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Real Estate Essentials Posts

Should You Sell Your Home or Rent It?

Thinking about selling your home?  You may want to consider holding on to it if you can afford to do so.  Here’s why.  In this market, rental properties are scarce and rental rates are at a premium.  Since the foreclosure crisis, there are still many that prefer to rent or may have no other option due to their credit score.  And where do most people want to rent?  In single family homes.  So if you have enough reserves (usually 6 months) to cover your mortgage in case of no renters, you could buy a new home while keeping your current home as an investment property.

 

Things to consider:

  1. Check with a lender to see if you qualify for this option.
  2. Find out what the rental rates are in your neighborhood for similar properties.  If it is more than your current mortgage payment you could stand to make money each month as well as enjoy tax benefits.
  3. Consider whether you will manage the property or if you will hire a property management company to do it for you.  They typically charge 10% of your rental rate.  If it is only one property, you can likely manage it yourself.
  4. Research how you will find renters.  I posted on Craigslist and had a call within an hour!  They turned out to be great renters.
  5. Subscribe to an online tenant screening service so that you can verify the creditworthiness and legal history of your prospective tenants.
  6. Talk to an accountant about how to document properly for tax deductions related to owning an investment property.   Also inquire about selling the investment property down the road and avoiding capital gains tax.  If you have lived in your home 2 out of the last 5 years you could be exempt from paying taxes on your net proceeds.  So make some profit while renting, then sell the home at a profit and not pay taxes on your net proceeds.  Have your accountant help you document this properly.

 

Renting your own property can be a great experience and financially rewarding!

Want to Know Where the Fireworks Will Be This Weekend?

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Below is a list of local fireworks displays to celebrate the 4th of July:

Longmont

Firestone

Greeley

Estes Park

Loveland

Fort Collins

Boulder

Happy Independence Day!

“The preservation of the sacred fire of liberty and the destiny of the republican model of government are justly considered… deeply, …finally, staked on the experiment entrusted to the hands of the American people.”  George Washington

Transaction Broker or Agent, What’s the Difference?

A licensed real estate broker can perform one of two roles with you as the client.  Both are held to the same uniform duties that govern licensed brokers, though an agent has additional responsibilities to you as the client.

The default role is that of a Transaction Broker.  A transaction broker will facilitate the process of a real estate transaction, perform any written or oral agreements given by you as the client, fully inform parties involved in the transaction and assist with contracts.  A transaction broker can work with both the buyer and the seller in the same transaction if the parties agree.

An agent on the other hand, is committed to advocating solely for you as the client.  An agent must promote your interests with the “utmost good faith, fidelity and loyalty” according to the Colorado Real Estate Commission.  Further, in advocating for you, a real estate broker working as an agent will seek the price and terms that are acceptable to you as the client and inform you of all material benefits and risks of the transaction.

When shopping for a broker, it is important to know the difference between these roles and seeing which one best fits your needs.  A key distinction is that a transaction broker assists while an agent advocates.  Some real estate brokerages may only provide the role of a transaction broker or that of an agent while others allow their brokers to perform either role in meeting your needs.

For me, I have the freedom to perform either role.  Though personally I prefer the role of agent as that allows me to provide the most extensive level of customer service to you.

Please let me know if you have any further questions about this topic.

Is It a Good Time to Buy Real Estate?

Buying a home is the largest investment you’ll make and should also be one of the most enjoyable.  So when should you buy a new home?   Answer: When you find that perfect home and you can afford it!  In today’s market there are some that say it’s best to hold off due to appreciated values as well as the difficulty in getting your offer accepted in this hot market.  We’re experiencing a  significantly high demand due to low inventory.  This results in multiple offers being made on homes though of course only one is accepted.  This is frustrating to buyers , especially those that have made multiple offers in their efforts to buy a home.

However, it’s still a good time to buy if you have the patience and the ability to keep trying.  With mortgage rates still hovering at  historical lows, you can save yourself a lot of money over the course of a 30 year loan.   According to a recent article on Realtor.com, buying in at these rates can save you over $100,000 over the life of a 30 year loan (Stults, 2015).

You can also save yourself money in the short term as well.  If you’re renting, Instead of throwing money away at rent you’ll be building equity, get tax benefits and likely have a lower monthly mortgage payment than you currently may pay for rent.

So if you’re in a place where you’re ready to buy, it’s a good time to start looking so you can capitalize on savings.

 

Which Home Improvements Will Give the Greatest Return on Your Investment

Which remodeling ideas will bring the biggest return on your investment?  Recent data suggests that less is more.  One simple idea to improve both curb appeal and value to your home is to replace your front door.  If the structure of the door is in good shape, re-coat it with fresh paint or varnish (if it’s a wood door) to make it look brand new.  Not sure if you have the know-how to refinish your front door?  Let me know and I’ll be glad to give you the name of good, professional painters in the area.

While replacing a door is relatively inexpensive, it can be a difference maker in the  attractiveness of your home and possibly bring more buyers should you be selling your home.  If you choose to completely replace your front door, you will likely recoup 91% of the cost with a steel door and 69.6% with a fiberglass door , according to the COST vs VALUE Report (see website below).

Whether you live in your dream house and want to find cost effective ways  to improve it or are preparing your house for sale,  it is good to know what gives you the most value for your investment.

www.remodeling.hw.net/costvsvalue/2015

 

Mortgage Rates are Relatively Stable, For Now…

Mortgage rates have been hovering in the 3 percent range for a 30 year fixed rate mortgage, with a slight rise into the low 4’s during the month of May and into June.  There is ongoing talk that the Federal Reserve will raise the rates at some point this year though they won’t say when.  For the time being the rates are remaining relatively stable.  As of the writing of this post, the rate for a 30 year fixed rate mortgage was 4.14%.

Ways to take advantage of these still historically low rates is to refinance your home or purchase that house you’ve always wanted.  Refinancing will allow you to decrease your monthly payments, sometimes to the tune of more than a hundred dollars.  You can also buy that house that may be just out of reach once the mortgage rates are increased.  Always check with your lender to see what rates they offer and for which loans you qualify.  There can be variations between lenders, the type of loan and on which day you inquire.  Please contact me if you need the name of a few good lenders in the area.

As real estate will likely be the biggest  financial investment we make in life, it is wise to consider how to take advantage of the currently low rates.  Refinancing or buying a home could be beneficial to you as a short or long term  investment.  While no one knows exactly when the Federal Reserve will raise the  mortgage rates, it will likely happen this year.

 

What is Your Home Worth?

Ever wonder what your home is worth now?  Values have appreciated in the last couple of years rather significantly as I’m sure you saw in your recent tax assessment.  Demand is up due to low inventory and thus property values will continue to appreciate, at least moderately.  We are probably in the 5th year of a 7-10 year cycle so values should remain stable.  This is good for you to know as a potential seller because if you sell your home now, you can have relative confidence that the new home you purchase will likely appreciate over the next couple of years.  Plus, buying at these low interest rates you’ll be saving money and have more purchase power if using a loan.

Using current market data, I can give you a free Comparative Market Analysis to give you an idea of what your home is worth.   Being equipped with information and knowing the big picture of real estate cycles can help you make wise investments for your future.

 

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Welcome to my Blog!  I’ll be posting articles that will help to equip you with the information you need to navigate through our current real estate market.

Feel free to contact me with any questions or ideas for articles that you want me to write about.