5 Tips for Real Estate Investing

 

If you’re just beginning to invest in real estate, it’s a good idea to familiarize yourself with the fundamentals before getting your advanced degree. Here are 5 basic tips to get started investing in real estate.

1) Location matters

You may want to invest in the worst house on the best street because it gives you an opportunity to build equity. Invest some money to fix it up and sell it to someone else who wants a ready-to-move-in house in a fabulous location.

2) Wholesale properties

Avoid paying “full price” for properties. Instead, look for so-called wholesale properties that are offered at a steep discount. Sure, they’ll probably need some work. Run the numbers and see if the investment in rehab is worth the ultimate selling price.
You can easily invest $20,000 in a property and add twice that much to the selling price.

3) Tax Benefits

Uncle Sam offers significant tax benefits to real estate investors, including the depreciation write-off. When you buy an investment property that includes a building, you get to write off the depreciation of that building as a tax deduction.

Keep in mind that the IRS views your real estate investment efforts as a business so you also get to claim the “necessary and ordinary“ deductions that business owners take, including mortgage interest, insurance, and maintenance expenses. Remember to consult your tax advisor about specifics.

4) Check your credit score

Banks aren’t going to loan money to you for a property that’s not your primary residence as readily as they’ll loan it to you for your own home. That’s why your credit has to be spectacular. If you have problems on your credit report that are mistakes, get those resolved as quickly as possible.

5) The 1% rule

The 1% rule simply states that an income property must produce 1% of the price you pay for it every month. For example, if you’re looking at buying a property for $150,000, the monthly rental income should be 150,000 x 1% = $1,500.

Article courtesy of HuffingtonPost.com


8 Top Real Estate Mistakes

 

Get insider secrets to avoid costly blunders on the most important investment of your life.

SELLERS:

Failing to Showcase your Home
When you are selling your house, you have to look at it objectively from the viewpoint of the house hunter. Make minor enhancements to the house, perhaps hiring a professional stager to arrange your furniture. Staging is about decorating your house for the buyers’ taste, not yours. Home staging is designed to increase the potential selling price and reduce the amount of time the house stays on the market.

Setting a High Listing Price
To price your home, your agent will suggest a figure that is comparable to what the homes in your neighborhood have sold for, unless you have upgraded features. It’s always better to price a home this way rather than start too high and have to reduce. Once you reduce, people may think something is wrong with the home.

Doing Major Renovations Before Selling
Minor upgrades usually have a higher return on your money than tackling major renovations before placing a home on the market. The main reason? Huge construction projects always cost more than you think and take longer than expected.

Not Hiring an Agent
There’s a lot more to selling a house than just putting a sign on the front lawn. If you don’t have an agent, you will miss out on somebody negotiating on your behalf. It is really important to have someone on your side who understands all the complexities, paperwork, and legalities.

BUYERS

Buying What You Want–Not What You Need
Look at the space you already live in. It will help you realize what you have been missing and what you need in your next home. Make a list and ask your agent to start shopping based on those needs.

Overlooking Hidden Costs
Buying a home is not just about the money you spend up front. Find out what the property taxes are, what your water and other utilities might cost, possible HOA fees, insurance, and if you need to factor in furnishings or renovation costs.

Buying a Home Without an Inspection
A professional home inspection can reveal many things about a property that are not visible to the naked eye. Be sure to hire someone who comes with a good referral, who’s been in the business a while and knows what to look for. Once you find an inspector, make sure they compile a written report, complete with photos. Photographs are important because there are areas a home inspector will look at that you might not see.

Skipping the Loan Pre-Approval Process
When you are pre-approved, the bank is saying, “we will give you a mortgage of up to this amount, so now all you have to do is find your home.” Some sellers only allow real estate agents to show their house if someone has a pre-approved letter. That indicates that the shopper really is serious about buying a home.

Article courtesy of HGTV.com


Summer Staging Tips: 7 Tips to Enhance Outdoor Spaces

 

Staged homes spend 78% less time on the market. Attract the most buyers in the least time with these 7 summer outdoor staging tips:

Prep the Deck
Visually increase your square footage by emphasizing outdoor living space. Whether your home features a deck, patio, porch or other outdoor living area, take time to power wash the surface to remove any debris. If your outdoor furniture is lacking, consider purchasing a fresh set, complete with all-weather cushions and pillows in vibrant colors.

Mow the Lawn
Whether you hire a professional landscaper or DIY, trim the lawn and any hedges—the latter can be a trip hazard if left untouched.

Roll out the Welcome
It’s no secret—curb appeal matters to buyers, but too often, minor details are overlooked when setting the stage out front. To roll out the welcome for buyers, replace your worn welcome mat with a summery alternative, and install large house numbers in a prominent location that can be viewed from the street.

Wash the Windows
Cleaning windows inside and out can be taxing, but it makes a noticeable difference. For the exterior sides of the windows, scrub off any accumulated film from tree pollen and polish until glistening. Buyers will be pleased to see not only a sparkling home outside, but a light-filled interior as well.

Clean the Pool
Pools can be a make-or-break feature for buyers, so play it up as best you can. After having the pool cleaned by a professional, take care to skim the surface for any debris that accumulates between buyer visits. Be sure the pool cover, mechanized or otherwise, is free of damage and the filtering system is in working order.

reddoorLighten Up
Make sure the outdoor spaces around your home, including the front entrance, deck, patio, and walkways, are appropriately lit. Spotlight your best features and make sure to check the porch light. Updated light fixtures are not only aesthetically pleasing, but are an added safety feature to the home.

Showcase a Spot of Color
In lieu of a costly exterior paint job, choose specific areas outside to add pops of color. Window boxes bursting with blooms are often well-received by buyers, as well as container plantings. If the exterior could use refreshing, consider repainting the front door before recruiting a professional to do the entire home.
Article courtesy of RealEstateBook.com

 

 


7 Tips to Improve a Fixer Upper

 

Look for Red Flags
Before signing on the dotted line, hire a home inspector to give the place a thorough evaluation. An inspection may cost $200-$300, but it is well worth the price if the inspector uncovers a major structural issue or another pricey problem. Tip: If the problem sounds like a money pit, it probably is.

Spy on the Neighbors
Scope out the neighborhood before starting any work. You don’t need to upgrade far beyond neighborhood standards. For example, if most homes have window air units, or none at all, you won’t recoup the cost of central air conditioning. Conversely, if granite countertops are a staple, you’ll lose money on your investment by installing laminate. Tip: Attend a few real estate open houses in the area to examine the homes’ interiors.

Remodel the Most Important Rooms
Kitchen and bathroom remodels are still high on the must have list, because they’re the rooms buyers look at first and use the most. What upgrades you make and how much you spend will depend on the market and your budget, but make it your mission to create bright, clean, family-friendly rooms.

Upgrade the Underbelly
The heating and air conditioning unit, water heater, wiring and plumbing should all be in good condition. If they aren’t, hire a licensed electrician to do the work, since if improperly done, it can lead to a fire and/or legal hassles.

Paint + Flooring = Dramatic Value
Real estate experts always advise giving walls and trim a fresh coat of paint, but don’t forget what’s underfoot. Old hardwood flooring hidden under outdated carpet and laminate is usually worth refinishing.

It’s the Little Things
Don’t underestimate the effect of inexpensive cosmetic improvements like new doorknobs, switch plates, toilet seats, ceiling fans, faucets and cabinet pulls.

Add Curb Appeal
Keep a clean, mowed front yard, a colorful planter and a welcome mat. If the home’s landscaping is overgrown and neglected, trim out the excess or plant a few inexpensive foundation bushes near the front. Tip: Mulch flowerbeds with a dark-colored mulch to add instant charm.

A good rule of thumb to keep in mind, is to invest in improvements that will add at least twice their cost to the home’s value.

Article courtesy of hgtv.com


10-Minute Tricks: Freshen Up your Home for Spring!

With spring fever comes a desire for a change in décor. Check out our top 7 quick, easy, and dollar-conscious ways to freshen up your living space before the flowers start to bud.


Rotate your Artwork

Are your walls cluttered with stagnant artwork? If so, it’s time for a change. Some people hang everything they own on every wall. Look at it all the time, and you start taking it for granted. Try this: Separate art into summer and winter piles. Hang the lighter, pastel colors for spring and summer, and put the darker oil paintings in storage. Every six months, rotate your pieces. This way, you enjoy your art with a new vigor, and it’s something you can do in minutes.

Natural Scents

Spring is not only a colorful season, but a fragrant one, so bring the aroma indoors. Scents have a profound effect on mood. Infuse aromas into your décor with essential oils, natural candles, fresh cut flowers, or incense to change the overall feeling of a space. A quick, floral tip: Purchase an inexpensive bouquet of flowers, split them up by color, and place the bunches in small vases around your home.

Buy New Bulbs

You’re thinking flower bulbs, right? Not a bad idea, but we’re talking about light bulbs. Many of us aren’t using our lights properly­—in the winter you need more light, but in the spring you can get away with less. Swap your 60-watt bulb with a 3-way bulb to allow you to soften a room’s light.

Let the Sunshine In

In the winter, dirty windows can go unnoticed. On the first day of spring, take advantage of the sunny season by giving the windows a wash. You can have a gorgeous room, but if the windows are dirty, it won’t look as beautiful or as bright. As an added tip, pull back dark window treatments and add a shade or valance for a touch of color. Or, you can also replace window treatments with ecru or white sheers for an elegant look.

Update Accessories

Just as you’d add a scarf or necklace to enhance an outfit, do the same with your home—dress your home like you would yourself. Look for great accent pillows in bright colors. Put away the winter throws and drape light, bright throws on your sofa. Pick out spring-hued vases or candles to boost a cocktail or dining room table.

Beautify your Boudoir

Bright, new bedding can do wonders for your personal space. Tuck away the heavy, winter flannel comforter and pull out crisp linens with coverlets for color. Bring in the spring with floral-designed spreads or colorful solids. Don’t forget accent pillows for added style and comfort.

Lose the Magnets

In just minutes, you can tidy up a kitchen by getting rid of the scraps of paper, business cards and take-out menus stuck to the fridge. If you have odds and ends everywhere, it looks messy. If you clear it, your kitchen looks and feels organized.

Article courtesy of HGTV.com


Sell your Home for More Money

Drastically increase the amount of money you make on the sale of your home with these eight easy tips.

1) Price it below market value.
List your home below the current market value; maybe even as much as 5-10%. As a homeowner, you may be reluctant to try this approach, but the results may surprise you. This can be highly effective, create a sense of urgency and drive in even more offers and buyers than you ever imagined.

2) Brighten up the bedroom.
Bring in as much natural light into the room as possible. If you can’t remember the last time you cleaned the windows in your house, now is the time–inside and out! Replace any burnt out light bulbs and bring in an extra lamp or two.

3) Clean out the closets.
Open up the closet doors, pull everything out, and get rid of 50% of the clutter. If winter has passed, pack away all of your winter clothes. When a buyer opens up the closet doors, they see the available closet space, and not an unorganized, overstocked storage area.

4) Paint the front door.
Don’t let an old, weathered door be a buyer’s focal point. Painting the front door can make a home feel more welcoming. By carefully choosing the right color, you can unexpectedly make your house stand out from the rest.

5) Enhance the landscaping.
To help give your home a boost in curb appeal, spruce up the landscaping around the front of your home. By carefully planning and doing your homework, you can achieve a nice upgrade on a small budget.

6) Stain the deck and driveway.
Staining your deck and driveway is a cost effective way to prolong the life of an area that takes a beating from the weather and heavy foot traffic. It will let the buyer know your home is properly maintained.

7) Paint the walls a neutral color.
Don’t let the color of your walls be the focal point of a room. It will be easier for a buyer to relate to a neutral wall color, and they won’t be distracted by a room that is bold or too loud.

8) Make kitchen improvements.
Kitchen improvements can yield high returns if done properly. Popular upgrades include resurfacing or replacing kitchen cabinets, adding a new backsplash, or replacing outdated countertops.

Article courtesy of garrettsrealty.com


2017 Design Trends

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If you’re renovating or building, look out for the following trends for 2017.
WHAT’S IN

TERRACOTTA

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Warm materials such as terracotta tiles will replace currently popular cool and white tones.

“Unlike in the 80s, they aren’t used as border tiles. Instead they will have a natural matte finish and be used as feature walls in bathrooms or for cladding fireplaces,” says Lauren Macer of Sisalla Interior Design. 

CORK

Not only is cork a stylish material idea that adds warmth and texture to spaces, it’s also ideal for absorbing noise in our increasingly large homes.

“It could be used to clad entire walls in the home office and used to pin notes to,” Macer says.

UPHOLSTERED HEADBOARDS

Beds will change dramatically in 2017, with upholstered bed heads set to replace the timber bed frames currently dominating the market.

“Whether you opt for the classic model in neutral color with buttons, or a plush one in velvet, a bedhead is an easy way to update and add instant glamour to a bedroom.”

ESCAPISM

Homes with nooks and places to relax will become more popular as humans react to our increasingly technological lives.

“With an ever-increasing amount of time spent in front of a computer or smartphone screen during the day…there will be a greater desire to create spaces in our lives devoid of digital distraction,” says the team at Nathan + Jac.

JEWEL TONES

Pastel shades of pink and blue will soon be overtaken by jewel tones inspired by metals, space, stars, clouds and the cosmos.

“Metallics, metals, raw-cut quartz, Lucite and opal will add a dash of sparkle and interest,” says the Nathan + Jac team.

WHAT’S OUT

COPPER

“The oversaturation of cheap and shiny imitation copper just ends up looking like you’ve tried too hard, and by doing so, you’ve already missed the boat.”

Our experts almost unanimously agree that copper and rose gold are out. In its place, a more industrial aesthetic is anticipated.

OPEN PLAN LIVING

Defined living spaces are returning to modern homes as consumers seek more private home layouts.

“As people have now lived with the open plan living areas incorporating kitchen, living, dining and even study areas, they have found problems with acoustics and cooking smells through the space,” Macer says.

Source: Domain.com


Rainy Season Landscaping: Attract Buyers to Outdoor Spaces

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Rainy season doesn’t have to mean diverting buyers’ attention solely to indoor features.
Highlight the vibrant greenery of the Pacific Northwest to showcase your yard’s Winter usability.

Landscape features to consider

Covered patio. To create an entertainment area that’s protected from the rain, add a patio cover to your deck. Awnings may also work, but they are more likely to be damaged in storms. Once you have a covered area, add a patio heater to draw even more guests outdoors.

Rain gardens. Adding a rain garden to your property will attract wintertime wildlife to your garden, providing you with an opportunity to see beauty even in the darkest, coldest time of the year. Furthermore, rain gardens are an environmentally conscious way to handle the heavy winter rainfall endemic to the Pacific Northwest.
VinedGazebo_small

Selecting plants that shine in the rain

Oregon and Washington gardeners can create a beautiful wintertime landscape by selecting plants that will attract the eye even on cloudy days.

Here are a few suggestions:
Astilbes. These are perennial shrubs that produce feather-like flowers in the summer. As fall and winter come on, these flowers dry into intricate stalks, which add vertical interest to any winter landscape. Astilbes flourish in the clay soils that are common in the Portland area. Furthermore, they love waterlogged soil, so they thrive alongside ponds or rain gardens.

Ferns. Ferns often stay green all winter long in the Pacific Northwest. For instance, sword ferns’ arching fronds can provide a beautiful green feast for the eyes throughout the coldest months. Licorice fern is another cheerful choice for winter landscape design, as they break their dormancy in the early winter, sprouting out fresh new growth just after the New Year. Planting a few ferns along your front walk will draw visitors to your door.

Ornamental grasses. Ornamental grasses are like the exclamation points of the winter garden—their fuzzy seed heads bob and sway in winter storms. Grasses add texture and height to an otherwise bland design.

Bamboo. Bamboo is actually a grass that loses its leaves in the spring. In other words, bamboo will bring lush greenery to your garden throughout the winter. However, landscape designer service experts recommend planting bamboo cautiously, as this is one plant that can spread very quickly. If you want to plant traditional bamboo canes directly into the earth, you’ll need to install three-foot-deep barriers to prevent underground roots called rhizomes from spreading. (This is not true for clumping bamboo species, which are less aggressive.) Alternatively, you can plant bamboo in containers. This is a great approach to adding privacy to your winter landscape—designer ceramic pots with good drainage can be massed to create a “wall” of bamboo.

Don’t let buyers track in the mud

Finally, outline high-traffic zones where you (and potential buyers) are likely to tromp. Place pavers or stones in these areas so as to reduce the amount of mud that’s tracked into your home.


This Week in Real Estate: Sept. 19, 2016

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While more and more homes move into a positive equity position as a result of continued strong price appreciation, ATTOM Data Solutions reported This Week in Real Estate that the second quarter realized the highest level of home flipping activity in six years. Below are a few highlights from the second week of September that influence our business:

* Rising Home Prices Wage War Against Negative Equity. CoreLogic released on Thursday a new analysis showing 548,000 U.S. homeowners regained equity in Q2 2016, increasing the percentage of homes with positive equity to 92.9 percent of all mortgaged properties, or approximately 47.2 million homes. Nationwide, home equity grew year over year by $646 billion, representing an increase of 9.9 percent in Q2 2016 compared to Q2 2015. The numbers of homes underwater decreased to 7.1% in the second quarter. This is a decrease of 13.2% from the first quarter’s 8.2%, and a decrease of 19% from last year’s 8.9%. Of the over 50 million homes with a mortgage, about 8.6 million, or 17% have less than 20% in equity. About 965,000, or 1.9% have less than 5% equity. “We see home prices rising another 5% in the coming year based on the latest projected national CoreLogic Home Price Index,” CoreLogic President and CEO Anand Nallathambi said. “Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from negative equity.”
Full Story…  http://www.corelogic.com/about-us/news/corelogic-reports-548,000-us-homeowners-regained-equity-in-the-second-quarter-of-2016.aspx

* U.S Home Flipping Increases to a Six-Year High in Q2 2016. ATTOM Data Solutions released its Q2 2016 U.S. Home Flipping Report Tuesday, which shows a total of 51,434 U.S. single family home and condo sales were completed flips in the second quarter of 2016, up 14 percent from the previous quarter and up 3 percent from a year ago to the highest number of home flips since Q2 2010 – a six-year high. A home flip is defined as a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data. “Home flipping is becoming more accessible for smaller operators thanks to an increasingly competitive lending environment with more loan options for real estate investors, who are also benefitting from the historically low mortgage interest rates,” said Daren Blomquist, ATTOM Data Solutions senior vice president. “We’re starting to see home flipping hit some milestones not seen since prior to the financial crisis, which is somewhat concerning, but there are a couple of important differences in the home flipping of 2016 compared to 2006 when home flipping peaked during the last housing boom,” Blomquist said. “First, home flippers are realizing a much bigger gross ROI in 2016, averaging 49% in the first two quarters compared to an average gross ROI of just 27% in 2006,” he said. “Second, while an increasing number of home flippers are financing their purchases, more than two-thirds are still using cash to purchase compared to about one-third using cash to purchase back in 2006.”
Full Story…  http://www.realtytrac.com/news/home-prices-and-sales/q2-2016-u-s-home-flipping-report/

* Mortgage Applications Jump 4.2% on Strong Buyer Demand. Homebuyers jumped back into the market after Labor Day, filing applications for mortgages at a far faster pace than in previous weeks. Total mortgage application volume rose 4.2 percent on a seasonally adjusted basis last week, according to the Mortgage Bankers Association. The results were adjusted to account for the Labor Day holiday. Unlike during much of the summer, application volume last week was fueled more by buyers than refinancers. Mortgage applications to purchase a home jumped 9 percent from the previous week. Purchase volume is down nearly 19 percent in the past four weeks, but August is not usually a strong month for homebuying. The jump last week may signal a stronger fall market ahead. “The purchase market remains supported by an improving U.S. labor market. Newly released data from the U.S. Census this week indicate that the median income increased by 5.2 percent last year, the highest rate of increase since 2007. Refinance volume has been strong all summer, up nearly 43% last week from a year ago, with rates sitting near all-time lows.
Full Story…  http://www.cnbc.com/2016/09/14/mortgage-applications-jump-on-strong-buyer-demand.html?__source=mnd%7Cnews%7C&par=mnd

* MBA: New Home Sales Surge in August. New home sales surged in August to the highest level observed in the Mortgage Bankers Association’s Builder Applications Survey since it began in 2012. The survey found that seasonally adjusted new home sales for August reached 601,000 sales. “New home purchase applications increased 5% over the month and increased more than 14% compared to August a year ago,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “Our sense is that builders have been attempting to catch up with demand in the face of labor shortfalls and other limiting factors in various parts of the country,” she continued. When broken up by product type, conventional loans composed 67.7% of loan applications, FHA loans composed 18.4%, RHS/USDA loans composed 0.7% and VA loans composed 13.2%. Additionally, the average loan size of new homes decreased from $325,843 in July to $325,224 in August. The seasonally adjusted estimate for August is an increase of 11.3% from the July pace of 540,000 units.
Full Story…  http://www.housingwire.com/articles/38047-mba-new-home-sales-surge-in-august?eid=322520585&bid=1530309

Have a productive week!

Jason
 

6 Home Renovations that Return the Most at Resale

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The inaugural Remodeling Impact Report examines 20 home renovation projects, analyzing what they potentially return at resale. The report comes courtesy of the National Association of Realtors, or NAR, and the National Association of the Remodeling Industry, or NARI.

“In the past, NARI data suggested that a complete kitchen remodel could recoup 75% to 80% (at resale),” says Steve Carasso, director of marketing and communications for NARI. But this report pegged the resale return at 67%, he adds. That means kitchens didn’t make the top 6. Neither did bathroom remodels.

Here are the top 6 home improvements, ranked (from lowest to highest) by which renovation returns the highest percentage of your investment.

New Vinyl Siding
Replacing old siding with new vinyl siding costs about $12,000 on average. At resale, homeowners get back about 83% of what they spend.

While it’s something that can improve the home’s appearance, it’s probably not the kind of thing you’d do just before putting the home on the market—unless it’s damaged, of course. If it’s just dirty, a good power washing is all you need.

New Garage Doors
For many street-facing homes, a garage door is the “nose on the face of your home,” says David Pekel, national treasurer for NARI and the president and CEO of Milwaukee-based Pekel Construction & Remodeling.

A new garage door “has traditionally ranked as one of the highest returns on investment,” he says.

The cost averages $2,300 and returns about 87% at resale, Homeowners are opting for natural wood, doors with more windows, and carriage-style doors, which are currently trending.

New Wood Floors
Installing wood floors will get you most of that expense back when you sell, according to the remodelers’ report. The average cost of installing new floors is about $5,500. Homeowners recoup about 91%.

Recently, some wood flooring has been plagued by controversy over high formaldehyde levels and off-gassing. If you can, opt for hardwood over engineered products, some of which contain formaldehyde. If you prefer engineered wood, ask a lot of questions, and find a knowledgable, competent pro who can tell you what’s in various options.

Insulation Upgrade
No one comes out of an open house excited about the insulation. But an insulation upgrade does add value. On average, it will cost about $2,100, and homeowners can recoup about 95% at resale. Many homes are now being evaluated by energy efficiency as a matter of routine.

Refinish Hardwood Floors
Want to get back all of your home renovation dollars? Refinish those hardwood floors.

Refinishing costs an average of $2,500 and that’s about what it adds to home value, the study finds.

New Roof
Among home renovations that return the most, replacing the roof tops the list.

A new roof will set the average homeowner back about $7,600. But on average, homeowners recoup more than that —about $8,000. That’s a 105% gain.

It’s the only renovation project in the report that returned more than it cost. But, as anyone who’s been through it will tell you, there are plenty of easier ways to make $400.

Article courtesy of BankRate.com


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