These Home Improvements Could Hurt Your Home’s Value When You Sell

Every seller wants to snag the highest possible price for their home when they sell, which is why certain measures should be taken to prep a home and craft a solid listing for buyers to see. And one of the recommended things that sellers should consider is making improvements that will help garner more attention from buyers.

Certainly, a home that’s in great condition and has been modernized and upgraded with high-quality finishes and conveniences will be perceived as more valuable and attractive to buyers. It’s why sellers spend time and money fixing up their homes just before they hit the market.

But while there are plenty of improvements that can help sellers fetch higher sale prices, other improvements don’t bring in us a great ROI.

If you’re considering improving your home before selling, great. But make sure to pick and choose wisely. The following are some improvements that might not bring you the returns you would have hoped.

Over-the-Top Kitchen Renovations

The kitchen is easily the most important room in a home and serves as the central hub. It’s not just where you prepare and enjoy your meals, but it’s also a place of gathering and entertaining, whether on a quiet evening at home with the family or when guests come to visit. Homeowners often place a lot of emphasis on this part of the house, and for good reason.

Outdated, tired-looking kitchens don’t really do well for listings. They tend to be an eyesore and do little to add value to a home. But the opposite is also true: when a kitchen is modernized with high-quality materials and finishes, it can add tremendous value to a home.

But be careful how far you go when sprucing up your kitchen. While certain upgrades are fantastic – such as new granite counters, refaced cabinetry, and new stainless steel appliances – going overboard with in-depth renovations and gut-jobs likely won’t let you recoup the money spent on such an endeavor.

The trick is to get the biggest bang for your buck. You want your upgrades to make a big difference in the look of your kitchen, but not at the expense of spending too much. Be careful how far you go with your kitchen renovation.

Pay attention to what other homes in the area have and try to stay somewhere along those lines. “Over-improving” can negatively affect the value of your home relative to how much you spend on upgrades.

Major Bathroom Gut-Jobs

Like the kitchen, it’s easy to do a little too much with your bathroom renovation. The thing is, your bathroom is a big selling point of your home, despite its small size and seemingly insignificant contribution to the home. Bathrooms that are elegantly finished and offer modern conveniences can add value to a home.

If your bathroom could use a facelift before you sell, go for it. But, just as with your kitchen improvement, be wary of the types of improvements that you should focus on versus those that are just too much. The average buyer isn’t likely going to be willing to dish out more money to pay for a luxury renovation.

When it comes to improving your bathroom before selling, consider smaller, less expensive tasks that still pack a punch. Things like refacing the vanity, adding a new countertop, retiling the floors or walls, adding a new light fixture, or replacing the faucet can all go a long way at ramping up your bathroom and impressing buyers.

Sacrificing a Bedroom to Create a Larger One

It’s nice to have a spacious master bedroom with its own private ensuite bathroom. But many homes don’t have the square footage to accommodate such a luxury. That is, unless you convert an adjacent bedroom to be used to enlarge the bedroom and add a bathroom.

But as nice as this sounds, not only will this be a big, expensive job, it will also cost you a bedroom. When it comes to property values, the number of bedrooms plays a significant role. A 2-bedroom home will likely be valued higher than a 2-bedroom home on the same block, for instance.

By sacrificing a bedroom, you could be inadvertently lowering the value of your home.

Home Theaters

Having a space that is solely dedicated to screening movies and comes with all the bells and whistles that you’d see at a movie theater can be great. But unless you build a home theater for you and your family to enjoy for years to come, investing so much money in such a home improvement job makes little sense if you’re planning to sell some time soon.

Again, the majority of buyers aren’t going to want to pay more for your home just to have this added luxury. Whatever amount you end up spending on this type of space, don’t expect to get it all back.

Garage Conversions

If the square footage of your home is a little on the short side, you may have looked at different parts of your home to add more living space. And one of these potential spaces is the garage.

Maybe you want to include a home office, fitness room, or “man cave,” but no other place in the house can accommodate. In this case, a garage may be a potential spot to create the space you’re looking for.

But while this might suit you while you live in the home, it might not necessarily please buyers who would otherwise have preferred the garage to remain a place for them to park their car or store their tools and equipment.

Many buyers might not even consider buying a house that doesn’t have a usable garage, so you could really be hurting your listing with a garage conversion.

The Bottom Line

Taking on a home improvement project with the intention of adding perceived value to your home and attracting buyers is always a noble act. But how you spend your improvement dollars matters a great deal. Do your homework and carefully consider where you should be spending your time and money improving your home, and steer clear of improvement projects that will end up costing you more than you recoup.

Should You Refinance Your Home?

If you own a home and have some equity built up in it, you may have the opportunity to refinance your current mortgage. And there may be some good reasons why may want to consider refinancing, depending on your situation.

What does it mean to refinance your mortgage?

Refinancing involves replacing your current mortgage on your home with a new mortgage, usually with different terms than the original one, including a different interest rate.

The funds that you get from refinancing will allow you to pay off your original mortgage and free up money to be used for other purposes since the interest rate is lower.

Sound confusing?  Let’s illustrate.

Let’s say you have a mortgage for $300,000 with your current lender at a rate of 6%. If you’re able to get a mortgage for the same amount at a lower rate of 4%, you can use the original $300,000 to pay off the first mortgage at 6%.

That initial mortgage will then be considered to have been paid in full, and your obligations now lie with paying off your new mortgage at 4%.

Refinancing can be used to pay off your original mortgage as well as any other debts you may have, as long as you have enough equity in your home. In this scenario, refinancing can be seen as a type of debt consolidation.

In another situation, let’s say you have a mortgage of $300,000 at a 6% interest rate as well as $50,000 in various debts. If you can get a new mortgage for $350,000 at a rate of 4%, you can use that money to pay off your original mortgage and use the leftover funds to pay off your $50,000 debt.

So, should you refinance your mortgage? Here are some situations where that might make sense.

Secure a Lower Rate

The interest rate that you’re charged on your mortgage makes a huge difference in how expensive your overall mortgage will be by the time you pay it off in full. Even one percent can mean the difference between thousands of dollars over the life of the loan.

For example, a rate of 6% on a $300,000 would translate into $275,826 in total interest payments for a 25-year amortization period. In contrast, a rate of 5% on the same loan amount and time frame would amount to a total of $223,446 in interest paid. That’s a savings of $52,380.

One of the best reasons to choose a refinance is to take advantage of a lower interest rate. Lowering your rate will not only help you save some cash, but it can also help you build equity in your home faster. If you have the opportunity to refinance at a lower rate, it might be worth it to do.

Pay Down Your Mortgage Faster

If you can land a lower rate on your home loan, you can shorten the amount of time it takes to repay the loan amount in full. Even though your monthly payments might not change, the interest portion will decrease and your principal portion will increase. You can effectively slash the loan term by a few years, allowing you to achieve financial freedom faster.

Pay Off Debts

As illustrated earlier, refinancing might give you the opportunity to pay off some of your debts. This can be highly advantageous if you are struggling to pay down some high-interest debt, such as credit card debt.

By refinancing and freeing up some funds at a lower interest rate, you can pay off that high-interest debt and end up with a more affordable loan. Even though you still owe the same amount, you’ll have to pay a lower rate on the debt amount, making your payments cheaper.

Rates Are on the Rise and You Have an Adjustable-Rate Mortgage

If mortgage interest rates expected to increase and you have an adjustable-rate mortgage (ARM) on your home, you’ll be stuck with a higher rate when the adjustment period comes.

If that’s the case, refinancing may give you the chance to convert to a fixed-rate mortgage and lock in at a lower rate. This is especially true if the rate for fixed-rate mortgages is lower than what you’d end up paying when your ARM adjusts.

Factors to Consider Before Refinancing

Although refinancing might make sense in many situations, it’s important to take a few things into consideration first before deciding if this makes sense for you.

Do the math to make sure you’re actually saving money

There are costs associated with refinancing, so you’ll want to make sure you’re actually saving some money at the end of the day. Add up the costs of refinancing – which typically include loan origination fees, appraisal fees, and application fees – and determine whether or not it makes financial sense to refinance before you take this route.

Take the new term into consideration

Once you refinance, you’re basically starting your mortgage term all over. That means if you take out a 25-year term, you’ll be on the hook to pay your new mortgage for 25 years. As such, it might make more sense to refinance while you’re still earlier in your mortgage term.

Consider your credit score

Your credit score will play a role not only in your ability to get approved for a refinance, but it will also impact the interest rate you can get. If your score could use a little improvement, you might want to take measures to increase it before you apply for a refinance.

The Bottom Line

There’s a lot to consider before choosing a mortgage refinance. This loan product offers plenty of perks, as long as everything lines up. Take all factors into consideration to make sure this is the right step to pursue.

Short-Term or Long-Term Amortization Periods: Which One is Best For a Mortgage?

There are a number of factors to consider when choosing a particular mortgage product. While the interest rate and fees associated with a home loan are certainly important factors to consider, so is the amortization period.

Basically, the amortization period refers to the length of time that you have to fully repay your home loan. There are different amortization period lengths to choose from, depending on what you’re most comfortable with and what your lender is able to offer you.

But generally speaking, you can choose between either a long-term or short-term amortization period. Both have their perks and drawbacks, which you’ll need to sift through to determine which avenue is best for you.

Pros and Cons of Short-Term Amortization Periods

If you choose a short-term amortization – such as 5 or 10 years – you’ll have a shorter amount of time to pay off your mortgage. Let’s go over some of the benefits and drawbacks of this time frame.

Pros:

Pay off your mortgage sooner – Since the life of the loan is much shorter in comparison to long-term amortization periods, your mortgage can be paid off a lot sooner. Once that loan term expiry date comes and goes (assuming you’ve been diligent with your installment payments), your mortgage will be fully paid off, allowing you to achieve financial freedom sooner rather than later.

Save money in interest – Since you’ll be on the hook for paying your mortgage for a shorter period of time, you’ll spend less time paying into the interest option of your home loan. If you spend more time paying your mortgage, you’ll also be spending more on interest to the lender.

But the opposite is also true: the less time to spend paying the mortgage, the less interest will be paid to the lender, which can save you a bundle at the end of the day.

Interest rates are usually slightly lower – Many lenders reward borrowers for choosing a shorter amortization period with a slightly lower interest rate compared to longer-term time frames. As such, you may be able to save quite a bit of money in interest over the life of your loan.

Cons:

Monthly mortgage payments are much higher – If you have less time to pay off your loan amount, your monthly mortgage payments will be higher. As such, shorter-amortizations often translate into mortgage payments that are not affordable for many borrowers.

Pros and Cons of Long-Term Amortization Periods

Choosing a mortgage with a longer amortization- like 20 or 25 years – also comes with its own set of advantages and disadvantages, which we’ll take a look at.

Pros:

Make smaller monthly mortgage payments – Perhaps the biggest advantage of a long-term amortization period is the fact that the monthly mortgage payments are cheaper. Because you have a lot more time to pay off the same loan amount, each installment payment will be less compared to repaying your loan within a shorter time frame.

As such, long-term amortization periods can make mortgages a lot more affordable for many borrowers who may not otherwise have the budget to accommodate larger monthly payments. This is the main reason why long-term amortization periods tend to be a lot more popular and common among homebuyers, especially first-timers.

Cons:

Takes longer to pay off – The farther out the end date of the loan term, the longer it will take to pay off the mortgage. As such, you’ll be stuck with your mortgage for a much longer amount of time than you would if you chose a shorter-term mortgage. And the longer it takes you to pay off your mortgage in full, the longer you’ll have to be committed to these payments.

More interest is paid over the life of the loan – With every year added to a mortgage term comes more interest paid over the life of the loan. The more time your lender gives you to pay off your mortgage, the more they’ll earn in interest payments from you. This can mean tens of thousands of dollars more spent in interest over the life of the loan compared to a shorter-term amortization period.

To illustrate, let’s compare a $200,000 mortgage with a 4.5% interest rate at a 15-year term versus a 25-year term. Over a 15-year term, the total interest paid would be $65,694, whereas the amount would be $115,612 for a 25-year term. That’s quite a difference in interest paid for the same loan amount, though the monthly payments would obviously be higher for the shorter-term mortgage to compensate.

The Bottom Line

When it comes to short- versus long-term amortization periods, one isn’t necessarily better than the other. It all comes down to what’s more appropriate and convenient for you.

If you’re able to afford larger monthly payments and are working towards financial freedom sooner rather than later, then a short-term amortization might be best. But if you need something that will fit better within your tight budget, perhaps it’s best to go with something more long-term. Discuss your options with your lender to help you make your final decision.

8 Best Paint Colors For Your Front Door

Curb appeal speaks volumes. It not only creates a welcoming vibe to your home, but it also plays a key role in its value, too. Given this, it’s important to keep up with your home’s curb appeal and spruce it up if need be.

And while plenty of things come into play that influences your home’s curb appeal, your front door is an important component. A tired, drab, worn-out front door that’s seen better days can really pull down the look and feel of your home’s exterior. But the opposite is also true: a front door that’s in great shape can make your home seem more inviting and can even help increase the perceived value of your property.

If your front door could use a little extra pep, all it might take is a fresh coat of paint. With a small investment and a little elbow grease, you can almost instantly take your front door from drab to fab. The question is, what’s the best paint color for your front door?

Here are a few suggestions.

1. Fire Engine Red

While not a standard color for a front door, red is still a somewhat popular choice among homeowners who are looking to add a pop of color to their home’s exterior. Red doors work well paired with just about any exterior materials, including stucco, siding, and brick. And with contrasting trim, the color can really make your front entrance stand out in a good way.

2. Orange-Red

Just as vibrant as simple red, tones with a mix of orange are still fiery and playful and go quite well with warm tones on surrounding surfaces.

3. Burgundy

If you’re a little sheepish about going bright with red, then consider a toned-down version of the same hue, like burgundy. It’s a great option for homeowners who love the idea of color but don’t necessarily want to be overly bold. Burgundy is reminiscent of brick red with brown undertones and still offers plenty of pizzazz compared to brighter hues.

4. Lime Green

A non-conventional choice for a front door is lime green, though it’s not just a hue that needs to be reserved for your fruit bowl or flower beds. Instead, lime green has a savvy way of instantly cheering up any surface, and what better spot to do the cheering than with the front door! In fact, any neutral-toned home would do quite well with the addition of a bright and non-traditional color like lime green.

5. Pine Green

You can’t go wrong with green, no matter where you are on the color spectrum. And another shade of green that works quite well on front doors is a deeper pine green. This cool hue pairs really nicely with white, light gray, and navy blue accents.

6. Teal

A vibrant color no matter where you put it, teal works quite well on a front door. If you’re tired of the average browns and taupes on these surfaces, consider trying something completely different with teal.

7. Black

Black has a way of making any home look grand and rich. And painting trim and shutters in the same ebony hue can make your home’s exterior look even more stately.

8. White

Not exactly a color, stark white is a neutral that goes with everything. And while not the most exciting shade, sometimes white works best, especially if all other surfaces are busy in color. On the other hand, even an all-white exterior may pair well with a white front door, particularly when accented by contrasting dark tones.

The Bottom Line

The inside of your home could be amazingly decked out, but there’s little reason not to give your home’s exterior just as much attention. And if you’re planning to sell some time in the near future, then sprucing up your curb appeal should be on the agenda. And one of the best ways to enhance the exterior of your home is to give your front door a face lift. Consider any one of the above colors to instantly brighten your home’s exterior.

6 Ways to Boost Security in Your Condo, Even Without a Concierge

All homeowners want to take measures to make sure their homes are secure and that all occupants within their homes are kept safe at all times. When it comes to condos, there is usually an added level of security in the form of a locked main entrance, security cameras, or 24-hour concierge. In secure buildings, visitors typically have to be buzzed in by a guard or an owner before they’re allowed in.

But as much as homeowners associations are responsible for making sure that their buildings are secure at all times, unit owners can take measures into their own hands as well to ramp up their own personal security.

Here are suggestions to take the level of security of your condo to the next level, whether or not your particular building is armed with 24-hour surveillance.

1. Consider Installing an Alarm For Your Unit

The building itself will come with its own security measures, but you might want to consider having your own security alarm installed in your unit. While you may have to get permission from your HOA to install an alarm, it can give you more peace of mind knowing that there’s another hurdle that thieves must go through in order to cause any amount of harm.

You might be even willing to take things a step further and have an alarm installed in your locker as well, especially if you’ve got valuables stashed away in there.

2. Never Lets Strangers in Behind You When You Enter the Building

Owners of the building are equipped either with a fob or a code that allows them to enter through main entrances of the building. Anyone else who doesn’t have either one of these things will need to be let in by someone who knows them. If you happen to be near the entrance and notice someone you’re not familiar asking to be buzzed in or trying to slip in behind you, resist the urge to be polite for a moment.

You don’t know who the person is, so you could be inadvertently allowing someone with bad intentions into the building. The person that they’re coming to see – if their visit is legitimate – should be the one to let them in. Even if the person is wearing a uniform, don’t allow them to enter unless they’re armed with appropriate identification.

3. Always Keep Your Balcony Doors Locked

Locking the door to your unit is a no-brainer, but are you guilty of leaving your balcony door unlocked from time to time? People with bad intentions will go to great lengths to break into units, including trying to go through balcony entrances.

Don’t underestimate what some people will do to gain entrance to other people’s homes, including climbing walls and making their way through any nook and cranny they can access, and balcony doors are one of them.

4. Block Windows and Install Bars if You’re on the First Floor

There are advantages to living on the first floor of a building; namely, not having to take an elevator every time you want to go in and out. But having a first-floor unit also comes with certain hazards that other unit owners on higher levels might not have to worry about, including being within easier access to criminals.

If you live on the main level, consider blocking out your windows. Thieves like to have a look inside where they plan to break into, and if they can’t see what’s inside, they may be less inclined to break in. You can do this either with blinds or even with frosted stick-ons.

Further, you might also want to install a bar across your balcony sliding doors to make it nearly impossible for bandits to pry the door open.

5. Get Familiar With the Residents of the Building

Knowing who lives in the building and what their regular routines are can help you get better acquainted with normal ongoings versus activities that seem out of the norm.

By paying attention and getting to know who lives in the building and what their routines are, you’ll be in a better position to spot suspicious activity. So get out there and don’t be afraid to mingle a little.

6. Make Sure the Door Closes Behind You After You Enter

When you enter your building, make sure to wait and verify that the door closes behind you so no one can slip in without anyone noticing.

The Bottom Line

Condo living is usually very secure. There are usually multiple layers of security that you can feel safe behind. But if you really want to ensure the ultimate in safety, consider adopting any one of the above tips. There’s absolutely nothing wrong with going the extra mile to ensure your safety and that of your family.

SAN RAMON CONDO UNDER $450K!

215 Reflections Dr, Unit 21, San Ramon, CA 94583

$435,000 | 1 Bed | 1 Bath | 624 SqFt

Great Location in San Ramon! Located in The Desirable Reflections Community This One Bedroom, One Bath Home Boasts An Open Floor Plan and Vaulted Ceilings. Situated On The Second Floor, As You Walk in You Will Notice An Updated Kitchen, Attractive Stone Flooring, New Patterned Berber Carpet, Update Dual Pane Windows, Newer Hvac System, Indoor Laundry, A Fireplace in The Living Room and A Balcony That Includes A Storage Closet. Close To The Marketplace Shopping Center, San Ramon’s New City Center, The Popular Iron Horse Trail, City Hall, Central Park, Target Greatland, Chevron Corporate, Restaurants, Shops and More! Enjoy The Community Pool, Exercise Facility and Soothing Fountains Within The Gated Complex!

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HOT NEW PRICE IN DANVILLE!

128 Lasata Ct, Danville, CA 94526

$1,299,500 | 4 beds | 3 Baths | 2,506 SqFt

Wonderful single-story home that is crisp, clean and classy!! Spacious, open floor plan – light and airy! Neutral paint color and carpeting plus handsome engineered distressed hardwood floors. Architecturally designed windows and ceilings. Lots of natural light, augmented by extensive recessed lighting. Attractive window treatments, including shutters and shades. The large kitchen, remodeled in 2018, has many quality and appealing features, creating an epicurean delight! The large master suite has a dual walk-in closet and a lavish bath, including a large jetted tub. Lovely grounds, plus a large back yard with a spacious patio and a variety of fruit trees, greenery and color. Close to schools, parks, shops, services, entertainment, dining, downtown and commute access.

WHAT I LOVE ABOUT THE HOME

New Kitchen with Granite tops. relatively new bath rooms and almost new heating units and air conditioner units. (2 each). 3-car garage. Low miniatous back yard. Large master bed room with walk in closet. Very good school district near by.

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How Do Appraisers Determine the Value of a Home?

Sellers are obviously interested in knowing the value of their homes so they can figure out roughly how much they can potentially sell for. But buyers also want to know the value of homes they’re interested in and may put an offer on, as it will help them determine an appropriate and competitive offer.

Even homeowners who have no intention of selling may want to know how much their home is worth if they plan to refinance their mortgage.

In any case, having the home appraised by a professional is usually the best way to get the most accurate assessment of how much a property is worth according to current market conditions.

While homeowners can always hire an appraiser to assess their property’s value, appraisers usually work for lenders when a buyer applies for a mortgage.

Before final approval can take place, lenders typically send out an appraiser to find out whether the agreed-upon purchase price is an accurate reflection of the current market. This will help lenders determine an appropriate loan amount to approve a buyer for.

The question is, what exactly goes into an appraisal? How do appraisals come up with an accurate value of a particular piece of property?

The Standard Uniform Residential Appraisal Report

In order to take out as much subjectivity in the appraisal of a property, appraisers use what’s known as a Uniform Residential Appraisal Report (URAR), which is a standard report used to determine the overall value of a home. Appraisers must go through all the sections of the report to come up with a final value.

This form ensures that all appraisal reporting and analysis is standard across the board, regardless of the person doing the appraising.

Here are some of the major factors that appraisers look at when coming up with the value of a home.

Location

Location always plays a role in property values. The same home and lot in one location can be worth a lot more than the exact same property in another. As such, the exact zip code and neighborhood will be looked at.

Further, the exact location of the lot in the neighborhood will also be factored in. For example, a pie-shaped lot on a cul de sac will be worth more than a lot abutting the main road, even if they are within the same block.

Lot Size

The size of the property that the home sits on will be assessed. Generally speaking, larger lots are valued higher than smaller lots in the same neighborhood, though other factors will also have to be taken into consideration, such as slope or vegetation.

Square Footage

Not only is the size of the lot important, but so is the size of the home. The exact square footage of the subject property will be factored into the calculations to determine the overall value of the home.

Exterior Condition

The condition and style of the home’s exterior will be looked at. This includes the foundation, roof, and exterior walls to see what condition they’re in.

Interior Condition

Once the outside of the home has been looked at, the appraiser will scope out the interior of the home in great detail. Things such as the doors, windows, floors, ceilings, walls, plumbing system, electrical system, kitchen, and bathroom are all crucial components of a home and the state that they’re in plays a key role in the appraiser’s assessment of the property’s overall value.

Improvements

If any improvements to the home have been made, this will be considered. Many improvements increase the value of the home if they are done properly and use quality materials and finishes. New flooring, granite counters, appliances, windows, or HVAC system are all great examples of improvements that can boost the value of a home.

But some improvements can actually compromise the look and functionality of a home, and the appraiser will take that into consideration when determining its value.

Floor Plan

The functionality and flow of a home are determined by its floor plan. For instance, an open floor plan might be valued higher than a choppy layout that doesn’t make much sense. The appraiser will factor in the layout of the home and jot that down in the URAR form.

Number of Bedrooms and Bathrooms

A home with 4 bedrooms and 3 bathrooms, for instance, will likely be assigned a higher value than a home with 2 bedrooms and 1 bathroom in the same neighborhood, generally speaking.

Amenities

The types of amenities that make a home more comfortable and enjoyable will be accounted for. For instance, a pool, hot tub, master ensuite bathroom, finished basement, and heated flooring are all examples of amenities that can add extra value. The appraiser will make note of such amenities.

Current Market

Of course, the current market will play a key role in the value of a property. What a home may be worth today will be different than what it may have been worth only 6 months ago.

Methods of Assessing Value

On the URAR form, appraisers have three different ways to actually come up with the value of a home: the sales comparison approach, cost approach, and income approach.

Sales comparison approach – This is perhaps the most common way to come up with property values for residential properties. It basically involves comparing the subject property to other similar homes in the area that have recently sold. Ideally, the features of comparable homes should be as close in similarity to those of the subject property.

Cost approach – This approach factors in the cost of the land and construction of the home, minus any depreciation.

Income approach – This appraisal method involves estimating property value by dividing the net operating income of any rent collected by the capitalization rate. This is more suited for investment properties and not for owner-occupied residential homes.

The Bottom Line

No matter what side of the coin you happen to be on, knowing the value of a home is helpful. Sellers will want to know what they can list at, and buyers will want to make sure their offer price is fair. Homeowners may even want to know how much they can refinance at. Regardless, the job of an appraiser is an important one, and it helps to understand how they come up with their values.

What Landlords Need to Know About Rent Control Law

If you’ve invested in the right property and your rent is easily covering all your expenses – and then some – you can make a decent profit and build sustainable wealth over time, especially as the property appreciates in value.

But when it comes time to increase your rent or evict a tenant, you may be subject to certain rent control laws in your area.

Like anything else in life, the price of things goes up over time. You might find that the cost to operate your rental unit has gone up over the past few years, and the rent you were charging a while back may no longer be adequate enough to cover your operating expenses. Increasing rent is totally fine and is even part of the business.

But you may be subject to certain restrictions, especially when it comes to things like how high or how often you can hike up the rent charged to your tenants or how to evict them if necessary. It’s important to be in compliance with these regulations, or you could find yourself in legal hot water.

So, what should you know about rent control in California?

What is “Rent Control?”

The 1995 Costa Hawkins Rental Housing Act governs the restrictions that certain cities in California are allowed to impose on landlords and tenants. Basically, the law was put in place to regulate how much power cities across the state are able to regulate their own rental markets.

The Costa Hawkins state law dictates certain issues surrounding how landlords handle things like rent and evictions. For instance, it stipulates that landlords are only allowed to increase renter after a tenant moves out of the unit. It also prevents cities from putting rent control in place on units built after February 1995.

Rent Price Increases Are Restricted

In California, rent control places a key role in regulating rent charged. More specifically, rent control laws dictate the maximum percentage that landlords can increase rent. For example, in some places, landlords might not be able to increase their rent by any more than 5% at a time.

Further, rent control places a limit on how often rent can be raised. While every jurisdiction may have their own specific rules about this, it’s usually customary not to allow rent to be increased any more frequently than once every 12 months.

It’s important for landlords to understand the exact ordinances in their own cities, as the laws vary from one place to another.

For illustration purposes, here are some examples of different cities across California and their rules governing rent increases.

  • Los Angeles – One rent increase is permitted every 12 months based upon the regional Consumer Price Index (CPI). The allowable rent increase is 3% per year.
  • Oakland – Landlords can only increase rent annually based on the regional CPI.
  • San Francisco – Rent can only be increased every year by no more than 60% of the regional CPI.
  • San Jose – Annual rent increases cannot be any more than 5%.
  • Alameda – One rent increase is permitted only once every 12 months at no more than 5%.

Landlords are encouraged to find out the exact details about the types of rent increase restrictions that are placed on them in their particular city before informing their tenants of a rise in rents.

Not All Property Types Are Governed By Rent Control Laws

The Costa-Hawkins Rental Housing Act stipulates that rent control isn’t applicable to all properties. For starters, single family homes or condos built after February 1995 are exempt. Further, buildings with no more than three or four units that are owner-occupied are also exempt. The exact number of units will depend on local laws.

Other exemptions also include short-term rentals, detached units that are legally a part of the main residence, and rental units that are subsidized by the government.

Renters Are Protected Against Frivolous Evictions

Landlords are allowed to evict a tenant for any reason as they see fit once their lease expires, whether the tenancy is based on a 12-month or the tenant is on a month-to-month lease. That said, landlords must have a valid reason to evict the tenant before the lease expires.

The majority of rent control regulations require an acceptable reason to evict a tenant, including the following:

  • Being in breach of a lease term (such as not paying rent on time)
  • Participating in illegal activity on premises
  • Causing damage to the property
  • Disturbing the peace

Landlords can also evict tenants if they are selling the property or are planning to move into it themselves.

Tenants are protected under local rent control laws from being kicked out without any just cause. The law in California gives specific criteria for landlords to end a tenancy early.

If the tenant has violated the lease in any way, certain steps still need to be taken to evict the tenant, and the exact protocol will depend on the situation. More specifically, the landlord must give written notice to the renter before terminating the lease.

It’s important for landlords to take the proper steps to evict a tenant in accordance with their local laws.

The Bottom Line

It’s important for landlords to fully understand and get familiar with local rent control laws in their cities to make sure they’re in full compliance. While renting out real estate can be an excellent way to enjoy an income or build wealth over time, legal repercussions can negatively impact profits, so it’s best to adhere to local rent control laws that apply.

How to Stage Your Home For Airbnb

Listing your property on vacation rental sites like Airbnb can be a great way to supplement your income. It can also be a great way to earn a full-time living, especially if you’ve got a handful of vacation properties on the go.

But whether you’re collecting rent on properties as part of an investment business or are just looking to rent your own home only parts of the year, your Airbnb listing needs to attract clients. Creating a welcoming, tastefully designed space for your guests will not only attract them the first time they come across your listing but will have them coming back for more every time they visit the area.

Not only should your property capture people’s attention online, but it should also impress them once they’re there. The place should be uniquely designed and furnished, but it should also include all the necessities and conveniences of home.

If you’re thinking of putting a property up for rent on a vacation rental site like Airbnb, consider the following tips to make sure it’s staged appropriately to attract a ton of business.

Leave a Welcome Gift When Guests First Arrive

Welcoming your guests with a special treat will definitely leave a great impression the moment they walk through the door. Whether it’s a few homemade cookies or a bottle of wine, guests will certainly appreciate the gesture and will be more inclined to leave you a raving review after their stay.

Fully Equip the Kitchen and Bathroom

If you were to stage your own home when selling, the kitchen and bathrooms would be the spaces that would require plenty of attention given how commonly used and important these particular rooms are. With Airbnb properties, kitchen and bathroom staging is just as important.

You want to make sure that these particular spaces are as clean and well-equipped as possible. Clear the clutter and free up counter space. Equip the kitchen with all the dishes, cutlery, and cookware that guests would need, and fill the bathroom with all the towels and soaps required. Think of all the amenities that you would find in a hotel room and try to emulate that.

Offer Attractive and Comfortable Bedding

The bedroom is another key space that deserves plenty of attention. In particular, the bed should be prepared for guests accordingly. Obviously, you want to make sure the bed is properly made and is decked out in attractive linens and pillows.

But you also want to make sure it’s comfortable as well. Consider splurging on high-thread-count sheets, extra plush duvets, and a plethora of pillows for the ultimate in comfort.

While you’re at it, make sure you’ve got extra linens and pillows tucked away in the closet just in case, and flank the bed with convenient an esthetically pleasing end tables. Ensuring that your guests get a good night’s sleep is crucial so, don’t overlook the comfort factor on the bedroom.

Highlight Special Features

If your property has some sort of feature that isn’t typically found in other rental properties, take the time to highlight it. It might be a pool table, hot tub, or gaming console, for example.

Whatever that feature may be, make sure you advertise it in your listing description and create a space around the feature that makes it more inviting. Be sure that the space is free of clutter and offers plenty of comfortable seating to make the area more comfy and usable.

Incorporate a Few Local Pieces

No matter where your Airbnb rental property happens to be, try to add a few local touches to the space to make your guests feel at home. Whether it’s a book on local attractions, a guide to the top-rated restaurants in the area, or some artwork created by local artists, these local touches can go a long way at helping your guests quickly adjust to their new – albeit temporary – surroundings.

Keep Out Fresh Flowers or Hardy Plants

Adding some greenery to a space can instantly make an interior feel warm and welcoming. It’s also a great way to incorporate some vibrant color.

If you live nearby your Airbnb rental and have the time available, consider leaving out fresh flowers for each new guest. If not, put out a few hardy succulent plants that can withstand long periods without being watered and still thrive even in low-light conditions.

Stock Up on Outdoor Equipment

If the place you’re renting out has an outdoor space, consider outfitting it with some items that will allow your guests to enjoy the outdoors. You might want to deck out the yard with a patio table and chairs or some comfy outdoor sofas.

If you’re close to the water, leave behind some lawn chairs, an umbrella, and even some floaties or wave boards. You might even go so far as to adorn your yard with a fire pit and a few sticks to roast some marshmallows. Outfitting your Airbnb so that guests can enjoy both the indoors and outdoors can help maximize their enjoyment and overall experience.

The Bottom Line

About 2 million people stay in an Airbnb every night across the globe. Clearly, there’s a huge market for travelers who prefer the commodities of “home” as opposed to staying hotels that typically offer fewer amenities.

Given such a market, there’s no reason why you can’t take your own piece of the pie. And if you stage your place appropriately and allow your guests to make the most of your space, you should experience frequent bookings and make a pretty penny while you’re at it.