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Understanding the SEER System and Its Relation to Your A/C Unit

Understanding the SEER System and Its Relation to Your A/C Unit


Today, let’s talk about the things to keep in mind when it comes to replacing your air conditioning unit.

First, what is a SEER rating? Well, SEER stands for Seasonal Energy-Efficiency Ratio, and this basically measures the air intake and outtake of your unit and provides a rating system to weigh how efficiently it runs. Most air conditioners have a SEER rating of around 13 or 14, depending on that state’s requirements, with the maximum being 21.

I’ve personally replaced all the systems in my own home, with the exception of one little unit that is now 27 years old. It still runs, but given its age, I figure that it’s getting to be time to replace it, especially since it’s not all that efficient.

I had my trusted heating and air company come out and look at my systems, but they didn’t even price out a 14 SEER system; they said that a 14 SEER unit would eventually go out, and they instead gave me prices for 15 and 16 SEER units.

That’s when I decided to get a second opinion, but the second company to look at my units didn’t bother pricing out a 14 SEER unit, either. When I asked them why, they told me that a 14 SEER unit was exactly what I needed. The reason they gave me was related to my furnace—it was old, but not so old that it needed to be replaced. It was, however, so old that it didn’t have a variable speed motor.

This second company told me that yes, I could replace my unit with a 15, 16, or even a 21 SEER unit, but if I did, I wouldn’t get any benefit from it. That’s when the bells started going off in my head: The company that I’d been using for 15 years has been withholding information and trying to upsell me!

Since I got two different opinions on what I should do, I decided to get a third and fourth opinion. I posed the same question to companies three and four: “Does a 15 or 16 SEER system match my furnace?” Both companies were completely honest with me and told me no and that I should stick with a 14 SEER system.

Overall, the price for the replacement system went from $5,200 for a 16 SEER system to $3,150 for a 14 SEER—that’s a huge amount of savings!

After that experience, I went online to do some research. I found all kinds of information on the SEER rating, energy efficiency, and calculating cost-benefit ratios, but nothing about matching the SEER rating of a unit to the type of furnace you have.

In the end, if you want the efficiency of a 16 SEER system and you have a slightly older furnace that’s not really ready to be removed, then you’ll actually need to replace your entire furnace, too. Do you want to spend the money to replace two systems when you really only need to replace one?

The moral of today’s story is that you need to ask a lot of questions, even if you’re working with a company that you’ve known and trusted for years.

If you have any questions about this or other real estate topics, please feel free to reach out to me. I would love to hear from you.

How to Collect Rent and What to Do If Your Tenant Doesn’t Pay in Hillsborough

How to Collect Rent and What to Do If Your Tenant Doesn’t Pay in Hillsborough

A good tenant pays rent on time every month, but sometimes even good tenants run into trouble and your payment may be late once or twice during a tenancy. That’s understandable, but a tenant who chronically pays late is a big problem.

Increase the chances of having your rent paid on time with a solid rent collection policy, consistent consequences, and flexibility in how the rental payments are made.
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Do You Need a Carbon Monoxide Detector?

Do You Need a Carbon Monoxide Detector?

Carbon monoxide poisoning is a very serious issue. The CDC has said that over 10,000 people each year get treatment for some kind of carbon monoxide poisoning, and well over 430 people die each year as a result.

Because of this, state legislatures across the country have changed the rules about when a carbon monoxide detector is required in a home or a rental property.

If your house or rental property uses gas in the furnace, stove, or any other appliances, or if you have an attached garage, a carbon monoxide detector is required by law. Even if the home doesn’t have gas appliances but it has an attached garage, it needs a carbon monoxide detector on every level of the home.

Well over 430 people die each year from carbon monoxide poisoning.

Why is there such a focus on garages? Well, in the event that a car housed in the garage was left running, the deadly fumes could get into the home.

I can say that once I learned about this rule, I immediately went out and replaced my carbon monoxide detectors on each level of my home. I recommend that you do the same, or at least replace the batteries in the ones you currently have.

If you have any questions for us about buying, selling, or investing in real estate, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.

What Type of Lending Is Required for 1031 Tax Exchanges?

What Type of Lending Is Required for 1031 Tax Exchanges?

What type of loan do you need to get when doing a 1031 tax exchange?

To recap, if you sell an investment property, a 1031 tax exchange allows you to defer paying a capital gains tax on it as long as you use the funds to purchase another investment property. In other words, you can keep that money invested in the new property and watch it grow.

To qualify for this exchange, you need to be investing in a “like-kind” property, meaning it can’t be your residential home or a second home.

The type of loan you need for this exchange depends on how you hold title to the original property—do you own it in your own name or did you purchase it in the name of an LLC?

If you own it under your name, you can use a conventional loan. If it’s owned on behalf of an LLC, then you need to purchase your new property on behalf of that LLC, and you can’t use a regular residential loan—you need a commercial loan (a client of mine recently found this out the hard way).

It’s very important that you work with a knowledgeable agent when doing a 1031 tax exchange. If you’re thinking of doing a 1031 tax exchange and you need any assistance, don’t hesitate to give us a call.

As always, if you have any other real estate needs, feel free to reach out to us as well. We’d love to help you.

Expert Advice on Real Estate Investors and Loans

Expert Advice on Real Estate Investors and Loans

The Real Estate Experts work with a lot of investors, and Teresa Parker from Union Home Mortgage always does such a great job with them, so we thought it would be beneficial to bring her in to answer some loan-related questions for our investor clients.

So, is it better for a real estate investor to purchase a property with cash or with a loan?

Teresa typically recommends that clients review their options. A lender should be able to put something together that will show them the benefits of either utilizing a loan so they’re not depleting all of their liquidity, or buying with cash.

She uses a program that allows investors to clearly see the benefits of purchasing investment properties by using leveraging with a loan versus depleting all of their liquidity to buy a property. This tool can also show people their projected liquid net worth and total net worth over certain periods of time. It can look forward five, 10, or 15 years, and allows you to view a comprehensive analysis of how much better off you would have been if you’d purchased with a loan or with cash. It can also show you whether, if you leave your funds invested as they are, you’ll grow using that vehicle.

A house is going to appreciate at the same rate, regardless of whether it’s fully leveraged or whether it’s fully owned outright. Homes don’t appreciate any faster than what the market dictates. When an investor makes a cash-only purchase, they’re missing out on the opportunity to place those funds in an interest-bearing account, where they’ll grow.

So what are the biggest challenges Teresa faces when working with investors?

One of the issues Teresa has frequently seen, especially with newer investors, is their tendency to convince themselves that they can’t qualify to buy an investment property. While they make a very good income, have sufficient funds to support the down payment, and have the desire to become an investor, they just feel like they can’t qualify.

However, the lender should be able to show the investors ways that they can qualify for buying an investment property, as well as how to utilize and leverage some of the potential rents on the particular property they’re buying. That also helps them with their debt-to-income ratio. Is it better for an investor to purchase a property as an individual, an LLC, or a corporation?

Clients that Teresa works with are buying homes in their own names, whether that be a single-family, duplex, triplex, or quadruplex. Clients that buy using their own name will get regular preferred loan interest rates. If you buy an investment property in the name of an LLC, the loan will be in the name of the LLC. In that case, you’ll be looking for a commercial loan, which have different terms and rates associated with them. In a future video, we’ll address what happens when you buy a property individually and then want to assign it to a corporation.

If you’d like to contact Teresa for questions or information, she can be reached at (919) 697-2598 or at [email protected].  

For my team’s part, we would love to know what kinds of questions you have for us. Reach out and let us know, and we’ll be sure to address them in future videos. We hope to hear from you soon!

Why Professional Photography Is Critical to Your Home Sale

Why Professional Photography Is Critical to Your Home Sale

With buyers increasingly starting their home search online, your marketing efforts are actually reaching them all over the world.

From the outset, buyers want to see pictures of your home. If one room of your home is messy in any way, it’ll be reflected in the picture online, and buyers have a low tolerance for clutter. Your Realtor will help you position your property with professional photography so that your home is highlighted in its best possible light.

Your Realtor may use a staging service or they may conduct the staging on their own by way of drone footage or virtual staging.

Ultimately, the goal is to have a marketing plan and professional photography is an incredibly important way for buyers from all over the world, and who are looking in your area, to see your home.  

If you have any questions about professional photography or these types of services, don’t hesitate to be in touch. I’d be happy to help!

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