Can I sell my home within the 3 years?
Yes. We hold an annual review in which we enlist the help of the Top Realtor in your area to determine what the current market value is of your home. Once you have the numbers you need, you can make a decision on whether you want to sell the home or continue leasing it out. We'll even discount the commission rate for you if you sell with one of our Top Realtors. See Realtor Network.
How is my Guaranteed Lease amount determined?
Determining lease value is not an exact science. It takes years of experience and expertise to accurately determine the Guaranteed Lease amount. We use the top property management companies in your area to determine what the home's market value of rent is. Your Guaranteed Lease amount is based on the current market rate of rent for your home.
How does SMA make money?
We are paid by your builder to facilitate this program. The builder will make less than they would have by not offering our program but are thrilled to do it because this enables so many more buyers to get into a new home. They make up the loss in extra volume. Everyone agrees that in this market, quick nickels are better than slow dimes.
How are tenant repairs handled?
Up to $1,000 per year or up to the balance of the sub-tenants security deposit will go towards any tenant caused damages. We recommend homeowners change the insurance to a Landlord’s Policy and raise the deductible to $1,000 which may save money on premiums. By doing so, you know that any tenant caused damages under $1,000 are paid for and anything above that will most likely be covered by your insurance.
Do you allow smoking or pets?
Absolutely no smoking is allowed in the homes we manage. Pets are handled on a case by case basis. We are responsible for tenant caused damages which includes any damage caused by a pet. So naturally we wouldn’t want to risk a pet in a home that is going to cost us money. Small pets don’t pose much risk and will be considered. Approx 70% of tenants have pets. Vacancy rates go up dramatically if we have to advertise that we don't allow pets. Our standard pet deposit is $500 per pet. We do not allow dogs less than 1 year old, or any breeds which are on the insurance carriers aggressive breeds list. We also have the property manager check previous landlords to make sure that the pets have not been a problem. As long as they check out and give a deposit then we allow pets.
How are tenants procurred?
It is in all parties best interest to secure the best possible tenant for your home. We heavily scrutinize every possible tenant to ensure we are minimizing our risk and yours. Our property managers do background and criminal history checks, run credit reports, and call past Landlord references.
Do you inspect the home throughout the lease term?
We inspect all properties on a regular basis to ensure that your home and yard is being well maintained by the tenants.
What does it take to qualify for the 3 Yr lease?
You simply need to buy a home from one of our preferred builders and qualify for the new home without selling your existing home. In most cases, you will need to include both your existing and new mortgage payments in your debt-to-income ratios in order to qualify.
What happens if the home is vacant or the tenant doesn’t pay?
You’ll receive at least our guaranteed payment regardless of whether the home is rented or even if the tenant doesn’t pay. You’ll feel secure knowing that no matter how many months the home might sit vacant you will receive the Guaranteed Rent Payment every month.
Do I need to have Equity in my home to use the program?
No, it doesn’t matter if you’re upside-down or have your home paid off. You can use the program regardless of your equity position. Most savvy homeowners recognize that it’s one of the bet buying markets we have seen in generations. That also means that it makes for a tough selling market. Since we take all the risk for 3 years, it makes sense to buy now and sell later, even if you have equity in your home.
When will I receive my first payment?
The first payment is designed to coincide with your first payment on the new home. The goal is that you’ll never have to make a double mortgage payment during the 3 yr lease. If you turn the home over to us the same month you close on your new home, your first rent payment will come the same time your first new home mortgage payment is due.
Why are the first two months waived?
It usually takes us 45 days on average to get a renter into a home. We win some and lose some. In some cases we are able to place a renter quickly in other cases it takes months and months. We are paying for the upfront lease fee anytime a new tenant is placed, which is equal to a full months rent. We also pay for the 10% monthly management fees the first year as well. The 2 month waiver allows us the time to find a great tenant and help offset some of the costs we cover. Again, in some cases it takes us more than the 2 months and in some it takes us less. We need to set proper expectations as to when you'll receive a payment regardless of how long it takes us to find a renter. The good news is that you'll get your first payment to coincide with your first payment on the new home, as long as you give us possession of your home the same month you close on the new home. That means that you'll never have a double mortgage payment since the new home payment isn't typically due until the 1st of two months after you close.
How much are the fees for property management?
Property managers typically charge an up front leasing fee equal to one months rent to cover the cost of advertizing and tenant placement. The second type of fee is the monthly management fee, which is typically 10%. In addition to sending you the guaranteed rent you receive during vacancies, Smart Move will also pay all of the upfront leasing fees when a new tenant is placed, for the entire 3 year period. We will also pay the first year’s monthly management fees. You will be responsible for the monthly management fees in years 2 & 3.
What happens at the end of the 3 Year Lease?
By the end of the 3 years we typically have a quality tenant that is paying rent every month. You are welcome to continue renting the home through our property manager or you can sell the home with the Realtor of your choice. It’s typically a smooth transition to have our property manager continue to manage the property for you.
How are the utilities guaranteed?
While the home is occupied, SMA guarantees that you will not have to pay for those utilities. SMA will reimburse you in the event that you are billed for utilities after the home has been rented to a subtenant. The utilities will remain in your name until a sub-tenant starts their lease period. Utility costs during vacancies are minimal as the water; lights, etc are not being used.
Can I list my home while it is being rented?
You can list your home as long as the tenant has agreed to allow showings. If you sell the home, you’ll need to make sure that you honor the terms of the sub-lease by setting the closing date after the current lease has been fulfilled.
Does SMA make money if the home rents for more than the guaranteed payment?
The guaranteed payment is designed to have something to fall back on in the event that the home is vacant or the renter doesn’t pay. If the home rents for more than the guaranteed payment, then we pay you all of the up-side. We don’t make money off of the rent. Our goal is to help you get as much as possible in rent each month.
Is their any maintenance that I will be responsible for during the leasing period?
The tenant is responsible for general up-keep and maintenance of the home. If the tenant is not maintaining the home or landscaping, then SMA will send out a crew to rectify the problem. You as the owner would still be responsible for winterizing sprinklers and swamp coolers and will only be responsible to maintain the landscaping and snow removal during vacancies.
How are repairs handled?
As an additional benefit of the 3 Year Lease, SMA will pay up to $1,000 each year towards repairing any tenant caused damages. You as the owner would still be responsible for any repairs not caused by the tenant like normal wear and tear or mechanical repairs.
Are their any tax benefits for turning my home into a rental?
Most likely! Check with your CPA to see what tax advantages you’d qualify for by converting your home into an investment property.
Can I count the rent you guarantee to qualify for the new home?
Lenders won’t take into account the rent we guarantee to offset your mortgage payment when qualifying for the new home. You'll need to qualify for both mortgage payments to use our 3 Yr Lease Program. Check with your Builder’s Preferred Lender for more information.
What’s the next step?
Give us a call at 1-866-269-2615 or fill out your information here and one of market consultants will give you a call.