WHY I HATE THE WORD LANDLORD

You won't find me using the word Landlord or Tenant on this blog.  I hate both words.  

Hate has a strong meaning.  It means you intensely or passionately dislike something.  I truly feel that way about these two words.

Landlord implies that someone owns the land is therefore Lord of his property.  I don't know about you, but Lording over something seems pretty outdated to me.  That word implies someone is a master of something; completely in charge, and what he says goes, no matter what.  Historically, people died at their Lord's hand if they were not in alignment with the Lord, and depending on the situation, the Lord could choose to impart mercy or justice.  Eek. 

Tenant implies you are subservient to the Lord of this land.  While I do believe there should be respect for the ground rules that the "Lord" has established, I don't believe there is a subservient relationship to this Lord.  I know as someone that has rented a home, I did not want to feel like I was a minion to Lord, and simply there to serve a master.  Yuck.

Therefore, I just don't use those words.  I don't believe that there is a hierarchy in the relationship between me, the homeowner, and our clients who choose to rent our homes.  I know fully that our clients are the ones caring for our home while they are there, and I want them to know that we appreciate them.  At Haymount Homes, we see them as the caretaker of something special, of something we love. We also want them to love it in return.  

Changing this perspective is imperative in improving the relationship with homeowners and clients that rent their homes.  It starts from a place of trust, mutual respect, and positivity.  It encourages communication and it sets everyone up for future success, both with the clients enjoying their rental home, and for the homeowner knowing that their home is being well cared for. 

Of course, there are times when legally I get bound into using the words I despise, like within a lease ( just because I don't like them, doesn't mean they are obsolete....although in my world, that will change someday too :).  Just as a rule, I don't use them.  I don't see them as a positive place to start a relationship. 

I was recently interviewed by Zillow (the top real estate and property management companies on the web today).  They wanted to hear my perspective on becoming my own property manager.  I told them about my "passionate dislike" for these two words and they were fascinated by that.  Maybe I am alone in the world on this perspective, but I just don't see it as a positive one.  I want all my relationships to start from a positive place.  

So there you have it.  Call me weird (I am), call me crazy (some might agree), but what I can tell you is that we have had great relationships with all our clients.  We are blessed by them and try to be a blessing to them as well.  This is a place where everyone wins, not just a Lord of some land.

How do you feel about these words? I hope I'm not alone!!

- Casey

FOUNDATIONS - The "F" Word FOR HOMEOWNERS

Foundations.  This might be the "F" word of homeownership.  Nothing strikes up Fear, Frustration, and other words that I will not mention (but absolutely know that you can envision where I am going with that). No one wants to hear that they have a foundation problem.  I know I didn't when I realized we had one.  I had slowly watched some cracks develop in our house.  We had even hired them to be fixed, and they were, but they rather quickly reappeared. This work was completed by contractors that I know and trust.  I had a gut feeling that there were bigger problems lying below.  We had just recently re-flashed our chimney and added a new roof to our front porch.  A few days ago, I was getting the kids off to school and I turned around only to see what I had feared.  There was a large crack in the chimney.  The Chimney was separating itself from our house.  Inside, it was pulling the wall with it.  Not good.  Immediately, I found myself immersed in a series of "F" words;  I turned to fear, frenzy, and frustration.  I was scared.  I did not know where to start, the costs involved, who to trust, and more.  I had forgotten another "F" word for foundations - FIXABLE.

Yup. Like anything else that breaks down in a home, foundations are fixable.  When I unpacked all those "F" words, I realized that at the core of all my fear was the fact that I did not know enough about the problem to find peace with the solution.  Many times, homeowners fear what they do not know.  I find that the more I understand and analyze the issue, the more comfortable I become with the problem.  The more comfortable I am with the problem, the less fear there is.  Once the fear has subsided, I am able to gain clarity and work to problem solve the issue. When I have a plan, I am much more calm, objective, and able to handle fixing the problem.

Why do foundation problems scare us?  I suppose is the idea that the house is going to crumble and fall down around us, or the idea that we are going to have to go bankrupt fixing it.  Insurance companies (with minor exceptions) don't include the foundation in a homeowner's plan because the scope of repairs can be costly.  I would add that it is the fear of the unknown that also increases the scare factor.  Let's look at these fears. 

Fear #1: The house will fall

Okay, it would be scary if your house completely fell down all around you. No one would be okay with that.  However, in most cases, your foundation has signs of warnings or issues far before the entire structure is shot and your house instantly crumbles to the ground.  Usually, the entire foundation does not fail all together, but rather parts of it become compromised.  There are several reasons the compromise can happen. Here are some major and more common reasons the foundation might fail:

• Soil Shifting - contraction and expansion/recoil of the soil changes the pressure on the foundation and slowly causes movement
• Highly wet/dry regions can shift the soil quality and change the pressure against the foundation.
• Time - nothing lasts forever. Sometimes things just give out
• Poor Worksmanship - hate to mention this one, but not everyone does good work. validating a contractor and company is very important with structural work.
• Natural Disasters  - floods, earthquakes, tornados - all can change the landscape and structural integrity of the foundation
• Water flow against the house - can alter the masonry and positioning of the foundation

interior wall crack and mantel pulling from the wall

Fear #2: Cost

We all freak out when things are expensive, especially when those things are not things we want to spend money on.  Spending 10K on a foundation repair is a lot less satisfying than a new kitchen remodel.  Definitely does not give you the "wow" factor when the work is hidden.  However, structural problems are things that cannot be ignored. While the first fear of the house falling down is unlikely, if you let things go, then eventually things will start to crumble...not good. 

The good news is that a foundation does not usually fail all at once.  Typically, there are portions that require your attention and reinforcement to improve their function and stability.  These portions are often stabilized by "push piers" that are drilled down to the bedrock surface inside the soil.  From that stable surface, they push back up under your foundation to reinforce your existing structure and prevent further compromise to the stability of your foundation.  In North Carolina, each pier that is required is roughly $1200. The amount of piers required is based upon your current structure, length, and size, which is calculated by state law and code requirements.  While this is not cheap, it is also better than 40k to lift your entire house and replace your entire foundation.  While that can happen from time to time, it is usually not the typical repair. 

fireplace mantel pulling from the wall

Fear #3: The Unknown

I will be the first to admit, I am not an expert in the world of foundations.  In fact, I used to know very little.  This fear of the unknown is possibly the worst fear of all because we feel overwhelmed by where to begin.  Let me help you with that:

• Step 1: Identify the problem - Look for cracks in your foundation and bricks.  Large cracks are often seen going along the mortar and are called step cracks.  If you see cracks, measure them.  Note a spot on the wall where you are measuring and mark it with a crayon (wax based). This will help you identify where you made the mark so you can consistently measure the crack.  Measure it once/week and note any changes. You might see the crack enlarge or shrink with rain and dry seasons, or you might see it steadily increasing.  Monitor this.  You can also buy foundation crack monitors that sit inside the crack and help keep up with measurements for you.   If you see the crack progressing, you might have a problem

• Step 2: Consult a Structural Engineer - Once you believe you have an issue, contact a structural Engineer that you can trust to evaluate your problem.  Ask for recommendations from Architects and contractors you trust.  Finding a good engineer will be important so they can survey your site and provide recommendations for repair. Having this done will cost around $500, but you will need to have this completed as most states require this prior to any foundation repairs being completed.

• Step 3: Gather your Estimates - Ask your trusted structural engineer for recommendations regarding repair companies.  Trust these recommendations.  There are lots of companies out there that are willing to do work, but that does not mean they will do it well.  You want only the best people to do this type of work.  Once you have your list, contact at least three companies to provide you with estimates for repair. You want "apples to apples" comparisons so you can correctly see what price differences are for the same work.  Use your engineering report to instruct the contractors in what work you want completed.  Because you already have an outline regarding what work NEEDS to be completed (from the engineer), you will avoid being "oversold" by any of the companies (aka, them telling you that you need something that you don't.  Information reduces that fear).  Ask about their warranty.  That needs to be part of your evaluation of the work.  Some companies will offer a 5 year warranty, and others up to a 75 year.  Ask if the warranty is transferrable to a new owner if you sell your home; you want to know what you are buying

trim separation

• Step 4: Barter. Yup. You now have three estimates and you know what work needs to be done.  Let's pretend you trust one company more, but their price is higher than another, or they offer a shorter warranty.  Work with the people you trust and ask for them to price match or warranty match the competition.  The worst they can say is "no."  Also ask if there is a discount for paying up front in cash if this is an option for you.  It might save you 10%.  If your estimate is 10K, then you'd save $1,000.  That's not bad.

• Step 5: Repair That Foundation - "suck it up, buttercup". I know, not cool, but that is what needs to happen.  Again, you need to decide that you have to stop caring about it being expensive, and just get it done.  You will feel better in the long run if you stop worrying about it. 

• Step 6: Document - that is something that should be done along the way, but be sure to keep the engineering report, repair procedure, and receipts from all this work.  When it comes time to sell your home, there might be concerns with foundation integrity.  Having these documents in hand can actually help promote the sale, especially when you might be able to say there is a 75 year warranty on the work. 

ceiling crack

So, you might wonder where that leaves us.  Well, we are having the chimney repaired for sure.  That will be about 2-3K.  As for the other cracks in the side of the house, we are monitoring them for now as we don't see as much movement inside the house on those.  If they progress in the next six months, then we will have to throw another 8K on that.  At least we have some time to prepare.  More than anything, we know what we have on our hands.  Our home is lovely, but the bones underneath need to be strong.  It's kind of like a super model with osteoporosis.  She is only going to look good for so long...if the bones underneath break, it's all over :) Better to be informed so the issues can be solved, then to run around with all the "F words" that come to mind.   Most things are fixable.  This is too.

Have you had to fix your foundation?  What was your experience?

- Casey

HANGING WALL ART

Have you ever struggled with placement of objects on the wall?  How high should they be? How close together?  Should individual items be hung, or should they be grouped?  Should you group them or hang them alone?  How do you create a gallery wall?  Or, my sister-in-law's exact question, "How do you hang a grouping together that won't make it look like a flea market?" Ha. We've all had that frustration of 10 nail holes in the wall, only to get one picture hung right.  Even though we try to cover them with the art, we know they are there, don't we??   

We've all struggled with his question and this post answers a series of questions about hanging art/objects and more on the wall.  More specifically, it is a framework to help make wall decorating fun and enhance the visual appeal of your home. 

Let's start simple.  When you are hanging one item, whether it be a picture or an object, the most visually peaceful height to hang that object is at eye level.  If you find yourself looking up or down to focus on the object, it is physically distracting rather than pleasing.  Of course, eye level will vary based up on your height, but it usually varies within about 12 inches between most of us.  That means that the height of the top of the object or frame, should be at the upper part of eye level and that you look about dead center onto the object.

This rule holds true even for rooms with taller ceilings and, hence, taller walls.  Standard wall height is eight feet.  You will still go for eye level on a 9-12 foot wall.  Wall height changes, but our visual space doesn't. If you hang things higher on high walls, it will feel very uncomfortable visually.

Now, let's continue to assume you are hanging only one object.  Most of the time, you'll want the object to be centered on the wall space provided.  Even if the wall is only a half wall, or on the side of something else, you'll want the object in the center of the wall.  This symmetry on either side will balance the visual appeal and focus the viewer on the object.

Scale.  You must consider scale of your object.  Let's pretend your wall is 8 feet tall and 8 feet wide.  It would not look visually appropriate to have an object that was 1 foot by 1 foot large in the dead center of the wall. It would be small and not scaled appropriately for that wall.  In the same vein, it would not make sense to have a 6 foot by 4 foot object on that wall. it would fill the space and be really large.  Someplace in between makes sense.  Think about 3-4 feet by about 2-3 feet in measurement. That would be a nice ratio on either side and really highlight your image.

Let's also discuss hanging something over the sofa.  Rule of thumb is that you won't hang something within the first 12 inches from the top of the sofa.  If this rule is broken, you will find people hitting their head on whatever you decided to hang lower.  Of course if your sofa is really tall, this might not be an issue, but it is always worth considering.

Okay, let's move beyond one object and discuss two. The same rules apply as far as height.  If you hang them in a vertically stacked position, you want the middle of the overall length of hanging to still be eye level.  If you place them horizontally, you want eye level and have equal balance of wall on either side. 

When hanging two objects, you might find yourself overall conflicted with the look.  This is often because we often visually gravitate toward odd numbers in decorating.  Why? I am not sure, but the rule of three is often sited as a fool proof decorating strategy as many people find this visually appealing.  This is not to say you cannot hang two objects together, but it often will be more appealing to you if a third is added for visual symmetry. 

Let's talk about framing a focal point, such as a window or a fireplace.  I have a fireplace with a large window on one side an a wall on the other.  There is no place to hang something on the window side, but the window is large.  Therefore, on the other side of the fireplace, I have gone with a large 3x2 framed picture.  It mimics the shape of the window on the other side of the fireplace, and provides similar scale visually.  When framing a focal point, you want to lessen the distraction on the sides of the item to allow focus on the center item. 

How to find the middle of your wall?  You want to measure the length and the height.  Once you know that the wall is 8 feet high, that means it is 96 inches high.  Now you would divide that in half and find that 48 inches from the floor is the middle of the height of the wall.  Then you measure from side to side.  Let's assume that the wall is 5 feet or 60 inches.  Now we know that 30 inches into the wall is the center.  Once you have found the center, you can build your placement from there.  You can safely assume that visual height for many people is about 5 feet or about 60" up on the wall. 

You then need to measure your object.  Let's assume that the object is 2 feet tall.  You would want the top of the object to hang 30" in from the side of the wall and about a foot up from the measured center point of 48" of the height of the wall.  HOWEVER, you need to account for where the hanging attachment of your object is.  Let's say our 2 foot tall picture, has a hang tag in the back that is 6 inches down from the top.  Now, instead of hanging that object at the 60" height (visual height), we need to drop it down by 6" to account for that hanging tag in the back.  So, the exact point for your nail or screw, is about 30" in from the side of the wall, and about 54" from the floor.  When you hang your object, it will be smack in the center and visually the right height. 

Confused yet?  It's not that bad once you start measuring and it takes the guess work out of the placement.  When you add additional objects, there is more math involved, but mostly you want to have symmetry on either side, and then you want some space between.

These rules get a little more lax when you start moving into a wall gallery.  There is more flexibility with a wall gallery and they can be fun.  The main thing to keep in mind with a wall gallery, is visual symmetry between objects.  Balance and overall shape are very important. We're going to talk about that in the next post. 

Have you struggled with hanging wall art? What is your best solution?

-Casey

Choosing Paint Colors - Part Two - Evaluating Your Layout

Have you ever heard of a whole house palette?  Call it a new trend in decorating, but it has everything to do with coordinating undertones throughout the house.

In part one of evaluating your paint color, we discussed understanding the undertone as the basis of your color.  Once you knew if your undertone was yellow, red, green, or blue, you would then know if your room would cast warmer or cooler hues on the wall.

Next, we must consider layout and lighting.  My sister asked the question, "do all rooms need to have the same undertone?"  The answer is "it depends".

In many newer homes today, rooms often blend into one another, creating an open layout and floorplan.  When rooms are visible to one another, and especially if they truly are seamless and blend into each other, then it is more important that they share a coordinating undertone.  You can still choose differing colors within the undertones (ie, gray and beige, but both with a yellow undertone for example), but you'll want to keep the undertone coordinating.

Neutral Whole House Palette - all of these have a yellow undertone

In many older homes, such as most of the homes we decorate, the rooms are often more segmented.  In this case, you have more freedom with undertones as they will not clash between rooms.  However, I have found that if you keep the undertones more coordinated throughout the house, it ends up casting a very satisfying feeling in the home.  Many new home contractors employ this strategy throughout their new home builds.  They pick 3-4 colors, all in a unified undertone family and place them throughout the house.  The result is usually a very pleasing palette to a prospective buyer.

Choosing a whole house palette can be fun because you can repeat colors in different rooms and they will behave differently in each room, but coordinate easily between rooms.  The color difference is due to the lighting in the room (which will be discussed in an upcoming post).  In fact, I have Sherwin Williams Agreeable Gray in my kitchen, living room, and dining room. I wanted the color to look the same in each space, but my kitchen has very weak lighting.  To compensate for this, I decreased the intensity of the color by 70%.  I looks the same on the walls in all three rooms, even though there is less pigment in the wall in the kitchen. These three rooms run into one another and I wanted a congruent look to the space.  Agreeable gray has a slightly yellow undertone, so it is a warmer gray/beige color. 

Agreeable Gray by Sherwin Williams

Adjacent to that room, I have a darker gray called Mountain Smoke by Valspar, but still a gray with a yellow undertone.  All my white trim has a barely there, but still there yellow undertone in it.  Together, they all look their own white, gray, or dark gray, but that little bit of yellow unifies them. Another trick is to ask the paint counter help for the recipe for the color.  They have a formula for each color they mix.  When I am on a fence about two colors or cannot determine their undertone, I ask for the recipe for the color.  I look to see what percentage of the formula is gold/yellow/black/gray/blue etc.  That helps me see what undertone is strongest. 

Mountain Smoke by Valspar

Doing a simple Pinterest or Google search will land you with scores of whole house palettes.  There is no need to re-invent the wheel. However, if you are really wanting a certain color, use it to build the rest of your palette.  Start with what makes that color speak to you and evaluate the undertone. Moving from there, add coordinating colors with similar undertones.  Nature does this naturally if you start looking around you.  There is also a wonderful blog to those devoted to color and the appreciation of these palettes. 

Check them out at Design-Seeds at https://www.design-seeds.com/blog/page/3/

In the end, choose colors you love, but also consider the layout of the rooms.  If they share an undertone, they will provide a more serene, cohesive look for your home.

Next we'll look at lighting!

- Casey

Choosing Paint Colors - Part One - Evaluating the Undertone

Why is choosing paint colors so difficult?

This is a question that seems to frustrate many clients, homeowners, and decorators.  Just when you think you have it figured out, it goes up on the wall, and SURPRISE, it is nothing like you envisioned.  Back to the drawing board.

I am with you.  I have struggled with paint colors for many years.  After thinking I had a fool proof plan or color, I would be excited to put it in a new room, only to see the color behave differently.  There had to be a better way to evaluate my color before putting it up on the wall. 

I found the common theme of my mistakes was that I had misjudged the undertone of the color.  Most paints are rooted in a yellow, blue, green, or red undertone.  When you start to compare the swatch colors, you can see how a certain shade pulls through.  Understanding that you like or dislike certain undertones is critical in deciding what colors will work for you.  

Let's take an example.  In the photo above, there are several shades of neutral and brown present.  In the bark, we have a brown that has a green and blue undertone, and it presents as more of a gray as a result.  The background behind the cat has a more yellow undertone, and it presents as a warmer brown.  Looking at the back of the cat, and somewhat in the face, you will see a brown that has a more red undertone, giving the brown even more warmth and a reddish undertone.  Finally, the cat's fur has a very mild gold undertone, making a very light beige slightly warm brown. As you can see, there are several browns, all of which present as brown, but when you look at each more closely, they have different undertones which come across while altering the shade.

When you have your paint chip samples, you can look at three colors that you are considering, and you can see what undertone appeals to you.  Blue undertones will cast cooler vibes to a color, whereas yellow and red undertones will warm things up.  Red undertones tend to cast more "santa fe" pink/rustic red cast into their color, and that is something that does not typically appeal to me.  However, in my bathroom, because of the lighting (which is another topic we'll discuss), I had to choose a gray that had a red undertone because the marble tile we chose had the slightest bit of red undertone in it.  I had missed that at first and had chosen a cool gray (blue undertone - Gray Owl by Benjamin Moore), and it ended up looking Mint Green on the wall!  Not at all what I was going for.  I was afraid to choose the red undertone gray as I don't usually like those, but it was the perfect choice in that bathroom.  Sometimes you have to go with what you see, rather than what you think you want. 

In summary, when comparing colors, you have to decide what undertones appeal to you. This is the first step to ensuring you are going to like the color once it gets on the wall.  As an experiment, look at the things you already have in that room or in your home. Evaluate the undertones and see what you are already drawn to based upon what is in your home.  Additionally, you also ensure that the new color you choose will harmonize with what you already have in the room (it is expensive to have to purchase new furniture and décor just because you repainted!).  There is no wrong or right, only what you prefer, and this should start coming through when you evaluate what you already have.  If you are struggling, I like to take crayons in the color of red, yellow, green and blue and then put it up against whatever item I am evaluating.  Usually, the crayon with the same undertone as the color of the item being evaluated will look the best with that item.  That is a little trick to help determine the undertone. 

Of course, in my example above, even if you don't think you like a certain undertone, you might find that you have chosen other things with that same undertone.  If you try to compete with several undertones in the same space, you'll end up with a mess on your hands.  Trying to keep the undertones complimentary throughout the space will unify the space.  This is a subtle point, but it is what will make the room pop at the end.  People won't be able to place their finger on "why" the room just feels good, but they feel like it is visually appealing.  That is likely because the undertones are congruent. 

More on color choice will follow, including lighting, paint sheen, choice for neutrals and home rentals, and more.  Stay tuned!

Casey

WHAT IS THE 50% RULE OF REAL ESTATE INVESTING?

The 50% rule is a easy way to estimate the year end cash flow of a property. Simply put, you can assume that over the average span of you owning and renting the home, 50% of your rental income will go towards expenses.  Those expenses can include maintenance, capital replacements (ie, new appliances, roofs etc), property taxes, insurance, and more.  You can quickly determine what your profit on a house would be by applying this 50% rule to any house you are considering. 

For example, if you are considering a $100,000 all in price on a home, we already know that the 1% rule would mean that you needed to be renting this home for $1,000/month.  If you had the home rented all 12 months, you would have a gross rental total of $12,000/year. Sounds lovely, right? Now we apply the 50% rule.  That $12,000, turns into $6,000/year once you apply costs.  Now, if you put 20% down on that same $100,000 house (which would be $20,000), that means in the first year, you'd earn $6,000 on your $20,000.  That's nearly a 30% return.  For this reason, many people advocate buying homes with loans because you can spread your investment over several houses, making your returns higher.  However, your risk also increases with debt.  We'll cover more on that topic later.

Applying the 50% rule means you are applying this math across the ownership duration of this house.  The first year, you might sneak by with only $4,000 in costs, meaning you are ahead. However, that next year, you might need a new roof, and your total is now $8,000 on the year.  The idea behind the 50% rule is that everything will average out over the course of time.  It is simply an easy way to judge what total profit you can claim from the home.

Clearly, this is a simple way to calculate profit.  Actual accounting is far more accurate and in depth.  However, this is a fast and easy way to size up the potential earnings on a home before you decide to buy it!

Have you ever considered the 50% rule when purchasing a home?

- Casey

STOMACHING REAL ESTATE

Having the patience and stomach for real estate is not for everyone.

After our offers, counter offers, and attempts at negotiating on this newest house, another offer was accepted.  We were frustrated by the fact that we were not even told another offer had been accepted, but rather found out on our own accord on the internet.

It's hard to be patient and disciplined. We had our budget, did not want to overspend, and also tried to make fair and reasonable offers.  This time it was not in the card for us and that is okay.  We have to trust in timing and what makes sense.

Of course, I get emotionally attached to each house I tour.  I see its potential and imagine what I could or would do if it became ours.  It is hard to walk away, but it is necessary to move on and trust that the next thing will happen as it should.

Trying to get a new home always motivates me to save, however.  Sometimes I lose focus, get lazy, and forget to keep my eye on the target.  Having money for houses and down payments is a lot easier when you set a target for it.  Falling off the wagon is easy when I am not focused on house hunting.

Whatever your timeline is for an investment, remember to keep your eye on the target and stick to your guns.  Sometimes it will fall into place and work out.  Sometimes it won't.  Know what you want and how you plan to get after it.  If you plan ahead, then you can make fast offers that make sense and fit your goals. 

Until then, I will keep my eyes open...and on target!

- Casey

HAVING VISION

Can you see potential?  When you walk into a space, do you focus on what is or do you see what it might become?

Seeing potential is about being optimistic.  It is about visualizing the best case use of a space, rather than focusing on what the drawbacks are.  Seeing potential is easy in some situations, especially when someone has done the work for you.  It gets a little harder when you have to look beyond neglect, misuse, down right filth, and more. When you are willing to dive into things that normally frighten other people, that is when you know you can see potential.

For consideration, a house I just toured today.  My realtor's opening statement to me was that the house was filled with mouse poop.  Not the most appealing thing I have seen in a house.

Mouse poop is always exciting in your cooking areas, right? Who wouldn't love that?  Turns out, mouse poop was only the start.  The house needs a new roof, evidenced by moisture damage on most walls, crumbling ceilings, and rotting insulation.  The gutters are full (and growing their own small forest), it has cracks, weirdness, and more.  I was afraid to pull down the attic stairs; I just did not know what creatures might greet me. 

There were a few cracks in the foundation, the floors are not quite level, and on and on we go.  

HOWEVER...

Me being me, I did not really mind all that.  I saw a darling front porch (which I forgot to photograph but will!), wonderfully old solid wood floors, a large welcoming living room, gracious dining area, ceramic tile in the kitchen, a nice (although dirty!) tub surround, a large master closet, vinyl siding, new windows, thick window moldings, wood cabinets, walk out kitchen, laundry area, large attic and lots of charm.  The street is nice, and the location is lovely.  

So, while you don't want to underestimate the drama and cost of repairs (which could be a lot in this situation with water, creatures, and more), you don't want to limit yourself because things look scary.  Neglect does not mean unfixable.  There are houses out there just begging for someone to care for them and restore them to their glory.  This house was a sweet little house, calling out to become a charming home for someone.  

Don't be afraid. 

“Vision is the ability to see potential in what others overlook.”

— Rick Warren

So, did we make an offer on this water logged, poop filled house?  Sure did. Why? Because we see it as a charming home, just waiting to be loved. 

What do you see?

- Casey

Organizing Your Lease

Found a client to rent your home!  Check that box.

Yikes.  Now you need a lease. 

Creating a lease and organizing your paperwork is not as hard as you might think.  There are plenty of services out there that will let you customize your lease according to your state and needs.  We use EZ Landlord Forms for our homes as they have an array of forms and state specific topics. We don't rely on their free forms, however.  We find them too general and not state specific.  When it comes to getting things in writing, you want to be sure that you are up to date and complete with your state requirements.  Rather than becoming an expert in the ever changing regulations and laws, we have found it much more effective to allow them to stay up to date and us utilize their service.

When it comes to what pieces to include in the lease, it makes sense to review everything that is included by you and everything that you expect from the client.  Some often overlooked things might include:

• Pet Requirements - deposits, fees
• Clean Out Expectations
• Homeowner Contact Hours
• HVAC Filter Replacement
• Utilities
• Emergency Contact Information
• Parking Instructions
• Key Responsibility
• Surface Care (ie, Granite, Tile, Grout, Wood Floors)

The more your outline expectations, the easier it is for you and your client.  We like the simplicity of the online services.  Most clients are in the middle of a move and have a transitional address.  It wastes a lot of time sending a lease through the mail to your client.  With online forms, you can use digital signatures that allow you to create, send, and receive the signed lease all within a few hours.  Additionally, you then have a saved copy already to go on your computer.

Even though the services do help automate your lease creation, that does not relieve your your burden of being familiar with your state requirements.  Things such as security deposits, late fees, termination notice, and more all vary by state.  There are cues in place with automated forms to help you understand what you need to be familiar with.  We will cover that in greater detail in another post.

“You are far too smart to be the only thing standing in your way.”

— Jennifer J Freeman

Don't be nervous.  This is a lot easier than you might think.  In a matter of an hour, you can have a solid lease that is ready for your client.  You just need to do it!

- Casey

RENTAL HOME YARDCARE - INCLUDING LANDSCAPING IN THE RENT

Including yard care in the rent? You must be kidding?  Rental homes are already expensive enough!

Well, I am not kidding.   I do feel like I have a valid argument for why including yard care is an important service for your potential clients. 

We include routine yard care for all our homes.  This includes mowing, trimming, edging, blowing, and such.  Including yard care in the rent has several benefits for both the client and for the homeowner.

Primarily, by including yard care, you ensure your property's landscaping is well taken care of.  You ensure that the neighborhood says attractive and help your property values continue to rise.  You prevent drawing attention to the fact that the home is a rental property because it is continually manicured as if a homeowner was invested in the home.  All of these things help improve the neighborhood, deter crime, and hopefully will add to your property value over time.

Additionally, your clients are renting a home from you.  Clients that rent homes are more likely to be moving more frequently, have recently changed jobs, and are in a state of transition.  Many of them do not own yard equipment.  Often, potential clients will turn away from a single family home because they do not want the hassle of yard work.  You do not want to lose potential clients to an apartment or condo simply because they cannot or do not want to perform yard care.

Yard care is more reasonably priced than you might think.  We have several homes and our yard care professionals discount their work because we give them several homes to care for.  Additionally, depending on your climate and location, it might not be something that has to be done year round.  We service our southern NC homes twice a week from about March through October.  We usually include a leaf blowing, gutter cleaning, and hedge trimming in there as well.

Finally, if you have someone staying on top of your landscaping, you will avoid the negative connotations of having to bother your clients to keep up with the yard.  Negative interactions as a whole are bad for your relationship with your clients.  You will also ensure that there are minimal costly "whole yard" landscaping renovations once your client moves on.  This can often add up to more than the landscaping over the course of the season would have amounted too.  Even if it means an adjustment in your asking price, landscaping will be a huge benefit to the client and to you.

Clients love it when landscaping is included in the rent.  Often, they cannot believe it when I let them know.  I think it is important to think about what makes life a little nicer for your client.  Landscaping care not only improves their quality of life, but it will improve your stress and neighborhood appeal as well.

- Casey

SETTING A RENTAL RATE

650? 1000? 1500?

Utilities? Yard Care? Pet Rent?

Yikes! Where do you begin? 

Spinning from the last post about the 1% rule, we already know that the house needs to rent for approximately 1% of the total purchase price of the home.  So, using our last example, if the home was $100,000 to purchase, then the home needs to rent for $1000/month.

You have to understand your rental market to know if your home can command this price.  This is where you must become a student in your market.  You need to invest time researching your market.  There are plenty of rental sites to choose from.  One of my personal favorites, is zillow.com, but there are plenty of them to choose from.  Look around the area you are considering purchasing your home.  What are the going rates?

You'll quickly find that it is hard to compare.  Some homes will have the same number of bedrooms and bathrooms as yours, but yours might have additional rooms that offer more square footage.  Some homes have better or worse finishes than yours, such as granite verses laminate counters in the kitchen, or a master en suite bath verses a shared bathroom.  The list of comparisons can be daunting.

Comparing homes can be difficult, here are some fairly tried and true rules that I have learned that allow me to size up the market and the competition.

• Number of Bedrooms
• Number of Bathrooms
• Quality of the Kitchen and Bathrooms
• Overall Square Footage
• Yard
• Storage

Let me preface this by stating that we rent mostly historic homes.  These homes are in an area that particular streets are more desirable (less traffic) and yard size is often small (thus, more private, larger lots, matter).  Additionally, historic homes traditionally offer storage challenges, so when a historic home offers storage, this is a big advantage.

That stated, people overall care about having a nice space/street to live on, some place to store their holiday decorations, and enough space for their family.  They also care about the amount of bedrooms and bathrooms.  The price of the home is usually most dependent on the number of bedrooms, more than bathrooms, but no one will complain about having additional bathrooms!

People care about kitchens and bathrooms and the quality of the finishes.  Depending on your market, the level of quality can change.  However, across the board, attractive surfaces, cared for appliances, and nice flooring go a long way.

When you put this all together, you can start to compare homes on a more equal basis.  Perhaps you have a very nicely appointed two bedroom home that has 2 bathrooms, a fully remodeled and upgraded kitchen, and a private, fenced yard.  This might rent for the same price as a three bedroom, one bathroom house that has a standard grade kitchen and one less bathroom, on a busier street with a smaller yard.

It is not simply the size of the home that determines the rent, but as importantly, the quality of the home.  Some people will sacrifice more space for better finishes; others will want that extra bathroom. When pricing your home, consider the competition in your size range and determine if you were looking to rent, where would home fall amid the available competition on the market?  Would your home be as nice as the others? Nicer? Less nice?  If you were looking to rent, consider what price would make your home a "no brainer" or "I need to call quick before this house is gone?"  That is the price you want to consider.  Something that makes a potential client act so they don't lose out.

We'll cover more on this in the future, but hopefully this helps guide you in determining a rental price for your home. Once you know your market, you can better compare what your home has to offer a potential client, and you can more accurately determine the best price.

- Casey

HOW DO I KNOW A RENTAL HOME WILL BE PROFITABLE? EXPLAINING THE 1% RULE.

The 1% Rule.

Ever heard of it?

The 1% rule is a quick and easy way to determine if your rental home is going to make you money.  This rule helps you know if your property will cash flow (ie, will you make money after your mortgage, repairs, taxes, insurance, and other bills are paid?).  Will there be money left for profit?

Here is how the 1% rule works.  If you can rent the home out for 1% of the price of the home, then it will likely produce income.  When you consider the total price of the home, you need to consider your "all in" price.  If the home is ready to go, then the total price is the home price and any associated loan or closing costs.  If the home will require any renovations, then the price is the purchase price (including any loan/closing fees) + renovations = total home price.

Once you have determined your total home price (let's say for ease of math that the all in home price is $100,000), then you need to be able to rent that home for 1% of that price, or for this example, $1000/month.

If you can achieve that ratio, then you most likely will end up with a profitable rental home. 

Some people are more strict, and opt for a 2% rule to ensure a greater margin for profit.  Some rental markets are not as lucrative and 2% is harder to achieve.

What if your home doesn't meet the 1% rule?

Well, then you probably need to keep looking.  There are lots of reasons why, but let me give you the most obvious example that makes me strive to meet the 1% rule. 

Historically, a mutual fund in the stock market achieves about 7-8% returns annually.  When you invest in a mutual fund, you literally spend a few minutes making the transaction and then you move on.  You might spend a little time checking your investment, but essentially, it becomes a passive investment and does not cost you any additional time.

Therefore, if you are going to spend your time renovating, renting and managing a rental home, you should expect something more for your time than what you could otherwise achieve passively in the mutual fund.  You need to get paid for your extra effort and time.  If you can meet the 1% rule, you will likely see better returns on your money than what you'd see in good to average mutual fund.  You are rewarded for your additional work with additional returns.

This is just a brief overview into how the 1% rule comes into play.  There is a lot of additional math that does need to be considered, but usually the 1% rule is a fast and easy way to size up a property and see if it will work for you.  Many people are confused by the 1% rule because they don't understand why it matters; I hope that this helps break it down a little bit.

Have you purchased a home that meets the 1% rule?  Do you consider the rule when you are looking for rental homes?

- Casey

INVEST IN YOUR COMMUNITY

One of the best ways we have found out how to make our homes more appealing and better suited to the market is through investing in our community.

Investing does not always equate money.  There are a lot of forms of investment that bring great returns.  Investing our time, talent, and treasure in our community has expanded our knowledge on what our clients are looking for, and how we can better meet the needs of those we serve.

For example, we are active in several community organizations, community parks and recreation activities, religious organizations, and the local arts community.  We attend local events and socialize with neighbors.  We do our best to lend a hand in organizing neighborhood socials, events, and groups. 

Participation in these activities not only allows us to grow as a family and as individuals, but we engage in discussion that educates us on the frustrations and limitations of our community.  We also learn about plans that are being developed to improve the community for expansion and growth.  We hear the needs of the area, the highlights of the neighborhood, and see the direction things are moving.

While this may seem lofty and unimportant, it is anything but.  If you understand where your community is headed, you can be wise in your financial decisions about how to invest your money.  For example, if you know your city is about to embark on a downtown restoration project where they plan to highlight historic projects and preservation, then you have an idea that land and homes in that area will likely appreciate with the investment by the city.  Now might be a time to look at the adjacent properties that might be currently undervalued so that you can invest early. Likewise, if you learn the city plans to expand a major operation and relocate it to another area of town, this could move jobs out of your area and relocate them.  Property values can be affected as the demand for your location might decrease.

Concurrently, you can also learn about what people like and dislike about their current homes and neighborhood.  Are they craving more space? Better quality appliances? A nicer layout? Improved maintenance? The list goes on.  Whether they rent or own homes, they have something to share and you get a sense for what is trending in your area now.

Understanding your community is imperative to understanding how to optimize your rental.  knowing the needs and plans of those around you will help you better serve your clients and ultimately result in a better place to live for you and them.  Even small, local investments of your energy, talents, and money can offer great returns both socially, mentally, and physically. 

What have you learned about your community this week? Does it spark an idea that you might be able to act on? What might the result of your action bring? I'd love to know!

- Casey

Quick evaluation of a potential rental property investment

One common question: What am I looking for when I tour a potential investment home? 

Good question.  There are lots of things to look at when you consider a purchase of a rental home, but let me give you my quick list that I have created for a fast evaluation of a property for purchase.

I tend to focus on the "big guns" first. I look at high dollar items that will quickly add a lot of cost to the transaction.  Here are the things I typically inspect:

ROOF

• How old does it appear? Most roofs last 15-30 years depending on the shingles
• What type of shingles are there? 15 year flat shingles? 20 year? 30 year architectural shingles?  The more expensive the shingle, the longer it usually lasts.
• Do the shingles appear well intact? Any dents? Any ruffles? How is the flashing?
• Roof angles and pitch - the simpler it is, the cheaper it is to redo.

WINDOWS

• Have they been replaced with vinyl?  On historic homes, old windows can be beautiful if in good condition. Equally, they can be a disaster if they are spent.  Drafty, high in cost to maintain, dysfunctional and difficult to use.  They are also fairly expensive to replace.
• How many windows? This can add up quick if there are a lot
• How big are the windows? You guessed it, the bigger they are, the more they cost to replace.

HVAC SYSTEM

• How old is it? Look for a date on the machine.  That date is usually the date it was made, not installed, but it gives you an idea.
• Older homes often have additions. Are they ducted for central heating and air, or are there window and electric heating units?  It costs money to re-duct systems, and often, there are difficulties with tight spaces to do so.
• Does it work? Check the thermostat and see what the response is.

FOUNDATION

• Do a quick round about look.  Do you see crumbling?  Shifting in the brick or blocks? Do you see "step cracks"?  These are cracks that follow the bring stacking line and zig zag up the brick.  These can be signs of serious issues.  Though anything can be repaired, the question becomes what the cost will be?

KITCHEN & BATH(S)

• Surfaces - what countertops are there and what are their condition?
• Appliances - condition, age, functionality, style?
• Shower and Toilet - condition, style, and function (make sure the water is on at the house before testing that)
• These are things that quickly add up to high spending if they are dated.

FLOORS

• Are there hardwoods?  Big bonus if there are. Hardwoods are expensive, but their condition matters too.
• Ceramic tile?  If well done, this material can outlast a lot of other floorings, but can also become dated fast.
• Are they level?  In older homes, you can expect some settling of the floors and this is forgiven.  However, some settling does not equate floors that are all over the map.  Usually, if you see very uneven floors in a home, there is a chance that the foundation is compromised or there has been a water incident in the home and there could be rotted joists beneath the floor. Both are very costly to deal with.

I hope that helps give you some insight in how to quickly sum up a property in terms of financial risk to invest.  Clearly, this is a minor overview, but it is my "go to" list to quickly tally what a house might take to make it a home for someone special.

Seize the day and we'll talk soon!

-Casey

The Birth of Haymount Homes

Welcome!  Today is the first day of our website.  We are proud to be moving into the online space and we hope you'll become our fast friends.  A little about ourselves, we are a family of six (well, seven if you include our dog) and we are a proud military family in Fayetteville, NC.  Fayetteville has been home to us for nearly 14 years and we have embraced the southern charm of our historic neighborhood, Haymount.  We don't believe there is a better place to call home and we're excited to welcome you to it!