Buying properties and renting them out does not mean the owner has a lot of money. The income is not as free-flowing as people believe. Aside from utility bills and maintenance costs, landlords have to pay the bank. Most, if not all of them, have bank loans to get their business running. Loaning money also means paying interest. Sometimes when interest rates become low, landlords might think about refinancing their property.
Refinancing a rental is when a landlord pays off their current loan and replacing it with a new one. Usually, landlords do this to acquire a lower interest rate and shorten their mortgage term. However, before this becomes possible, lenders will want an appraisal of the property. It is a standard protocol in refinancing a rental unit. Appraising a property will determine if its value is consistent with the amount of money.
• Why it’s necessary
Having a property appraised will mean the landlord has a chance to know its value. The lender will not be able to refinance if the value is not what they expected. And this is why it is a crucial step. The landlord may worry about improving its appraisal and might seek out advice on how to improve it.
• What they look for
Property appraisers mainly evaluate the overall structure of the property. They will inspect the foundation, building materials used, roof, and home systems. They will also verify the measurements of the property and their accuracy.
The appraiser will check garages and basements separately from the living areas – these rooms are still included in the overall appraisal. The landlord must also make sure that he follows building codes. The appraiser will also check for damages.
Landlords must realize that the appraiser is not concerned about the temporary facets of a property. The building’s interior and décor will not affect the value. But it does not mean it is ok to have clutter around during the inspection. The appraiser will look into some internal aspects like security devices, smoke alarms, heating, and ventilation systems.
• How to improve property appraisal
Present documents about past renovations
Let the appraiser know of any renovations and upgrades done to the property. It will show him that the landlord invested money in modifications to enhance the rental. He can present receipts and records of the work done. He can even show them before and after photos as proof.
All landlords would want to make a good impression. The essential thing to do is to do their assessment. Are there issues with the appliances and gadgets? Is the smoke detector working? Are there repairs needed on anything? These questions will help landlords know which items need maintenance. They should look at the property through the eyes of an appraiser.
The property should look its best.
The first thing the appraiser will see is the exterior part of the rental property. For this reason, the outside look must be in its best form. If the property looks incredible on the outside, it will become a good impression. The landlord must make sure that the front does not have any clutter. It also helps to have flowers and plants to add color and make it more attractive.
It is like when you post property listings online on websites like Padleads. We make sure that the pictures are attractive, am I right? So once we post them and syndicate them to other websites, we are sure to entice potential tenants. The exterior is the first thing they see, as will the appraiser.
Make sure the appraiser has a pleasing experience
The appraiser doesn’t have to receive gifts or anything like that. But it does not mean that they should not have a pleasant experience because it can affect the outcome. They will appreciate landlords who are prepared and can answer questions promptly. It will also help if there are no distractions present during the assessment.
These very easy-to-do steps will surely help with the property’s appraisal. Suggest these things to landlords who want to have their rentals appraised. They’ll thank you for it. Trust me.