below market value

Flipping a home often means sinking thousands upon thousands of dollars into renovations. Even if you’re handy enough to do that work yourself, and have the time for it, supplies and materials cost money. Therefore, make certain the price you’re paying for a home to flip is reasonable, given the amount you’ll need to put into it. This means you may not want to buy a foreclosure at auction, when you’ll often be unable to perform an inspection. A better bet could be a short sale or REO property, where you have a chance to see what you’re getting into.

3. Focus on improvements with the best return on investment

If the home you buy to flip has damaged plumbing and out-of-code electrical work, you’ll clearly need to address those issues if you want to be able to sell it. But once you tackle your “must do” repairs, set priorities on cosmetic enhancements. Typically, you’ll get more bang for your buck if you sink money into kitchens and bathrooms — these are high-profile areas that tend to be important to buyers. At the same time, focus on low-cost improvements that offer a lot of value. For example, paint and carpet are fairly inexpensive but make a huge impact. Refreshing a home’s walls and floors could be a better bet to drive up its purchase price and attract potential buyers than putting in high-end lighting features.

4. Don’t over-improve that property

When you buy a home in disarray, it’s easy to go overboard on renovations to the point where it becomes the nicest property in town. That’s not necessarily what you want. If most homes in the area don’t have marble flooring or ultra-high-end kitchen appliances, follow that trend. You don’t want to improve a home to the point where you have to price it at the very top of its market. Often, buyers will balk at buying the most expensive home on the block because it’s a sign that they may not recoup their investment once the time comes to sell the house .

Flipping a home is a great way to be successful as a real estate investor. Just make sure you know what you’re getting into so you don’t lose money. If you’re not confident, talk to people who have been through the process before. Enlisting the help of a local real estate agent could also help you not only identify the right home to flip, but also invest just the right amount of money into making it marketable.

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Source: MillionAcres.com – By: , Contributor
Published on: Oct 27, 2019
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How Long Is That Remodel Going to Take?

Removing kitchen floor during a house remodel
Image: ItsOverflowing.com

Some remodeling projects go on for weeks and make a mess of your home life. Here’s how to survive.

Renovations can take weeks — and sometimes months. That means endless days of subcontractors traipsing through your home, noisy tools, and major dust. Even some minor projects can disrupt your daily routine. Before you begin to remodel, know what’s in store for you and your family.

We’ve highlighted nine common remodeling projects that homeowners are likely to undertake — projects that require professional contractors and that take at least one week to complete.

We also talked with veteran remodeler Paul Sullivan, who has renovated homes for 34 years and is president of The Sullivan Company in Newton, Mass.

Sullivan helped us rate each project on a “disruption scale” of 1 to 10, with 1 being the least disruptive to your everyday home life and 10 the most. If your project reaches a 10, consider getting a hotel room for the duration.

Attic Conversion

National median cost: $75,000

Time: 8 to 10 weeks

What’s involved: A project that converts unconditioned attic space into a bedroom must include egress windows and at least one closet. Most likely, you’ll extend plumbing, HVAC ducts, and electrical wiring to the attic, and add insulation, drywall, and flooring.

Disruption scale: 3  Luckily, most of the work is in the attic and doesn’t involve your main living areas. You’ll have to put up with contractors moving through the house to get to the top, so provide drop cloths or old rugs to protect your floors. Also, plaster dust from drywall installation and finishing likely will float throughout your home, so you’ll want to change furnace filters every two to three weeks during the project.

Refinishing Hardwood Floors

National median cost: $7 per square foot

Time: 2 to 14 days

What’s involved: Sanding, staining, and sealing wood floors.

Disruption scale: 9  Whether you’re refinishing one floor or an entire house, the process involves a world of hurt. You have to move furniture and cover surfaces to protect from wood dust, which disrupts the flow of family life. And if you use oil-based sealants, you’ll have to live somewhere else to avoid breathing VOC fumes. Plus, you won’t be able to walk on floors for at least two days after the last coat of sealant is applied.

Related: Should You Refinish Hardwood Floors Yourself?

Bathroom Renovation

National median cost: $30,000

Time: 2 to 3 weeks

What’s involved: Turning your outdated bathroom into a dream spa includes updating plumbing fixtures, installing ceramic tile around a porcelain-on-steel tub, replacing an old toilet with a low-flow, comfort-height model, and installing ceramic floor tiles and solid-surface vanity counters.

Disruption scale: 7 to 10  If you’re remodeling your only bathroom, expect major disruption of your personal hygiene routine. You’ll have to wash in the kitchen sink, and install a portable potty in the yard or make friends with a neighbor when nature calls. You’ll have less pain if you have more than one bathroom in the house. Even then, you’ll suffer water outages during plumbing updates. And if you’re remodeling a master bath, you must put up with workman tromping through your bedroom.

Related: 7 Smart Strategies for Bathroom Remodeling

Complete Kitchen Renovation

National median cost: $65,000

Time: 8 to 12 weeks

What’s involved: Replacing cabinets, installing a kitchen island and countertops, replacing appliances, adding lighting, and changing flooring.

Disruption scale: 8  Kitchens are the heart of the home, so when they’re down, you’ll eat out more, wash coffee cups in bathroom sinks, and hold family meetings in the family room where your microwave and fridge now live. To ease the disruption, your contractor can easily set up a construction sink somewhere by running a couple of hoses from existing kitchen plumbing through the dust wall to a make-shift kitchen in an adjacent room.

Kitchen Upgrade

National median cost: $35,000

Time: 1 to 2 weeks

What’s involved: Replacing cabinet box fronts, adding new hardware, updating appliances, sinks, and faucets, and installing new flooring.

Disruption scale: 5  Kitchen facelifts are less disruptive merely because they’re finished faster than major remodels. You’re mainly pulling and replacing, so plumbing and electrical can stay put, and you’ll still have access to your fridge until the new one arrives.

Basement Conversion

National median cost: $40,000

Time: 2 to 3 weeks

What’s involved: Finishing the lower level of a house to create a playspace and video area for kids.

Disruption scale: 2  Seems counter-intuitive, because turning unfinished space into extra living space requires all the finishes of a new addition — electrical, flooring, wall surfaces, and insulation. But the good news: Work is confined to a part of the house you rarely use. Contractors can enter and exit through the basement door (if you have one), and noise and dust are easily confined. The biggest disruptions come from periodic electrical outages.

Roofing Replacement (Asphalt Shingles)

National median cost: $7,500

Time: 1 week

What’s involved: Removing and replacing roofing moisture barriers, flashing, and shingles.

Disruption scale: 1  Replacing your roof is one of the least inconvenient remodeling projects you can do. You’ll have to put up with some banging, move your cars away from the house, and keep dogs and kids out of the yard during the demolish phase. Roofers will cover the ground around the job to corral debris; and after the job, they’ll go over your yard with a magnetic roller to pick up stray nails.

Siding Replacement (Vinyl)

National median cost: $13,350

Time: 1 to 2 weeks

What’s involved: Removing and replacing old vinyl siding with new vinyl siding.

Disruption scale: 3  You’ll endure lots of banging around your house as the new siding goes up. If noise bothers you, stick in your earbuds and listen to something soothing. Even though contractors will cover the area around the house, expect some debris to litter the yard. Keep curious kids and pets inside while work is being done to avoid accidents.

Source: HouseLogic.com – LISA KAPLAN GORDON

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Home renovations are costly, prone to errors

Jennifer Skingley and her partner—the former an erstwhile project manager and the latter an executive manager—are meticulous planners, so no detail was spared when they planned a home renovation. However, no amount of planning could have prepared them for the aggravations they would subsequently endure.

“We got the keys to our home in February 2018 and before we even took possession of it we had teed up people to do the work. We really researched and organized our renovation,” said Skingley. “There were several false starts trying to get people who were available to commit to doing the work. We interviewed a ton of contractors, got multiple estimates and did as much of the leg work ourselves as humanly possible without actually being construction experts. We tried to hand everything over on a silver platter, but for the work to actually start was like pulling teeth.”

And that was only the beginning, added Skingley.

The basement level needed external waterproofing, upgraded plumbing and a new bathroom was fitted in, while the kitchen and upstairs bathroom also received significant work.

However, because of last minute cancellations by contractors and a seeming deluge of errors, the home renovation took much longer than originally anticipated and cost over $80,000.

“Management was the issue,” said Skingley. “There were some blatant oversights and lossages with the team of people we picked, so we definitely ended up spending more money than we had allocated, even though we budgeted quite thoroughly from the outset, because we know when you tear things apart you find ugly surprises, but we there were things like having to tear floors out a second time because they forgot to get a permit. Silly little things like that took us way over and above. Even sourcing material was challenging.”

Unfortunately, Skingley and her partner’s nightmare renovation is extremely common, and given the exorbitant cost of the work, most homeowners can afford nary a thing to go wrong, says Casper Wong, co-founder and COO of Financeit, a consumer financing platform.

“When most Canadians renovate their homes, they aren’t offered flexible payment plans by their merchants, and while there are more traditional ways of paying, like with cash or using HELOCs [home equity lines of credit], not every Canadian can afford to make cash payments up front,” he said.

“Not everybody has access to HELOCs. Only three million Canadians have access to them, and on average Canadians owe $65,000, and 25% of Canadians with HELOCs just make interest-only payments.”

Financeit, a digital platform, works with thousands of contractors to homeowners make those large renovations in low-installation payments.

“We use our technology—and we own the entire stack, which allows us to manage credit, underwriting, servicing, and we work with multiple lenders and have a mobile app,” said Wong. “Not every Canadian can afford to make cash payments up front and usually when they do, they’re more reliant on credit, but credit cards have high interest.”

Source: Canadian Real Estate Magazine – Neil Sharma 12 Aug 2019

 

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10 Signs to Watch out for to Avoid Renovating a Money Pit

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Condo flippers beware: The taxman is watching you, and has new tools at his disposal to ‘take action’

A condo building in downtown Toronto.Jack Boland/Toronto Sun/Postmedia Network

If you plan on selling a home or condo that you bought fairly recently, especially if you never actually moved into it, be wary as the tax man will be carefully watching how you report any gain on your tax return, lest it be seen as a “flip” and be fully taxable as income, rather than a half-taxable capital gain.

The Canada Revenue Agency’s ability to hunt you down over your real estate transactions has improved thanks to the recent $50-million boost in funding over five years announced in the 2019 federal budget to help “address tax non-compliance in real estate transactions.” The CRA uses advanced risk assessment tools, analytics and third-party data to detect and “take action” whenever it finds real estate transactions where the parties have failed to pay the required taxes. Specifically, the CRA is focusing on ensuring that taxpayers report all sales of their principal residence on their tax returns, properly report any capital gain derived from a real estate sale where the principal residence tax exemption does not apply, and report money made on real estate “flipping” as 100 per cent taxable income.

But what, exactly, constitutes a real estate flip? That was the subject of a recent Tax Court of Canada decision, released this week.

 

The case involved a transit operator for the Toronto Transit Commission who, along with his brother, bought and moved into a two-story, three-bedroom townhouse in Vaughan, Ontario, in 1999. His brother contributed toward the initial down payment, lived with him and together they equally shared all household expenses, including the mortgage payments. In 2003, the taxpayer’s brother met the woman who would become his future wife, whom he married in April 2007. She moved into the townhouse and they had a child together in February 2008.

Sometime prior to this, the taxpayer and his brother began discussing going their separate ways. The taxpayer testified that he wanted to sell the townhouse and move to a place that was smaller and closer to work. Indeed, in 2006 he found a smaller place, a two-bedroom condo, which was in the pre-construction phase. The tentative occupancy date of the condo was April 2008, but that date was pushed back several times, ultimately to 2010.

Prior to taking possession of the condo, however, circumstances changed. In December 2008, the brothers’ father passed away while in Jamaica, where he lived together with their mother for about six months each year. Following their father’s death, their mother did not feel safe living alone in Jamaica and in March 2009 she moved into her sons’ townhouse. The taxpayer testified that his brother and his family shared the master bedroom, while the taxpayer and their mother each occupied one of the remaining two bedrooms. This living situation didn’t last long and the taxpayer refinanced the mortgage on the townhouse in order to buy out his brother’s share of the property, enabling him and his family to move out.

In August 2010, the taxpayer took possession of the condo and immediately arranged to list it for sale, realizing that it would be too small for both he and his mother. No one lived in the condo in the interim. He sold it in October 2010 resulting in a net gain of $13,412, which the taxpayer reported as a capital gain, taxable at 50 per cent, on his 2010 tax return. The CRA reassessed him, finding that the $13,412 should have been reported as fully taxable income and slapped him with gross negligence penalties.

The common question of whether a gain from the sale of real estate is on account of income or on account of capital always comes down to the underlying facts. The courts will look to the surrounding circumstances and, perhaps most importantly, the taxpayer’s intention.

The judge reviewed the facts in light of the four factors previously enumerated by the Supreme Court of Canada by which these types of cases are decided: the taxpayer’s intention, whether the taxpayer was engaged in any way in the real estate industry, the nature and use of the property sold and the extent to which the property was financed.

The taxpayer testified that he purchased the condo with the full intention of living in it after his brother moved out of their shared townhouse; however, when his father died and his mother wished to return to Canada to live full-time, the taxpayer “changed his plans to move so that his mother could live with him at (the townhouse), which was a larger space.” He testified that since he could not afford to own both homes, he listed and sold the condo shortly after assuming title. As he testified, if not for his father’s death and his mother’s return to Canada, he would have carried out his plan to sell the townhouse and live in the condo as his primary residence.

The judge concluded that the taxpayer’s intention with respect to the condo was indeed to live in it as his primary residence. He had no secondary intention of putting the condo up for resale at the time of purchase.

The judge therefore concluded that the sale of the condo was properly reported as a capital gain and ordered the CRA to reassess on that basis and cancel the gross negligence penalties.

One final note is warranted: while justice was ultimately done and the taxpayer prevailed, it actually took him nine years and three separate visits to court to get relief. The CRA originally reassessed his 2010 capital gain as income back in 2014. The taxpayer filed a Notice of Objection to oppose the reassessment, which was reconfirmed by the CRA in January 2016. The taxpayer then had 90 days to appeal the CRA’s reassessment to the Tax Court. For a variety of reasons, he missed that deadline and ended up in Tax Court seeking an extension of the deadline to file an appeal. The Tax Court denied his request for an extension. He then went to the Federal Court of Appeal which, in June 2017, reversed the lower court’s decision and allowed an extension of time to appeal to Tax Court, which heard the case in March 2019 and released its decision this week.

 

Source: Financial Post – Jamie Golombek July 5, 2019

 

Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director, Tax & Estate Planning with CIBC Financial Planning & Advice Group in Toronto.

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7-Step Process for Finding Great Contractors for Home Renovations

To be blunt, most contractors are terrible. As a landlord, I deal with it all the time. 

They don’t answer their phone. They don’t show up when they said they would. They don’t do what they said they are going to do.

But there ARE gems to be found in the rubble. The problem is most people have no idea how to identify that great contractor from all the bad ones out there—until long AFTER they’ve already hired one.

I want to share with you my seven-step process to identify a great contractor before hiring them. Whether you’re remodeling your own home, a rental property, flipping houses, or need a contractor for something else, here’s how to land a great one.

How to Find a Great Contractor

  1. Build your contractor list

What I mean by this is you need to get the names and phone numbers of a lot of different contractors in your area. I mean, if we’re searching for a needle in a haystack, we have to first get a haystack.

You can find potential contractors in a number of ways, but my three favorite are: 

  1. Referrals, meaning ask people you know who they have used
  2. Referrals, so yeah, asking people you know who they have used
  3. You guessed it! Referrals.

Human nature is to generally do what you’ve always done. It doesn’t guarantee success, but when you know a contractor has done great work in the past, it’s likely they’ll do it again.

So get in the habit of asking your friends and family often—even when you’re not looking for a contractor. “Who did this work for you?” Then, keep track of those referrals.

There are a few other ways to find contractors, as well. I like to talk to other contractors and ask who they like working with.

Rockstars tend to party with other rockstars, and good tradesmen tend to work with other good tradesmen.

For example, I have a great finish carpenter, so I can ask him, “Hey, do you know any great plumbers?”

You can also build your list by snapping a photo every time you see a contractor sign on the side of a work truck, or by searching Yelp, or by asking the employees in the pro department of your local home store who they like.

Related: The Ultimate Guide to Finding an Incredible Contractor

  1. Pre-screening on the phone and in person

Just as with tenants, our opinion of the contractor begins the moment we start talking with them, whether over email, phone, or in person.

Do they carry themselves professionally? Do they respond well to questions?

Ask them some general questions, such as:

  • How long have you been in this line of work?
  • What skill would you say you are the best at?
  • What job tasks do you hate doing?
  • In what cities do you typically work?
  • How many employees work for you? (Or “work in your company” if you are not talking to the boss.)
  • How busy are you?
  • Do you pull permits, or would I need to?
  • If I were to hire you, when could you start knocking out tasks?

Then, set up a time to meet and show them the project, if you have one. Set an appointment and be sure to show up a few minutes early, just to see exactly what time they arrive.

Are they on time? Late? Early? Do they look professional? How do they act?

If everything feels OK after this first meeting, move on to the next step.

man sitting at desk working on a computer

  1. Google them

The first thing we do now when looking for information on a certain contractor is to simply search Google for their name and their company name. This can often unearth any big red flags about the person.

You’ll also want to add your city name and some other keywords to the search, such as “scam” or “rip off” or “court.”

For example, if we wanted to find out more about First Rate Construction Company in Metropolis, we would search things like:

  • First Rate Construction Metropolis
  • First Rate Construction scam
  • First Rate Construction sue
  • First Rate Construction court
  • First Rate Construction evil

These terms can help you discover major complaints about a contractor. But keep in mind, not all complaints are valid. Some people are just crazy.

What this will do, however, is give you direction about what steps to take next.

  1. Ask for references

Next, ask the contractor for references from previous people for whom they have worked. Photos are nice, but names and addresses are better.

Then, do what 90 percent of the population will never do and actually call those references!

You may want to ask the reference several questions, like:

  1. What work did they do?
  2. How fast did they do it?
  3. Did they keep a clean job site?
  4. You are related to [contractor’s name], right? (If they are, they will think you were already privy to that information and will have no problem answering honestly!)
  5. Any problems working with them?
  6. Would you hire them again?
  7. Can I take a look at the finished product? (This could be in person or via pictures.)

These questions will help you understand more about the abilities and history of the contractor. Then, if possible, actually check out the work the contractor did and make sure it looks good.

Another tip recently given to us by J Scott was to ask the contractor to tell you about a recent big job they’ve done. Contractors love to brag about their big jobs, so he or she will likely regale you with the story of how much work they needed to do and how great it looked at the end.

Find out the address, and then go to the city and verify that a permit was pulled for that project. If not, the contractor did all the work without a permit, which is a good indication they are not a contractor you want on your team.

  1. Verify

It’s okay to be trusting, but make sure the contractor is worthy of your trust first! To do this, first verify that they truly do have a license to do whatever work you intend for them to do.

If they are an electrician, make sure they have an electrical license. If they are a plumber, make sure they have a plumbing license. If they are a general contractor, make sure they have a general contractor’s license.

Next, make sure they do actually have the proper insurance and bond. As we mentioned earlier, you could ask them to bring proof, but you can also simply ask the name of their insurance agent and verify it with that agent. Either way, just make sure they have it.

Remember: this protects you.

  1. Hire them for one small task

Before hiring the contractor to do a large project, hire them to do just one small task, preferably under $500 in cost. This will give you a good idea of what kind of work ethic they have and the quality of work that they do.

If the work is done on time and on budget, and if it meets your quality standards, consider hiring them for more tasks.

Even if the contractor has passed through the first several steps of this screening process, 75 percent of them will still likely fail at this step, so don’t settle with just one contractor. Hire multiple contractors for multiple small jobs and see who works out the best.

Related: 14 Killer Questions to Ask Your Contractor

  1. Manage them correctly

Ninety percent of the time, when I have a disastrous situation with a contractor, the blame lies on no one but myself. If I had managed the job correctly, I wouldn’t be caught in the positions I’ve been in.

Here’s an example. I hired a contractor to paint a bedroom. He says $500. I say, “Great.”

He calls me, tells me he’s done, and I send him the $500.

Now, I go check out the property and what do I see? He didn’t paint the ceiling, despite the obvious need for it. And there are a couple paint splatters on the floor that are easy to clean—but now I have to do it.

I call the contractor and he says, “Well, you didn’t say I needed to do the ceiling,” and “No, the floor was perfectly clean when I left. Someone else must have made the drips on the floor.”

Now, you might be saying, “But that’s ridiculous! It’s clearly his fault.”

But it’s my responsibility to manage him correctly. Therefore, when you work with a contractor, always get a detailed scope of work that clearly lays out 100 percent of what is going to be worked on, what’s included, and what isn’t.

Then, never pay anything until you’ve inspected the work. On larger jobs, be sure to spread out payments over the course of the job, so they don’t get too much money up front. You always want them hungry for the next paycheck.

To help with this, I put together a really simple “Contractor Bid Form” over in the BiggerPockets FilePlace—100% free—so you can fill this out every time you work with a contractor. Just go to BiggerPockets.com/bigform.

The Bottom Line

Whether you’re a real estate investor like myself or not, you’re going to need to deal with contractors in the future. By following this seven-step process, you’ll save yourself time, stress, and a lot of money.

Source: BiggerPockets.com by

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Listen, 2008 Is Never Happening Again—Invest NOW for Best Results

The real estate crash in 2008 was unique in that we saw a very fragmented industry that was burdened by large-scale systemic risk. This is not what usually happens.

It’s important to realize this situation would not be easy to duplicate; it was sort of a perfect storm of bad circumstances. Since then, we have implemented things to protect us from a similar event. Things like Dodd-Frank, better lending fundamentals, and a lot of growth left to capitalize on all make the possibility of another crash similar to 2008’s very unlikely.

Real estate is usually market-specific, so this isn’t to say prices can’t drop in the near future in your market. But it does imply that those waiting around for the next nationwide crash are going to watch a lot of success pass them by in the meantime.

This is going to frustrate many people who see inflated prices and increased competition making it a harder time to buy. However, the truth is real estate is going to be a good investment for a long time going forward. Now might not be as lucrative of a time to get in as it was in 2012, but investing now is likely better than getting in five years from now. In 20 years, it won’t make any difference at all.

Waiting for the perfect moment costs a lot more in experience and opportunity than the potential downsides could produce. As the saying goes: “Time in the market is better than timing the market.”

red down arrow on black and white grid indicating stock loss

When Will the Next Crash Happen?

In 2016, I bought my first rental property. At the time, there were an abundance of threads on BiggerPockets that said, “Don’t buy now. We are about to see a crash.”

Luckily I ignored this noise and bought anyway. In the last three years, I’ve done very well—despite the supposedly imminent danger. Grant Cardone had a bunch of content around this time claiming he was preparing for a crash, as well, but he’s done quite a bit of business since then.

The BiggerPockets forums now reflect much of the same message as a few years ago. Don’t buy! There will be a crash soon!

Maybe those members who are spreading this sentiment are right; maybe they are wrong. Either way, I find that this message seems to have a single constant underlying motive: jealousy.

I really think much of this mindset is coming from people who are actively hoping the market will downturn so they can buy in. They are salty they missed the last big opportunity.

I’m not mad about that. In fact, I’m salty I missed the last downturn, as well! I would have much rather purchased in 2012 than 2016. But unless I create a time machine to go back to 2010 and buy assets, I’m sunk. Fussing about it is never a helpful strategy.

While another recession of some sort is inevitable, no one really knows what it will look like or when it will happen. It most likely will NOT be a repeat of last time though. So waiting for the bottom to drop out of real estate is a mistake, because you’ll be waiting forever while not learning or building experience along the way.

If you don’t have the confidence to buy in an upmarket, you don’t stand a chance to pull the trigger in the down market.

Plan Around Fundamentals—Not Luck

Over the last eight years, many BiggerPockets members (myself included) have bought low and then ridden the wave upward, making money on the sheer luck of being in a good industry at the right time. This is not a sustainable strategy for success in the long term, but it doesn’t mean that real estate only works when you stand to get outsized gains.

Do you only want to buy real estate because you think you might get lucky with an area that’s rising? Or do you want to buy a profitable asset at a discounted price that is going to make money even through market fluctuations?

Waiting for a theoretical crash is just admitting to the world that you can’t compete unless the market is unusually easy to make money in.

In real estate, you make money when you buy. This holds true no matter where we are in the market cycle.

So instead of waiting for your market to downturn, find great deals that are going to make you money no matter what. Have good exit strategies in place, and pass on deals that don’t make sense.

Businessman forecasting a crystal ball

There are two kinds of mania surrounding real estate right now:

  1. Those who are so excited about real estate that they are willing to spend anything to get into an asset and are therefore blind to risk.
  2. Those who are so sure a crash is coming that they are sitting on the sidelines.

Neither of these two parties is going to make as much money as they could. They are too busy making decisions based on emotional hyperbole, anecdotes, and luck instead of solid financial analysis.

Focus on the fundamentals, and you can make money in any market.

Accept That Real Estate Is a Long Play

Why does everyone seem to be playing a two-year game with a 30-year investment? Even if you’re doing fix and flips, there is a long road of education and understanding that goes into this business.

Certainly there are outlier success stories of people doing 20 deals in their first year. However, it’s disingenuous to assume that is universally possible.

In many cases, chasing unrealistic gains gets people into more trouble when ambition outruns reality. Real estate is a slow business filled with complex transactions and ill-liquid assets. Even most superstars go slow!

It’s a patience game that relies on compounding. Trying to force outsized gains at the command of one’s ego is dangerous.

The long game of real estate levels out lots of short-term instability. You need cash reserves to weather economic storms, and you need to buy based on good fundamentals.

You will absolutely experience drops in the future; you can’t avoid them completely. This is why it’s best to get in now (at the right price) and start making money—money that will help you get through a recession.

Even if there were a crash tomorrow, it would be a long time before you felt comfortable at the bottom. The last bottom was in 2009, but people didn’t start buying until 2012 or so.

That’s three years later! Do you really want to wait that long to get started—just because you can’t buy at the discount the last crash offered?

You missed the crash. So what?!

Stop waiting around, nostalgically hoping that opportunity will return. Instead, enter the marketplace. Grab the opportunities that are available right now!

Source: BloggerPockets.com – by

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What Size Storage Unit Do I Need? And Other Questions to Ask When Picking a Facility

If you need a storage unit, there are many questions you should ask before you pick one. For example: What size unit do you need? How much does a storage unit cost?

Choosing a storage unit may seem daunting at first, but if you’ve reached that point where you’ve run out of space in your home for all of your belongings, it’s time to dive in. Here are some questions to ask to ensure you find the right storage unit for you.

What size storage unit do I need?

Before you begin your search for the right unit, make a list of all the items you’ll be storing. This way you can save time by focusing only on storage facilities that meet your needs in terms of size.

Storage units generally range in size from 5-by-5 to 10-by-25 feet, and some may be even larger. Wondering which size is best for you? Picture these:

  • A 5-by-5 unit is the size of a small closet and could hold several small- to medium-size boxes, a dresser, or a single bed.
  • A 5-by-10 unit is comparable to a walk-in closet, which could hold larger furnishings such as a queen-size bed or couch.
  • A 10-by-10 unit could hold two bedrooms’ worth of furnishings.
  • A 10-by-20 unit is equal to a standard one-car garage, and could hold the contents of a multiple-bedroom house.

Prefer not to climb over mountains of tubs and boxes to track down something stashed at the far reaches of that space? Choose a unit that allows entry on either side.

“How many times do you put something in the back of a closet only to find that you need it? The same thing happens with a storage unit,” explains Willie Dvorak, owner of AAA Storage in Mellette, SD. “Ensuring you can access your goodies from both sides of the unit makes it that much easier to find what you need quickly and safely.”

How much does a storage unit cost?

Unless you’re filthy rich (and then you probably have a big house with ample storage), you’ll want to know how much this unit will set you back each month. CostHelper.com breaks down how much you can expect to pay on average:

  • A 5-by-5 unit costs about $40 to $50 a month.
  • A 10-by-20 unit costs about $95 to $155 a month.
  • A 20-by-20 unit costs about $225 a month.

Is this storage unit easily accessible?

What good is having a storage unit if it’s hard to access, both in terms of its location and its design? Dvorak outlines what to look for when selecting a facility.

“If you can’t get your vehicle close enough to the unit, you’ll be lugging your stuff feet—even yards—in both directions,” he says. “While it may not seem like a long walk as you look at the unit, imagine carrying all of your stuff back and forth all of that way. When you’re storing stuff, every step is a nuisance. And, when you are stressed, you’re more prone to accidents. Turning that rental truck around just adds to the stress. Be sure you can pull up the unit and get your vehicle turned around without any trouble.”

What are the storage facility’s hours?

Once you’ve unloaded your belongings, you still want to know that you can reach them in a hurry should you have the desire.

“It’s hard to predict when you’ll need that hiking gear you haven’t used for years, Grandma’s scrapbook, or that special award you want to show off,” Dvorak notes. “Don’t miss out because you think of it after they’ve locked things up for the night (or weekend). Make sure you can access your stuff 24 hours a day, 7 days a week.”

What’s the payment policy?

Fred Levine, founder of Little Hard Hats, recommends reading all of the fine print of the contract to determine how long the price is guaranteed.

“They routinely get you in, then shortly thereafter, once you’ve moved all your stuff in, they sometimes raise the rates,” he cautions.

“Understanding the payment policy can also help you make decisions about a storage facility,” says Caitlin Hoff of consumersafety.org. “What is the late fee or policy? Some facilities will auction your storage unit if rent is not paid after a certain amount of time. Does your facility allow for online payments? If it doesn’t, do you have to pay in person? Knowing the full extent of the policy can narrow down a list of facilities.”

What type of security is used?

Ask how the storage unit facility is secured. Is there a guard? Video surveillance? Alarms? Is the area well-lit? Also, don’t assume the facility is going to cover damages to your possessions inside the storage unit in case of an accident. Check your homeowners policy, and purchase a rider if necessary.

Is it climate-controlled?

Depending on the items you are looking to store, you might debate whether or not you want a climate-controlled storage unit. A climate-controlled unit is better for items such as appliances or antiques that might be damaged in extreme temperatures.

How are pests handled?

No one wants to find that a family of critters has turned your family heirlooms into their home.

“If you are looking at an outdoor storage unit, you want to ask about pest control,” says Hoff. “Ask if they have had issues with any insects or critters, and find out how they handle these situations.”

Eric Hoffer, president of Hoffer Pest Solutions, suggests doing your own detective work when you preview the facility.

“Overgrown bushes, unkempt landscaping brushing up against the side of the building, and overflowing trash cans are not only a sign that maintenance may not be a priority for a storage facility, but these can be things that attract pests like rodents and roaches close to the building,” he says. “All it takes is a small crack or gap in the wall to allow pests inside.”

If you’re going to the trouble of storing your items for later use, you want to know they’ll be in the best shape possible when you want them. Finding the right facility can make all the difference.

Source: Realtor.com –  | Oct 29, 2018. Liz Alterman is a writer who’s covered a variety of subjects, from personal finance issues for CNBC.com to career advice for The Muse.
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The Cost of Selling Your Home Without a Real Estate Agent

Everybody likes to save a little money. So when Rossana was ready to sell her condo a few years ago, she figured she could save some cash by selling it herself — without using a real estate agent. After all, her property was in a hot real estate market and she thought: “How hard could this be?”

Rossana, a busy mother of one, had become overwhelmed juggling her daily responsibilities in addition to managing her rental condo. She had grown tired of being a landlord and dealing with a revolving door of tenants — so when the family currently renting it was moving out, she decided that it was time to sell.

In hopes of saving some money, Rossana chose to sell her condo herself instead of working with a real estate agent. She thought: How hard could it be? She figured it would be easy to just hire a company that charges a flat fee to photograph the condo for her and advertising the property online. After all, she could handle the rest of the details herself. Right?

What she quickly discovered was that this approach didn’t work.

Missed Opportunities

“I found the service I used was not the best,” Rossana says. First, she says the service might have turned off potential buyers with unprofessional photos, “Honestly, I could have done a better job if I had done it myself.”

Second, when it came to marketing her property, Rossana says the marketing plan wasn’t aggressive enough to expose her condo listing to a large population of potential buyers. “My condo just didn’t get the same visibility if it would have had on MLS.”

Her condo was not widely promoted, and the service she used was not authorized to advertise on Realtor.ca (also known as MLS), which is many Canadians’ first stop when starting their home search.

Low Buyer Confidence

Rossana found buyers who had real estate agents wouldn’t come to view her property since she was selling it herself. “I think they lacked confidence that the sale would go through, or that it would be a complicated process because I didn’t have an agent.”

While she wasn’t getting a great deal of interest, Rossana still had to be on-site for open houses over the weekends. “I was living at the other end of the city at the time, so the commute was terrible. It was so much work, but I wasn’t getting much traction.”

Less-than Attractive Offers

When offers did get presented, they were far below the listing price. Plus, agents came in very confident with their clients’ offers, and Rossana didn’t feel she had the experience to handle these types of negotiations.

“I felt people were trying to take advantage of me, because I was trying to sell on my own. And I didn’t have the full picture of the market. I didn’t have the background to stand up to those low offers.”

Making the Decision to Hire an Agent

After more than five weeks of trying to sell the property on her own, Rossana decided to list her home with a professional real estate agent, after getting a referral from a friend.

“I immediately saw the difference in having a real estate professional in my corner,” Rossana recalls. “She offered staging, took really nice photos, and her level of professionalism was so impressive. And when there was an offer coming in, she was able to negotiate on my behalf.”

In the end, Rossana sold her condo — about two weeks after hiring an agent — and for a price she was very happy with.

“I really underestimated the amount of time an effort needed to sell a home myself. For anyone looking to sell their home, I highly recommend working with a real estate professional.”

Reasons to Use a Real Estate Professional

Rossana’s experience is a valuable tale for those thinking of taking a DIY approach to selling a home. While there is a cost to selling with a real state agent in the form of commission, the cost to sell without one may be greater.

Here are five benefits to working with a real estate agent:

  1. Market Knowledge. Rossana’s real estate agent knew what comparable condos in her neighbourhood had sold for, and the inventory on the market at the time. This enabled her to have an informed perspective on a reasonable listing price and acceptable end selling price.
  2. Visibility and Presentation. From professional staging to high quality photos, Rossana’s real estate agent presented her home in a highly attractive manner that was appealing to potential buyers. And because she could list the property on Realtor.ca, those looking for properties online could browse the photos and features of Rossana’s condo 24/7.
  3. Administration and Coordination. One of the things that Rossana underestimated was the time commitment required to sell a home privately. Her real estate agent took care of all the showings and open houses, allowing Rossana to be completely hands off until it came time to review an offer.
  4. Professional Real Estate Networks. As an established agent, Rossana’s real estate agent could connect with others working with buyers in the neighbourhood, and present the property to those in her network, further widening the net of potential purchasers.
  5. Negotiation Skills. Rossana’s real estate agent had significant experience negotiating deals and was in a great position to get Rossana the best possible price for her condo — Rossana didn’t have to do any of the negotiating herself.

Thinking about selling your home? Let Rossana’s story be a reminder of the benefits to working with a real estate professional.

Not sure how to find one or what to look for in a real estate professional? Discover Seven Things to Look for in a Real Estate Professional for some valuable tips.

Source: RoyalBank.com – By Diane Amato February 19, 2019
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