Tuesday, October 30, 2012

Real Estate Investing In Fort Collins

Real estate investing, when done appropriately, can create long term wealth and financial security.  Too many folks jump into the real estate investing world, spurred on by a new book promising riches, or an info-mercial that touts low risk but in reality there are risks.  Trust me, it's not as easy as those salesmen make it seem, but it doesn't have to be risky...

In Fort Collins, there are several factors that make real estate investing an excellent vehicle towards long term wealth while with low risk.

1)  High, Sustainable Rents

According to the Northern Colorado Business Report, Fort Collins/Loveland has the highest rental rates in the state.  The average rental in Fort Collins goes for $996 per month, which is higher than rates in the Denver metro area.  Taking advantage of high rents will improve cash flow. 

2)  Built in Equity

Fort Collins has a reasonable amount of bank owned foreclosures, short sales and other distressed properties that have the opportunity to provide built in equity upon rehabilitation.  Finding the diamonds in the rough can prove difficult, but the hunt is well worth it.  If you're able to get a distressed property for 15% below market value, and put 5% in repairs, you've already got 10% of the homes value in built in equity.  Rent it out for several years and reap the rewards of your efforts.

3)  Safe, Diversified Economy

Fort Collins is home to one of the safest, most diverse and resilient economies in the nation.  According the the Fort Collins Chamber of Commerce, Fort Collins is strong in high tech, manufacturing, higher education, and government employment.  It's easy to see why we have such a diverse economy, our major employers include Anheuser Busch, Hewlett Packard, Colorado State University, Woodward, and many more.  The mix of both blue collar, white collar and green collar jobs keep the city safe from typical boom and bust cycles.

4)  Renewable Rental Base

Colorado State University is a major driver for the rental base in Fort Collins.  Having thousands of students pour out of the dorms and into rental housing each year keeps turnover consistent and renewable.  Enrollment is either consistent or growing at CSU and demand for rental homes is abundant.  On top of the student rental base, those renting in the senior age bracket have been growing too. 

5)  Low Vacancy Rate

At last report, Fort Collins rental vacancy rates have fallen to the lowest levels in a generation.  Only 3% of rentals are recorded as "vacant".  That means if you buy an investment property, and price rents appropriately, you have a 97% chance of filling your vacancy.  I like those odds.  Low vacancies are advantageous for real estate investors not only to fill your vacancy, but also to have a larger pool of qualified tenants.  With a tight rental market, you get to pick from the cream of the crop, meaning on-time rent payments, less damage to your unit, longer lease rates, and higher rents!  What could be better?

I'd like to help you get into the world of real estate investing.  Give me a call or email me and see what kind of opportunities are available for your particular situation.  Together, we can work to get you down the road towards financial security.


Tuesday, October 23, 2012

Home Projects that Require Permits

A lot of homeowners are in the dark as to what kind of projects actually require permits.  For the weekend warrior, do it yourself kind of homeowner, permits might be neglected all together.  Sure there are plenty of small little fixes and upgrades around that house that you can easily do, but are you sure those fixes are safe?  The entire reason for a permit is to record that your home was safely updated to the current codes.  On top of that, having recorded permits verifies with any future buyer that they are receiving a good, well built product.  There is always the chance in any property transfer that un-permitted work could muck up an entire deal.  It can also be an expensive fix to go back and get the work permitted. 

Permitting your work is the safe way to do things.  Permitting works differently from city to city as different cities have a unique process or building code to use.  Contractors should know what kind of work needs permitting, but just with any other trade, there are good contractors who know what they're doing, and there are some that might not be caught up on current procedures.  Before you start any work, make sure that you understand what projects will need to be permitted by checking with your municipal building department. 

The following are projects that will most likely need permits in your area:

1)  Electrical:  Electrical work is a very particular skill.  Un-permitted work is downright dangerous and can cause serious harm to your home and family.  Most electrical changes require permits and inspection, even if it's just moving an outlet.

2)  Plumbing:  Plumbing is more of a building safety issue than a life safety issue.  Bad plumbing can ruin your home, leave sewage backed up, or cause mold damage.  Typically, removing existing plumbing or installing new plumbing requires a permit.

3)  Structural:  Changing a major load bearing system requires permitting because it changes structural load path and load distribution.  If you're opening up a new room by installing a load bearing beam on columns, have your contractor build per residential building codes and get it permitted and inspected.  This also goes for cutting holes for new windows on exterior walls.  If it's a structural change, get it permitted.

4)  Additions:  If you're changing the configuration by extending out from the current footprint, you'll need a permit.  Along with the permit, you'll most likely need architect and engineered drawings for the addition.  Additions are expensive because of all the permitting required.  Make sure you use a skilled and knowlegable contractor who can help you navigate the bureaucratic systems to get permitted for such a big project.

5)  Exterior Changes:  Most landscaping, sheds or fences don't require a permit if they are within size limitations per city codes.  Sheds typically have a square footage or height threshold before they need to be permitted and the same goes for fences.  If you have plans to create a large outbuilding or a shop, it'll most likely need permits.

Although permits are time consuming, sometimes expensive and laborious, they are the only way to go to protect your well being and your investment in your home.


Thursday, October 18, 2012

Prepping Your Home for a Winter Sale

Where I come from, selling in the winter time is tough work.  Inventory levels shrink which can help your home stand out, but also, the amount of buyers searching for homes shrink.  You're likely to have fewer showings.  Not a lot of people want to be hauled around in parkas and snow pants to see a few homes in sub zero temperatures, let alone have to move in the snow.

The odds are stacked against you in the winter time unless you have a plan.  Make your home stand out.  Here are a few tricks to getting that listing sold over the winter time.

Exterior Photos Set the Stage

If you're thinking about listing your home in the winter but you're not quite ready, I suggest getting some photos taken immediately.  Soon, trees will be bare, grass will be brown, flowers will be dead and snow will cover all of your beautiful landscaped areas.  Winter is the worst time for photos.  There's something about the angle of the sun that makes the sky much more pale.  Greys and browns abound.  It's always a good idea to get good pictures of your house in spring, summer and fall.  I feel autumn and spring are the best times for exterior photos, there is just so much color.  You be the judge:

Winter Photo:

or the Autum Photos:

Granted, these aren't the same homes, but you get the point...

Keep it Warm and Cozy

The last thing you want to do after getting out of a cold car, walking through a cold December afternoon and opening a cold door handle is to walk into a cold and un-inviting home.  As a seller, winter is not the time to skimp on heating.  Don't sweat our your buyers, but make sure your home is warm and draft-free.  If you have a fireplace, light it up before a showing.  It's a nice touch that provides a cozy ambiance and let's the buyers know it is fully functioning.  Winter also means windows are constantly closed, allowing the house to get musty and stuffy.  Bad smells can kill a deal.  My advice on the cheap:  get a tea kettle and pour in a few pints of apple juice, throw a dash of cinamon, nutmeg and/or cloves and set to a light simmer.  The cold weather spices will conjure cozy memories of Thanksgiving and Christmas and will help your buyers really feel at home. 

Keep it Safe and Clean

I always tell my sellers:  make it easy for someone to see and fall in love with your home.  If that means putting a little extra effort into the sale, then so be it.  You wouldn't believe how much a shoveled walk way can impact a buyer. Not only do they appreciate the effort to keep them safe from slipping on ice, it is a further indication of the care you most likely put into your home and yard.  They may not be able to see the lawn through the snow, but if you neatly shovel the drive way and walk, they'll assume you handle the yard in the same careful manner (they should already know because you provided springtime pictures of your yard, didn't you?).  One other nice touch that benefits the buyer and the seller is providing some sort of shoe station.  You don't want folks bringing in dirty, slushy muck into your home, so provide them a station to remove their shoes.  If that isn't an option, provide disposable "booties" to slip over their shoes so they don't damage your carpets.  Better yet, a nice touch would be to provide an array of comfortable slippers or sandals, so your buyer's feet stay warm and cozy throughout the tour!

Although the odds are stacked against you, I've always got inventive ideas to put the odds in your favor when selling over winter time.  Give me a call today if you're interested in making a move.


Tuesday, October 9, 2012

Approaching Your Neighbor About Building a Fence

It's inevitable that at some point in your life, you are going to need a little privacy and you'll need to put up a fence.  Where do you begin?  Approaching your neighbor about building a fence can be a very tense situation if you aren't on good terms with your neighbor, or if you've never met with them before.  You're literally asking them to help pay for and build a physical mechanism so you don't have to see each other, it's an ironic paradox.  Having open communication and planning ahead can really help reduce the stress of approaching your neighbor.  Here are some great tips on how to get the fence building process started:

1)  Never Assume Anything
Your best bet is to go into the whole fence building operation understanding you'll end up paying the entire bill.  Don't assume your neighbor will pay for anything or even allow you to build a fence.  Don't assume that you're even allowed to build a fence. 

2)  Do Your Homework First
Check with your city building, planning or zoning commission before you think about building a fence.  They may have city guidelines that you need to follow in order to stay within the law.  On top of that your HOA may have restrictions and covenants regarding fences.  They'll probably spell out what type of fence, materials and heights are required in your particular neighborhood.  Doing your homework will show your neighbor that you're concerned with doing things correctly, and that'll go a long way.

3)  Open the Lines of Communication
Don't just walk over your neighbor and ask them to pay for half the fence.  Be friendly and understanding of their needs.  Hopefully your neighbor is like minded and understands that the current fence needs replacing, or at least that it would be beneficial to have a more sturdy fence with better privacy.  Go into the whole situation with a goal of collaboration - collaboration in design, effort and hopefully payment.  By involving the other party in the whole process, you make them feel respected and appreciated.

4)  Use a Professional
Building a fence might seem like a piece of cake, but if you've never done it before, chances are you shouldn't experiment while your neighbor's money is on the line.  Use a professional and you'll get a professional fence.  This is really where you'll get what you pay for.  Check the better business bureau and ask for references. 

5)  Design to Accommodate All Parties
There will be several disagreements on design of the fence.  There are two sides to every argument which parallels nicely with there being two sides to the fence: an attractive side and an ugly side.  You'll need to gently approach the subject with your neighbor.  Maybe you pay a little more for the attractive side, or maybe it doesn't matter to the other party.  If you're splitting the cost, make sure both sides are happy with the design and materials before you begin.  Maybe your neighbors are assuming you're using wood, where you'd like to use vinyl or steel.  Make sure it's been agreed upon before you get building.  There's even a design called the "Good Neighbor Fence" which makes each side the attractive side, a wonderful compromise.

6)  Maintain Your Side
After the construction, keep up your end of the bargain by maintaining your fence.  Stain, protect or refinish your side when necessary to safeguard its looks as well as extend its life.  The worst possible thing that could happen is not maintaining a fence that took you so much effort to build and pay for.  Worse yet, you'll need to approach your neighbor in a few years to build a new one if you don't maintain it!


Tuesday, October 2, 2012

How to Be a Good Neighbor

Neighbors aren't who they used to be.  Back in the day, neighbors knew each other, they helped each other, and they looked out for each other.  Nowadays, being a neighbor has boiled down to living within proximity to another human.  The human element is gone.  Neighbors rarely talk to each other, living in their own little bubble, and usually when they do interact, it's more likely that they'll be complaining about too much noise, those rowdy kids, or that annoying dog.  I'm here to bring back what a neighborhood should be and tell you how to be a great neighbor.

1.  Introduce Yourself
This may be a tough one at first but being familiar with your neighbors will go a long way.  Get to know them and their situation.  Let them know that they can count on you and they will most likely return the favor.  If you're just moving into a neighborhood, go meet a few neighbors early on...The longer you wait to introduce yourself, the more awkward and uncomfortable it'll be once you do finally meet them.  If you've got new neighbors moving in, do introduce yourself.  Bringing baked goods can't hurt.

2.  Be Respectful
One part of getting to know your neighbors is understanding their unique situation.  Do they have young children?  Do they work late hours and sleep during the day?  Put yourself in their shoes and imagine which ways you could be disrespecting them.  You don't always have to agree, but respect goes a long way.

3.  Mind Your Yard
You have that one neighbor in mind right?  That one who lets the grass go to seed, the one who hasn't trimmed the bushes in years, the one who never shovels snow or rakes leaves...Your goal is to not be THAT neighbor.  If enough people manage their own yard, it creates a strong sense of pride in the neighborhood which will not only boost property values, but it'll also attract those who value that pride.  Keep in mind your yard doesn't have to be perfect, just pay attention to it.

4. Control Your Pets
If you have pets, you know their demeanor.  If you put your dog out because you're tired of him barking inside, chances are your neighbors already hate you and your pets.  Take the time to either train your animals or control them in a way that doesn't upset your neighbors.  Who knows, maybe instead of that expensive pet boarding, you could have a neighbor watch your animals while you're on vacation if you've made it known you've got well behaved pets. 

5.  Communicate Often

It's probably a good idea to have your neighbors phone number or email address.  Whether it's an emergency or maybe just a quick question being able to get a hold of your neighbor is important.  Don't abuse the privilege!  If your neighbor is working on their home, drop by and lend a hand.  Invite them over for back yard parties and get togethers.  Do what it takes to communicate on a regular basis.

Having a good neighbor-to-neighbor relationship can pay off in ways you never thought possible.  More than anything, the security of knowing your surroundings can give you confidence that you've found a great place for your family.  Don't just live in your bubble, get out and be a great neighbor today!
