What to Know About Buying a House with Leased Solar Panels

It is a complicated process when an individual wants to buy a house with leased solar panels. Solar panel leases can last anywhere from ten to twenty years. Plus, it can be expensive to buy out of the contract or roll it into a new house purchase with a mortgage service provider.

Solar leases also operate on an escalating payment system, which poses an ongoing liability while under personal ownership. In situations where a solar lease increases one’s debt-to-income ratio, there may be other hurdles to clear when going through the mortgage qualification process. Be sure to review the solar lease contract before signing on the dotted line.

Is it possible that a highly-touted initiative can end up costing a family time, money, and well-being when purchasing a new home?

Possibly. Let’s take a closer look at the issues surrounding the purchase of a home with leased solar panels:

Related: Is Buying A Home Without A Realtor A Good Idea?

How Buying a House with Leased Solar Panels Affects Your Mortgage

Some homebuyers may balk when discovering that taking on a home with leased solar panels means qualifying for additional credit to take on the contract payments for up to 20 years. There is even the possibility that the solar panels become technologically obsolete after paying around $15,000 for the benefit.

Solar panels still generate energy now and in the future. It’s likely technology can create adaptations to account for the lag between technological advances and past purchases. However, the effects on one’s mortgage terms are more important to consider.

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Find Out Who Actually Owns the Solar Panels Before Taking on a Mortgage

There are upsides to purchasing a home with solar energy whether still on lease or purchased outright. The cost and energy savings alone are reasons enough. However, asking a few questions beforehand can help ease anxiety when it comes to taking over the contract.

First, it’s essential to find out whether the seller leased or purchased them. Even if they bought them outright, it’s possible they purchased the solar panels on credit. That makes the seller responsible for paying off the loan and providing proof of ownership before the sale takes place.

Related: Best Time Of Year To Sell A House

Increased Costs Mean a Bigger Mortgage for Buyers

It’s more challenging to obtain a mortgage loan with leased solar panels as well. Leased solar panels require additional funding that is unnecessary for most home sales. Find out what the lease agreement entails, including the contract term length and associated monthly fees.

A homebuyer may even want to discuss how the added cost of leased solar panels affects his or her overall financial picture, too. It may increase one’s debt-to-income ratio and end up being a disadvantage in other areas of a person’s economic life.

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How Solar Panels Affect a Home’s Value

Solar energy has amazing financial benefits since they are more efficient and offer tremendous cost-savings. Plus, it’s clean, green energy that puts power “back into the grid.”

First, buying a home with leased solar panels means that the job is complete. A family can start benefiting from their installation immediately without having to set-up and schedule an installation.
Aside from long-term financial gains on one’s bank account, leased solar panels give a boost to the home’s overall value by $15,000 or more on average due to the immediate savings.
It’s a form of equity that a buyer can’t afford to miss. In fact, it allows the individual to recoup most, if not all, of the original investment in case one decides to take out an equity loan or resell the home later on.
Related: Buying A House Checklist

Know What You Are Getting into Before Going Under Contract

Buying a house with leased solar panels does not disqualify a person from getting a mortgage directly. However, there are a few details to iron out with the bank and financial advisors before agreeing to the purchase.
Transferring the solar panel lease is the major issue to address first. Each manufacturer has different terms, so it’s critical to understand how the process works. Obtain a copy of the lease and review it with an attorney to ensure the details are understood.
It’s likely that the manufacturer requires proof of the pending mortgage before transferring the equipment into the new owner’s name. The prospective buyer must also inform his or her bank that the house comes with leased solar panels. Although rare, the lender may decide not to engage in this type of home purchase transaction.
Buying a home with leased solar panels may be an excellent decision for homebuyers. However, one must determine the best course of action for his or her current and future goals before reaching a final decision.
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Consider These Additional Issues Regarding Buying a Home with Leased Solar Panels

If a person is considering purchasing a home with solar panels pre-installed, speaking with the homeowner first is a good idea. He or she should be able to address the following questions:

  1. Are the solar panels leased, owned on a personal loan, or purchased outright?
  2. If they are under contract, what are the terms of the agreement?
  3. Who manufactured the solar panels?
  4. Who installed them?
  5. Did the installers guarantee their craftsmanship?
  6. Can you provide copies of the lease, warranties, and guarantees?
  7. How big is the system?
  8. How much power does the system generate?
  9. What was the difference in your energy bill before and after the installation?
  10. Does your utility service provider offer net metering?

Uncovering the answers to the above-referenced questions is the best way to dig for information regarding the terms and conditions surrounding a home purchase that comes with leased solar panels.
Avoid engaging in any transactions in which the seller seems reluctant to answer anything. He or she may be hiding something that no one wants to take on.

Final Thoughts and Considerations on Buying a House with Leased Solar Panels

The main takeaway from this article that homeowners need to know what they are getting into when purchasing a home with leased solar panels before formally sign anything. It’s still an excellent investment. However, no one wants to encounter any surprises later on after conducting a transaction of this magnitude.
If the homebuyer decides to take over the lease, he or she must be clear on what his or her long-term obligations are and discuss any rebate programs available with the utility company. Doing so can help factor in the real costs of purchasing a home with solar panels.
Ready to buy your first home? See how Zumbly can help!

How to Improve Your Home to Make More Money on Airbnb

Airbnb is becoming a popular source of revenue for homeowners around the world. You too could enjoy passive income on your extra bedroom, house, or apartment. However, one of the things to consider is the security of your premises and guests, which you can guarantee by getting the best home security system you can buy.

Unfortunately, making money using Airbnb is proving to be difficult due to the increased number of listings. Here are a few tricks you can use to improve your home to make more money on Airbnb.

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Step 1: Inspect and Design Your Space

Before you start taking pictures and uploading them on Airbnb, inspect the room or the home to identify any problems and fix them if any. This could include a leaky tap or a flaky wall that needs a fresh coat of paint. Here is a full guide on how to remodel your house.

You will need to design the space with a unique style that will distinguish your listing from the thousands that are in your city or location. However, when designing or redesigning, think about the functionality of the space and how easy it will be to maintain it.

Related: How long does it take to buy a house?

Step 2: Take High Resolution Photos

It is vital that you only use high-resolution photos for your listing. Since potential guests are looking through thousands of listings, you must photograph every inch of your space in different angles.

On top of this, the more photos you have, the better. Better yet, you could hire a professional photographer to take the pictures and edit them. This will surely attract guests to your listing and make money.

Photographer taking photo in desert

Step 3: Be Honest in Your Listing

Most homeowners tend to exaggerate the truth about their Airbnb investment home, and this ends up costing them rankings and good reviews. You should not give the guests a chance to second-guess why they chose your listing over the rest.

The bottom line is that you should tell the guests what to expect, and they will give you credit for your honesty in their reviews.

Step 4: Decide How Often You Want to Host Guests

Airbnb allows you to set the rules for bookings ahead of time. This includes the minimum and maximum stay limits, and you can block out the calendar a day before or after the booking. This will allow you to clean up and welcome the guest to a tidy home.

With the rules in place, you will know how to arrange your schedule to present a homey feeling worth five stars.

Step 6: Install  Home Security System

People are apprehensive of the security of their lodging facilities. For this reason, it is important to include information on how you plan to protect the home to make them feel safe. A security system is an excellent place to start. However, it will not only give the guests a sense of security, but it will also be for your benefit.

By having one of the best home security systems money can buy, you can pass on the costs to your guests and they will not mind as long as they feel safe.

Step 7: Interact with Guests

Think of the Airbnb guest as a new friend you have invited to dinner. You need to know the purpose of their stay through friendly interaction and mention whether you will be present during their stay at your house.

Step 8: Get a Superhost badge

Airbnb has a ‘Superhost Badge’ that is awarded to owners who have a current calendar among other criteria. However, the main purpose of keeping your calendar current is to avoid booking guests when you are not in a capacity to provide a holistic experience. This will result in guests leaving bad reviews.

Moreover, you could restrict how far and when guests can book your space. For example, you could reduce the number of months from six to three or less. Moreover, you could also block out the dates that you are not available to host guests.

Step 9: Price Your Listing Accordingly

When considering the pricing of your listing, you can use the auto-pricing rules on the platform, or you could set your own. The recommended pricing works well for people who do not have the time to keep up with the current real estate listings of the area.

However, if you have an event in your area, you could adjust the prices manually to account for the major bump in demand. With that said, always look at the pricing of similar listings in your area and standardize the price as you see fit.

Related: Best Real Estate Tech Startups


Airbnb creates an avenue for you to earn a passive income, but it is tied to the reviews you get from your guests. However, do not be discouraged with a few negative reviews; work on the feedback and improve the quality of guest experience in your home. Despite all else, the security of your guests should be the top priority. These tips will help you earn more money from your space.

How Much Does It Cost To Build A House In 2020?

Many people have a dream house that they have wanted to live in since they were a child, but sometimes, that house either doesn’t exist or isn’t on sale; or maybe you are looking to build and sell houses to make money.

Whatever your reason, there are many costs to building a home and it can obviously be very expensive. Before we get started, it is wise to first understand what the expected costs are so that you can properly budget for your entire project. Obviously, there is a significant amount of variance in figuring out the cost for the project due to variables such as city laws, labor laws of your state, land prices, size, and design.

Given the range for what something may potentially cost when building a new building, it is difficult to directly state the cost of your project through blanket statements; however, getting a ballpark from online sources such as this one is a good start, and there is also further importance in having a checklist of expenses when getting started.

Related: Mezzanine Loans – Everything you need to know

What are the expenses you should expect when building a new home?

In 2017, the National Association of Home Builders (NAHB) provided the average cost to build a house $237,000.

Cost to build a house in 2017
Source: NAHB

They did this by conducting a survey that gathered information from 4,267 home builders of the average price each given phase of a house building project and also surveying for the average size of all the project.

This survey was conducted specifically on the construction of single family homes. They found that the average construction cost of all the projects was around $237,760. They also found that the average size of all the projects was 2,776 square feet, and the average lot size used was 11,186 square feet.

Though price varies between house to house, using the costing provided by the NAHB is a good benchmark for understanding the price of building a house. To answer the question of how much you should expect for the cost of building a new house, this NAHB average will be referenced several times.

Related: How Does Rent to Own Work in 2019?

Site Work Expenses are an Important Cost to Build a House

neighborhood top down view site work house building

Site work expenses include a bunch of potential different expenses that you must pay, usually as a result of some sort of regulation. This includes things such as building permit fees, impact fees, water inspections, sewer inspections, landscaping, land clearing, and possibly more depending on your situation.

Site work expenses have a massive variance as but ultimately is mostly reliant on the number of square feet that your property is using, and the amount of professional work needed. For example, if you are needing to clear land the average cost would be between $1.28 and $2.00 per square foot. If you have a special case such as having greatly uneven terrain to build on, it may cost you an extra $15 per square foot to even it out. We recommend you get a full site plan before building the house.

If you are in a wooded area, the price will also be increased considerably. If you have an abnormal case, it would be wisest to refer to your contractor to figure out any other unaccounted costs. To reference the NAHB study has noted that the costs of site work include, building permit fees, impact fees, water & sewer fees/inspection, architecture/engineering, and some petty cash used for miscellaneous items that may pop up. The NAHB study found that, on average, this portion of the project cost home builders $15,903.

Foundation Expenses

Framing will set up the skeleton of your house, effectively creating the physical representation of what a home’s blueprints would display. This will frame the outlines for all the spaces within a house and show the size of every given room that you are planning to have in the house. NAHB has classified this section of expenses to include framing (including roof), trusses, sheathing, general metal, steel, and once again a small section for miscellaneous purchases that may be needed.

Like everything else when building a house, square footage is a large factor in the cost of framing; however, the number of rooms, doors, windows, and walls will also play a large role in the overall cost of framing the house. All said and done, NAHB has found that the average cost of framing will total $41,123. So don’t forget to include framing in your cost to build a home.

Related: Best Places to Buy a Home in Southern California

Exterior Expenses

After the framing of the home is completed, there is structure provided by the framing that allows for the construction of the exterior to begin. Forming the outside of the house before the inside will allow the water system, electrical system, gas system, etc… to be given better structure when that part gets built. The NAHB’s exterior expenses include the costing for exterior wall finishes, roofing, windows, and doors (including garage doors).

The exterior expenses of a house are actually more dependent on the overall surface area rather than the raw square footage of a house. Furthermore, the price of your exterior expenses will increase with more doors and windows that need to be installed. For exterior expenses, the NAHB has found that on average, home builders should expect to pay $33,066 to get this part of the project done.

System Installation Expenses

brown brick building air conditioners installation

Once the exterior has been established, system installation can proceed to provide the house with modern necessities such as water and electricity. The system installation expense scales on the number of rooms that are expected in the final product of the house. The level/grade of heating, ventilation, and air conditioning (HVAC) that a building has will also make a substantial difference in the cost of system installation. Overall,

NAHB has included plumbing, electrical, HVAC, and small category of miscellaneous purchases as the factors that make up system installation expenses. The final cost of system installation should cost $32,746 on average.

Interior Finishes Expenses

kitchen installation

Among all the categories of expenses, the expenses of the interior finishes are probably the largest aggregate cost of any section of a home building project. The interior finishes close up all the open wires and pipes. This part of the project allows the home to be substantially more aesthetic along with making it a much more livable space.

Obviously, a home should include rooms such as restrooms, kitchens, and most of the time a means to install a room for laundry and dryer. Interior finishes also complete the plumbing and electrical for the house as it installs all the light and water fixtures such as ceiling lights, sconces, faucets, toilets, showers, and other related items.

Some houses may be built with a fireplace which adds another extra cost. For interior finishes expense, the NAHB survey categorized the following as components of interior finishes: Insulation, drywall, interior trims, doors, mirrors, painting, lighting, cabinets, countertops, appliances, flooring, plumbing fixtures, fireplace, and miscellaneous purchases add to the cost of building a home. The NAHB found that on average, the interior finishes expense usually totals about $67,939.

Final Steps Expenses

Once a home is built, finishing touches must be added allowing for the house to be more presentable. These are usually additions that are done to the exterior of the house such as a driveway, mailbox, porch, patio, and lawn. According to NAHB final steps expenses are broken down into the categories of landscaping, outdoor structures (deck, patio, porches), driveway, clean up, and miscellaneous purchases. These final touches will cost the home builder an average of $16,591.

Is There More to the Cost of Building a Home?

In many projects, there are unique cases and instances that will require the home builder to make extra purchases that are not part of the standard categorical purchases involved with building a home. According to the NAHB, these purchases average out to cost about 2% of the total project with an average cost of $4,722.

Related: House Hacking Real Estate with an Airbnb Investment Property

The Other Costs to Building a House

The above explains the costs of building a house from a construction point, but when you are building a house, there are more costs involved that should not be forgotten. The cost of constructing a home makes up roughly 55.6% of the total cost of building a house, from production to sale. If you plan on personally living in this house, only some of these costs will apply to you, but if you are looking to build and sell a home, all the following costs should be noted (costs are based on NAHB averages):

Finished Lot Cost (including financing cost); $91,996:

This is the second largest cost to building a house. If you want to build a house, you must first find the land/lot to build the house on. Lot prices have significant variance and is hugely dependent on your state and area. It is hard for you to hold a lot of expectation with the use of this average.

Financing cost; $7,636:

Unless you plan on paying for your entire project up front in cash, you will likely need to finance the project. With that in mind, almost any time you decide to finance something, the act of financing will raise the cost of the purchase.

Overhead and General Expenses; $21.835:

If you are in any business, there are expenses that exist as the ongoing cost of operating the business. This cost, in respect to the costing averages made by the NAHB makes up about 5.1% of the entire cost.

Marketing cost; $5,314:

In order to sell your finished product, you must list the house and set up advertisements for it.

unfinished modern home with wood floors for sale

Sales commission; $17,448:

When selling the house, chances are you will be using a broker. Any time you use the services of a broker, they will take some commission based on a percentage of the sale.

Profit; $45,902:

Obviously, if you are trying to make a business off the building and sale of a house, then you are going to need to place a mark up on the final price of the sale.

When everything is said and done, the average sale price (combining all the above costs, construction costs, and profit) is $427,892; which is roughly $154.14 per square foot.

Related: How to Find Out Who Owns a House

Should you Really Build Your own House in 2020?

If you are trying to save money when building a house, using the services of Zumbly can be very helpful. Zumbly assist you in finding fixer uppers, calculating ROI, and also rating houses on their expected investment value. Fixer uppers can really come in handy incase of emergencies during or after the construction of your building.

Using Zumbly before building a house may allow you to do building comps on other high value investment properties so that you may try to imitate the successes of other buildings. Zumbly will also help you with figuring out what areas have stronger demands for houses allowing you to be able to locate the home you are building in a much more ideal location. Using these comps and ROI calculator, you will have a much easier time deciding how you want to invest your money as it will show you what is most optimal for you.

Related: The Ultimate Beginner’s Guide On How To Find Investment Properties Using Zumbly