FOUR REASONS TO RENT YOUR VACATION HOME
July 15th, 2010 categories: Real Estate News
If you have a vacation home that you had hoped to retire to some day but have since changed your mind, don’t jump to sell it…consider renting it out instead.
For many, it seemed like a great idea to buy that vacation condo 20 years ago. The plan was to vacation there as often as possible, then some day sell your primary residence and retire there for your Golden Years. But lifestyle changes or financial situations might now be causing you to consider selling it instead.
However, I have seen many a client successfully rent a retirement home instead of selling it. Author Christine Karpinski, director of Owner Community for HomeAway.com (HomeAway.com), offers some good reasons to consider renting your second home:
1. Circumstances have changed. Maybe grandchildren have arrived on the scene and you can’t bear the thought of moving hundreds of miles away from them. Or your parents are in poor health and need you nearby.
2. You’ve suddenly realized there’s no place like home and you’ve simply changed your mind. You’ve decided you like being near your friends and you don’t want to leave your church or synagogue. Renting your second home out during the time you are not staying there makes it financially feasible to keep both homes.
3. You’ve decided to “retire” from retirement. These days, it’s not unusual for people to test-drive retirement and find that it’s just not for them. Work can provide many rich rewards—structure, social interaction, mental stimulation, a sense of purpose, and so forth—that people keenly miss when they retire. And, let’s be honest—sometimes people simply can’t afford to retire.
4. Your fixed income hasn’t kept up with your lifestyle. Even when you’re happy to give up the daily grind of your job, losing the paycheck that comes with it can be pretty painful. Factor in inflation, rising taxes, and unexpected “new” expenses, and you may find that what seemed like a manageable cost of living five years ago doesn’t seem that way anymore. Your second home, even if it’s paid for, may start looking like a liability due to property taxes, homeowner’s association dues, and maintenance costs. Not if you rent it out, says Karpinski. Then it becomes a source of new income.
So don’t give up and seek to unload your second home just yet! There are still many ways to make this investment pay off. For more information on renting or buying a second, potential retirement home, please e-mail our team. And please forward this email to any friends and family who could benefit from these insights.
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Shocking News About Credit Scores
July 13th, 2010 categories: Financial Information
It has been reported that in the United States there are 42.4 million people (approx. 25%) whose credit scores (FICO) are below 599, in comparison with the 25.5 million (approx. 15%) whose scores were below 599 before the meltdown. Add to that the fact that 26 million people are out of work with many foreclosures pending and you can see where this is going.
There is a difference between people who were unwillingly placed a situation that caused them to make a choice between paying their bills or feeding their family, and those who chose to “strategically default” on their loans. Strategic defaulters are people who can afford to pay their bills but choose not to. They know their credit scores will be affected and the make their plans ahead of time to compensate for their diminshed scores.
Not everyone who defaults on a loan has a choice; and I feel they should be given special consideration once they are back on their feet and capable of making payments. Their credit scores should not be treated the same way
These are just my thoughts as I consider the situation we are in right now. As a Realtor I know that there are a lot of people who deserve a second chance. Financial reform has to happen and it has to happen sooner than later or there will be a lot of people unable to buy a home any time soon.
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A DUMB REASON NOT TO BUY A HOME
July 8th, 2010 categories: Real Estate News
Whenever we purchase any big-ticket item we first look at the price. Unless you are buying all cash, you must take into consideration the expense of financing your purchase. In real estate the expense of financing is the mortgage interest rate. Let’s take a look at how interest rates impact the monthly cost of a home.
If prices goes down but interest rates rise, it could mean an actual increase in the monthly cost. Look at the chart. Prices would need to go come down 10% to make up for one percent increase in mortgage rates. You could decide to wait on your purchase based solely on price (dumb), but if you think interest rates are going to rise in the future it probably makes sense to purchase now (smart).
Interest rates are at historic lows. If we look at interest rates since 2000, we find that the average monthly rate was 6.29%. That is more than one and one-half percentage points higher than where they stand today. Though experts are pulling back on their original predictions of 6% rates by the end of the year, there is growing concern that rates will start to rise. Bankrate.com does a weekly survey of analysts to determine how many think rates will increase in upcoming months. The graph below shows that the number expecting rates to rise has been trending upward over the last two months.
When considering whether it makes financial sense to purchase a home, make sure you are considering the cost not just the price.
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GREAT BUY IN FOREST RIDGE
July 8th, 2010 categories: Arborwood, FOR SALE
3 BEDROOMS/2 BATHS/2 CAR GARAGE LIST PRICE: $199,000.
This home is a great buy for an investor or for a end user. It’s located in the Arborwood section of Forest Ridge in Davie, Florida. Forest Ridge is a community of approximately 1600 homes, including The Ridge on Nob Hill. It is located in the center of Broward County not far from NovaSoutheastern University, Broward College and branches of the University of Florida, Florida International University and Florida Atlantic University.
The quarterly maintenance fee is $250.00. Amenities include a community pool, tennis courts, and walking and riding trails. Bamford Sports Park is just a bike ride away, featuring an Olympic sized pool, soccer fields, baseball diamonds, roller hockey rink, tennis courts, a community room, indoor basketball and more. Swim lessons, dance classes, yoga and other programs are offered through the Department of Parks and Recreation. Senior activities and programs also take place in the community center.
This is the lowest priced home in the community and with interest rates today this home could be a money maker for you.Similar homes in the community rent for approximately $1700-$1800 per month.
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Long Term Real Estate Investors Are In For A Bonanza
July 8th, 2010 categories: Real Estate News
Your Golden Opportunity
John D. Rockefeller said, “The way to make money is to BUY when blood is in the streets.” Another noted rich-guy said, Warren Buffet, believes you should “be fearful when others are greedy and to be greedy only when others are fearful.” Huge success comes to those who see confusion as an opportunity. More millionaires were created as a result of the Great Depression than at any time in the nation’s history. Today, there is a significant opportunity for new millionaires to be made.
With interest rates at historic lows and home values where they are (the Housing Affordability Index is as favorable as it has ever been) I have one question….”Why hasn’t everyone jumped into the market?” Housing is still one fo the most basic of needs (food, clothing, and SHELTER).
Real estate is the way to building a financial fortune. Today, rents collected can cover mortgage payments, often creating a positive cash flow. That is a critical determinant to the strategy; buy something, have the rent make the payment, and wait for the market to improve. Ten years from now you will be glad you did. This is no “get rich quick” scheme. It is a long term commitment.
I believe that to eat up all this inventory we are going to have to entice more people who want to own their own slice of the American Dream into the market. We need to bring back the entrepreneur to real estate…the investor who wants to “buy and hold” real estate for a long-term investment. Investors uy multiple units/homes and find long term results that outpace the stock market.
WHAT IS HOLDING PEOPLE BACK?
1.) Fear of further declination of home values(better known as greed). The “Why buy now if prices are going lower?” mentality will hurt today’s buyer the same way as the “Why sell now when prices continue to climb?” mentality hurt sellers 5 years ago. By the way, who cares if prices delcine in the short run, you have a positive cash flow, remember? And, you’re not selling this home for 10 years. It’s like losing your first bet in the casino. It doesn’t matter until you leave the building before you determine if it was a good day.
2.) Limited Financing Options. For competitive rates, most lenders require 25-35% as a down payment (while there are limited programs with 20% down at higher rates). When mortgage programs constricted, investor loan products were among the first to go because people are more likely “not to pay” the mortgage on the house they don’t live in. But with conservative loan- to- values and A+ borrowers being the only people being approved for these loans, there is a reason to believe that the tightening may be loosened a bit.
3.) Being A Landlord. Many people don’t want to be bothered collecting rents or getting the phoe calls in the middle of the night that the air conditioner doesn’t work. I see this as an opportunity for more real estate agents to become Property Managers, where they can take on these headaches for the invesors (for a fee). Agents are best positioned to identify property, find a tenant, and manage rent collection and home improvement/maintenance issues.
There are real estate speculators (who buy low, fix up, and hope to sell high), but that is a full time job that should be left in the nads of the experienced professional.
Let’s look at an example of a long term investor who is bullish on the long term value of real estate in America.
Buy a home for $200,000, expend $50,000 for a down payment and clsoing costs, and have your monthly carrying costs covered by rent. If you sell the property in 15 years for $400,000, you did not double your money, you had a 400% return on your money (because you only used $50,000 cash to get your $200,000 profit). The fact that you canleverage real estate is how fortunes are made. If you could cover your expenses through rent payments received, and leverage your cash invested at a 3:1 ration, WHY WOULDN’T YOU EXPLORE THIS STRATEGY TO BUILD YOUR FUTURE NEST EGG FOR RETIREMENT???
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Forest Ridge Sales January – June 2010
June 30th, 2010 categories: CLOSED SALES, Forest Ridge Sales Activity, North Orchard, The Ridge on Nob Hill
There have been 13 home sales in Forest Ridge in the past 6 months. This represents an 8% turn-over in the community. The Average list price was $400,943.00 and the average sales price was $373,333.00. Homes that were on the market for 0-30 days sold at 97.01% of their list price, while properties on the market for 30-60 days sold for 91.36% of their list price.
SOLD
2864 W. Orchard Circle (North Orchard). Sales Price $355,250. Listed by Patti Reid, EWM Realtors , Sold by Patti Reid, EWM Realtors.
4 bedrooms/2 baths/covered patio.
9625 E. Tree Tops Court (The Ridge on Nob Hill). Sales Price $485,000. Listed by Patti Reid, EWM Realtors.
4 bedrooms plus den/3 full baths/pool and covered patio /ridge lot.
9664 E. Tree Tops Court (The Ridge on Nob Hill). Sales Price $485,000. Listed by Patti Reid, EWM Realtors.
4 bedrooms plus den/3 full baths/pool and screened patio/lake lot with ridge view.
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Fireworks for Forest Ridge Residents
June 30th, 2010 categories: Forest Ridge Neighborhood News
Another great thing about living in Forest Ridge is the having the Fourth of July fireworks pratically in your own backyard. The town of Davie annual Independence Day Craft Show and Fireworks Show takes place on Sunday, July 4th from 6 – 10: p.m. Pine Island Park is just around the corner from Forest Ridge at 3801 S. Pine Island Road, Davie, FL 33328.
At 6 p.m. at Ballfield #2 “Shadow Creek” will perform on the Main Stage. You can also enjoy a display of Arts and Crafts, free Bounce House and Climbing Wall for the kiddies, along with a Petting Farm. Girl Scout Troop #1102 will provide face painting and tatoos for a small fee and there will be food concessions available. Free Cake for all residents while supplies last.
Fireworks begin at 9:00 p.m. No alcoholic beverages or personal fireworkds of any kind, including sparklers, are permitted during the event or inside the park.
For a view of several area fireworks you can go to Davie’s Vista View Park, the highest man made point in Broward County. There you will be able to see a panoramic view of various fireworks from across the county. Marvel at the light shows of Davie, Miramar and Pembroke Pines, as well as Hollywood and Fort Lauderdale.
Have a safe and fun holiday.
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Forest Ridge Road Closing
June 23rd, 2010 categories: Forest Ridge Neighborhood News
The Forest Ridge Master Homeowners Association has announced that on or around July 12, 2010, the front entrance to Forest Ridge at Pine Island Road will be closed for entry repairs. No one will be able to enter the community via this entrance. All traffic must take Nova Drive to the Grove Road entrance to enter the community. Residents and their visitors will have complete access to the tennis courts and parking lot there. The repairs are expected to start July 12,2010 (weather permitting) and finish (weather permitting) July 23, 2010.
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Shadow Inventory is a Cause for Concern
June 10th, 2010 categories: Real Estate News
You have probably heard a lot about Shadow Inventory lately; it’s another one of those phrases that makes its way into our language when an unusual situation arises demanding an explanation. If you live in South Florida you probably never heard the phrase “cone of error” until a few years ago. (BTW, it means the area where a hurricane is most likely to hit or miss!)
So, what is Shadow Inventory exactly:
It consists of homes that are not yet on the market but fall into one of these categories:
* Houses that have not come to market because the homeowners didn’t put their homes up for sale in the last few years hoping that by waiting they will get a higher price.
* Homes that have already been reposed by the banks but not yet on the market (REO).
* Homes that are already in the foreclosure proces but have not yet reposed by the banks.
* Homes that are 90+days behind on their mortgage payments (less than one percent will ever catch up, 99% will become a short sale.)
Zillow released a survey on the category of “pent up selling demand”. The question asked was, “If you saw signs of a real estate market turnaround in the next 12 months, how likely would you be to put your home up for sale?” 5.3 million homeowners said they would be “very likely” to put their home up for sale, 6.1 million would be very likely and 10.6 million would be “somewhat likely”.
In comparison, 5.2 million existing homes were sold during 2009.
Many organizations have tried to quantify the other category (delinquencies, homes in the foreclosure process and bank owned properties and these are their findings:
The Mortgage Bankers’ Association believes that there are 4.3 million homes in this category.
Barclay’s Capital puts the number at 4.7 million.
Capital Economics says 5.5 millon
Morgan Stanley’s recent study claims 8 million.
If we take the lowest number in each category (5.3 homeowners being very likely to put their homes up for sale and 4.3 million in default) there would be an additional 9.4 million homes entering the market. If 5.2 million were sold in 2009, and the same number is expected in 2010, it isn’t hard to see that there will be an excess of homes on the market. With Inventory at a high and demand at the same pace as last year it can only mean one thing….downward pricing.
Statistics show it will take another 13 years for prices to climb back to where they were at the height of the market in South Florida. For homeowners who plan to sell their home in the next few years, it is time to take a look at these statistics and consider your options. If you are lucky enough to have a home that you can enjoy and afford for the next 13 years then your patience will pay off. For others, and that means most of us, 13 years is a long time to wait.
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Welcome Home
May 28th, 2010 categories: Real Estate News
This morning I had the pleasure of reading a blog by real estate guru, Steve Harney. It really touched my heart. With his permission I would like to share it with you. It expresses the joy that is felt by Realtors when they help someone buy a home.
KCM Blog
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My Son, His New Home, and What It Means Posted: 28 May 2010 04:00 AM PDT
This week was different. I was able to personally FEEL the true value of a home. My older son closed on his first home yesterday. I have the great fortune to work with him at our company. I get to see him a lot when I am not traveling. This week I was home and got to spend every day with him. I saw how nervous he was as he got all the last minute paperwork together. I heard the relief in his voice when he found out that he had overestimated his costs and would need to bring a little less money to the closing. I could feel how proud he was when he hugged me as he left the office the night before the closing. He should be proud. He just purchased his own home. He just took a major step toward accomplishing the American Dream. He now owns a piece of this country. He now has a community he can call his own. He has a place to go ‘home’ to every night, a place where he can work in the yard, a place he can invite friends and showoff his ‘castle’, a place where he will someday raise his family. Owning a home makes things different. You can’t necessarily explain it logically. But you can feel it. That feeling is the real value of a home AND IT IS PRICELESS. My son slept in his own home last night. I am happy for him. |
Every week we try to help you put an accurate value on housing in today’s real estate market. We give you all the charts, report on all the surveys, and quote every housing expert willing to talk on the subject. And we are still not 100% sure what prices should be. At best, we can only tell you what we think.| Discussion: Leave a Comment »
