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House Flipping: Is It for You?
Maybe you’ve heard of house flipping or seen it on TV. It’s really grown as a method of making money and there are even reality TV shows about it. So how do you know if house flipping is for you? Really, no one else can make that decision except for you. You’re the only person who knows if you can afford it, if you can risk it, and if you will enjoy it.
Here are some situations where house flipping may not be right for you:
- You don’t have the money – It takes money to invest in real estate and if you can’t afford it, you don’t want to risk it right now. Flipping houses can pay off big but you might also lose in some of your investments and if you don’t have the money to take the risk, you shouldn’t do it.
- You don’t have the time – Flipping houses is going to take time. To really do this successfully, you’re going to need to invest time. You need to research houses, watch the market for quick sales and auctions and good deals, invest time in doing appraisals and also in putting time and money into fixing up the home. Then, you’re also going to need to invest time in reselling it. So if you don’t have the time, this is not for you.
- You don’t have the knowledge – If you don’t know anything about real estate, the value of properties and the current market, this might not be right for you. If you don’t have the industry knowledge, you’re not going to know how to find good deals and make profits.
Here are some things that may make house flipping good for you:
- Have a support network – If you have a good network of friends, family members and associates that can help you, this puts you in a good position for doing something like house flipping.
- Have a feel for DIY and handyman stuff – If you enjoy DIY and other handyman work, you might enjoy house flipping because you can do a lot of this work hands-on for yourself. If you’re interested in it and passionate about it, then this could be a great choice for you.
- Experience in real estate – If you already have experience in real estate, you’re going to have the upper hand in the world of house flipping.
With these ideas in mind, you can decide if house flipping is the right choice for you. If you have the money to invest and the time and you enjoy it, this can be a great part-time job or even a full time career for you.
What Happens if I’m Renting and My Landlord Goes into Foreclosure?
What Happens if I’m Renting and My Landlord Goes into Foreclosure?
In the past, if you were renting and your landlord went into foreclosure, you could be immediately forced out of the home. However, times have changed and new laws make it possible for renters to live out their lease in most cases. In other cases, they may be able to recover costs from the original landlord.
Talk with Your Landlord
If your landlord goes into foreclosure and actually tells you about it, you may need to discuss other things, like utilities. If your landlord was taking care of the utilities as part of your rental agreement, you need to find out if that is still going to happen. Someone who isn’t making their house payment with your rent money may not be paying the utilities either. Try to get as much information as you can so you are able to plan ahead for the safety of your own family.
Thank You Obama
In 2009, President Obama signed an act to protect tenants from having their lives turned upside down if their landlord went into foreclosure. The Protecting Tenants and Foreclosure Act of 2009 was designed to give tenants a chance to recover from what to them may be an abrupt change.
The act basically states that tenants can live out their original lease undisturbed. Since some tenants live on a month to month lease, this could have meant that they had 30 days to move out. However, the act gives them 90 days to find a new home. The only exception is when someone buys the property with the intent to live there. In such cases, the tenant has 90 days, regardless of whether they live on a month to month lease or not.
Recovering Costs
Aside from potentially having to deal with a higher rent, moving itself is expensive. You may need to travel to investigate a potential rental, pay application fees, and rent a truck to move your furnishings. Renters can sometimes recover some of those costs by taking their original landlord to small claims court.
Naturally, while you are living in the rental, all of the details of the lease and your responsibilities still stand. It may be even more important to follow the lease to the letter in order to avoid being evicted because of your own folly. If this happens, you won’t be able to recover costs from your former landlord because you will have to move due to your own behavior and the details of the lease. Talk to a real estate agent about your opens if you do need to move. It may just be time to buy your own home!
How to Prepare for Turning a Home into a Rental
How to Prepare for Turning a Home into a Rental
If you have made the decision to rent out the home you are living in rather than living in it yourself, you have some prep work to do. Not only do you have to get the home itself physically ready to rent, you also need to prepare yourself mentally. Understand that they are going to treat your home differently than they will and make yourself come to terms with that fact. Use some of the tips below to make the whole process much easier and safer for you and your future tenant.
Decide How Involved You Want to Be
You don’t have to deal with tenants at all if you don’t want to. Instead, you can turn your home over to a rental agency or real estate agent who will collect the rent and make timely visits to ensure that the property is being taken care of. This helps avoid any issues with getting personally involved with the tenant or letting your feelings about the house get in the way of how you manage your business.
Safety First
You may want to check with a local lawyer or building inspector to learn exactly what the rental codes are and what your responsibilities are toward the tenant. Some states require that you furnish appliances while others don’t. The same is true of things like smoke detectors.
You most likely have the best interests of everyone in mind, so it won’t hurt to take a few extra steps. Make sure that the smoke detectors are adequate and in working order. Check the stability of any and all handrails. Install GFI sockets near the sink, tub, and washer.
Get Neutral
Neutral tones are fairly common in rentals because they work with just about any kind of décor. Brown carpet is the most common because it hides traffic paths and minor stains better than most other colors do. When it comes to the walls, stay with one neutral color. This will prevent you from having to match paints every time a new tenant moves in.
You may not be trying to offer a palace, but you expect your tenant to be timely with the rent, so give them something worth renting. Make sure everything is in working order and create a schedule for doing things like changing furnace filters. The more you invest in maintaining the home as a reliable landlord, the more likely you are to have tenants who will stay for long periods of time and pay their rent in a timely manner.
What is a Green Mortgage?
What is a Green Mortgage?
If you are buying a home or thinking about refinancing a home, you might want to consider using a green mortgage. This type of mortgage is sometimes called an energy efficient mortgage because of the nature of the loan. Whatever you might call it, it’s a great way to save money right off the bat, and even benefit from some of the tax breaks that come from going green in general.
Not a Renovation Loan
Usually, a mortgage covers the cost of buying a home just as it is. However, lenders have recognized that you may be more inclined to buy a home if you can turn it into something a bit closer to your idea of a dream home. Because of that, there are now mortgages like the FHA (203)k mortgage that allows you to borrow more than just the cost of the home. It allows you to borrow enough to make the changes you want to make. This makes it easier for homebuyers who may not be able to afford the cost of a mortgage with renovation costs stacked on top. However, these loans are not specific to energy efficient changes.
Green Mortgages
Unlike a renovation mortgage, a green mortgage focuses on making a home more energy efficient. This would include things like adding solar panels, point of use water heaters, more efficient insulation, energy efficient appliances, and just about anything else that makes your home more environmentally friendly and cost-efficient. One of the main differences between these loans and renovation loans is that green loans tend to help you save money because your home requires less energy to maintain a comfortable situation.
Tax Benefits
There are federal tax breaks for those who make their home more energy efficient. There may also be state tax breaks in your state. In either case, be sure to check the exact specifications so that you can benefit from these breaks. In some situations you may be able to claim the entire cost of installing new appliances, ceiling fans, insulation, and other energy efficient items.
Making sure you get the right mortgage for your situation is about more than just the interest rate. With things like a green mortgage in place, you can save money on more than just interest. You can reduce the cost of your utilities, lower your taxes, and still find an interest rate that is comparable to all other types of mortgages.
Century 21 Cedarcrest Realty Recognizes its Top Performers for 2015
How to Deal with Buyer’s Remorse in Real Estate
How to Deal with Buyer’s Remorse in Real Estate
Buyer’s remorse is not uncommon at all. Buying a house is a major decision and every person who has the mindset of an adult is going to question major decisions they make. They have fears concerning their finances and future, and that’s actually healthy. It prevents them from making decisions on the fly and considering all of the angles rather than making decisions based on things that aren’t really important. As a realtor, it’s your job to let them know how common this is and walk them through a few steps that will help them make the right decision in the end.
Explain Commonalities
Sometimes people need to know they aren’t alone. You can explain to the buyer that many people experience this same feeling. You might even relate this situation to a decision about getting married, though you might want to avoid this route if they are recently divorced. Explain that any life decision this big is bound to cause a bit of anxiety. That doesn’t mean that they are making a bad decision.
Go Back in Time
Talk about why they chose this house to begin with. Point out that those things still exist. If there are elements about the house that they don’t like, address how those might be dealt with. For example, if they don’t like the fact that there are stairs in a house, you can discuss how this is a commitment and a great buy, but that in the future, when the kids are grown and moved out, they might actually make a profit off the house when they sell it and buy something smaller with only one floor. Just be sure to return the focus to the things that they loved about the house and which caused them to claim it as their own.
Discuss Options
The buyer might still have the option of backing out. Talk with them about what might happen if they do back out and what they would look for in the next house. If possible, reveal some of the ways they might incorporate those elements into the house they are set to buy right now.
Sometimes it helps to write things out, so you might sit down with the client and list the pros and cons as they see it. Make a special note in any areas where the cons are going to be the same in any house they choose. Encourage them to take the list home and consider it before making any kind of decision to back out of their existing real estate transaction. Sometimes they just need a bit of time to calm themselves down and see all the potential that their new house has.
Bad Credit? You Can Still Buy a Home
Bad Credit? You Can Still Buy a Home
If you have bad credit, you might be under the impression that you don’t have any hope of buying a home. Not only is that not true, but 2016 real estate trends might even demonstrate that this is the best year for success when it comes to buying a home with bad credit.
Consider All Lender Options
There is a good chance that if you just walk in a bank and apply for a mortgage while having bad credit you are going to get turned down. In fact, don’t even try that option until you have looked into a few others. Consider things like FHA or VA loans, which have more flexible credit limits on them. They also allow for variations in terms that other lenders might not, like letting gifts from family members be applied toward the down payment.
Ask About Seller Financing
Seller financing is probably one of the most popular options. It may even give the seller more room to customize the purchase. That gives the seller a lot of power, but as long as the terms are ones you can live with, this might be one of the easiest ways to buy a home with bad credit. Look to sellers who are interested in being relieved of a mortgage or who already have the house paid for. People who aren’t in a hurry to sell may be less likely to offer you this option.
Settle for Less
If you have bad credit, it may not be possible for you to get the home of your dreams, but that doesn’t mean you can’t get a home at all. Look for homes that are affordable and livable, but may need a bit of work. This allows you to mot just buy a home, but make an investment that you might realize a profit from in the future.
Be Timely
There is potential for a new bill to pass which allows rent and utility payments to be considered along with the FICO score. If this passes, you won’t be put out of the running just because you don’t have a credit card. For the first time, making your rent and utility payments on time will actually count toward your buying potential.
You may have to deal with high interest rates and a fixer upper, but as long as you can afford the payments, you can always pay a little extra to limit your interest. In the future, you can sell the home once it and your credit is fixed up. Then you can move into the home of your dreams at an interest rate you can afford.
What is the Home Buying Market Like in February?
What is the Home Buying Market Like in February?
The home buying market in February may be a bit slower than it is in other months, but there are still some significant trends to watch for, some of which can set the tone for the market later on in the year. Since the start of the buying season is considered to be between March and April. February tends to be a month of preparation.
Assessing the Numbers
2016 is already off to a good start for potential homeowners. With the average interest rate in February being 3.79%, down a quarter of a percent from the beginning of the year, buyers have access to homes that they couldn’t afford just a month ago. If the interest rates keep falling, this could set a trend for buyers to step things up a notch when it comes to the homes they are looking at.
Naturally, interest rates aren’t the only things that have an impact on home buying trends. Current bills that may lend more insight into credit scores are also something to be considered, as well as the job market. Since unemployment rates are falling, the January Non-Farm Payrolls Report may have the biggest impact on the market in February.
February Compared to 2016
The home buying market in February shouldn’t be used to perceive how the rest of the year might go, since February means something a little different for those who are considering buying a home. For the most part, shoppers aren’t all that interested in getting out in the cold and looking at snow-covered homes. On the other hand, they may have their tax returns in hand, making them prime targets for current scammers.
Some current scams involve false reports of identity theft and disputes on credit reports. Since millennials are expected to be some of the most active homebuyers this year, they are also going to be some of the biggest targets for February scams. Right now, shoppers are expected to be doing a lot of online browsing and hopefully, ignoring the calls from scammers rather than responding to them.
Now is the time for realtors to start really promoting visuals for their market and interacting with the public. Since this part of the home buying season is largely done online, it’s a great time to catch the eye of potential buyers with images and helpful advice. For potential home buyers, it’s a great time to reach for that home they couldn’t afford last month, and do some research on areas they want to live in.
Cedarcrest Realty, INC. Congratulations to Our 2015 Fourth Quarter Top Achievers!
The Real Estate Market in 2015 (and What to Expect in 2016)
The Real Estate Market in 2015 (and What to Expect in 2016)
One of the biggest things to impact the real estate market in 2015 was the availability of homes for sale in the metropolitan area. The inventory is already 4% less than it was this time last year, so buyers can expect that trend to continue and with it, an increase in prices for homes in the metropolitan area. At the same time, an increase in the number of millennials who are expected to become homeowners this year may have an even bigger impact on the housing market. With the fluctuation in these numbers comes a change in the way that FICO scores are viewed, which may have the biggest impact of all.
Metropolitan Inventory
As millennials hit the job market and become prospective homeowners, they seem to have a trend of sharing a desire to live in a metropolitan area. This is because of the easy access that they will have to an active job market, as well as entertainment options. However, since the inventory has become so limited, many prospective homeowners are expected to take up residence in areas just outside of the larger cities. By doing this, they have easy access to jobs and entertainment, but are also in a great location to raise a family.
Speaking of families, 2016 may see a rush of older people leaving the city for a quieter life in the suburbs. This may be due to retirement status, but it also may be a reflection of the decrease in interest rates that allows for potential homeowners to have a bit more buying power.
FICO and Common Sense
Ever since there was the potential for a person to get credit to buy a home, there has been a question of the lack of consideration for rent and utilities when it comes to credit scores. After all, one would think that not living beyond your means with credit cards you can’t afford, but being able to make your cost of living payments on time should count for something. This year, it just might. Freddy and Fannie have introduced a bill that allows creditors to consider things like rent and utilities, but there may also be a potential to claim more income. Previously, rent from rooms and payments from live-in relatives couldn’t be considered as income when it came to home loans. Later this year, that may change and open up more options for people who live on a limited income.
As more people have the chance to enter the housing market, the home prices are expected to increase. However, they are only expected to increase at half the rate they did in 2015, leaving sellers and buyers alike a bit of wiggle room for shifting inventory.
