Feb 5, 2020 | Real Estate
Buying a new home is a big step for individuals and families. This is a time for celebration as the new furniture gets moved in, everyone gets adjusted, and the honeymoon phase starts with the new home. On the other hand, buying a home also means that all of the responsibilities rest with the owners.
Here are a few common problems that new homeowners face.
Taking Care Of The Outside
Many homeowners are quick to realize that there is a tremendous amount of maintenance on the outside of the home. Now, the exterior is their responsibility and doesn’t fall on a landlord. Sure, it can be helpful to hire someone; however, this can be expensive.
Some of the common questions that homeowners have include how frequently they should water the lawn. There might also be questions regarding which type of fertilizer and when they should use this. Also, the issues caused by weeds can be substantial. When in doubt about these issues, simply reach out to a professional and ask for help. Someone is always willing to lend a helping hand.
Plumbing Issues Are Common
It is important to do a home inspection before buying a home. This will let the potential buyer know about any repairs they might be inheriting. Some of the common issues have to do with the plumbing system.
One of the most common issues has to do with clogs. Sometimes, the clog takes place in the sink when someone tries to force food down the drain. In other situations, toilets might get clogged if something other than toilet paper gets flushed down the toilet. While a basic plunger is a great place to start, it is also prudent to invest in some drain cleaner and a snake.
The Lights Go Out
Sometimes, people are shocked to see the power go out during a storm. In some cases, the power company may need to come out and handle the repairs. In other situations, it might be a tripped circuit breaker. When the power goes out, head to the circuit breaker and take a look at any fuses that might be turned off. Unplug some of the appliances and then turn the circuit breaker back on! This might do the trick, but if it goes out again, call an electrician.
If you are in the market for a new home or interested in listing your current property, be sure to consult with your trusted real estate professional.
Feb 4, 2020 | Real Estate
New housing construction starts reached a record high in December 2019 going up 16.9%. This represents a seasonally-adjusted annual rate of 1.608 million homes last December, which beat the record set in December 2006, 13 years ago, according to CNBC.
This was surprising news, as predictions made before the end of the year were that housing starts in December would reach only 1.375 million homes.
Experts say the current housing construction boom in the United States gets its support from the easy mortgage financing available and positive consumer expectations about the economy.
What Does The New Housing Boom Mean To Buyers And Sellers?
It is a wonderful time to be a home builder, except that builders are experiencing a shortage of construction labor and less availability of low-priced building lots. Nevertheless, there are plenty of interested buyers, especially for modestly-priced starter homes that very desirable for first-time homebuyers.
If you are one of these interested buyers, then, make sure you stand out from the crowd. Be sure to get your credit history in order so that any mistakes are corrected. Get pre-approved for a loan commitment in writing to be the most attractive buyer to a home builder. You may also have to be patient while waiting for your new home to be built. Put your deposit down and then allow extra time for the process to complete. Builders are extremely busy right now.
Consider Renovating For Resale Value
If you are thinking of selling your home, consider making renovations to bring it up to high-quality standards in a “like new” condition. Many buyers who are paying a premium for a newly constructed home will also consider a newly renovated one. Work closely with your REALTOR® to make sure your renovations have the best chance to add value and increase the resale price.
The Boom Areas
Housing starts were up about 40.8% in December when considered on a year-on-year basis. Single-family homes are the largest portion of the housing market. Those new housing starts increased in the Midwest and the South while decreasing in the Northeast and the West. The Midwest and South are seeing revitalized interest in residential home investments after being stagnant for the previous six quarters.
Summary
As we go forward in 2020, homebuilders’ confidence is slowing slightly but still remains close to levels last experienced in the middle of 1999. The housing market, which represents about 3.1% of the total U.S. economy, is doing its part to support the longest economic expansion on record.
If you are in the market for a new home or interested in listing your current property, be sure to consult with your trusted real estate professional.
Jan 30, 2020 | Real Estate
Real estate, which is a rental property, has the unique characteristic under the tax code of being able to depreciate it and pretend the asset is going down in value, while, if you are a clever investor, you will acquire property that actually increases in value. Additionally, there are other tax advantages for owning a rental property that can help shelter income.
Positive Cash Flow
The key to success with a real estate investment portfolio of rental properties is to build value while it is self-sustainable. Have the goal of creating positive cash flow from every owned property. Making $100 per month positive cash flow from a single property may not sound like much until you multiply that by 25 properties. A portfolio with those characteristics makes a nice passive income of $2,500 per month or $30,000 per year.
Leverage
Using leverage increases the return on investment (ROI) as long as you choose properties that are cash-positive enough to cover their carrying costs and do not lose value over time. The lower the amount of your money that you invest, the greater the leverage you have and the higher your ROI will be.
Finding Rental Income Property
Commercial rental income property is more challenging so it is best to focus on residential rental properties, especially when starting to build up a real estate portfolio. The things you want to look for when hunting for residential rental properties are a manageable median price for the area, an area that is showing steady annual appreciation in home values, and an area that is stable with no severe negative challenges now or in the foreseeable future.
City Opportunities
It is possible to find properties that are excellent investments in many parts of the United States. Here are some examples of cities that currently have investment opportunities so you can consider them and compare them to your location.
Here are the top ten residential rental markets as ranked by TurboTenant for 2020:
1. Reading, PA
Median Sales Price $140,000 — Annual Increase 11.1% — Average Rent $957
2. District Heights, MD
Median Sales Price $252,000 — Annual Increase 0.4% — Average Rent $1,408
3. Allentown, PA
Median Sales Price $145,000 — Annual Increase 19.0% — Average Rent $1,063
4. East Orange, NJ
Median Sales Price $273,000 — Annual Increase 10.0% — Average Rent $1,534
5. Nashua, NH
Median Sales Price $283,000 — Annual Increase 4.5% — Average Rent $1,524
6. Cincinnati, OH
Median Sales Price $163,000 — Annual Increase 3.1% — Average Rent $1,048
7. Paterson, N.J
Median Sales Price $268,000 — Annual Increase 11.9% — Average Rent $1,614
8. New Castle, DE
Median Sales Price $188,000 — Annual Increase 8% — Average Rent $1,884
9. Rochester, NY
Median Sales Price $136,000 — Annual Increase 5.6% — Average Rent $1,126
10. Hyattsville, MD
Median Sales Price $279,000 — Annual Increase 0.4% — Average Rent $1,982
Summary
It is possible to find cash-flow positive properties in all of these markets, so they are all excellent examples of what to look for when you are hunting for a residential rental property to acquire. Be sure to work with a qualified local REALTOR® who knows the market well that you are considering.
Jan 23, 2020 | Real Estate
For many people, owning a home is seen as a rite of passage. At the same time, purchasing a home is expensive. As a result, many people end up renting for an extended period of time.
Here are a few signs that someone is ready to stop renting and purchase a home.
1. Rental Prices Keep Going Up
Year after year, rental prices are going to keep going up. While the rental company is going to claim that these increases are consistent with the industry, they tend to be exorbitant. As a result, those who are tired of their rent being increased should think about buying property instead.
2. The Credit Score Has Gone Up
Someone’s credit score is going to play a major role in the mortgage approval process. Anyone whose credit score has gone up recently should think about buying property.
3. Debt Management Is Second Nature
Before taking out a mortgage, someone is going to have to be good at managing debt. A mortgage is simply another form of debt. It needs to be managed properly.
4. There Is A Liquidity Fund In Place
The cost of owning a home extends far beyond the mortgage. Anyone who is thinking about owning property is going to have to have money set aside to cover additional costs. These include repairs, maintenance, and homeowners’ insurance.
5. There Is Money For A Down Payment
There is going to be a large check due upfront. A down payment is essential when it comes to buying a home. In addition, be sure to set aside money for closing costs as well.
6. You’re Going To Settle Down
When someone is thinking about buying a home, they need to stay in the same place for an extended period of time. When someone buys and sells homes quickly, they are likely to lose money to closing costs.
7. A Major Life Change Is Happening
Many people elect to buy a home after a major life change. This might come in the form of marriage. This might also come on the back of having kids. These major life changes can trigger someone to settle down and buy a home.
8. Your Vision Of The Future Is Clear
Those who know where their life is headed in the near future are in a great position to buy a home. If the future is clear, you are ready for the responsibilities of homeownership.
Call your trusted real estate professional today to discuss the options for homeownership in your local marketplace.
Jan 22, 2020 | Real Estate
Nobody enters into a mortgage assuming they are going to fall short on their payments; however, life happens and borrowers might need a way out. In serious situations, lenders may elect to foreclose on homeowners who are unable to make their mortgage payments. Fortunately, there might be another way out. This is called a short sale.
A short sale can be used to help homeowners who are struggling cater to those who are looking to buy a home. At the same time, there are risks to both parties. Therefore, there are a few important points to keep in mind.
What Is The Structure Of A Short Sale?
If someone owes more on their mortgage than the property would otherwise sell for, this is called a short sale. In this situation, the lender accepts the money coming from the sale of the home rather than that money going to the homeowner. This is because the homeowner still owes a significant amount of money on their mortgage.
Take, for example, someone who owes $300,000 on their mortgage. In a short sale situation, he or she would sell the home for $250,000 in a short sale. In this fashion, the lender agrees to accept a smaller amount of money for the home than he or she would get otherwise. In essence, the lender is then short $50,000. This is where the name comes from.
This is different from a foreclosure. A foreclosure happens when the borrower falls so far behind on payments that the lender reclaims the property.
The Benefits Of A Short Sale
The biggest benefit of a short sale is avoiding foreclosure. A foreclosure is a disastrous event for someone’s credit score. When someone agrees to a short sale process instead, he or she will often buy a more affordable home shortly thereafter.
Buying A Home In A Short Sale
On the buyer side, the biggest benefit of targeting a short sale home is that there is usually a great deal on the price. The lender is already not getting their money on a regular basis and is often motivated the sell the home quickly to recoup their money.
On the other hand, short sales often take longer to proceed. The lender has to approve the sale and price, which might lead to delays. The condition of the house may also not be in good shape. Therefore, be sure to get a home inspection.
Calling your trusted real estate agent and mortgage loan professional is the best thing to do if you have questions regarding your home and a possible short sale.
Jan 15, 2020 | Real Estate
When it comes to selling a home, there is a lot to think about. While most people know that the best time to list a home is in the Spring (due to the fervor of the summer), the real estate market keeps rumbling along no matter what time of year it is.
With this in mind, it is important to have a firm strategy in place. This comes in the form of a real estate professional. In addition to trusting the professionals, there are a few other important points to keep in mind.
Don’t Trust The Online Estimates
The internet has impacted almost every area of the economy. This includes real estate. Many homeowners love visiting sites to get an estimate of how much the home is worth. Unfortunately, these online estimates are often inaccurate.
There is not a real estate professional employed by these sites who is driving around taking estimates on homes. There is no way these sites can know what renovations have been done or what improvements have been made. These make a large difference in the overall value of a home.
Hiring A Trained Professional
Those who are looking to get the most out of their home need to hire a professional real estate agent. These agents have the training and expertise necessary to make sure a house sells for as much as possible. These agents also have access to additional selling tools that are not available to the general public.
Furthermore, a real estate agent is going to earn a commission on the sale of a house. For this reason, real estate agents have a lot of incentive to sell a home for as much as possible. It is important to trust the professionals for help.
Letting A House Sit On The Market
It is also important for people to know when to list their home and when to remove it. The longer a home sits on the market, the harder it is going to be to sell that home for what it is worth. As a home sits on the market, the excitement surrounding it is going to fade. Your agent is qualified to guide you through the process.
Call your trusted real estate professional today to see what your home is worth!
