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Archive of posts published in the category: apartment
Jun
24

Investing In Real Estate For Beginners: Apartment Complexes

Here is some advice for investing in real estate for beginners who are thinking about investing in apartment complexes. Many commercial property advisors with an opinion say that apartment complexes with over 150 units are the properties to buy, it’s not necessarily true. Multifamily units are indeed a solid investment. However, what you really want to invest in is where you can earn the most rent per unit. Often that is in multifamily complexes with less than 100 units.

When you are making a purchase bid for a large complex, you are often bidding against financial institutions with deep pockets. This creates two distinct disadvantages for you as a beginning investor.

First, most beginner commercial investors are forced to join a large consortium of other investors to get in on a multi-million dollar deal. This dilutes your ownership interest and the weight your opinion counts when issues arise such as when to sell.

Second, when you and your investors are bidding with the last dollars that you have to invest, the large institution can easily out bid you by several thousand more than you can raise. Going up against large institutional investors can be overwhelming.

There are many other reasons to invest in complexes with less than 125 units:

A. There is less upkeep and maintenance. You may be able to avoid the added expense of an on-site manager and full-time maintenance crew.

B. There are more medium-size complexes available at any given moment. That means less competition from other investors and more opportunity to find one with exceptional cash flow.

C. Cash on cash returns for medium complexes are frequently better than for large complexes as you are able to offer a wide variety of amenities and services.

D. You will not be dealing with a financial institution as the seller with a cumbersome sale policy. The seller will more likely be an individual or small partnership that can provide flexible sales terms if they choose.

E. They typically will require less equity to acquire. This means you can control the property as an individual or with a couple of partners. You thus own a higher percentage of the property and thus a bigger amount of the profits.

F. Often the less knowledgeable seller has avoided raising rents because they have become friendly with the tenants or they are afraid the vacancy rate will increase. By studying the local market rents and vacancy rates, you could find that you can immediately increase cash flow through rent increases.

There are some very good arguments to owning small apartment complexes in the 4 to 12 unit range. This can be a good start if you personally manage them and perform most of the maintenance. However, this size complex seldom generates enough income to leave a profit when a property management company is hired.

Investing for beginners can begin with small complexes and once the income is stabilized buy another. After a couple of years, you will have 3 or 4 small …

Jun
21

New Jersey Penalties and Consequences For Failure to Comply With Apartment Registration Requirements

In today’s article, we will discuss the importance of two separate documents required for landlords of residential real estate.

Certificates of Occupancy

The first document is the Certificate of Occupancy. The vast majority of municipalities in the State of New Jersey require that the landlord obtain a new Certificate of Occupancy each time a new tenant moves in. Inspections that accompany the application for a certificate of occupancy vary by municipality. All towns will check the smoke detectors, and if there is gas heating, there will also be a check of the carbon monoxide detector. Some towns will also conduct much more thorough examinations in an attempt to increase the quality of housing throughout the town. It should be noted that it is no longer permissible for a municipality to require a new certificate of occupancy inspection when a family expands by natural means (e.g.; the birth of a new child).

While most landlords are vaguely familiar with the fines which the municipality may impose upon them for failing to obtain a certificate of occupancy, few are familiar with the far more severe consequences which can result from such failure. Where certificates of occupancy are required, a home rented without a certificate of occupancy constitutes an illegal contract. Hence, in the matter of Khoudary v. Salem Board of Social Services, 260 N.J.S. 79 (App. Div. 1992), the Court determined that a landlord who rents without a certificate of occupancy is without authority to file a suit for rents.

In essence, what the Khoudary Court said was that it would not help the landlord enforce an illegal contract. In the event that the tenant vacates the premises owing rents, either for prior months or months that may become due under the unexpired lease, the landlord may not file an action to collect the rents, and furthermore, may not apply any of the tenant’s security deposit toward these rents. The landlord can still bring an action or withhold security for tort damages, such as destruction of the apartment. It remains uncertain whether a Court should allow a tenant to file an action for return of all rents previously paid under the illegal contract; however, most Courts will rule that the tenant should pay for the quantum meruit benefit of the use of the apartment.

For nearly a decade, Courts interpreted the ruling in Khoudary to mean that failure to obtain a Certificate of Occupancy was a bar to eviction. However, this issue has been since clarified. In the matter of McQueen v. Brown and Cook, 342 NJS 120 (App. Div. 2001), the Court ruled that while failure to obtain a certificate of occupancy rendered the contract illegal, the landlord still maintained the right to evict the tenant. Essentially, the Court’s decision holds that a tenant should not be able to benefit from the illegal contract, and furthermore, it is clear that leaving the tenant in the illegal rental would be contrary to public policy.

Landlord Registration Statement

While failure to obtain a …

Jun
18

Renting in Tucson With Bad Credit

Tucson, Arizona’s second largest city, the home to University of Arizona, has a diverse population and culture. You have Native Americans, Mexicans, Spanish, and of course your good old westerners among the 541,811 Tucson citizens. You have attractions such as Arizona-Sonora Desert Museum and the Fred Lawrence Whipple Observatory. You could enjoy a ballet at the Tucson Music Hall or if you are in the mood for music, head to Tucson Convention Center or the Rialto Theater for a concert. There is much to do in Tucson and you would have a great time living here if you rent a Tucson, Arizona apartment.

When you search for a Tucson, Arizona apartment for rent it is taken for granted that you need a good credit record. Landlords and companies usually do a credit check before they let their apartments out and you would be demurred, if you don’t pass. So what do you do if you have a few bad marks in your credit record? Will you not get a Tucson apartment for rent at all? That is not so. There are means by which you can rent an apartment in the city even if you have bad credit.

If you know a person in Tucson who has good credit, and would agree to act as your guarantor, then you will have no problem finding a Tucson apartment for rent. This is what students usually do. Most real estate companies who are in the business would pass your application on the guarantee of a trustworthy Tucson citizen.

If you do not know anybody in the city, then your next option is to share your Tucson apartment with someone who has good credit. Since rental companies would pass your application if even one of you has a good credit record, you have a very good chance of finding your apartment. You could find advertisements for roommates in local newspapers such as Tucson Citizen, Tucson Post, or Tucson Weekly. You may also find advertisements online.

If you cannot find anyone to share with or you do not want to share your apartment, then, your third option is to try to find those apartments in Tucson that require no credit check. You will find their listings in Tucson newspapers and online too. Mostly, apartments that are let by individuals do not require credit check. As long as you have a decent income, have proof of income, and a few good referrals, you will be all right. You might try for condos let out by individual owners as well.

You could also try asking the rental agents to not do a credit check. There are many agents who allow it. You will have to pay a higher deposit for your Tucson apartment in return for their skipping the credit check. The owners, after all, would want to be sure that they get their rent. However, as long as you have good references and a decent income, and are willing to pay extra deposit, you should …

Jun
9

Places in Sacramento to Rent an Apartment With a Broken Lease

Sacramento is the capital of California, and the city boasts a rich history and culture, being home to a diverse population. In a way, the city is one of the most racially diverse and because of its political bearing, continues to attract businesses and people throughout the year. This has made it the operating headquarters to many large companies and organizations. The city also affords a very hospitable climate and as such is a great place to live. Sacramento has many apartment homes that cater to almost any housing need. But renting an apartment in Sacramento can be problematic if you have a previous broken lease. This is because many apartment do rental background checks where they check for the applicant previous rental record. If one has a blemish on their record, they may be denied approval. An option is to look for places in Sacramento where there are second chance apartments willing to rent to people with a broken lease. Let us examine some of these:

Here are some neighborhoods in Sacramento where one can be able to find an apartment that approves even with a prior broken agreement with another apartment:

  • Tahoe Park
  • Curtis Park
  • Land Park
  • Oak Park
  • Ben Ali
  • Robia
  • Boulevard Park

Apartments that are willing to work with problem applicants in Sacramento are called second chance apartments. These are rental units and real estate management companies that are willing to consider tenants who have had issues in the past. It is however, good to note that even though this is the case, certain requirements will still need to be met:

  • One must demonstrate that they have a job
  • The applicant must earn enough to satisfy the rent requirements
  • A criminal background check may be conducted

The challenge

Even though these second chance apartments do exist, they are difficult to find. This is because they do not readily advertise that they are willing to consider applicants with tainted rental pasts and because of that, one can become very frustrated when it comes to searching for them.

One place to search is off course the Internet. The realm of second chance apartments in Sacramento is not very wide and there are very few websites that give information as to the exact location of these types of apartments. Furthermore, many applicants are weary of renting apartments in crime-ridden parts of town therefore they exercise caution when searching.

Do you have a broken lease and are looking for an apartment in Sacramento that will consider you?

May
28

How to Rent Apartments in Charlotte Even With Bad Credit

Though most of the apartments in Charlotte will require you to have a good credit history but with the help of the right sources you can easily get a good Charlotte apartment even if you have a bad credit record.

The beautiful city of Charlotte is not only the biggest city in the state of North Carolina but also the seat for the chamber of commerce as well. Over the years this particular city has proven itself to be amongst the most ideal places to live in America. the city is already is home to around 700,000 people yet continuously attracting not only tourists but also other people planning to settle in here. This is so because of the city’s economic growth, employment opportunities, and cultural heritage and last but not the least the city includes some of the safest neighborhoods to live in with a family. But buying apartments in Charlotte can be expensive so the best possible means to live in this city is go for the Charlotte apartments for rent.

There are plenty of good apartments in Charlotte that not only gives you job proximity but also are easy to get on rent with all the amenities to make your living a comfortable one. You can easily get Charlotte apartments for rent but it would be easier if you don’t have a bad credit record or record of any broken lease. The landlords of the Charlotte apartments mainly run this type of background checks before choosing the right tenant only to keep a safe neighborhood and also to follow the housing laws for tenancy as well. So if you have any flaws in your credit record or rental history you may be denied by the apartments leasing managers. You can be approved for tenancy only if you go for the no credit check Charlotte apartments for rent.

But you need not to worry even if you have a bad credit history as you will surely get plenty of good Charlotte North Carolina apartments for rent where you will get a chance to explain your situation to the leasing managers or the landlord even after running a background check over you as it is a standard procedure before leasing apartments in Charlotte city. But it can tricky as well and apartments like these or apartments with no credit check can be difficult to find too. But there are certainly a few places where you can look for if you are looking for a good apartment. They are:

• Cotswold

• The Aboretum,

• Parkdale

• Sedgefield

Usually apartments with no credit checks are a bit difficult to find only for one reason and that is they are not advertised properly in order to avoid drawing the attention of the wrong kind of people. So the best way to find suitable apartments in Charlotte is to seek help of your trusted sources such as family, friends or co-workers. You can also go for the good apartment finders or real …

May
27

Pay Less Rent by Paying More Security in Mumbai Real Estate

In Mumbai most of the residential property owners follow a simple rule. The rent is a package and the package is divided into rent plus security. For every Rs one lakh of security that one pays, the rent decreases by Rs 1,000 per month.

Take the case of Amit Tandon, a bachelor working with KPMG in Mumbai, who shares his three bedroom apartment with his two friends. Their monthly rent package was Rs 30,000 but after paying a whopping security of Rs five lakh, they have managed to reduce the monthly rent by Rs 5,000 to Rs 25,000. Says Amit, “This is a simple rule that is followed in most places in Mumbai. And the security amount has to be paid before shifting.” If it is a furnished flat, a landlord takes deposits that cover the assets of his flat.

But when does the tenant get the refund. “Ideally before one leaves, one should get the refund. Normally there is a month’s notice during which time the landlord has to arrange the money,” says Amit.

If you are bank a employee in Mumbai, then the bank provides support for security deposit and then it becomes a bank lease. The tenants pay the bank and the landlord is paid by the bank. Nearly all banks in Mumbai property markets help their employees with security deposits, and this is basically part of their perks.

However, banks intervene only in case it is a bank lease. But banks generally do not intervene unless there is an issue still the responsibility is with the tenants to recover this money.

Security system is different in Mumbai and southern cities. In the property markets of southern cities of Bangalore and Chennai, ten months rent as deposit is the general rule. But in Mumbai Property market there is no concept of how many months of security deposit. The amount paid per month as well as security deposit depends on location, and varies significantly in different parts of Mumbai, based floor, sea facing or non sea facing and finally it depends upon how you negotiate the deal.

May
22

Real Estate Submarkets and Their Characteristics

The Jamaica real estate submarket

The general market for goods and service is made up of many submarkets. When left free to operate without private or governmental interference, each submarket and the general market as a whole should theoretically regulate itself by the laws of supply and demand.

One of the submarkets of the general market for goods and service is the Jamaica real estate market. While the real estate market differs in a number of distinctive ways from other markets, it acts much like all markets with respect to changes in supply and demand, but with a slower response time. It has the appearance of being a single, simple entity when in fact the real estate market is itself composed of many complex sub markets. This would include Jamaica homes for rent as well. This would be known as a parent category.

Real estate is a commodity just as wheat, gold and sugar. By combining the other factors of production with land we can produce wheat, gold and sugar or buildings.

Major sub markets of Jamaica Real Estate

Most authorities agree that the five major submarkets of Jamaican real estate are:

1. Residential homes for rent in Jamaica;

2. Commercial;

3. Industrial;

4. Agricultural;

5. Governmental and special – purpose properties

Each of these five categories is further divided into minor submarkets. For example, “residential” as a major submarket can itself be divided into minor submarkets as follows:

1. Urban;

2. Suburban; and

3. Rural

Each of the minor submarkets can be divided further into single-family and multifamily, which could then each be classified as owner-occupied and rental. The point is what appears to be one big, but simple real estate market is in reality, a complex structure of many individual submarkets, each of which contributes to the overall market.

The characteristics of the real estate market

If the real estate market were allowed to operate without any interference or restraint whatsoever, each person could use his or her property in any way that would produce the greatest return. This could result in one person’s use of Jamaican property causing a loss in value to another person’s property. Obviously, we cannot permit land to be used for whatever purpose the owner thinks best for his or her private gain.

For example, if you lived in a very fashionable up-market residential subdivision and your neighbor bought two undeveloped lots adjoining your property for use as a pig farm or for a paper mill with its offensive odors, the social costs to you and the rest of the subdivision would far outweigh the private gain to your neighbor. Therefore, the real estate market cannot be permitted to operate free of all controls and restraints.

Listed below are five primary characteristics affecting ownership and sale that set real estate apart from other markets.

1. The market is local in nature; the product is immoveable.

2. It is slow to respond to change in supply and demand.

3. There is relative permanence of …

May
16

Apartments in Cleveland Ohio That Can Consider a Broken Lease

The artistic Cleveland, Ohio downtown area is rich in history, adventure and culture. This picturesque city located in the proximity of the Cuyahoga River, continues to attract droves of people who either simply come to visit, work or settle. There are also plenty of attractive riverside apartments for rent around the riverside section and also within the Cleveland environs and neighborhoods. But these apartments do conduct background checks not to mention checks on rental history and credit. This spells automatic denial for any customer who has a previous broken lease with other apartments. So are there any apartments in the Cleveland area that will consider a broken lease?

Neighborhoods In Cleveland With Second-Chance Apartments

Apartment complexes in the Cleveland area do routine checks. Many use a service called SafeRent which is a national database that houses tenants’ rental history information and any derogatory information that has been reported by previous apartments. A previous broken agreement, meaning the tenant walked out of a lease, is deemed very serious and can warrant immediate approval. Here are some neighborhoods that have apartments which will be willing to consider a broken agreement.

  • Downtown Cleveland
  • Buckeye-Shaker-Square
  • Central Cleveland
  • Collinwood
  • Corlett
  • Forest Hills
  • Union-Miles Park area
  • Woodland Hills

With second chance apartments that are willing to rent to individuals with an impaired rental background, the challenge becomes finding the exact apartments that are willing to take the risk. When it comes to the list of items considered non-negotiable, bankruptcy is the most serious followed by a broken lease.

To find places in Cleveland that are willing to take a chance with a tarnished rental record, an applicant must first of all check the Internet. The Web offers excellent opportunities to look for such complexes without having to leave one’s house. The challenge off course becomes that most of these types of apartments do not readily advertise because they do not want to attract negative publicity and also they want their rates to remain high. Bad publicity can drive rental rates down.

It is good to note here that even if you manage to locate these types of apartments, there are a few qualifiers that will be required. For instance, these apartments will be stringent on employment and income. One has to have been employed for at lease six months and be making almost 4 times the amount of the rent not to mention that the apartments will also conduct a criminal check.

May
8

The Advantages and Disadvantages of Single Family Houses

There are many different types of real estate property. These include condos, apartments and single family houses. Single family houses are those that are occupied by only one family and have only one dwelling unit. This is quite different from apartments and condos which have multiple dwellings and are occupied by many families. Like other types of real estate property, these houses also have some advantages and disadvantages. These advantages and disadvantages are discussed below.

Advantages

Firstly, single family homes have more appreciation in value and are more resistant to down markets than multifamily dwellings. Thus, your investment will be protected and yield greater returns.

Secondly, such houses provide control over your space. You can renovate, remodel or revamp your home the way you want. There are no restrictions on changing the look of your home. Thus, you can make your home match your personality. However, you still have to follow city and locality rules.

Thirdly, there is more privacy in such houses. You don’t share walls with anyone and so, can enjoy the peace and quiet. You also don’t have to put up with any nonsense of other families living in the community.

Fourthly, there is no association to deal with. You don’t have to give any maintenance fee for your home or follow the strict rules and regulations of the association.

Disadvantages

Firstly, the cost of single family homes is high. They are more expensive than multifamily homes. Many people cannot afford them single family homes and so, opt for multifamily houses.

Secondly, maintenance is the responsibility of the homeowner. This can be quite a headache as everything from landscaping to plumbing has to be done by the homeowner himself.

Thirdly, amenities like swimming pool and gym will cost a lot in single family homes and are affordable only for those having high income.

Fourthly, the cost of maintenance is high in these homes since everything has to be done by the homeowner. In multifamily homes, the cost is shared and so maintenance is not that high.

Finally, it is better to have an apartment or condo in the city near facilities like hospitals and transport rather than a home in the suburbs where everything is far away. This is especially true if you work in the city and have to commute to your workplace every day.

In the end, the suitability of a single family home depends on you and your needs. So keep these advantages and disadvantages as well as your own preferences in mind when deciding whether or not to buy such a house.

May
3

The Buying and Selling Costs of Real Estate Transactions in Kenya

As would be expected, there are several transactions involved in buying and selling property, which attract fees and taxes. In Kenya, you incur charges from the moment you begin searching for feasible investment ventures.

While some costs are set, such as registration and requisite search fees, many costs associated with buying and selling real estate in Kenya are highly variable and based on:

  • The type of real estate
  • Location of the property
  • Commissions and fees charged and earned by the various professionals (which are also often based on type and location of the property)
  • The type of transactions
  • Documents you want or need

The estimated sum for round trip transactions can range from 4.5% to 6.8% of the selling/buying price of the real estate.

Real-estate Agent Fees

  • Searching fees: rates vary depending on the type, size and cost of property with an urban apartment in upmarket neighborhood costing as much as Ksh5,000
  • Viewing fees: varies among real estate agents but usually ranges between Ksh500- 1000 for residential houses and over Kshs5,000 for commercial properties
  • Listing Fees: varies depending on size and location of property with landlords paying from 2% the value of the property
  • Agent’s commission (buyer & seller): 1.25% of the sale price

Property Requisite Search Fees

  • Preliminary requisite search fee: Ksh500
  • Costs of obtaining requisite completion documents (seller): Kshs500

Registration Costs

  • Registration fees: Ksh500
  • Banker’s cheque fee: Kshs600
  • Land rent clearance certificate: Kshs 7,500

Stamp Duties

Stamp duties are taxes tied to documents and real-estate sale/purchase transactions. It’s usually based on the sale price of the property.

  • Duly signed sales agreement: Ksh200 for original copy and Kshs20 for each copy
  • Property transfer (properties within municipalities): 4% flat rate
  • Property transfer (outside municipalities): 2% flat rate
  • Mortgage: 0.1% of the amount of mortgage
  • Property leased for less than 3 years: 1% flat rate
  • Property leased over a duration of 3yrs: 2% flat rate stamp duty

Taxes

  • Income tax (non-residents): 30% of gross rental income
  • Income tax (foreign companies): 37.50% flat rate
  • Annual property tax: varies across locations and property value but is usually 1% of the property value
  • Land tax: varies by location of the land and is most costly in major towns such as Nairobi with rates as high as 8%

Legal and Mortgage Fees

  • Legal charges related with taking mortgage
    • Depends on amount of mortgage you take (higher mortgages mean higher fees) but mostly the rates are between 0.5-1.5% of the value of property
  • Property insurance: varies with duration of loan repayment and lender
  • Mortgage life policy: charged at 0.3% and 0.6% of the mortgage loan per year
  • Mortgage negotiation fees: although it varies, most lenders ask for 1% of the mortgage amount
  • Mortgage indemnity insurance: often ranges between 5 – 10% of the value of property
  • Legal fees related with lawyer overseeing sale process: 1.5%

Other Important Costs

  • Survey fees: Ksh 5, 000 consultation fee.
    • Survey fees are determined by the survey work done
  • Valuation charges: usually Kshs5,000 consultation fee
    • However, the actual valuation fee depends