Bridget Alves                of Valencia

Blog - Full Service Real Estate Group, Inc

Investing in a home to rent? Here's how to keep tenants

Bridget Alves - Monday, May 02, 2016

One of the worst things that can happen if you own a home that you intend to rent out is to have long periods in which the home is uninhabited. During these times your investment is effectively a liability. You're the one stuck with the mortgage, you're the one paying the utilities, and you're the one who's going to be wondering if the whole thing was even worth it. If you're thinking of buying a home with the intention to rent it out, or you're already the owner of one or more rental properties, here are some tips to help you get, and keep, your tenants for as long as possible.

Take a good look at prospective renters' backgrounds
The obvious things you'll want to look for will be anything having to do with paying their rent on time and whether or not they've had any evictions. What may not be so obvious, though, will be to look at the length of time they stayed at any one residence. Sometimes, a person looking to rent a home will tell you straight-away that they plan to be in the area or home for only a year or two. Other times they won't. If their rental history indicates that they typically move every 2 to 3-years, it will be reasonable for you to assume that's what's going to happen if you rent to them, too.

Ask them why they're moving to the area
If the person is from out of town, asking what brought them to town can provide valuable insight into whether or not they plan to stick around. For example, a family moving to the area with a young child because they like the school system indicates that they plan to remain. Additionally, moving to be closer to family and friends can also indicate a desire to remain in the area.

Don't buy a home you wouldn't live in
When you buy a home you don't plan to live in, there can be an element of “disconnectedness” in the purchase. This “disconnect” can lead investors to buy homes in less than great neighborhoods simply because they're inexpensive. While there's nothing inherently wrong with buying or renting a home in a lower income neighborhood, it can lead to complications in finding (and retaining) tenants later; and the neighborhood itself can greatly limit the home's appreciation as years go on.

When you buy an investment property, that property is your product, and you want to make sure the product you're showing to the people is the best one possible. Treat it like you live there. If you think it could use some improvements regarding curb-appeal, make them. If the place could use some upgrades on the interior, then make those too. Homes are supposed to be warm and inviting, ensuring that the home(s) you're renting out feel that way will surely help you keep your tenants.

How do you know you're getting the best deal?

Bridget Alves - Monday, April 25, 2016

Moving is a stressful process in and of itself, to be sure. Doubts and fears regarding the price you're paying for your new home can make it far worse. One of the best things you can do for yourself when looking for your new home is to give yourself the ability to make the purchase in confidence. If you know you're getting a good deal (or, at least, the best possible deal you can get), it can take a serious load off your shoulders and free your mind to deal with everything else. The question is: how do you make a purchase with confidence? After all, a new home is likely going to be one of the biggest purchases you ever make in your life.

Be realistic
Take a look at your budget and see just how much you can spend on a mortgage without having to lower other expenses. Just because you qualify for a $300k home loan doesn't necessarily mean you can afford a $300k home. If you find yourself in a position where your monthly mortgage payments are going to lower the budget for things like food, entertainment, car-related costs, etc., then you may need to rethink things.

Get info on the area
So, you've found a home that fits comfortably within your budget – good job! Your next step will be to get information on the area the home is in. Things like the school district, crime rates, accessibility to freeways, nightlife, commercial areas, etc. Even if the info regarding the area doesn't all apply to you, knowing it is still important. Regardless of whether or not you plan to have children, a home in a good school district will often have a higher resale value than one that isn't.

Get an appraisal

Most lenders will require an appraisal anyway, but even if they don't, make sure you get one. The appraiser will be able to to tell you the home's worth and you can then compare that to the seller's asking price.

Compare similar homes' selling prices

Most neighborhoods will have homes that have been bought and sold recently, so compare the price of the home you're interested in to recently sold homes in the area. If the home you're looking at is significantly lower, there's probably a good reason for that. Ask the seller if there are any issues with it. If it's significantly higher, there's probably a reason for that, too. Make sure you find out the reason(s) if you find yourself in either of these situations.

Does downsizing really save you money?

Bridget Alves - Monday, April 18, 2016

When couples decide to start a family, they often look for homes of a size that will comfortable accommodate them and their kids. This is great while everyone is living there, but once the kids move out and it’s just the two parents again, the subject of downsizing often arises – especially when said parents have retired and are living on fixed incomes. Before deciding to move into a smaller home, there are some considerations that need to be taken into account if you really want to know whether or not it makes financial sense.


Moving costs money in packing materials, a truck, helpful hands, etc. All of these costs are going to have to come out of pocket if you’re living on a fixed income, and they can be considerable. Is it really worth digging into your bank account to foot the bill for moving?


What about storage? Over the course of a person’s life, they tend to accumulate a lot of “stuff.” If you move into a smaller home, what are you going to do with the things that aren’t going to fit? Many people choose to put these items into storage, but that’s going to cost you more money. A storage room (or, heaven forbid, two storage rooms) can easily cost 2 to 3-hundred dollars a month. And then there’s the work involved. If you’re the type of person who gets emotionally attached to a lot of things, odds are these things are all over your house; in the closets, crawlspaces, attic, etc. and de-cluttering the place is going to be a ton of work.


Downsizing can indeed save money in the long run, provided that you take into account all of the costs associated with moving and storage. If you have your heart set on a smaller place, odds are you’re going to get one. If you need a smaller place, but lack the energy to move yourself, there are a number of services available that can not only help you de-clutter the home, but they’ll pack and move your things without you ever having to lift a finger. Just know that the easier you want your move to be, the more it’s going to cost.

Lose the bidding battle, win the buying war

Bridget Alves - Monday, April 11, 2016



Placing a bid on a home is exciting, but it doesn’t guarantee that the place is going to be yours. Depending on the market in the area, there may be plenty of people placing bids on a particularly peachy piece of property. If your bid isn’t accepted, though, don’t fret – all is not lost!


Just because someone’s bid was accepted over yours doesn’t necessarily mean that they’ll end up with the house. Deals fall through all the time. That being the case, let the seller know you’d like your offer to remain on the table as a backup; they may just take you up on it. The reason for this is that once they accept an offer, they’re going to start looking to move. If they have their new home already selected, they may begin moving things over right away. If the deal falls through, the seller is still going to be in “moving mode” and is far more likely to accept the next best offer than to hold out for a better one.


Also, the original buyer may rescind their offer for a number or reasons. The most common one is because that, after the home was inspected, additional issues came up that soured the buyer’s taste in the home. These issues aren’t necessarily catastrophic, and they don’t mean a great deal of work needs to be done on the home. Some folks just like to move into a home without having to make any upgrades or repairs, and that’s fine.


If you do choose to keep your offer on the table as a backup, make sure you set a time limit for when the offer expires. If the original deal falls through a month after you’ve purchased another home, you could be in for a huge headache when the seller comes a calling. Also, ask if you can include a first-right-of-refusal clause in your backup offer. This will allow you to stay first in line if the deal falls through, but it doesn’t obligate you to purchase the home if you’ve changed your mind.


Whatever you do, make sure you get all of the terms of your backup offer in writing. You’ll want to ensure you have a record of their agreement to the terms, as well as their agreement to sell to you within a certain frame of time.


Placing a backup offer on a home doesn’t always work out, but if you’re a serious buyer and you’re really in love with a home, asking to place one certainly won’t hurt. You never know, you may just end up with the home.

Earthquakes and fires and floods, oh my!

Bridget Alves - Monday, April 04, 2016

It’s always sad to see a story on the news about catastrophic floods or fires destroying neighborhoods and leaving people homeless. Some of these folks will have insurance policies with companies that aid them in purchasing a new home, or repairing their old one, but the unfortunate truth is that many do not. While there’s really no way to know if you’re ever going to end up being one of those unfortunate souls, there are ways to reduce the odds.


Flood maps

Here in Southern California, flash floods are a thing. They happen. To help keep your risk of winding up in the path of one, ask your real estate agent to show you the flood maps before you buy a home. Homes that are the most at-risk for water damage are those that are on ground that’s angled downhill. Also, check the grade of the lawns. Sometimes, the front and back yards are graded ever so slightly upwards from the house, which means that heavy rainfall will be funneled toward the home. If you find that your home has this problem, it’s possible to re-grade the yards to funnel water away from the house.


Know where the gas lines are

You’ll want to start by finding out where the main lines are that feed the houses in your area and how close in proximity your home is to them. Main lines sometimes explode, and if your home is located too close …


Second, you’ll want to know where the gas lines that feed your home run through your yard. Knowing where the gas lines are can help prevent little Timmy from accidentally severing a gas main while he’s digging for buried treasure in the front yard.


Assess the trees
Trees in the yard can be a beautiful thing, but during a storm, they can fall down and result in terrible damage. Also, the roots of trees planted too close to the home can damage the foundation or basement (if you have one). If you’re not sure about a particular tree in the yard, there are folks you can call that specialize in this sort of thing. An arborist or tree specialist will be able to help you out.

Buying an older home? What you need to know.

Bridget Alves - Monday, March 28, 2016

The old saying: “They just don’t make things like they used to” applies to a number of products, and none more so than homes. If you’re the type of person who is attracted to older homes and their old-fashioned appeal, then you’ll want to read on. Older homes, with their architecture and styles, can have a ton of character and charm – but they can also have a lot of problems.


Old Wiring and Plumbing

Homes built a century ago, or close to it, were constructed using the best that the builders had available to them. Odds are, if the home is 100-years old, the wiring has probably been replaced since then. However, it’s extremely important that you inquire as to whether or not it has been, and to find out when. If the wires were replaced at some point in the 70s or 80s, you’re probably ok. But, if the place hasn’t had much done since F.D.R. was in office, you’re probably going to need a good electrician to take a good, long look at what lies behind the walls.


If you find that the home has original wiring, it will need to be replaced. Most insurers won’t insure homes that have old, out-dated wiring.


The same goes for plumbing. Running water is a wonderful thing, and in the short-term, it may seem rather harmless. But over time, water pipes will need to be replaced for any number of reasons. Century-old homes that have been occupied more or less constantly since their construction will not have their original pipes (unless the original plumber was a wizard). Regardless, when you find an old home that you’re interested in, you’ll want to have someone take a good look at the plumbing and ensure that everything seems okay. If the plumbing needs substantial work, you definitely want to know as soon as possible because you can use that info when working out a price.



Many old homes contain several bedrooms, but only one bathroom. If there are more than 3 people who are going to live in the home, you’ll want to make sure there’s at least 2 bathrooms… or look into adding on a second.


Old homes can sometimes have problems with the floors, as the foundation has been sitting for a very long time. Also, older homes can sometimes have had several additions made (such as a second bathroom) which will leave a room or 2 needing to be stepped up or down into. If this unevenness doesn’t bother you, great! If you’re going to have someone in the home who has trouble walking or seeing, though …

Preapproval and how to mess it up

Bridget Alves - Monday, March 21, 2016

Being preapproved for a home loan can reduce a ton of the stress associated with home buying. After all, shopping can be a blast, but trying to get all your ducks in a row financially after you’ve found your dream home can sometimes be a nightmare. Unfortunately, even if you’re preapproved, you can still mess up your finances enough to reduce the amount you’re preapproved for, or tank the deal altogether.


  • Do not apply for new credit or create new debt after being preapproved. Credit inquiries, like the ones that are used when applying for credit cards, can lower your credit rating. Also, buying something using lines of credit you already have will offset your debt:income ratio and can ruin your preapproval.
  • Keep most of your money where it is. If you’re the type of person who sees to their finances by shuffling around large sums of money, try to hold off for now. Mortgage lenders want to be able to track all of your finances, and the more you move things around, the harder that will be. If they have trouble acking funds, it will raise suspicion that there are funds you didn’t claim when you applied for a mortgage.
  • Pay your bills on time. Payment history is 30% of your credit score, and making late payments after being preapproved for a mortgage can alter your score and change the lender’s opinion about whether or not you can actually pay.


Ultimately, lenders want to see stability; stability in your income history, your payment history, where your money is, etc. If things start going haywire, or your credit rating drops too much, too quickly, the lender is likely to get skittish and either approve you for less than you originally planned on or flat-out deny the application.

Improve your chances of being approved for a mortgage

Bridget Alves - Monday, March 14, 2016

When you’re in the market for a home, the search is often the most fun. You get to attend open houses (and, hopefully, get some free refreshments), check out all sorts of interesting styles and types of architecture, and eventually settle on the home that’s right for you. Unfortunately, once you’ve decided on a home, the stressful part of home buying begins: applying for a mortgage. There’s nothing worse than having your heart set on a beautiful new home in a wonderful location only to be turned down for a mortgage. Here are a few things you can do beforehand to help improve your chances of being approved for a mortgage:


  • Get your credit reports early. There are 3 major credit bureaus, and you’ll want to get a report from each one to make sure there are no errors. If you have late payments or collections, ask the creditor to remove them. Additionally, if your credit score is lower than you’d like, work with a credit counselor to come up with ways to improve it.
  • Know your income. Lenders like to see at least 2-years of continuous employment in the same job in their applicants. Sometimes, if you’ve changed companies but still do the same job, lenders will still count your income from your previous employer as well as your current one. However, when an applicant has changed fields in the past 2-years, lenders are often apprehensive about approving the application.
  • Pay off as much of your debt as possible before you even apply. If you have too much debt in relation to your income, regardless of whether or not you’re making payments on time, a lender might not approve your application. Typically, they don’t like to see a debt:income ratio above 43%.
  • Make sure you can show where your funds come from. If you’ve been gifted a down payment, make sure you’ve got a paper trail showing where that money came from. Additionally, make sure that the person (or people) who gifted you the down payment can show where the money came from and that they can actually afford to gift you the payment. They’ll likely need a good deal of their financial information ready, so ask them to get it available ahead of time.

Unless you’re fabulously wealthy, or choose to live way, way below your means, there’s really no sure-fire way to ensure 100% that a lender will grant you a mortgage. However, taking these 4 tips to heart before you apply can increase your chances and help reduce some of the stress.

Common pitfalls of first-time buyers

Bridget Alves - Monday, March 07, 2016

Maybe you’ve just gotten married, or finally gotten that good-paying position you’ve worked so hard to achieve. Either way, you’re ready to buy your first home. This is truly an exciting time and one that should be savored. However, first-timers need to be extra careful not to make some all-too-common mistakes when shopping for that first home.


Mistake #1: You don’t know what you can afford
Whether you’re a couple living on two incomes or a single person making some serious money, how much you can borrow and how much you should borrow are two very different things. Mortgage qualifications can be tricky, and sometimes a person will qualify for a mortgage that they can’t realistically keep up with. Just ask the people who lost their homes when the housing bubble popped a few years ago to tell you just how disastrous it can be when this happens.


How much you should borrow will depend greatly on the kind of life you choose to live. If you’re the type of person who likes to stay at home and takes a thrifty approach to their expenses, then odds are you’ll be okay with a pricier mortgage. However, if you love the night life, spending money on things and experiences, like to travel, etc. then you may want to take a very close look at just how much of your monthly income is going to be eaten up by your house payment.


Mistake #2: Focusing too much on your mortgage

While your monthly mortgage payments will definitely be the longest running payments you’ll be making, they aren’t the only ones. Make sure you take into account the closing costs associating with home buying, as well as moving costs and any repairs you may need to make. You’ll want to leave several thousand dollars in your budget allocated to these costs.


Mistake #3: No down payment

Just because you can qualify for, and afford to keep up with, a mortgage doesn’t mean you’re ready to buy a house. If you can’t put down at least 20% of the closing cost as a down payment, then you’ll need to purchase private mortgage insurance. This will increase the cost of your monthly mortgage as well as the amount of money you’ll need to borrow to buy the house.


These mistakes are not meant to scare you, but to show you that buying a home can be more complicated than it seems. Provided you take the time to inform yourself of what you need to do, and where you need to be financially, buying your first home should remain the exciting experience it should be.

Not interested in moving? Buy a home anyway!

Bridget Alves - Monday, February 29, 2016

There are two good reasons to buy a home. The first, and most obvious, is because you want to live there. The second reason is because real estate is a tried-and-true investment vehicle that has been an effective way to build wealth for a long, long time. If you have the money to buy a home, but you’re not looking to move, here are a few reasons why buying anyway might be a good idea.


  • There are lots of ways to invest. Buying and selling stocks and commodities, for example, all have one thing in common: they’re intangible assets that you have very little control over. If you purchase stock in a tech company, for example, and that company’s CEO makes some bad movies, you’re out of luck. With a home, though, you have much more say in the matter.
  • The rate of return via renting a home that you own can be considerable. When you rent a home that you own, the money is paid to you and you use that money to pay the mortgage. Currently, rental increases are outpacing the growth of home prices; which means that you’re likely going to be able to rent the home out for more than the cost of the mortgage. So, when your renters pay you the monthly rent, a portion of that money is pure profit.
  • The renters put equity in the home for you. Even if the monthly rent of your home does not exceed the cost of the mortgage, every payment your tenants pay you, that you in turn pay the bank, becomes equity. If you decide to sell the home ten-years on, provided you get at least what you borrowed back, all of the money you accrued in rent over that time period becomes yours.


Interest rates are low right now, and the market is trending upward, which means right now is a great time to buy. Remember, though, that if you choose to become a landlord you will take on some responsibility for the home even though you don’t live there. Make sure you have someone draft a very comprehensive rental agreement so that you and your tenants know exactly who is responsible for what. If you play your cards right, can easily put yourself on the road to financial freedom through owning several homes.

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