September 12, 2011 4:57 pm
With home prices at bargain levels, it may be the perfect time to consider purchasing a property to rent. Investing in a rental property can be profitable for those with time on their hands and who are knowledgeable enough to work the market appropriately. Although no purchase is ever a sure-shot, you can avoid losing money by keeping the following in mind:
Don’t assume a cheap deal is a win-win: Although low prices are always attractive to you, the buyer, don’t forget to keep other factors in mind such as location and building type. If the property is in a less-than-desirable location, you may have trouble finding the right renters or any renters at all. Look for properties in busy areas or cities where demand will never waver.
Don’t forget the extra costs: Always factor in a 3-6% closing-cost fee and keep in mind that you’ll also need funds to maintain the building. Try to plan ahead and figure out what your profit margin will likely be and determine whether buying the property in question is worth your time and investment. Too many times do first-time landlords purchase properties without thinking on a long-term scale. Cover all of your bases by taking all costs into consideration.
Be reasonable about your profit expectations: When you become a landlord, you become a collector. If tenants lose their jobs or stop paying for any other reason, it may take several weeks to evict them. Don’t simply assume that money will keep coming in. It may take time to find the right tenants and even then, there could always be a disruption in payment. Be prepared for this, just in case.
Owning a rental is different than owning a home: Some tenants may be more demanding as to what’s acceptable in terms of maintenance and repairs. State laws (which vary by state) may also impose strict rules and regulations, dishing out even more work for your plate. Although property managers can help out with a lot of this, hiring one will cost you. Be mentally and financially prepared for the task of becoming a landlord so that there are no surprises later down the road.
September 12, 2011 4:57 pm
Approximately 98% of all basements will become flooded basements, suffering from some form of water damage at some point. Homeowners up and down the East Coast and across the Southeast joined the 98% club in the last few weeks, as hurricane Irene and tropical storm Lee soaked homes and businesses with torrential rainfall and caused record flooding in many areas.
Basements are natural targets for excess water, due to their position as the lowest point in any home and the fact that water loves to run downhill. It is always advisable to make sure the landscaping surrounding a home slopes away from the structure for a distance of no less than 10 feet. In extreme cases, once the ground has been saturated, any additional water that is added will have to go somewhere, and it is going to seek the path of least resistance.
As with any sort of water damage in the home, it is always advisable to begin the water removal process as soon as possible. Water will continue to cause damage for as long as it is allowed to remain untreated, rotting wood, rusting metal, and destroying personal items and valuables, not to mention setting the stage for mold to grow.
All utilities should be shut off at the source. Water and electricity do not mix, and if gas is leaking as a result of the flood, then it only takes a spark to trigger some undesirable circumstances.
Wet/dry vacuum units or gas-powered submersible pumps should be used to extract the water from the basement. Which type of unit used depends on the depth and severity of the spill. When pumping, it is vitally important not to pump the water out too fast. Doing so may cause a sudden change in pressure that could weaken the structural integrity of the walls, making them prone to collapse. The water should be pumped out slowly but steadily, at the rate of about a third a day.
Once the water is out, the job is not finished. Carpeting, flooring and drywall will still have retained a significant amount of water. Fans, blowers, and dehumidifiers will be required to remove all residual moisture from surfaces and the surrounding air, as well as reduce humidity levels in the area to ward off mold.
Electrical appliances and outlets should not be used until the system has been checked out by a qualified electrician. The same principal should be applied to the heating and air system.
Carpets should be salvageable if they have been submerged for less than 48 hours. They will need to be taken up, dried, cleaned, disinfected and sanitized, possibly more than once. All damaged carpet padding will need to be thrown out and replaced. Floors should be checked for warping or cracking, and drywall inspected for the telltale swelling and discoloration that accompanies water damage.
If the right steps are taken, you can minimize water damage to your home and hopefully clean up before any mold has the chance to grow.
September 12, 2011 4:57 pm
Anemic demand from owner-occupant home buyers has forced investors to rent out about half of the homes they purchase—as opposed to renovating and flipping the properties, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
The latest HousingPulse Survey results showed the proportion of first-time home buyers in the housing market rose to 36.9% in July, from 35.4% in June. Meanwhile, the HousingPulse Distressed Property Index (DPI) climbed to 46.2% in July from 44.7% in June, indicating a high percentage of foreclosed property sales and short-sale transactions in the housing market.
The gap between first-time home buyers and distressed property supply was 9.3 percentage points in July, unchanged from June. Given that home purchases by current homeowners do little to absorb the supply of distressed properties, the housing market is increasingly dependent on investors to pick up any slack in purchases by first-time home buyers.
Because the current housing environment makes it difficult for investors to sell properties, many are choosing to rent instead. Campbell Surveys estimates that investors will ultimately rent out 48% of the properties acquired in the month of July 2011. A comparable figure for the month of July 2010 would have been investors renting out 28% of acquired properties.
Significantly, real estate agents responding to the July HousingPulse survey indicated that the debate in Congress over the U.S. debt ceiling negatively affected home buyer activity last month.
“I spoke with several would-be buyers who, because of the ridiculous behavior of our government, felt uneasy about purchasing at this time. This may be contributing to the hot rental market,” reported an agent in Washington State.
The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,500 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.
For more information, visit www.realestateeconomywatch.com.
September 9, 2011 10:57 pm
According to Mark Clement, professional contractor and host of MyFixItUpLife home improvement radio show, fall is the perfect time to focus on the exterior of your home. “While the weather is good, my advice is to get outside and fix up problem areas, work on the landscaping and invest in products that make your home’s exterior not only look great, but work great.”
One of the most important and personal design elements of your home’s exterior is the front door. Clement recommends taking the following steps to make sure your front door is both functional and stylish:
1. If you can see light around your main entry door from the inside, the door is hard to close or lock, or the door itself is warped, it’s time to consider a new door.
2. Even if you can’t see light, air may be moving through gaps in the weather stripping at a surprising rate. On a very cold or hot day, hold the back of your hand an inch or so away from the bottom and perimeter of your door. If you can feel air moving or a significant cold spot, that’s a signal your existing door could benefit from better sealing.
3. Determine what role you would like an entry door to play on your home’s exterior. Do you want it to be a focal point with a splash of color? Is it important that you have decorative glass in the door system? Will you need vented side lights to allow more light and air into your home? Search the Web for “Door Designer” and “My Saved Door” online tools to help visualize how a new door will look on your home.
4. Think about the weather conditions your home’s door faces along with your energy bills. If either run to the extreme, consider replacing your entryway with a high-performance fiberglass door (which has four times more insulation than wood doors). You can also request features such as enhanced weather stripping, corner seal pad, door bottom sweep and profiled sill that all work together to provide strength and stability.
September 9, 2011 10:57 pm
Environmental Data Resources Inc., (EDR), provider of property-specific environmental information and risk management solutions, recently unveiled the Environmental Issues Report (EIR), an online environmental education tool for homeowners, home buyers and real estate brokers.
The EIR provides access to information about the historical and current use of land in U.S. neighborhoods, especially uses that may pose environmental risks.
For over two decades, EDR has provided information nationwide for commercial real estate transactions. Now, homeowners and buyers, sellers, brokerages, real estate agents and home inspectors can directly access EDR's extensive database.
"Conducting an environmental history search on a possible new home or residential lot is a prudent step in the due diligence process for home buyers," says Max Cook, an environmental professional with Ranger Environmental Services, Inc. "Just as the market requires home buyers to procure appraisals and home inspections, the natural next step should be to identify impacts to properties or surrounding properties which have nearby contamination reports that could affect home occupants."
Commonly recorded impacts include contaminated soil or groundwater, and according to Cook, "facilities such as gas stations, dry cleaners, landfills, former airports and military bases are everywhere and can affect the environmental health of many neighborhoods across the U.S."
To run an EIR, users can visit www.environmentalissuesreport.com
and enter the desired address to obtain a property map that shows environmental issues within a one-mile radius. Users can then request access to a more detailed report that will help inform them of the risk any reported event(s) poses to their home or well-being. If a professional opinion on the information is needed, users can consult with an environmental professional from EDR or consult with their real estate agent regarding the next steps to take.
According to EDR, current homeowners should consider evaluating their property for environmental impacts throughout their ownership, as spills and contamination events happen often.
September 9, 2011 10:57 pm
While we all know it’s important to stash money away on a regular basis, especially in today’s tentative economic climate, it still seems like an impossible feat to many of us. According to the “Money Matters” newsletter from the Federal Trade Commission, however, saving money is indeed possible when you follow these simple strategies:
• Consider yourself a creditor. When you pay your bills, write a check to yourself. Decide on a realistic amount. Deposit the money into a savings, investment, or retirement account. Then, pay your other bills as usual. If you find that you don’t have enough money to cover all your expenses, write down the amount you are short and look for ways to trim your budget: Borrow books from the library rather than buying new; brew your own coffee rather than buying it; consider raising the deductible on your auto insurance; buy store brands instead of name brands; cancel subscriptions to magazines you don’t read or can find at the library or online; cancel health club memberships you don’t use.
Once you establish a regular savings plan, consider increasing your monthly deposit if you get a pay raise, or when you pay off a debt. For example, once you pay off your car loan, student loan, or other installment debt, deposit that amount into a savings account. Once your toddler is out of diapers, deposit the amount you spent on diapers into savings. You won’t miss the money if it’s put into savings, but more than likely, you’ll find a way to spend it if it’s in your checking account.
• If you need some fast cash, consider selling items around the house you no longer use, either online, at a garage sale, or at a local consignment shop. When you sell online, you may use an auction or classified ad site. Check the sites for policies and procedures. When you agree to consign items to a shop, you’re a consignor. You still own your stuff, but you give the shop the right to sell it. The shop becomes the consignee. When the items sell, you get a percentage of the selling price that you agreed to in advance. A profit split of 50/50 or 60/40, with the higher percentage going to the shop, is typical.
• Avoid payday lenders. A payday loan is a cash advance secured by a personal check or paid by electronic transfer. It is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115; $15 is the fee to borrow the money. The check casher agrees to hold your check until your next payday. When that day comes around, the lender either deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday: the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge, which works out to an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.
September 9, 2011 12:09 pm
It’s easy to fall in love with a house, but buyers need to think about more than just the home itself before deciding to live there. While the home may have the perfect number of rooms, a large play area for the kids and that master bathroom you have always dreamed about, you also need to consider the neighborhood in which the home is located.
That’s why before buying any home, a buyer should explore the surrounding neighborhood and area to make sure it has everything they want and need.
For buyers with children or those thinking of starting a family, the first thing you will want to look at is the local school system. You’ll also want to research the closest parks and community centers and consider how busy the streets in the neighborhood get. Even if you are single, living in a top school district will raise your property value.
Another consideration is your daily commute to work. You’ll want to understand the traffic patterns to and from your job and figure out if you’re going to be sitting in traffic for several hours a day. Researching the local mass transit system is also important, as you may want a neighborhood that gives you the option to not have to drive to work.
Profiling the perfect neighborhood also involves scoping out the neighbors themselves. Are there a lot of kids on the block? Are there neighborhood events? Do you see a lot of fences and “Keep Out” signs? It’s never a bad idea to take a walk through the neighborhood and say hello to some of the people you see and ask about the neighborhood before putting in an offer.
Don’t forget to map out stores and restaurants in the area as well. You may be used to a five-minute drive to the local grocery store, only to find out that the home you are interested in is 25 minutes away from the nearest place to buy milk. And if you like to walk to stores and shops, make sure to tell your agent that you want a place where this is possible.
You also want to find out if your potential new home is part of a neighborhood association and if your community has lawn or construction restrictions and if there’s a yearly fee involved. The last thing you want is to find out that you can’t put those holiday decorations up because of a strict town ordinance.
Also consider warning signs that the neighborhood could be in trouble. If you see abandoned buildings, vandalism or a lot of “For Sale” signs, it could be a sign that the community is heading in the wrong direction.
A perfect home isn’t always in the perfect neighborhood and you’ll want to make sure that both meet your expectations.
For more information on choosing a good neighborhood to call home, contact our office today.
September 9, 2011 12:09 pm
It used to be that if you weren’t married or living with someone, the idea of purchasing a home was considered a bit outlandish, however, more of today’s home buyers are single than ever before.
According to the National Association of REALTORS®, in 2010, unmarried women made up 20% of all home buyers and single men comprised 12%.
Savvy men and women understand that now is one of the best times to buy a home and they can probably get a price that won’t stop them from enjoying their single lifestyle.
These buyers may be just starting out and still envision getting married and having kids someday; some may be divorced and are looking to start fresh; still others may see it as an investment that will pay off down the line.
In her book, “Buying a Home When You’re Single,” Donna Albrecht walks through all the steps that take place when searching for a home, getting pre-qualified, finding an agent, and struggling through escrow.
“Before anyone buys a home—single or not—they need to consider what they want their future to look like,” Albrecht said. “If kids are a big hope, buying a studio condo could be a mistake. Going the other route and buying a five-bedroom place may not be the best idea either.”
Purchasing a smaller home, say with two bedrooms or less, has a number of advantages for a single buyer. The lower purchase price will likely net you a mortgage payment that is lower than rent and you will save on utilities, maintenance and cleaning costs. You will also have fewer rooms to furnish and decorate.
Another important point to consider is that it could be easier to sell when you are ready to move on. Single buyers know that their circumstances may change so they want to be prepared, so making sure that the home can be sold or rented out is often a key interest to this group.
Single parents are more inclined to buy a home to give their children a more stable environment and the chance of a great school system.
According to Harvard University’s Joint Center for Housing Statistics State of the Nation’s Housing report, the nation's 4.5 million single parents have greater space needs and must worry more about safety and school quality when choosing homes than households without children.
Since there is only one name and one person responsible for buying the property, a person’s credit score and ability to meet all payments is more important to single buyers. The FHA even offers a special loan for single mothers that can help reduce mortgage costs.
Mortgage experts recommend that a monthly mortgage for home buyers with one income should not exceed 28% of a borrower’s pre-tax monthly income.
For more information on taking advantage of today’s market, contact our office today.
September 9, 2011 12:09 pm
In today’s fact-paced real estate market, having information at your fingertips has become more important than ever before. As real estate professionals and prospective buyers alike continue to turn to technology to make the home-buying and -selling process a little easier for everyone involved, applications (apps) have become the next big thing.
Applications can do everything from helping one accurately price a home, to improving its appearance to even controlling the home’s environment and energy usage from a distance.
Here are 10 popular apps available today:
Control4 My Home: This app turns your iPad into the ultimate touchscreen home control and automation system and enables homeowners to control audio, video, Web cameras, security systems, lights, thermostats, and other functions. In addition, this free application can manage your commands in Czech, Hebrew, Portuguese, Turkish and other languages.
Zillow: This free app allows prospective buyers to find homes in any neighborhood based on factors such as number of bedrooms, bathrooms and price. It’s also a helpful tool for sellers as it provides estimates of what your home and those in your area might be worth.
Gardening ToolKit: For $1.99, this application offers great gardening advice that will turn your thumb green. It will tell you the perfect flowers, shrubs, fruits and veggies that will thrive in your area using the built-in “automatic zipcode hardiness zone finder.” It also includes a watering guide, month-by-month gardening advice, colorful plant photos and information on what to sow and when, depending upon where you live.
ID Wood: Want to know what kind of wood your floors or dining chairs are made of? With this app, you’ll be provided a reference guide that can help you ID any kind of wood so that you can easily choose a color and grain that you love for future projects.
Lutron Radio RA2: For $14.99, this application lets you remotely control your home using an iPad. Not only can you control the lights, temperature, appliances, window shade positioning and energy usage, it’s perfect for turning on the air conditioning before summer home showings and it helps make a house look “lived in” when you’re away from home.
LoopNet: A real estate search tool, this application is perfect for the homeowner looking to upgrade, downsize or just make room for an expanding family.
Trulia: Trulia has thousands of home listings, making it easy to find real estate in your desired area and check out pictures online.
Home Value Pro: Another free application—for the iPhone and iPod Touch—that gives home sellers and buyers accurate and reliable market data on over 140 million residential properties in the U.S. It includes up-to-date property values, foreclosure information, 12-month median home price trends and analysis of housing statistics at the county and zipcode level.
Mortgage Calculator Pro: A quick and easy-to-use calculator for brokers, REALTORS®, and home buyers, where within seconds, you will be able to calculate the monthly payment for a mortgage, car payment, credit card, or other types of fixed rate loans. The calculator lets you add different adjustments such as insurance, property tax, and monthly fees such as an HOA to see how they would affect the monthly payment.
Dream Home HD: For $4.99, this application will enable you to integrate the latest interior design trends into your home by providing thousands of decor solutions from professional designers. You’ll also receive inspirational ideas, tips, real-life photos and an extensive menu of colors and styles for a variety of room types.
For more information on popular real estate apps, contact our office today.
September 9, 2011 12:09 pm
Every home buyer has a vision of their perfect house and the rooms that are most important to them. Because of their relatively small size in comparison to the rest of a home, bathrooms are often overlooked in the staging process, but for many, it could be the most important room when making the decision to put an offer on a home. Not only do bathrooms contribute to a home’s value, a well-designed bathroom will also increase the home’s appeal in the eyes of a buyer.
“A bathroom is more than just a place for grooming; it’s a sanctuary,” said Marcia Sullivan of the Staging Bug Blog. “It’s a place one can relax in a hot bath and escape the stresses of daily life for a few moments at a time.”
Updating a tired looking bathroom is one of the best things you can do to increase a home’s resale value and the fixes are not too costly or labor intensive. Easy fixes include adding luxurious towels, replacing the shower curtain and placing candles around the bathtub. However, with a little more money and effort, your bathroom can become a talking point of the house.
“Newly remodeled bathrooms will add value to your home and help your home sell faster,” said Debbie Batts, manager of Metropolitan Bath and Tile in Bowie, Md. “You don’t have to feel cramped for space in your average-sized master bath. Light, café-au-lait colors and white will give you a bright wake up call in the morning. Washed, natural cabinets and polished granite countertop with double white sinks and porcelain keep it light.”
Adding decorative glass, stone tile or accents to the bathroom will help the home stand out among the other houses in the neighborhood that are for sale. Extra-wide wall tiles are popular these days and wood cabinets can be beautifully embellished with intricately carved wooden onlays.
“Add more lighting options around the room, especially around the vanity to reduce shadows and glaring,” Sullivan said. “This is something that isn’t too expensive and can really highlight the positive features of a bathroom. Mood lighting around the tub area is also increasing in popularity.”
While there’s nothing better than coming home from a hard day’s work and relaxing in a big soothing tub, putting in a new tub and creating a spa-like atmosphere will enable prospective buyers to imagine themselves washing their cares away. Adding a massage element to the showerhead or one that replicates rain showers is also something that will appeal to buyers.
Changing out the fixtures in a bathroom can also dramatically enhance the space. From cabinet handles to faucets, the addition of brushed nickel or other metals that are polished and elegant are always a huge hit. If space permits, you may want to invest in adding a second sink.
When buyers walk into a renovated bathroom that exudes quality and offers an intimate, contemporary feel, it’s one of the top things that people will remember about a home.
For more tips on how to update your bathroom, contact our office today.