Apr 9, 2013 | Real Estate Tips
When you make an investment in Massachusetts real estate, it’s important to consider your options for turning a profit even before you write an offer.
It might be best to rent out the property to cover your mortgage and build equity providing the home cash-flows with solid rents and demand.
Or, you could fix up the home and flip it so that you can sell it quickly for a larger amount than you invested.
Both strategies may be appealing options, so here are some important factors to consider before making your decision.
Flipping May Lead To Short Term Profits
Flipping a house can be tricky, so you will want to have enough experience to know what you are doing, or work with an experienced advisor who can guide you around the most common pitfalls.
If you are thinking about fixing and flipping a house, you will need to have enough capital to invest in the property so you can make the required improvements and repairs.
Many people find themselves short of working capital after closing on the new purchase.
It is important to factor in carrying costs, or monthly mortgage payments while fixing the home, into your overall budget.
Do your research so you’ll know what renovations will have the most impact on the value of your real estate.
You will also need to know if the market in the area will support your new price point.
Make sure your flip property is in a very buyer-friendly community for your best chances of a positive return.
Renting Is The Buy And Hold Strategy For Investment Real Estate
Flipping a house gives you quick cash, but renting it out instead may give you monthly cash flow and a potentially larger long-term profit if the property appreciates over time.
If you don’t mind being a landlord and you have the time to screen for reliable renters, then renting out the property might be a better option for you.
This option also means that you will have the home later on in case you want to live in it.
Of course, don’t forget to factor in additional upkeep costs, such as repairs, utilities and property taxes.
Seek Professional Counsel
Investment real estate has consistently been considered a solid way to get your money working for you.
Whether you rent out or flip your investment property will depend on whether you are interested in a long-term investment or a short-term project.
A great next step while you are planning your investment real estate purchase would be seeking the advice of a qualified, licensed real estate professional.
Apr 4, 2013 | Real Estate Tips
When looking to buy or sell Worcester County area real estate, confusing terminology can leave you feeling somewhat uneasy.
From a multitude of numbers to marketing jargon, property listings can provide you with an overwhelming amount of information — and it’s hard to know what’s important.
So, brush up on the terms below and don’t get fooled this April.
Sale-to-List Ratio
This is an important number to pay attention to when choosing a real estate professional to sell your home.
The percentage is calculated by what a home was initially listed for, divided by the actual sale price.
The closer an agent’s percentage is to 100, the better.
If it’s low, that could be an indication that they routinely list homes too high, or you may be in a slow market which would favor the home buyer.
On the other hand, if it’s high, it could show that your agent markets their listings well and your market might favor home sellers.
Median Days on Market
The median days on market is the midpoint of how many days it took for homes in that area to sell.
If it’s 30 days, then half of the homes sold quicker and half took longer than 30 days.
If you compare the real estate you’re considering to its area’s median days on market and you find that it’s been on longer, the sellers might be willing to take a lower offer.
Distressed Property
Properties are listed as distressed when the owners have defaulted on their mortgage loans or are about to.
As a buyer, you might be able to get a good deal on a short sale or a foreclosure, as banks many times list them below market value to try and recoup some of their loss and clear the property from their books.
An Active Versus Pending Status
If you find your dream home and then notice that it has a pending status, brace yourself for disappointment.
An active status on a home means the owners are accepting offers, while a pending status indicates that they’ve already accepted an offer.
If you know it’s the one for you, you can still place a bid in case the first offer falls through.
While there are many new concepts and terms you will learn when purchasing your new home, the benefits of home ownership far outweigh any fear that you may have.
If you’re looking to purchase a new home soon, please contact a licensed real estate professional who can cut through the jargon and find the home of your dreams.
Apr 3, 2013 | Real Estate Tips
It’s a great time to buy a new home because there are still quite a few Worcester County area homes for sale, and interest rates have continued to stay comparatively low.
Whether it’s your first time purchasing real estate or you’re a seasoned professional, here are a few tips to make shopping for a new house more pleasurable.
1. Get Help
Searching through all of the available properties on the market can be mind-boggling.
Find a professional real estate agent to help guide you through the homes for sale and select one that meets your family and financial needs. Be certain to work with an agent or Realtor that you know, like and trust. If you don’t know any real estate agents or Realtors please contact me. I work with some of the finest real estate professionals in the area and would be glad to introduce you to an agent to match your needs.
2. Start Looking Now
Finding the perfect house can take longer than you might think, especially if you’re looking in a competitive market.
If you’re looking at getting a good deal on a foreclosure or short sale, then these transactions can take even longer because you’re likely waiting on the bank to make the final call on your purchase transaction.
Try to be patient. The more thorough you are in your search, the happier you’ll be in the long term.
3. Don‘t Settle For The First Place You See
Searching for a house can be extremely emotional.
If you think you’ve found the one, then take a step back, consult your real estate agent and go over your housing checklist one last time before writing an offer.
4. Weigh The Pros And Cons
Almost any property will need a few improvements; even newly constructed houses usually need improvements like landscaping.
Sellers are more savvy now about how to make cosmetic changes to catch a buyer’s eye, so look carefully.
There will still be things you want to change, so weigh the difference between the cost of those repairs and the sales price of the home.
If you really want a house even though it’s going to take a lot of work, make your offer accordingly.
5. Make Sure Your Financing Is In Order
Having financing done in advance makes the process of buying homes for sale much easier because you’ll know how much you can afford.
Your loan officer can also help you determine what your monthly payments will be based on how much money you borrow.
A great first step is to consult with a licensed mortgage financing specialist to go over the available programs and terms available in the area.
Contact me if you would like an introduction to one of our professional and accountable mortgage lender clients. 978-728-5104
