Monthly Archives: October 2015

Tips for finding a good Home Inspector!

Are you a home buyer looking for a home inspector? Well we all know that you when your making that big house purchase you want to make sure all is well. So read these tips below on how to choose the best…

Nine tips for home buyers hiring a home inspector

A home inspection is one of the most important steps you can take to make sure you’re buying what you think you are buying, to make sure the house is safe and your investment is secure. Make sure you hire someone who can give you a realistic assessment of any issues or expenses that might come with the property.

• How many inspections have you done? (You don’t want to be first.)

• Can I get a sample report?

• Are you licensed, bonded and insured, and for what?

• What professional or business organizations do you belong to?

• What’s the price and what does that include?

• How long will it take to get the report?

• Do you recommend experts to make repairs or do that yourself?

• Can I come with and bring a friend? (Then do it.)

• Do you have any guarantee if you miss something?

http://homes.reviewjournal.com/news/resale-news/nine-tips-home-buyers-hiring-home-inspector

Rent Crisis?

The article featured below explains today’s rent market. And where the rent prices are now standing. Is rent currently affordable? Read below and see…

Rent Affordability Could Be an Issue For Real Estate Investors

As a property management company reviewing hundreds of applications monthly for a handful of vacant properties, we get to see first hand the affordability and income issues that face today’s renters.  However, is that a rental problem or an income problem.  Inflation is outpacing earnings growth and rental households have more than doubled in the last 15 years.  Yet, earnings have stagnated at best.  So, is this an issue?

A recent report released by Zillow showed that rents hit the least-affordable point in history during the 2nd quarter of 2015 with rent swallowing 30.3% of a renters income.  Traditionally, that ratio is a safe and affordable ratio.  However, when put in context of a renter with less stable means of income and more instability surrounding other debt obligations, this number is the highest it has been in history and could spell trouble ahead.

To be fair, the affordability issue hits mostly metropolitan areas where housing prices have skyrocketed in recent years like New York City, Chicago, Los Angeles and Miami.  In other areas of the country such as Dallas, Memphis and Houston, affordability over-all is not as much an issue today, but still requires careful watching.

As real estate investors, we purchase in these markets based on today’s rental rates and our ability to earn a satisfactory return.  However, as smart investors, we are also looking for both price and rental appreciation mixed with the affordability of the initial investment.  These markets are not going to appreciate like the above mentioned markets.  They are not going to see value and rents double in 5 years like San Francisco experienced from 2010-2015.  At the same time, the median home value in San Francisco is now over $1 million putting it well out of reach for the average investor.

So what does this really mean for those of us investing in the Midwest?  It means we need to keep a close eye on our assets.  Buying the best asset at the best value is going to be crucial.  Cap-Ex on low-priced housing is going to eat many investors alive who invest in high-risk assets.  Renters are going to be squeezed for their dollars without wage growth and renters are going to look for the best value.  That means a good price for clean, well maintained and responsive property management.

The team at Affordable Online Colleges released an info graphic focusing on the brewing rental crisis and the implications it could have.  Take a look below…

real estate investing - Memphis Invest

 

 

http://blog.memphisinvest.com/inforgraphic-is-there-a-rental-crisis-brewing

Looking to Upgrade your house?

Read below about these top 4 ways to upgrade your home… These tips may even save you some more money in the long run!

 

For new-home buyers, they have some tough decisions to make: Which extra features are worth the extra money and which ones aren’t? Some upgrades buyers can easily put off without breaking the bank. But for others, buyers may be wise to get them done right away.

Read more: Cementing Partnerships in New Construction

Realtor.com® recently featured an article on some of the easiest upgrades to add to a new home now that could save time, money, and headaches later on. Among the upgrades to do now:

1. Cable conduits: This can be one way to future-proof a home. “Yes, smart home features are increasingly going wireless, but that doesn’t mean you should skip running cable conduits throughout the house—especially if you see a big home theater or full-home sound system in your future, both of which work best plugged in directly,” the realtor.com® article notes. “Adding an extensive system of cable conduits can make hooking up entertainment much simpler.”

2. Radiant heating: This is integrated into the floor, which makes doing it during the construction phase a lot easier than after. Buyers likely will pay at least $6 per foot for their system in new construction. Those adding it later will likely pay double that – or more. Also, consider confining radiant heating into one room because it “actually can be a limiting factor in future design changes, since the contractor will need to work around it or replace it by zones,” says Ken Streiff, a Minnesota contractor and builder with 20 years of industry experience.

3. Outdoor outlets: Adding outlets later on can cost upward of $250 each. Adding them during construction when the walls are still open can be much cheaper.

4. Accessibility: You never know what the future holds. Consider making hallways and doors wide enough to accommodate a wheelchair. Reinforce bathroom walls to make adding grab bars later on easier — and with no need to open up the walls. Also, consider the location of switches and outlets and don’t make them too high or too low.

http://realtormag.realtor.org/daily-news/2015/10/26/4-new-home-upgrades-do-now

5 Stats To Know About Houses On The Rise!

If you don’t know already the existing home sales have been on the Rise and rose 4.7 percent this September. Read this article featured below that shares more information on current home sales…

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Fall Home Sales Rebound: 5 Stats to Know

Existing-home sales were on the rise last month, posting a strong gain after a decline in August, according to the National Association of REALTORS®’ latest housing report released Thursday. All four major regions of the U.S. saw sales gains in September.

Regional Breakdown

Here’s a snapshot of how existing-home sales fared across the country in September:

  • Northeast: existing-home sales climbed 8.6 percent to an annual rate of 760,000, and are 11.8 percent above a year ago. Median price: $256,500, up 4 percent from a year ago.
  • Midwest: sales rose 2.3 percent to an annual rate of 1.31 million in September, and are 12 percent above September 2014. Median price: $174,400, up 5.4 percent from a year ago.
  • South: sales increased 3.8 percent to an annual rate of 2.21 million in September, and are 5.7 percent above September 2014. Median price: $191,500, up 6.2 percent from a year ago.
  • West: sales rose 6.7 percent to an annual rate of 1.27 million in September, and are 9.5 percent above a year ago. Median price: $318,100, which is 8 percent above September 2014.

Source: National Association of REALTORS®

Existing-home sales – which are completed transactions of single-family homes, townhomes, condos, and co-ops – rose 4.7 percent in September month-over-month to a seasonally adjusted annual rate of 5.55 million. Sales are now 8.8 percent above a year ago, NAR reports.

A slight moderation in home prices mixed with mortgage rates remaining below 4 percent is giving a boost to home sales, says Lawrence Yun, NAR’s chief economist.

“September home sales bounced back solidly after slowing in August and are now at their second highest pace since February 2007,” Yun says. “While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace.”

Overview of NAR’s September Housing Report

1. Home prices: The median existing-home price for all housing types in September was $221,000 — 6.1 percent higher than September 2014 ($209,100). September’s price increase marks the 43rd consecutive month of year-over-year gains.

2. Inventories: Total housing inventory at the end of September fell 2.6 percent to 2.21 million existing homes available for sale. Inventories are now 3.1 percent lower than a year ago (2.28 million). At the current sales pace, unsold inventory is at a 4.8-month supply, down from 5.1 months in August. “Despite persistent inventory shortages, the housing market has made great strides this year, backed by an increasing share of pent-up sellers realizing the increased equity they’ve gained from rising home prices and using it towards trading up or moving into a smaller home,” says Yun. “Unfortunately, first-time buyers are still failing to generate any meaningful traction this year.” First-time buyers dropped to 29 percent of sales in September, following a climb to the highest share of the year in August at 32 percent.

3. Days on the market: Properties stayed on the market for an average of 49 days in September – up from 47 days in August but below the 56 days in September 2014. Thirty-eight percent of homes sold in September were on the market for less than a month. Short sales were on the market the longest at a median of 135 days in September; foreclosures sold in 57 days; and non-distressed homes took 48 days.

4. Distressed sales: Distressed sales – which include foreclosures and short sales – held steady for the third consecutive month at 7 percent in September. A year ago, distressed sales comprised 10 percent of sales. Six percent of September sales were foreclosures and 1 percent were short sales (the lowest since NAR began tracking in October 2008). On average, foreclosures sold for a discount of 17 percent below market value in September, while short sales were discounted 19 percent.

5. All-cash sales: Buyers bringing all-cash to closing rose to 24 percent of all transactions in September – up from 22 percent in August. Individual investors, who account for the bulk of cash sales, purchased 13 percent of homes in September, up from 12 percent in August. However, investors’ share of sales is down from 14 percent a year ago.

http://realtormag.realtor.org/daily-news/2015/10/23/fall-home-sales-rebound-5-stats-know

What’s going on in the Rental Market?

This article featured below tells about how much the Rental Rates have increased. And in the past 8 months this rate has been about 5% or higher! Read more about where the market is headed…

It is the year of the apartment — 2.0.

While some thought the skyrocketing rents of 2014 couldn’t be sustained, they did, and then some. There’s no sign of any easing any time soon.

Annual rent growth in September was 5.2 percent, the highest since 2011 and the eighth-straight month the rate has been 5 percent or higher, according to Axiometrics, an apartment research firm. Annual rent growth was at 4.1 percent a year ago, which was still considered high.

“The eight months the rate has been above 5 percent is the longest sustained period of strength we have seen. The last growth cycle was only four years, and this cycle is already five years long — with no sign of stopping,” said Stephanie McCleskey, vice president of research at Axiometrics.

While apartment construction has been strong, it hasn’t been enough or in the places where it is most needed. Now, there are signs it may be tempering. Permits for multifamily construction dropped nearly 15 percent in September from August and are now 1 percent below September 2014, according to the U.S. Census.

Workers build an apartment building at a construction site in downtown Los Angeles.

Patrick T. Fallon | Bloomberg | Getty Images
Workers build an apartment building at a construction site in downtown Los Angeles.

The vast majority of new supply has been in pricier areas, in particular major urban cores, which has not helped renters in the suburbs or in smaller cities who are in dire need of more affordable rental housing.

Read MoreWant a discount on a house? Drive way out of town

“New inventory coming to market is weighted to the high end; it’s urban, Class A, with a rich set of amenities, targeting the coveted college-educated millennial,” said Sam Chandan, president of Chandan Economics. “Overall, we still have an affordability crisis in the United States with rents rising faster than incomes for the fourth-consecutive year.”

Apartments were 95.3 percent occupied in September nationally, a slight drop from August, but the third-strongest month this year, according to Axiometrics, which considers anything above 95 percent as a “full” market. Occupancy has been at or above 95 percent for six-straight months and 10 of the past 16.

It is clearly a tale of two apartment markets. The pipeline of new product is rich and full in urban downtowns, which will likely temper the rent gains there over the next few years. When doing the math on suburban or Class B markets, however, developers and investors just don’t see desirable returns. Weak income growth will simply not support rent growth.

“When you’re evaluating that as your target market, there is only so hard you can push on rents,” Chandan said.

Read MoreHousing today: A ‘bubble larger than 2006’

While some studies have shown that it is now more affordable to buy a home than to rent, several factors keep rental demand high: a lack of homes for sale, especially on the lower end, a desire by younger Americans to remain mobile, a downsizing baby boom generation that may be owning-averse, and high rents themselves keeping potential buyers from being able to save for a down payment.

Rent gains have been largest in cities with growing technology sectors, like Seattle, Denver and Portland, Oregon, but growth is also above average in Nashville, Charlotte and several cities in Florida. Playing into that demand is simple demographics.

“Younger, newly formed households continue to move out of their parents’ or roommate living arrangements and rent an apartment, driving up the demand for more rental units,” said David Crowe, chief economist for the National Association of Home Builders. He said the trend is expected to continue into 2016.

As single-family construction gains, perhaps the rent crisis will ease, but homebuilders like Lennar and Toll Brothers are hedging their bets, putting up rental apartments as well. Thirty-five percent of new home starts in 2015 have been multi-unit. That is higher than a year ago and the highest share since 1973. Developers are simply going to where demand is highest and most lucrative.

http://www.cnbc.com/2015/10/20/think-your-rents-too-darn-high-just-wait.html

Home features that can deter buyers!

The article featured below shares a list of 5 things that buyers look for in a home. Read more and learn what kind of “Buyer Pool” you may average… 

 

5 Cool Home Features That Can Deter Buyers

Several amenities that often are viewed as favorites by home by owners may actually make the home more difficult to sell. Realtor.com® recently highlighted a few “awesome features” that surprisingly can limit your buyer pool. Such as:

  • Nearby retail. Some buyers will be drawn to restaurants and bars within walking distance as well as easy access to major thoroughfares. But unless the area is mostly urban, sellers may find it a more difficult sale since not everyone wants to live near a busy street. “Homes that are on busy streets command less value than interior homes,” says Bob Ripp, a real estate appraiser in Fort Collins, Colo.
  • A swimming pool. In some warm-climate cities, an in-ground pool is practically a necessity. But in mild or cold climates, swimming pools don’t always give sellers an advantage. “There are several instances where pools detract from the home,” says Ripp, such as when it requires significant maintenance compared with the amount of year it is usable.
  • Big renovations. Home owners who over-improve their homes may also not see a big pay off in the end. If no other homes in the neighborhood has features like high-end granite countertops or the fancy landscaped yard, home owners may not see their high-end upgrades as appreciated when they go to sell. They may price themselves out of the market or some buyers may not be drawn to the fanciest home on the block.

Read more: 12 Most Popular New-Home Amenities in 2015

  • Big – or small – backyard. A giant backyard may be great for the home owner but some buyers may not want the extra maintenance. On the other hand, if the backyard is too small – particularly with zero privacy and barriers — some buyers may overlook that too. “The size of the yard can be a very big factor,” says Amy Cook, a real estate professional in San Diego. “Some people actually don’t want any maintenance and prefer to have a very small yard. Others want a yard for their kids or want privacy. … Many homes get nixed because of the lack of privacy with other houses right beside it.”
  • Tile flooring. Tile floor can be one of the most difficult flooring types to remove and it can turn off some buyers. “Tile is very difficult and expensive to change, and often what owners choose just isn’t very attractive,” says Cook. “Basic white, dated tile is usually a big turn-off for buyers.”

http://realtormag.realtor.org/daily-news/2015/10/20/5-cool-home-features-can-deter-buyers

Thought about remodeling your homes before?

If your an owner of investor.. Read this article featured below that shares why its the perfect time to remodel a home. It could increase its value. Read below..

home-remodel

For Owners: Best Time to Remodel Is Now

As home values continue to rise, more home owners may find now is the best time to add to that value even more. Spending on home remodeling is expected to climb from 2.4 percent in the second quarter to 6.8 percent by the second quarter of 2016, according to Harvard University’s Joint Center for Housing Studies.

Best Remodeling Jobs for Resale: Cost vs. Value Report

“Home improvement spending continues to benefit from the last years’ upswing in housing market conditions including new construction, price gains and sales,” says Chris Herbert, managing director of the Joint Center. “Strengthening housing market conditions are encouraging owners to invest in more discretionary home improvements, such as kitchen and bath remodeling and room additions, in addition to the necessary replacements of worn components such as roofing and siding.”

Sellers are already diving into more remodeling projects and using some of the equity in their homes to fund the projects. Black Knight Financial Services reported an increase in cash-out refinancing this summer – a 68 percent jump in the second quarter year-over-year, and it’s now at the highest level in five years.

Also with interest rates still low – for now – some home owners may be rushing to do projects before interest rates go up, says Matt Proper of Freeman Builders in Washington, D.C.

With spending in the repair and remodeling industry expected to grow to $300.5 billion in 2016, much of that spending will be in small, discretionary projects, such as kitchens and bathrooms, according to John Burns Real Estate Consulting.

The consulting firm projects home price appreciation to be 4.2 percent next and estimates that each 1 percent of real appreciation will lead to 1 percent incremental higher average project size for big and small projects and a 1 percent increase in average small project spend per remodel.

http://realtormag.realtor.org/daily-news/2015/10/19/for-owners-best-time-remodel-now

Do You Like Wallpaper?

Here’s an article about removable wallpapers. And where to get them. If your renting sometimes owners do not allow you to paint… But maybe a fun wall paper wouldn’t. Especially because you can remove it before you leave. Read about it below…

 

What’s your renters insurance cover?

Always a common questions… But you should ask your insurance company in detail what they do offer. This article featured below shares the questions clients have regarding what could happen during a flood. Read below…