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Archive for March, 2011

Is your bedroom making you feel claustrophobic but you don’t have the money for a home addition? Well, with a little paint, rearranging of furniture and a few tips, you can fool the eyes into thinking that the space is larger than it really is.

Furniture & Clutter
Remove unnecessary pieces of furniture and clutter. Furniture that serve many functions is a great way to save space and minimize clutter. Storage containers are a great substitute for small pieces of furniture. The containers can be purchased with or without wheels and kept hidden under the bed or in the closet. The idea is to keep the necessary large pieces of furniture in the room and remove the smaller ones. For example, one large dresser instead of two smaller dressers.

Not only will large pieces of furniture look more stylish, but they can actually add a feeling of openness to the room. Smaller pieces will just make the room feel more cramped. However, if your queen size bed is taking up too much space in the room, then maybe it is time to switch to a full size bed. If you are unwilling to give up on your queen size bed then it is a good idea to cut back on other pieces as well and turn your bed into the main focal point in the room. The more open floor space you have, the larger the room will appear. Remember to place furniture at an angle. When you place your furniture at an angle, it leads the eye along the longer distance, rather than the shorter wall.

Walls
Stick to pale colors when it comes to the walls. Light greens and blues are always best choice. Not only do these two colors have a calming effect, but light also reflects to pale colors, making the room feel more spacious. Dark colors, however, will make a room seem more closed in, which we definitely don’t want to happen. Painting the ceiling a shade lighter or completely white will create the illusion of a higher ceiling. Another good trick is painting the wall trims and moldings in a lighter color than the walls. This will make the wall appear further back.

Lighting
Lighting is a must when it comes to a small room. The perfect amount of light will open up the room and create an illusion of space. Natural light is the best and inexpensive lighting there is. Start by removing heavy drapes and replacing them with light and flowy window treatments. If too much natural light is a problem for sleep, use mini blinds to block out the light while you catch some Zs. In the morning you can simply roll up the mini blinds and let the natural light flow right it. Swag curtains are also a great choice when it comes to window treatments for small rooms. They are very stylish, affordable and look great with mini blinds.

Mirrors
Mirrors are not only stylish but they can also help reflect light and give the illusion of depth to a wall. Position mirrors in front of a light source, such as open windows and doors. Closet mirrored doors are a great choice.

Bedding
Stay away from dark colors and stick with a light-colored duvet cover, but make sure to keep it simple. When working with cool colors like greens and blues, choose a floral print for a more naturish feel. But do not over do it with the floral. A simple duvet cover set with one or two large floral prints on a light backdrop will do. Keep away from the scattered looked.

Just as real estate market deterioration has been known to lead the economy into a recession, it also has always been a spring board to recovery. Considering the thousands of products and services associated with residential and commercial construction, it is no surprise that our prosperity is so dependent on this one segment of the economy. Every adjustment in the real estate market creates a new economic dynamic and a new financial opportunity. Today’s low interest rates, a prevailing buyers market and a vigorous rental market combine to provide a window of opportunity for real estate investors in the rental property segment of the real estate market.

A preponderance of foreclosures, short sales and desperate sellers in general present an abundant supply of suitable rental properties in most marketplaces. The complexity for the investor is selecting the “right” property.

Location
It has been said by seasoned investors that the three key elements in buying a real estate investment are “location, location, location”. An excellent location could be defined as having close proximity to public transportation, shopping, employment centers, and other public services. The objective of the landlord is to easily rent the property and keep it rented. A great location attracts a much higher number of potential tenants and insures the potential of future appreciation in value.

Age
A house built in 1906 may have character and as a result command a little higher rent but everything deteriorates over time and the potential for severe maintenance issues is high. The exception is when it can be documented that plumbing, electrical and exterior materials have been recently updated. This is a factor that should be seriously considered and employment of a qualified home inspector should be a must and the purchase contract should be made contingent upon buyer acceptance of the inspectors report. This can be a stumbling block with foreclosures and short sales because the lending institutions representing the property will rarely accept or approve contracts with home inspection contingencies.

Size
Smaller properties make ideal rental properties because they are easier to rent and to maintain. For example; it is much easier to rent a property for $1000 To $1500 per month than one for $2500 To $3000. The cost to replace a roof on a 2000 square foot house is obviously less than one on a 4000 square foot house. One exception may be an upscale condominium that exterior maintenance is covered by the association. There are certainly exceptions to every aspect of property evaluation. Those with the best instincts make the best decisions.

Condition
Real estate that is placed on the market in shabby condition is likely to have a history of poor maintenance. “Handyman specials” frequently turn out to be not so special. If there are obvious repair items there may be deep seated problems that are not so obvious. There is a high probability that the seller could not afford to maintain the property for years in the past. In weighing the purchase price plus the cost to repair verses the acquisition cost there should always be a cost variation factor built into the equation. Again, a qualified home inspector is a must. A home that has obviously been well maintained may not be purchased at a below market price but it is much safer as an investment and less likely to cause the landlord aggravation.

Talk to the neighbors
Neighbors frequently provide a considerable amount of information about the community relative to making a decision to purchase. If drugs are being sold on the corner or the next door neighbor is a sex offender, the neighbors are likely to disclose this information and the investor may come to the conclusion that this is not the ideal investment property. The neighbors will usually be aware of any development plans by municipalities that could adversely affect the property values in the community. The municipality will be a more reliable source for this information. Although there are normally safeguards against such events, it is a good idea for the buyer to make sure that the purchase contract provides protection against easements or property line delineation issues.

The financial decision
The final step in the evaluation process is the financial equation. Will the rental property create a positive cash flow? Even if the rental value indicates that initially there will be a small negative cash flow the property may still be a outstanding investment opportunity. Rent increases may offset the negative cash flow in the relatively near future. Realtor and property managers can provide sufficient data on comparable rental properties to establish the subject property’s approximate rental value.

The mortgage is the key component to the final evaluation. The lender will require at least 20% down payment and the best execution is with 25% down payment. The interest rate on a 30 year fixed rate mortgage for an investment property will be at least 1% higher than that of an owner occupied home. The mortgage payment will include one month of the annual real estate tax and the premium for one month of the annual homeowner insurance. The real estate tax is public record and is usually included in the property listing. It is the only variable in the mortgage payment over the 30 year amortization.

Real estate is an appreciating asset regardless of market downturns. Inflation and a growing population see to that. The prospect of a tenant making the mortgage payment and reducing the mortgage balance while the property is appreciating is an overwhelming endorsement of the rental property investment. Managing rental properties can be exasperating at times but the eventual up side is a source of income from an asset that also has substantial equity through mortgage balance reduction and market appreciation.