You’ve Inherited a Rental Property: The First Three Essential Steps

real estate

When Pattie Sheehan and her four siblings inherited a house from their mother, it seemed like they had just received a windfall, but the inheritance was a bigger headache than boon. After sitting on the market for nine months, the house finally sold for less than asking process, and the siblings’ relationship suffered as they argued through the process.

According to CNN Money, this is not an uncommon occurrence, but those who are savvy can avoid this scenario. Instead of selling your inherited property in a tough market, you can keep the home and convert it to a rental property with the following three simple steps:real estate

Educate Yourself

Before making any changes to the property, educate yourself on landlord-tenant law in your area. Many cities offer classes and handbooks to new landlords. To see if your community does, call the local HUD (Housing and Urban Development) office, the county action center, or your city’s neighborhood services department. These departments also offer free mediation services that can be useful if any issues arise between you and your tenants.

Landlord-tenant laws vary from state to state and city to city but, according to the department of Neighborhood Services in Fort Collins, Colo., some of the issues you learn about when taking one of these classes include security deposits, the definition of normal wear and tear, leaky roofs, how to respond to mold, and more. Without the right education, you might make small mistakes like not hardwiring your fire alarm, and those little mistakes can lead to huge liability issues.

Create a Landlord Toolbox

To make your landlord experience successful, you need a tool box — not just the tools that you will use to adjust leaky faucets and repair holes in the sheetrock, but virtual tools that make your job easier. CNN Money recommends using property management software like Quicken, RentRight, or IDEAS property clerk. The AAOA (American Apartment Owners Association) is also an incredible resource and offers background checks, credit checks, and other essential services. By tracking your expenses carefully, you will be able to tell how lucrative your property really is, and by doing thorough background checks on your tenants, you will be able to safeguard and boost your potential profits.

Decide between Vacation Rentals, Executive Rentals, or Family Homes

If your property is in a great spot, you should consider forgoing the idea of renting it long-term. Instead, consider converting your property into a holiday getaway. Your guests will pay more per night for a holiday rental than they would a regular home and, according to HomeAway.com, the average vacation rental owner makes $26,000 per year in rental income.

If your property is not in a travel destination, you can still squeeze extra cash out of it by making it into an executive rental. This sort of rental appeals to business executives who have just relocated to town and are still looking for a permanent home or business executives who are just spending a month or two in town. By attracting this type of renter, you can charge about 150 percent of the average rent in your area.

If you opt to make your property into a vacation rental or an executive rental, you will have to invest some money upfront furnishing and decorating the home. However, depending on the condition in which you inherited the property, you may have had to face these expenses anyway.

Luke Horton is a property manager from Arkansas.

How to Create Stronger Passwords

make stronger passwords

Consumer Reports National Research Center found that more than half of U.S. adults had at least half a dozen password protected accounts, with almost 20% of them using the same password across many of their accounts. With much of our financial data online now, it is really practical to look for ways to secure this highly sensitive information against hackers by creating stronger passwords.

What Makes Your Password Easy to Crackmake stronger passwords

One of the problems with creating passwords is that typically the easier they are to remember, the easier they are to crack.

  • Never use personal information in your password. That means don’t use your child’s name (or birthday), your alma mater, or your home street with your passwords.
  • It’s the same (or very similar) across different sites. Do  you have a favorite phrase or password that you’ve used for your email, banking, and other sites? If so, stop using it and start diversifying. If one of your accounts is hacked, you are making yourself extremely vulnerable.
  • Using common password. Don’t think you’re being clever by using ‘password’ or ‘1234’ as your password.

If you’ve done one or more of the above with creating your passwords, now is a great time to make stronger passwords to protect your precious financial data.

Creating Stronger Passwords

How can you create a password without making it obscure and completely impossible to remember? One way to make your password memorable and harder to break is using pass phrases. Basically what you do is create a memorable phrase (usually limited in length by each site) and insert numbers and symbols in place of certain letters.

For example let’s say you use the phrase ‘eat more foods’. When you swap in numerals and symbols it becomes ‘3a+m0r3f00d$’. It looks more complicated, but it’s just as easy to remember as the original phrase. I’d also like to note that longer passwords can also be tougher to crack.

Consumer Reports ran the numbers on password length and hash-cracking time to get some idea of the difficulty.

Making a password longer also helps when it’s protected by hashing. Using a hash-cracking-time spreadsheet developed by Imhoff-Dousharm, we estimate that it would typically take a $2,000 computer 2½ hours to crack the strongest seven-character password. An eight-character password would hold up for about 10 days, and a nine-character password would last for approximately two and a half years.

Of course there is no guarantee that you will never be hacked, but with a few simple precautions you can make it that much harder for criminals to harm you.

Thoughts on Making Better Passwords

I’d love to hear any tips you have on creating stronger passwords or any stories you have about personal experiences with getting hacked..

Photo Credit:  liako

When To Call Your Partner Out On Over-Spending

couples-and-relationshipOne of the toughest aspects of managing a relationship is organizing finances and getting on the same page as far as budgeting, saving, and spending. Rarely does a relationship work if both partners are not in agreement on what counts as a splurge and what doesn’t.

The failure to have this conversation can lead to not knowing when it’s time to call someone out on over-spending, which in turn can lead to a slow, simmering resentment and, worse, long-term debt. Here is a checklist on when a couples’ spending needs to be better managed:

Frequently Charging to a Credit Card

Obviously using a credit card for small purchases that will be easily repaid is not a big deal. A trip out to buy some cheap sunglasses does not need to be discussed with your partner, nor does an inexpensive lunch or even an afternoon at the movies—with popcorn and soda!

But if the credit card is being utilized for things that you can’t afford, that’s when you have a problem. This ties into the next two indicators, as credit card expenses needs to be figured into your monthly budget for both big and small expenditures.

Monthly Budgets Not Planned in Advance

A couple who shares much of their lives together should also share their finances. This doesn’t mean that one partner’s money belongs to the other, but it does mean that you should be discussing your expenses together and preparing a budget. Whether your bank accounts are linked or not, you should both be on the same page as to what your utility bills will be, insurance costs, car insurance, student loans, etc. This will prevent one partner from spending the last hundred dollars on a new smartphone instead of more pressing expenses.

Big Purchases are not Discussed Beforehand

A sure sign that a couple is not on the same financial page is when one of them makes a big, expensive purchase without discussing it beforehand without the other. This could be as simple as an iPad or as egregious as a new car. Regardless of your combined income, big purchases should always be discussed prior to sliding the plastic. Perhaps your other half has a more pressing financial need that he or she has been reluctant to bring up.

A financially responsible and respectful couple stands to gain more than just a sound bank account, it can also lead to a healthier relationship. Money is nothing to be scoffed at, and being open and honest with your partner should not be underestimated as a huge bellwether test in your relationship.

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