Filed under: Buyers, Investors, Owner's Title Insurance, The Closing Process | Tags: Hunt Rounsavall, Louisville Ky, Louisville Real Estate, Owner's Title Insurance, Rounsavall Title Group
“Why should I buy an owner’s title insurance policy?”
Click on the link above to read more about Owner’s Title Insurance.
Filed under: Investors | Tags: Landlord, Rental, Rental Advice, Rental Problems, Tenant
Home Improvements
The biggest mistake that I see when investors buy a property is that they think it needs an elaborate renovation. Before attempting any work you should see how much it is going to improve your income (are you going to be able to charge more rent from these improvements?) and how long it will take for you to get your money back on the improvement.
If you are in a certain area where the houses are all alike then it might not be worth adding what you think the tenants may want. More often you will find people are satisfied with the way the house is built and there is no need for renovation. Most are looking for affordable rent, a clean environment, and working plumbing.
I would suggest if you are thinking about renovationing you might wait till you find a good tenant to work with. You can tailor their needs around the renovations and not what you would want if you lived there. This will also encourage the tenant to stay in the property longer and have a better relationship with the landlord.
Review Your Outgoings
Are there repairs that you could do yourself without hiring a repairman? Most everyone can change batteries in a smoke detector or light bulbs.
At some point the property will be vacant while you are finding a new tenant. A quick advertisement in the local newspaper and a “For Rent” sign in the yard of the property will usually generate enough calls.
The most important expense at this point is tenant screening. To offset the cost you can charge a fee to perform a credit check. You can get references but from my experience you have to be very careful with these.
I had one renter who told me he worked at a factory and gave me his supervisor’s number. Everything checked out – he had a great paying job and been there for many years. After a few months and the rent wasn’t paid I found out the reference he gave me was his brother. His brother did work at the factory and was a supervisor but the tenant never worked there (or anywhere else).
What is the cash flow of the property?
A good rule to follow is that you want the rent to cover your expensives on the property. If you’re digging deeper into your pocket to support your habit of being a landlord then you might have a problem.
Other Suggestions
- Always make sure the new tenant puts the utilities in their name and you call to have them taken out of yours.
- Set a time to inspect the property with the tenant. I would recommend about twice a year. Many tenants don’t call their landlord about leaking roofs etc until you have a major problem with major expense- they think if you are putting money into the property then you are going to raise the rent.
- Every year have the furnace/space heaters cleaned and inspected
REMEMBER
Your landlord responsibilities should include providing a safe, smoothly functioning home for your tenants. That means, for example, making sure plumbing, wiring and appliances function, outdoor areas and stairways are safe.
If you must evict do your homework. Make sure you are following the law and consult a lawyer if necessary.
You have to be able to smile, walk up to the individual, be polite and friendly. You must be able to treat them like a customer. Many tenants don’t understand that this is income to you and think that you are being unfair when wanting your rent on time.
I would suggest once the eviction process starts that you have no contact with the tenant. You should try to make the eviction go as smooth as possible to prevent damage to the property.
Rental property is a business, and if it’s not a business you like, then it might be time to consider selling.
Filed under: Investors | Tags: ceramic, DIY, drywall, KREIA, paint, plaster, repair
Filed under: Buyers, Investors, Sellers | Tags: diaster, FEMA, Flood, Homes, insurance
National Flood Insurance Program
Top Ten Facts… YOU need to know about the National Flood Insurance Program (NFIP)
1. Everyone lives in a flood zone.
- You don’t need to live near water to be flooded.
- Floods are caused by storms, melting snow, hurricanes, and water backup due to inadequate or overloaded drainage systems, dam or levee failure, etc.
2. Flood damage is not covered by homeowners policies.
- You can protect your home, business, and belongings with flood insurance from the National Flood Insurance Program.
- You can insure your home with flood insurance for up to $250,000 for the building and $100,000 for its contents.
3. You can buy flood insurance no matter what your flood risk is.
- It doesn’t matter whether your flood risk is high or low. You can buy flood insurance as long as your community participates in the National Flood Insurance Program.
- And, it’s a good idea to buy even in low-risk areas: between 20 and 25 percent of all flood insurance claims come from low-risk areas.
4. The low-cost Preferred Risk Policy is ideal for homes and businesses in low- to moderate-risk areas.
- Homeowners can insure buildings and contents for as little as $112 per year.
- Business owners can insure building and contents for as little as $500 per year.
- Residential renters can insure contents for as little as $39 per year.
5. Flood insurance is affordable.
- The average flood insurance policy costs a little more than $400 a year for about $100,000 of coverage.
- In comparison, a $50,000 disaster home loan can cost you about $240 a month at 4 percent interest over 20 years.
6. Flood insurance is easy to get.
- You can buy NFIP flood insurance from private insurance companies and agents; call yours today!
- You may be able to purchase flood insurance with a credit card.
7. Contents coverage is separate, so renters can insure their belongings too.
- Up to $100,000 contents coverage is available for homeowners and renters.
- Whether you rent or own your home or business, make sure to ask your insurance agent about contents coverage. It is not automatically included with the building coverage (except under the Preferred Risk Policy).
8. Up to a total of $1 million of flood insurance coverage is available for non-residential buildings and contents.
- Up to $500,000 of coverage is available for non-residential buildings.
- Up to $500,000 of coverage is available for the contents of non-residential buildings.
9. There is usually a 30-day waiting period before the coverage goes into effect.
- Plan ahead so you’re not caught without flood insurance when a flood threatens your home or business.
10. Federal disaster assistance is not the answer.
- Federal disaster assistance is only available if the President declares a disaster.
- Flood insurance pays even if a disaster is not declared. It’s just good sense.
For more information about the NFIP and flood insurance visit:
Heavy rains in Calico Rock, Arkansas caused widespread flooding. Unfortunately, the powerful flood waters also raised this house from its foundation.
Filed under: Investors | Tags: Income Tax, Investors, Property Management, Simplify'em, T-Rex Global
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Filed under: Buyers, Investors, Sellers | Tags: cable, Kentucky, LG&E, Louisville, Oldham, SheilaBarrett, Shelby, Water
Who To Contact
Cable
Insight Communications: 502-876-5076
Gas & Electricity in Louisville
Both gas and electricity are supplied by LG&E, the Louisville Gas and Electric Company
502-589-1444
Telephone In Kentucky
- Bellsouth (Jefferson, Oldham, Shelby) 502-557-6500
- Altel Kentucky (Bullitt Co) 502-543-2231
To have water turned on in your new home, just call your respective water company. Most water companies operate on a five-day business week and request a 24-hour notice. Some companies bill monthly, others bill every other month. All require small deposits for new customers. The basic minimum rate covers water, drainage and sewer services. Rates may vary based on location and usage and reviewed annually for adequacy.
Louisville Water Company (Jefferson, Oldham, Shelby, Buillett)
502-583-6610
Water Numbers for Bullitt County
- Kentucky Turnpike- 502-955-9281
- Lebanon Junction- 502-833-4311
- Mt. Washington- 502-538-4216 or 955-6784
- Shepherdsville- 502-543-2923 or 955-7803
Water Numbers for Oldham County
- Henry County Water District #2 (Oldham, Shelby) 502-747-8942
- LaGrange Utilities Commission (Oldham) 502-222-9325
- Oldham County Water District 502-722-8944
Water Numbers for Shelby County
- North Shelby Water District 502-747-8942
- Shelbyville Municipal Water and Sewer 502-644-2840
- U.S. 60 East Water District 502-747-8942
- West Shelby Water 502-722-8944
Voter Registration
502-574-6100
Filed under: Buyers, Investors | Tags: Questions To Ask Home Inspectors, Semonin, Sheila Barrett
Before you make your final buying or selling decision, you 
should have the home inspected by a professional. An inspection can alert you to potential problems with a property and allow you to make an informed decision. Ask these questions to prospective home inspectors:
1. Will your inspection meet recognized standards? Ask whether the inspection and the inspection report will meet all state requirements and comply with a well-recognized standard of practice and code of ethics, such as the one adopted by the American Society of Home Inspectors or the National Association of Home Inspectors. Customers can view each group’s standards of practice and code of ethics online at www.ashi.org or www.nahi.org .
2. Do you belong to a professional home inspector association? There are many state and national associations for home inspectors, including the two groups mentioned in No. 1. Unfortunately, some groups confer questionable credentials or certifications in return for nothing more than a fee. Insist on members of reputable, nonprofit trade organizations; request to see a membership ID.
3. How experienced are you? Ask how long inspectors have been in the profession and how many inspections they’ve completed. They should provide customer referrals on request. New inspectors also may be highly qualified, but they should describe their training and let you know whether they plan to work with a more experienced partner.
4. How do you keep your expertise up to date? Inspectors commitment to continuing education is a good measure of their professionalism and service. Advanced knowledge is especially important in cases in which a home is older or includes unique elements requiring additional or updated training.
5. Do you focus on residential inspection? Make sure the inspector has training and experience in the unique discipline of home inspection, which is very different from inspecting commercial buildings or a construction site. If your customers are buying a unique property, such as a historic home, they may want to ask whether the inspector has experience with that type of property in particular.
6. Will you offer to do repairs or improvements? Some state laws and trade associations allow the inspector to provide repair work on problems uncovered during the inspection. However, other states and associations forbid it as a conflict of interest. Contact your local ASHI chapter to learn about the rules in your state.
7. How long will the inspection take? On average, an inspector working alone inspects a typical single-family house in two to three hours; anything significantly less may not be thorough. If your customers are purchasing an especially large property, they may want to ask whether additional inspectors will be brought in.
8. What’s the cost? Costs can vary dramatically, depending on your region, the size and age of the house, and the scope of services. The national average for single-family homes is about $320, but customers with large homes can expect to pay more. Customers should be wary of deals that seem too good to be true.
9. What type of inspection report do you provide? Ask to see samples to determine whether you will understand the inspector’s reporting style. Also, most inspectors provide their full report within 24 hours of the inspection.
10. Will I be able to attend the inspection? The answer should be yes. A home inspection is a valuable educational opportunity for the buyer. An inspector’s refusal to let the buyer attend should raise a red flag.
Source: Rob Paterkiewicz, executive director, American Society of Home Inspectors, Des Plaines, Ill., www.ashi.org.
Filed under: Buyers, Income Tax, Investors, Sellers | Tags: Louisville Ky, Monthly Newsletter, Newsletter, Real Estate Information, Sheila Barrett, Tax
What Are Taxes?
In 1913 the 16th Amendment (an addition) to the U.S. Constitution was approved. This created the modern U.S. income tax system. Each year residents of the United States are required to file an income tax form based on their income during the year. One type of income is called wages. Most taxpayers are employees and earn a money in exchange for their work. Taxes are taken out of their pay check. At the end of the year they are sent a form stating how much they earned for the year and how much taxes were with held. Calculations on a tax form is done to see if the taxes with held during the year was enough or too much. If it was too much then you get a refund of the taxes you over paid or if you didn’t pay enough then you would owe the extra.
There are many factors used to calculate your taxes including credits, dependents, filing status, and deductions. Depending on the above factors the government has set up what is called a standard deduction that is taken off of the income you earned during the year and what is left is your taxable income.
Itemized Deductions
Certain kinds of deductions are called itemized deductions. If you have enough of them to beat the standard deduction, it is usually a good idea to itemize. For most taxpayers, owning a home makes itemizing worthwhile. To deduct expenses of owning a home, you must file Form 1040 and itemize your deductions on Schedule A. There are three primary areas: real estate taxes, home mortgage interest, and mortgage insurance premiums. Generally, your real estate taxes, home mortgage interest, and mortgage insurance premiums are included in your house payment.
If you have investment property other items can be added to the above list. Advertising, utilities, repairs, maintenance, supplies, and professional fees. All of which can be used to make your deductions higher therefore lower your taxable income.
There are also credits which the government gives you a certain amount of money to take off your income before it is taxed. Energy credits are one of these. You can claim a credit for energy-saving home improvements made for the cost of skylights, outside doors, windows, pigmented roofs and high-efficiency furnaces, water heaters and central air conditioners installed this year in a primary home. This is usually not what you paid for the improvement but a standard deduction for what type of improvement. I look for other items to be added each tax year.
