by Elsa Soto | May 16, 2018 | Homes, Villas and Condos, Investment Property in Florida, Long Term Rental, News, Property for Sale
So, how do you know if you’re ready to move from an apartment to a house? Maybe you’ve passed your step tracker hauling groceries up flights of stairs, or you simply just want the extra space for your belongings. Ask yourself these questions below to get a sense of where you’re at—or what you have to do to transition easily into home-buying mode once the time is right.
For starters, let’s talk money. Buying a home is a hefty purchase, probably the largest you’ll ever make. So, you’ll need a down payment (typically recommended to be 20% of the home’s purchase price) and steady income (i.e., a job) to pay your mortgage.
There are other costs also associated with homeownership:
- Closing costs (typically 2% to 5% of the home’s purchase price)
- Home insurance (cost varies by state)
- Maintenance
- Utilities
- Budget for unseen repairs and emergencies
While renting might seem more economical than owning at first glance, that’s not always the case; our rent vs. buy calculator can help you compare the costs. You might be surprised by the results!
Another good first step to figuring out whether you can afford a house is to enter your salary and town of residence into a home affordability calculator, which will show you how much you’d pay for a mortgage on a typical house in that area. Or talk with a loan officer or your local realtor about whether you would qualify for a mortgage, and how much you can spend comfortably. Such consultations are free, and will give you a concrete dollars-and-cents sense of where you stand.
Are you settled in your job?
Your job situation is not only important in terms of income to buy a home, but also whether you’re happy where you work and plan to stay put. Because once you own a home, your career prospects do narrow somewhat, purely because a home anchors you to one area.
“Homeowners tend to have fewer job opportunities compared to renters, since renters can easily accept a job in another city or state,” says Reid Breitman, managing partner at Kuzyk Law, in Los Angeles. “A homeowner may decline such an opportunity because they don’t want to go through the cost, time, and expense of selling their home. So, it may be better to wait to purchase a house until after you’re firmly established in your employment situation.”
Do you know where you want to live?
Since moving once you own a home is not as easy as just packing your bags (which, let’s face it, is a hassle in itself), you really need to make sure you’re picking a home in an area where you’ll be happy.
“It’s not easy to just sell a house and move to a new one if intolerable neighborhood issues come up, since the transaction cost to sell—up to 8% to 10% of the sale price for brokerage fees, escrow, title, and other costs of sale—would be relatively very expensive,” Breitman says. “So you need to really scope out the neighborhood.”
When in doubt, try renting for a few months to make sure you like the area before you start shopping for a home to own for good.
How much home maintenance are you willing to tackle?
If you love the challenge of fixing a leaky faucet and figuring out which shrubs will flourish in your yard, homeownership may be right up your alley. But if the idea of mowing a lawn or messing with the HVAC makes you depressed, then you may want to stick with renting, which gives you a roof over your head without the work.
“Apartment renters don’t have many home-related responsibilities,” explains Brian Davis, director of SparkRental, in Baltimore. “If something breaks, they call the landlord. Often, they don’t even need to worry about setting up utilities; they either come with the building, or the process is merely changing the name on an existing utility account.”
Living in a house you own is a different story. There’s no landlord to call if anything goes wrong; it’s all up to you. So you have to be either adept as a handyman, or willing to find and pay someone else to do such tasks. Or else consider buying a condo or co-op, where the lawns and public areas around your home are maintained by hired help.
Bottom line: Owning a home is a big commitment. So before you jump into it, you should have confidence that it works for your circumstances.
“No one should feel like they have to follow a template, that by reaching a certain age or having a certain number of children they need a house in the suburbs,” Davis says. “So forget the clichés and movies, and decide based on you.”
Contact one of our experienced agents at Bardell Real Estate and we are sure to walk you through the buying process. Even if this is your first-time purchase, our agents will make sure you have the knowledge you need to make an educated decision about your investment!
Source: Realtor.com
by Elsa Soto | Feb 28, 2018 | Homes, Villas and Condos, Investment Property in Florida, Long Term Rental
Real estate investing in general, and single-family real estate investing in particular, is very different from buying stocks, commodities or most other investments. Real estate is a leveraged investment that has the potential for delivering excellent returns because the cash down payment is a fraction of the retail value, yet it is also a hands-on venture where you make more decisions that affect your returns.
Key Considerations As You Plan Your Purchase
When considering your first (or next) single-family real estate investment, keep these seven pointers in mind:
1. Don’t let emotion cloud your decision making.
If most or all of your real estate experience to date has been buying and selling your personal residences, keep in mind that you were purchasing for a different purpose with a different set of criteria in those instances. Buying a home for yourself and your family is an inherently emotional endeavor. You “love” the large kitchen, your spouse is “wild about” the main floor master bedroom, the kids are “so excited” about the pool.
With investment real estate, it’s all about the numbers. If the combination of the purchase price, estimated renovation costs, expected rental income and market conditions support a purchase decision, you can feel comfortable moving forward.
2. Buy based on current returns, not future appreciation.
Will the property have a positive cash flow the day the renters move in? That’s the evaluation criteria you must use. Trusting that area rents and home values will increase over time and that that is where you’ll get your return is a recipe for disappointment, if not disaster. Optimism is an excellent personality trait, but in single-family real estate investment, it can lead to big losses. The best deals make money from day one, and long-term appreciation is a bonus.
3. Budget realistically.
As a property owner and landlord, there are expenses you will incur in order to maintain the value of your asset, so you must plan accordingly. The most obvious of these expenses is the upkeep on the property. However, there are other costs you should budget for. One that is often overlooked is vacancy expense.
In a perfect world, your property would be rented continuously with no gaps. However, the reality is that you may lose a tenant on short notice and have to pay the mortgage for a month or two before a new tenant has moved in. If you have not budgeted for vacancy expense, this interruption in your cash flow can come as an unwelcome surprise and a hit to your financial planning.
4. Know your sub-markets/neighborhoods.
Choosing to make a single-family rental investment in a particular metropolitan area simply because a national article states the market, in general, is positive can backfire if you don’t get the details on the specific sub-market or neighborhood where you intend to buy. While the key financial indicators for a city such as job growth, population growth and others may be on the rise overall, that doesn’t guarantee that the specific community you are interested in is enjoying the same kind of upswing. In fact, one sub-market may be growing because businesses are moving there from the area you have in mind. Be sure you have an in-depth understanding of all the forces at work. The key to success in real estate has always been location, location, location.
5. Learn about local regulations and federal laws.
All forms of investing are governed by regulations. However, with stocks and commodities, understanding those regulations is your broker’s job. In real estate investing, the responsibility for understanding everything from local annual registration and inspection requirements to federal fair housing laws falls to you. The time to learn about these legal issues is before you make your purchase. Failing to understand your obligations until after you’ve missed a deadline or violated an ordinance can be very costly.
6. Build a relationship with a local handyman or contractor.
Every rental property will need repairs and maintenance — if not immediately, then certainly over time. Before you complete your purchase, you should invest some effort in researching and connecting with experts in the area that you can call on as needed. Waiting until a pipe bursts to find a plumber can increase both your stress level and your repair costs.
7. Set aside funds for capital expenses.
As a property owner, you will have a variety of smaller, ongoing operating expenses, everything from fixing dripping faucets to making minor repairs. But items such as rooves, HVAC units and driveways eventually wear out. These things have longer lives and higher price tags and are known as capital expenditures or “capex.” These kinds of expenses can run from thousands to tens of thousands of dollars, so it is important to budget and set money aside on a regular basis to cover them.
Preparation: The Key To Investing With Confidence
Investing in single-family rental properties can be intimidating, especially if you are new to the process. The key to forging ahead confidently as you identify, vet, purchase, update and operate a rental is having done all your homework in advance. The considerations above are a great start.
Ready to start looking at your next real estate investment? Contact your local Bardell agent to look at potential investment purchase options.
by Elsa Soto | Feb 23, 2018 | Long Term Rental, News, Property for Sale in Orlando, Renters
Is Homeownership a Part of Your American Dream?
Are You Ready for Homeownership?
According to the latest Aspiring Home Buyers Profile by the National Association of Realtors (NAR), 82% of surveyed renters desire to own a home in the future, with 80% believing homeownership is a big part of achieving their American Dream.
The profile went on to state that 50% of millennials believe that their rent will increase, with 20% believing that an increase in rent will be the catalyst that pushes them to consider buying a home vs. renewing their lease.
So, what is holding renters back?
What would make renters take the plunge?
NAR’s Chief Economist, Lawrence Yun believes that,
“Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher.”
Yun goes on to warn that,
“However, with prices and mortgage rates also expected to increase, affordability pressures will persist. That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”
So What’s The Bottom Line?
If you are one of the many homeowners whose houses no longer fit their needs and are looking to move up to your dream home, now is a great time to list your starter home! First-time buyers are out in force looking to achieve their American Dream.
Are you a currently a tenant looking to achieve your goal in 2018? Don’t wait! As home prices are on the rise along with the changing mortgage rates, now is the time to get the ball rolling. Contact your Local Bardell Realtor® today to get some more information about your home purchase!
by Elsa Soto | Nov 2, 2017 | Homes, Villas and Condos, Investment Property in Florida, Long Term Rental
Central Florida Single-Family Home Long Term Rentals Make a Climb!
Let’s talk about the future of your home. Maybe you’ve been thinking of selling… maybe you’ve been contemplating Long Term Rental. The housing market consists of various home types with different situations in each – but has had a substantial number of Single-Family Home used for Long Term Rentals. Is now the time? The answer is YES!! There are more and more residents making the move to Central Florida and we have more tenants looking for homes than what we have to rent.
Daily Real Estate News – Single-family long term rentals are the fastest-growing segment in the housing market, outpacing owner-occupied single-family homes and all multifamily housing, according to the Urban Institute. Single-family rentals now account for 35 percent of the country’s 44 million rental units.
That figure is likely to increase, according to a panel of experts hosted by the Urban Institute’s Housing Finance Policy Center. Changing demographics and housing market conditions will fuel more growth in the rental market, the panelists say.
“Young people are waiting longer to get married and have children, which can make renting more economical,” the Urban Institute notes in a blog post about the panel discussion. “And while the age distribution of the U.S. population suggests most millennials are reaching the age of household formation and demand for single-family homes, much of this demand is likely to be channeled into the rental market.”
Two barriers remain blockades to homeownership for many millennials, tight mortgage credit standards and increasing student loan debt, the panelists note. So who’s buying these single-family rentals? Institutional investors account for only 200,000 of the more than 15 million single-family rental units nationwide, or about 2 percent of the market, the Urban Institute notes. On the other hand, 45 percent are owned by investors who own just one unit, according to Investability.
During the most recent financial crisis, institutions heavily invested in single-family homes, but that has since changed. Institutional investing is a small fraction compared to the growing number of mom-and-pop investors who have entered the sector.
But several headwinds stand in the way of sustained growth in the single-family rental market, Urban Institute panelists caution. Now that an abundance of cheap homes is no longer available, future growth will largely depend on successful management of what investors already own, says panelist Sandeep Bordia with Amherst Capital Management. Also, growth may come as smaller players look to consolidate. “While the single-family rental market may continue to grow rapidly in the coming years, it remains unclear whether institutional investors will make an increasingly large mark on this space or continue as small, niche players,” the Urban Institute writes on its blog.
Source: “Five Things That Might Surprise You About the Fastest-Growing Segment of the Housing Market,” Urban Institute
by Elsa Soto | Feb 3, 2017 | Long Term Rental, Testimonials
As many of you know, not only do we facilitate your real estate needs – we also facilitate long term rentals for owners and potential tenants. What other way to hear good news than to hear it from a client? Tim Hack, our Senior Property Manager, received great feedback from a Non U.S. Resident Owner impressed with the level of service he experienced in re-renting his long term rental home in Davenport, Florida. Tim works diligently to ensure our rental properties are in rent-ready conditions for our new tenants but also works quickly to ensure vacancy is at a minimum. What a wonderful team we have here – we are proud to be working closely together to provide this service to our owners and tenants.
by admin | Apr 1, 2016 | Homes, Villas and Condos, Investment Property in Florida, Long Term Rental
Buying a Second Home is a Great Idea
Buying a Second Home is a Great Idea 6 Reasons Why – There is something appealing about owning a piece of land that you can call your own. But you are not limited to just one property. When some people think about vacations, owning a second piece of land is even better. There are many reasons why people want to buy a second home, and below are just a few of them:
- Investment purposes: While markets go up and down, in the long run, markets tend to go up. Purchasing a home in an upcoming or already idyllic area can allow you to see that property appreciate over time, allowing your investment property to increase in value. To make that investment even more worthwhile, you can also rent it out. And when the time is right, you can sell the property at a huge gain.
- Retirement: You need to save a large amount of money so that you can eventually retire. But you don’t have to have your savings merely in the stock market or bonds – diversification is a good thing. Buying a second home can be part of that strategy. Choose a location where you would eventually want to live; if you are not sure, vacation in different spots until you find one that meets both your needs and wants. Consider the climate, cost of living, municipal facilities, and social life. You can visit your second home before you retire to establish connections as well as relax, and you can rent it out to help pay the mortgage.
- Vacation rental: Mountain homes, prime golfing location, waterfront property, national park hiking, wildlife retreat, fishing hole, or historical spot – there are many reasons why people pick their vacation spots. By buying a second home in one of these areas and renting it out, you can pay your mortgage and generate rental income from others who need a sweet escape from their daily lives.
- Let the good times roll: According to the National Association of Realtors, when asked for the reasons for buying a second home, vacation was the top answer. Given the great transportation system in the United States, it doesn’t take long to travel to any location you want. Whether it is your small isolated wooded retreat or a flat in a cosmopolitan city, getting away once in a while is always needed.
- Family getaway: Reunions, vacations, holidays, or for no reason at all – getting family together is a great way to remain connected. For larger families or groups spread across the country, buying a second home for a family retreat can simplify that connection while allowing family members to enjoy a more affordable vacation.
- Reverse it: As the saying goes, change is good. If you want to mix it up a little, consider a reverse – living in your vacation home while renting out your city home. Technology has made it easy for many of us to work remotely. Moving to a lesser populated place can mean lower costs while reducing your stress. Additionally, you can change back to your city home when you get a hankering for hustle and bustle again. Either way, you can earn a rental income while enjoying a different location. After all, a change can be as good as a rest!
Though it may seem easy peasy, owning a second home isn’t without its complexities. Make sure you speak with a mortgage lender to ensure you can afford both properties, including mortgage payments, property taxes, repairs, renovations, and general upkeep. Always try out the area multiple times before buying to get a feel for the location and to scope out neighborhoods that appeal to you. If renting out your second property, you may need to find a professional rental company to help ensure your property stays in great condition. Lastly, you need to be aware of the tax implications on your finances. But if you do your homework and obtain a local real estate agent who specializes in second properties, you can have years of enjoyment right around the corner.
Source: Shamrockfinancial.com
Buying a Second Home is a Great Idea
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