Tag Archives: real estate

6 Financial Perks of Being a First-Time Homebuyer

From mortgage points to PMI, unlock the essential info about how homeownership affects your tax burden.

Hours after we closed on our first house, my husband and I sat in our empty new living room and stared at the walls. He was the first to speak, saying simply, “I thought it was painted.”

We learned a lot about that old house over the next 15 years. While we knew to expect some of the work, other tasks, such as needing to paint the walls, we figured out as we went along. One of the changes we didn’t anticipate was needing to make some adjustments to our tax forms.

The forms you fill out when you buy your house are just the beginning. We quickly understood that first-time homeowners have years of mortgage and insurance paperwork to look forward to. Then, of course, there are the taxes. To help you sort through that pile of paperwork and ensure you’re saving as much money as possible we did some research into tax benefits that can come from buying.

Six Tax Benefits for New Homeowners

1. You can deduct the interest you pay on your mortgage.

The home mortgage interest deduction is probably the best-known tax benefit for homeowners. This deduction allows you to deduct all the interest you pay toward your home mortgage with a few exceptions, including these big ones:

  • Your mortgage can’t be more than $1 million.
  • Your mortgage must be secured by your home (unsecured loans don’t count).
  • Your mortgage must be on a qualified home, meaning your main or second home (vacation homes count too).

Don’t assume that if you are married and file a joint tax return, you have to own your home together to claim the interest. For purposes of the deduction, the home can be owned by you, your spouse, or jointly. The deduction counts the same either way.

And don’t worry about keeping track of how much you’re paying in interest versus principal each month. At the end of the year, your lender should issue you a form 1098, which reports the amount of interest you’ve paid during the year.

Warning: Since, as a first-time homeowner, you pay more interest than principal in the first few years. That number can be fairly sobering.

2. You may be able to deduct points.

Points are essentially prepaid interest that you offer upfront at closing to improve the rate on your mortgage. The more points you pay, the better deal you get.

You can deduct points in the year you pay them if you meet certain criteria. Included in the list (and it’s a long one): Points must be paid on a loan secured by your main home, and that loan must be to purchase or build your main home.

Pro tip: Points that you pay must also be within the range of what’s expected where you live — unusual transactions may cause you to lose the deduction.

3. Depending on the year and your income level, you may be able to deduct PMI.

Private mortgage insurance, or PMI, protects the bank in the event you default. PMI may be required as a condition of a mortgage for first-time homebuyers, especially if they can’t afford a large down payment.

For most years, PMI is not generally deductible, but the specific rules around it change annually. In 2016, if you made less than $109, 000 a year as a household, you could claim a tax deduction for the cost of PMI for both their primary home and any vacation homes. Check to see if the PMI deduction is a possibility as you are working on your taxes.

4. Real estate taxes are deductible.

Real estate taxes are imposed by state or local governments on the value of your property. Most banks or other mortgage lenders will factor the cost of your real estate taxes into your mortgage and put those amounts into an escrow account.

You can’t deduct the amounts paid into the escrow, but you can deduct the amounts paid out of it to cover the taxes (you’ll see this amount on a form 1098 issued by your lender at the end of the year).

If you don’t escrow for real estate taxes, you’ll deduct what you pay out of pocket directly to the tax authority.

And don’t forget about those taxes you paid at settlement. If you reimburse the seller for taxes already paid for the year, you get to deduct those too.

Those amounts won’t show up on a form 1098; you’ll need to check your settlement sheet for the totals.

5. Your other tax deductions may matter more.

To take advantage of these tax benefits, you have to itemize your deductions on your tax return.

For most taxpayers, this is a huge shift: in many cases, you’re moving from a form 1040-EZ to a form 1040 to list expenses on Schedule A.

In addition to interest, points, and taxes, Schedule A is where you would report deductions for charitable donations, medical expenses, and unreimbursed job expenses.

For itemizing deductions to make good financial sense, you generally want to have more total deductions than the standard deduction (for 2015, it’s $6,300 for individuals and $12,600 for married couples). Most taxpayers don’t reach those numbers — unless they’re homeowners.

The home mortgage interest deduction, in particular, tends to tip most homeowners over the standard deduction amount, making those other deductions (such as medical expenses) that might otherwise go unclaimed more valuable.

6. You’ll get capital gains tax relief down the road.

I know you just bought your home, but admit it: Resale value is something you considered when you chose your home. And different from other investments for which you’re taxed on the full value of any gain, you can exclude some of the gain attributable to your home when you sell.

Under current law, you can avoid paying tax on up to $250,000 of gain ($500,000 for married filing jointly) so long as you have owned and lived in the property for two of the last five years (those years of owning and inhabiting don’t have to be consecutive).

Gain over that amount is taxed at capital gains rates, which are generally more favorable than ordinary income tax rates.

 

Post courtesy of trulia.com

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Flip, Rent, or Hold: What’s the Best Path to Real Estate Riches?

Maybe you’re addicted to those home-flipping shows on HGTV where glam couples buy grim shacks, spend 22 minutes smashing down walls and adding funky kitchen backsplashes, and then make tens of thousands selling the refurbished places on the open market. Or perhaps you’re jonesing for a steady stream of extra income and feel certain you’ve got what it takes to be a landlord.

Or just maybe you’re on the prowl for a hands-off way to make serious real estate money with financial investments that don’t require laying down new flooring or screening prospective tenants.

Whichever option floats your boat, you’ve got plenty of company. After the epic boom-and-bust of the speculative home-flipping market in the aughts, everyone again seems to be looking to make a quick buck by becoming a real estate investor. But these days, there are a dizzying variety of different takes on the once-simple idea of property investing—all requiring varying levels of blood, sweat, tears—and risks. Which one might be right for you?

“Over the generations, real estate has proven itself to be a pretty good, time-tested investment,” says Eric Tyson, who co-authored “Real Estate Investing for Dummies.” “Like investing in the stock market, people who follow some basic principles and buy and hold over long periods of time should do fairly well.But, of course, there’s no guarantee.”

And that’s why the thrill-a-minute world of real estate investing isn’t for everyone—especially when life savings are involved.

OK, now that we’ve gotten that out of the way, let’s go shopping.

 

1. Home flipping: Not exactly like reality TV

First half of 2017 gross returns: 48.6%*
2014 gross returns: 45.8%
2012 gross returns: 44.8%

If the Property Brothers or Chip ’n’ Joanna can do it, why can’t you? Real estate reality TV has made the “fixer-upper” flipping market seem fun, very sexy—and mostly foolproof. But becoming a successful home flipper is a lot harder than it looks on television. And it isn’t always as wildly profitable as you might think.

The returns appear deceptively high, as they don’t account for hefty renovation costs, closing costs, property taxes and insurance. Flippers should figure that about 20% to 30% of their profits will go straight toward such expenses, say experts. The median returns above only reflect sale price gains—not net profits.

Newbie investors need to make sure they’re thoroughly familiar with a neighborhood before they consider buying a potential flip in it, says Charles Tassell, chief operating officer at the National Real Estate Investors Association, a Cincinnati-based investors group. This means looking at what kinds of homes are located nearby, what sort of shape they’re in, and how much they’ve sold for. Wannabe flippers should pay attention to the quality of local schools, transportation, and the job market—just as they would for their own home. Those are the things that can make or break a sale. And an investment.

A market where homes are still affordable but appreciating rapidly is ideal. Once they’ve settled on an area, flippers need to focus on the basic structure of prospective homes. Special attention should be paid to a home’s heating and cooling systems, foundation, and roof—the things that are most expensive to fix.

Then they need to create a realistic budget. Experts recommend setting aside 10% to 20% to cover any unknowns—like what’s inside the walls. Costly surprises are par for the course.

“The biggest hurdle of flipping is: The costs are never what they seem to be on HGTV,” says flipper and landlord April Crossley, co-owner of Crossley Properties in Reading, PA. She owns the business with her real estate agent husband, and they do 8 to 10 flips a year. “In fact, they’re always way more.”

Flippers are gambling that the housing market stays strong in their target area—at least long enough to resell their investment home.

“You’re constantly anticipating what the market will be doing 6 to 12 months in the future,” says Daren Blomquist, senior vice president at ATTOM. So if you miscalculate, and it drops, you could lose a lot of money.

2. Investment (rental) properties: You, too, could be a landlord

First half of 2017 returns: 13%*
Three-year returns: 9.9%
Five-year returns: 11.67%

Perhaps flipping homes, and all the varied costs and stressors associated with it, isn’t for you. But you’d still like to be a hands-on real estate investor. Why not consider buying investment (rental) properties?

One big advantage is the tax deduction folks get for their rental properties. They can write off their mortgage interest, property taxes, and operating expenses, as well as repairs.

Like home flippers, landlords-to-be should look at growing areas with new jobs moving in, says Steve Hovland, director of research at HomeUnion, an Irvine, CA–based company that helps smaller investors buy and manage properties.

“I’m very bullish on high-growth markets, like Texas, the Southeast, Arizona. You’re always going to have new renter demand,” he says. But coastal cities can be tough for aspiring property owners because they’re just too expensive.

First-time investors may want to target middle-class neighborhoods near top-rated schools, where stability rules and tenants are more likely to hold steady jobs. These homes often require less maintenance—a boon to landlords who don’t live nearby.

Landlords who aren’t local or don’t want to deal with 3 a.m. calls about an overflowing toilet will want to consider hiring a property manager who will find tenants and coordinate (but not perform) maintenance. But that eats into profits, costing about 7% to 12% of the monthly rent.

And the payoff you get, as compared with flipping a home, isn’t in one lump sum, and isn’t always steady. For example, landlord and flipper Crossley rents out multiple single-family homes, duplexes, and apartments in the Reading, PA, area, and once had a couple stop paying their rent for six months after they went through a divorce. She had to eat those losses, as well as attorney fees, while she went through eviction court to get them out.

Landlords also need to have insurance on their properties and set up their rental companies to protect their personal assets, in case they get sued.

And like other investors, owners also run the risk that home prices—along with the rents they were counting on—could plunge. “You have to be prepared for the worst. When something goes wrong in a tenant’s life, you’re the last person to get paid,” Crossley says.

3. U.S. REITs: Buying shares in real estate instead of companies

Year-to-date returns: 2.75%*
Three-year returns: 8.39%
Five-year returns: 9.79%

Those who’d like to own apartment and office buildings like a legit mogul but don’t have the bank balance to do so may want to turn to Real Estate Investment Trusts. Don’t worry if you’ve never heard of REITs. You don’t need a fancy finance degree to understand how they work.

Most REITs are publicly traded corporations that investors buy and sell shares in—just like stocks. Only instead of buying shares in Apple, you’re buying shares in real estate. Shares can range in price from just a few dollars to hundreds of bucks. Investors can buy into them on certain exchanges.

As with stocks, investors can make money by buying shares at a low price and selling them at a higher one, and by collecting quarterly dividends (payouts are made every three months).

There are two main kinds of publicly traded REITS. Equity REITs own rental properties ranging from homes to business space, and make money collecting income on them. Residential and commercial mortgage REITs allow investors to buy mortgage debt where investors profit from the interest.

4. Crowdfunded real estate: Like Kickstarter for property

Year-to-date annualized returns: 8.72%*
Two-year returns: 8.89%

Crowdfunded real estate is like the younger, cooler cousin of REITs. Simply put, it allows ordinary folks to pool their money to invest in things like apartment complexes, office buildings, and shopping centers. It’s like a Kickstarter for buying real estate—instead of funding your college roommate’s feature-length documentary about Furries.

Previously available only to uber-wealthy accredited investors, crowdfunding only became open to the general public in March 2015. That’s when the government enacted new rules opening up the investments to folks without ginormous bank balances. So there isn’t much data available yet on how these investments perform over the long term.

While REITs can hold tens of thousands of properties and be worth billions of dollars, crowdfunding companies are often significantly smaller, holding just one or a handful of properties. And they often require a long-term commitment from investors.

As with REITs, the two main options in crowdfunded real estate investing are equity or debt. Equity, the riskier of the two, involves investing in a fund connected to commercial or residential development. It makes money from the income the property generates and the increase in the value over time. The investment is usually tied up for about five to seven years. Debt is the loan used to get the project off the ground and continue to finance it through the life of the project.

“These are long-term investments, so if you pull your money out early, there’s usually a financial penalty,” Ippolito says. That’s a big difference from REITs, which can be sold at any time. “Retirees who need the money soon probably should look elsewhere.” Debt is a bit safer, but the payouts may not be as high.

5. Home appreciation: The investment you can live in

One-year appreciation: 10%*
Three-year appreciation: 26.7%
Five-year appreciation: 44.8%

Folks don’t need to flip homes or pour money into crowdfunded projects to make money as a real estate investor. Instead, they can search hard for the perfect home, get their finances in order, negotiate smartly, and close the deal for the best possible price.

And then live in it.

Real estate typically appreciates over time. That means that buyers who buy a home in a decent area and keep it in good shape should make money when they decide to sell. Depending on the market and the home, sometimes a lot of money. But they should plan on being in that home for at least five or so years, so they can build up enough equity in the home to net a profit once real estate agent fees and closing costs are accounted for.

“In general, buying a home is a good investment and a way to build wealth and equity over a lifetime,” says Joseph Kirchner, senior economist at realtor.com®. “[But] even if you’re buying it to live in the house for the next 30 years, it is always better to buy when prices are low.”

And as folks build equity in their home, through appreciation and paying down their mortgage debt, they can take out home equity loans or home equity lines of credit against their property.

But of course, just as with the other investments on this list, there are risks. The country could enter into a new recession, or there could be a local housing market crash if a big employer leaves the area. Or homes in your area could simply be overvalued.

However, when home prices fall, they do generally rebound—eventually.

“Good markets aren’t going to last forever,” says real estate investment author Tyson. “Even the best real estate markets go through slow periods.”

Post courtesy of realtor.com

What’s Really Included In Closing Costs?

Expect property taxes, homeowners insurance, and lender’s costs to be part of your settlement-day tab.

With your house-hunting and lender searches now in the rearview mirror, you can start steering your way around the final bend that leads to the driveway of your new home: settlement day and closing. A few days before you meet with your real estate agent, a title company representative, and your loan officer for this joyous event, you should have received from the title company a copy of your closing documents. Read these documents carefully — they will include details on the closing costs that are due upon settlement.

  • What are closing costs?

    Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.) Understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.

  • What’s included in closing costs?

    Closing costs will cover both recurring and nonrecurring fees that are a part of your transaction. Recurring costs are ongoing expenses that you will continue to pay as a homeowner, with a portion due upon closing; nonrecurring fees are one-time fees associated with borrowing money and the services that were required to purchase the property.

    Recurring closing costs are placed in your escrow account, which you might view as a forced savings account for those upcoming home expenses you’ll be facing. They can vary, but the most common ones are property taxes (one to eight months’ worth, depending on when your home purchase coincided with the local tax billing cycle), homeowners insurance (the annual premium is typically due at closing, plus another two or three months’ worth of payments), and prepaid loan interest (for the number of days you’ll have the loan until its first payment is due). Also placed into escrow are costs for title insurance, which is considered a must because it protects you in case the seller doesn’t have full rights and warranties to the title of the property.

    Nonrecurring closing costs are fees paid to your lender and other professionals involved in the transaction. They include: any home inspection fees; any discount points you’re paying upfront to lower your interest rate; an origination fee, which is charged by the lender to process your loan; a document-prep fee, which covers the cost of preparing your loan file for processing; an appraisal fee, which covers the cost of a professional estimating the market value of the home; and a survey fee for verifying the home’s property lines. Also expect as nonrecurring costs: an underwriting fee for the cost of evaluating and verifying your loan application; a credit report fee for pulling your credit scores; title search and recording fees; and a wire-transfer fee for wiring funds from the lender to your escrow account.

  • How to prepare for closing costs

    The best time to study closing costs is when you’re shopping for a lender and can compare your desired loan amount with interest rates you’re offered (plus any discount points you might plan to pay upfront to lower those rates). Then use a closing-cost calculator to determine what your costs might be. The calculator will gauge your monthly mortgage payments, based on whether you’re financing the closing costs into your mortgage or whether you’ve decided to pay them upfront.

6 Apartment Upgrades That Landlords Hate (Bye-Bye, Security Deposit)

When you move into a place, it’s normal to want to make it your own, by hanging pictures or even painting an accent wall cherry red. But when you’re renting, you’d best remember: Any changes you make may be reversed by your landlord once you move out and with your money. That’s why renters have to walk a fine line between making themselves feel at home and making changes that will cost them their security deposit.

“If you decide to paint the walls while you are there, you must return them to their original color or the landlord is within their rights to use the deposit to pay for it themselves,” says Trent Zachmann of Renters Warehouse. He explains that many landlords treat modifications or improvements and accidental damages the same when it comes to taking money from your security deposit. “An owner can withhold all or part of the deposit to correct either type of issue,” he says.

But all is not lost: Sometimes modifications can be made with the owner’s approval. Just make sure you’re 100% clear about the stipulations of your lease before you pick up a paintbrush or hammer. Straight from the mouths of landlords, here’s a list of upgrades tenants have attempted that they hate—and will use your security deposit to fix.

1. Painting

This is the No. 1 alteration that landlords complain about.

Annmarie Bhola, a landlord in New York City, understands that for first-time renters especially, there’s an excitement with moving into a new home. And, to many, that means breaking out the paint.

“To feel at home, a fresh coat of personality-defining color is the icing on the cake,” she says. “That’s all cool, but know that if you paint the walls hot pink, it will be coming out of the security deposit! That was one of the most memorable colors I’ve had to repaint.”

Atlanta landlord Bruce Ailion describes creative painting projects as his biggest headache.

“You would think a tenant would pick a neutral color and have a professional paint,” he laments. “Instead they paint purple or black, get paint on the ceiling, on the trim, on the door knobs and outlets. Some will paint around the bed and pictures. It’s a mess.”

2. Hanging pictures

After repainting, filling in holes in drywall is one of the most common issues landlords have to deal with after a tenant moves out.

“Everyone likes to put up pictures, and fortunately new technologies have brought about alternative, less destructive hanging methods, which is great,” says Bhola. So then why don’t more people think to use Command strips instead of nails? “Nine out of 10 times, I always have to fill in the holes and bust out the spare bucket of paint.”

3. Installing window treatments

We know: Those white plastic vertical blinds are so ugly. Your impulse to put up a curtain rod or Roman shades is completely normal. But the holes you have to drill into the wall to mount the window treatments, like those for your pictures, will require patching once you move out. Landlords fume every time they see big screw marks around the window frame.

“Repairing the holes ends up being expensive and time-consuming,” says Zachmann. If you must hang curtains, use large Command hooks that adhere to the wall and don’t leave any stickiness behind.

4. Mounting a TV

What’s worse than hammering nails into the drywall to hang pictures or curtains? Drilling holes in the wall to mount your flat-screen TV.

“The screws have to go directly into the center of studs,” says Brian Davis, director of education at real estate service company SparkRental. “At best, the renter will have screwed 10 to 20 holes into the wall. At worst, the TV will crash to the floor [because it wasn’t mounted correctly], possibly injure someone, shatter the TV, and take a chunk of the wall down with it.” He recommends that renters use a TV stand.

5. Gardening

You would think that planting a few tulips would delight a landlord. But that’s not necessarily the case.

“As a landlord, I want the most maintenance-free rental as possible,” says Atlanta-area property owner and real estate writer Laura Agadoni. “In some cases, I pay for a landscaping service, but I would not want to keep up a garden.”

So, don’t make any changes to the landscaping without the landlord’s written permission. And if you do, don’t be surprised if your security deposit is used to return the yard to its previous state.

6. Updating appliances

If you’re not a fan of that noisy old refrigerator in your rental, it’s perfectly fine to swap it out with a new one of your own so long as you talk it over with your landlord first, and then reconnect the old one after you move out.

“What’s never acceptable is swapping out an appliance, throwing the old one away, and then taking the new one with you when you move out, leaving a gaping hole where there was once an appliance,” says Davis.

So if there’s something you’d like to update, just ask your landlord about it first. You never know.

“What some landlords will allow may be different than what other landlords allow,” says New York City broker Eric D. Rosen. “In some cases, it might even be possible that a landlord will share the cost.”

Article originally found on realtor.com

3 Common Moving Nightmares (and How to Prevent Them)

There’s no other way to put it: Moving is stressful. But it doesn’t have to be a waking nightmare. Here’s how to avoid a move from … you know where.

Nightmares aren’t supposed to take place in broad daylight, but some common life events bring so much tension, uncertainty and anxiety that they can easily rank as “quality nightmares.” Moving house tops the list of stressful experiences that can feel like a bad dream — and it can easily come true unless you take precautionary measures.

Problems can occur at every stage of the relocation process: A violent storm hits just when the moving truck is parking in front of your door. The elevator is out of order when you arrive at your new high-rise building. You lose the keys to your car on the morning of moving day. The list goes on.

However, the most common moving nightmares fall into three main categories. Here’s how they typically play out — and how to avoid them.

Bad movers

Many moving horror stories involve rogue or incompetent movers.

  • The movers are late or don’t show up at all. The agreed-upon time comes and goes, but you see no sign of an approaching moving truck. When you call the moving company to demand an explanation, your relocation nightmare begins. Regardless of the excuses you receive (a traffic jam, a breakdown, a delay on a previous job, a mistaken date, etc.), the inevitable result will be lots of stress and wasted time. Worst of all, you may not be able to reach the moving company at all: fraudulent movers may have taken your deposit money and disappeared with it.
  • The movers are careless or inexperienced. If your movers arrive late, in a smaller moving truck than needed, or lack the required know-how and the proper equipment to handle your items safely and efficiently, your relocation can quickly turn into a nightmarish experience. The amateur movers may drop your plasma TV, break your heirloom china, scratch your antique dresser, dent the floors, or cause other overwhelming emotional and financial damage.
  • The movers are scam artists. In the worst case scenario, you may fall victim to unscrupulous moving scams. Rogue movers will often request much more money than previously negotiated based on some alleged extra services. They may hold your belongings hostage until you pay a considerable extra “fee” as ransom, or steal your more expensive belongings and just discard the rest.

The good news is that there is an easy way to avoid such nightmares. All you need to do is carefully research your movers before hiring them to make sure you are dealing with licensed and experienced professionals you can trust. It’s also a good idea to purchase appropriate insurance for your belongings, just in case.

Traffic problems

Heavy traffic or road accidents can also turn your move into a real nightmare.

  • Traffic jams. The moving truck is delayed and there may not be enough time to proceed with your move as planned. You may have to postpone the relocation to another day, or you may miss your flight.
  • Traffic accidents. if there has been an accident on the road, the moving truck will have to wait until the damaged vehicles are removed and normal traffic is restored. However, the scenario could get much worse: You may lose all your possessions or receive them badly damaged if the moving truck crashes, catches fire, or gets trapped somewhere because of adverse weather conditions like heavy snowfall or torrential rains. It’s even possible that thieves could break into the vehicle and steal your goods.
  • Breakdown. If the moving truck breaks down on the road, you’ll have to wait for the moving company to send another vehicle. What’s more, your items can easily get damaged while being transferred.
  • Parking issues. The moving truck has to circle the neighborhood for hours until an appropriate parking space is vacated, or the movers have to park far away from the entrance to your home. In such cases, you’ll not only lose valuable time, but will also have to pay an extra fee for the delay or an additional long-carry fee.

Of course, there’s nothing you can do to prevent traffic accidents or breakdowns. But you can at least reserve a parking place directly in front of your old and new homes, and choose a moving company that has experienced drivers and several moving vehicles in good condition.

Poor organization

The only way to avoid problems when moving house is to plan each phase of your relocation adventure in meticulous detail and stay one step ahead all the time. Otherwise, you may find yourself facing any of the following all-too-common moving ordeals.

  • Packing chaos. It may turn out that you’ve packed more items than previously discussed with the movers; packed items that can’t be loaded onto the moving truck; haven’t labeled the boxes properly; or forgotten to prepare an “essentials box.” Worst of all, you may not be ready when the movers arrive. All these packing mistakes will result in lost time and money.
  • Furniture troubles. If your large furniture doesn’t fit through the doors, you may be forced to leave some treasured pieces behind, or request hoisting services that will cost you dearly and will delay your move considerably.
  • Paperwork problems. If you forget to transfer the utilities, you won’t have electricity, gas, and water on move-in day. If you forget to change your address, you won’t have your mail delivered to your new home. If you forget to update your driver’s license and car registration in time, you’ll be fined. Not taking proper care of your documents will most certainly get you in trouble.
  • Overspending. If you book your movers at the last moment, require too many extra services, fail to create a realistic moving budget, pack all your items without sorting them out first, or allow any other financial imprudence, you’ll end up paying much more than you expected.
  • Safety issues. Make every effort to prevent injuries and accidents on moving day, as getting hurt is one of the worst things that can happen during your relocation endeavor.

Post courtesy of zillow.com

Real Estate Investing: How to Make Money in the Current Housing Market

Forecasters say that mortgage rates above 4 percent are here to stay. With that in mind, it’s important to realize what high mortgage rates mean and how they affect your current and future real estate investments.

As a seasoned real estate investor and house flipper, I’ve seen a lot of changes come and go in the housing market. I’ve come to realize that even the toughest and hottest housing market can still leave investors reaping the rewards.

Right now, prices for houses are higher due to the extremely low supply of homes. Very few homes are being built, especially in the low end-range. While it may seem like it’s slim pickings in terms of real estate investing, there are still good deals available; it just takes time and savvy investing smarts to find them.

Even though there are fewer listings in today’s market, rising prices present opportunities for people to sell homes that need work. While there are opportunities in both buyers’ and sellers’ markets, my advice when it comes to real estate investing is to always leave yourself plenty of room for unknown costs or changes in the market. That way, you can flip in good, bad or even mediocre markets. The trick is never assuming prices will increase and accounting for all costs. Investors get in the biggest trouble when markets change and they bought based on estimated future appreciation.

Real estate agents have also felt the effects of the current housing market. Along with the market changes and higher rates, real estate agents are competing in a smaller pool of homes. There are many buyers and prices are rising. Normally this makes a good seller’s market, which is good for agents, but this market is different because there are so few homes for sale. (Agents love a seller’s market, but not when there are no homes to sell!) They are suffering under fewer sales and less money, causing many to drop out of the business altogether. The bright spot for investors is that agents still in the game have much more time on their hands and investors may be able to find hungry agents who have both the time and the drive to find them deals.

As far as worrying about the current political climate, I don’t think the market will change much based on new policies. If anything, lending guidelines will get looser, making it easier to get loans. Prices are higher, but if you invest wisely based on ratios and profit margins, you can make money with low or high prices. It can be tougher to get cash flow on rentals in a hot market, but there are many markets in the U.S. that are still great for rental property investing. I think supply and demand are the biggest factors when looking at housing prices, and supply is not going to increase for single-family homes any time soon, so bear that in mind.

While rising mortgage interest rates can hurt buyer demand and buying power, you can still make money in real estate no matter what the market is like. It takes a huge jump in rates to significantly affect buying power.

Furthermore, I don’t think rates will cause a housing crash, either. The last crash happened because of inflated demand caused by loose lending guidelines. The builders over-built, and it all started to crumble when everyone realized how many people who should have never gotten a loan in the first place got one they really couldn’t afford. This time around, the people who are getting loans have much stronger financial capabilities and stability. There is also not the over-building that caused issues we saw in the past. So, even if there is a crash, many investors will do just fine. In fact, the last crash created more tenants and increased rents in some areas, while prices decreased. The trick is creating equity by purchasing below market, buying with cash flow, and not over-leveraging.

Regardless of the current interest rates, people will always buy and sell homes, which means there will always be opportunity to make money flipping or as a landlord.

Post courtesy of RISmedia.com

Easy Ways to Keep Outdoor Spaces Looking Fresh

Photo credit: rawmn / shutterstock.com

A very important part of the majority of landscape designs is the garden furniture that is to be used in the garden and lawn around your property. Outdoor furniture included in a plan of landscaping is a way of creating special places in your garden, where the family and their guests can meet comfortably, relax and enjoy the beauty of the surroundings. In addition, furniture for the outdoors will make people feel attracted to the special meeting area so that that they will be more willing to make use of the landscaping and appreciate your efforts for landscaping. Here are some tips on how to keep your outdoor space looking fresh.

Added Living Space

A beautiful and a marvelous landscape on your property, it will help your property stand out and enjoy the hike in its monetary value, the benefit of which, you will feel when you plan to sell your property. A superior landscape design not only produces beautiful surroundings, but the most advantageous landscaping concepts carve out extra living space that extends the useful square footage of your house. Depending on the size of your own land and landscape design, these outdoor living spaces can on certain occasions double the area people have for social gatherings of family and friends. The seating arrangements make a big difference in how well these spaces are finally used and the manner in which your guests will enjoy all your efforts on entertaining outdoors.

There is a wide range of furniture that is made primarily for use in areas that are outdoors. There are styles ranging from the formal to relaxed and elegant and comfortable. Numerous different types of materials are used in making frames of outdoor pieces of furniture as well as for cushions and covers which are used to make them comfortable and inviting.

Choosing The Right Colors

When making the right selection of garden furniture, some people prefer to select styles, colors and textures that blend and reflect the total design of the landscaping around their house. This type of approach has a tendency to create a harmonious blend that helps the people experiencing it to relax and feel more involved in the garden that surrounds them. Greens, browns and more muted tones of nature are well liked for those who want to create a smooth flow between your garden and furniture design they add.

Other homeowners enjoy furniture for the garden that pop out and end up getting attention. Often, the colors are bright and the designs are very bold and are not intended mix in with the natural background. The pieces normally have an artistic type of feeling are primarily intended to make a statement and on certain occasions reflect the personality of the homeowner. These types of options in outdoor furniture create a lively atmosphere of fun and frivolity.

Flowing Design

Another approach that some individuals take when it comes to their outdoor living spaces is to make you feel as though the garden or patio which they have just stepped into is no more than a continuation of the interior living space. This is accomplished by the selection of styles, fabrics and colors that intimately imitate the furniture inside the house. Numerous individuals like this approach because it can fool the eye and make both the house and garden spaces seem more prominent, as they flow together smoothly.

Once you have selected just the right outdoor furniture that will make your guests more comfortable and will continue with the overall theme and the feel of your living area outdoors, it is a good idea to give attention to the lighting in the area. Good landscape lighting really complete the outdoor spaces and make them feel even more welcoming and warm, particularly if you will be doing nigh time entertaining.