Home improvements have gotten more popular recently, as many people have switched to work-from-home and are spending more time there. Usually, these improvements are primarily made for the owner, rather than for a prospective buyer. These features would also be high in demand if you are planning to sell your home, but there are a few things that can actually increase the value of your home by much more than you spend.
You may be able to improve your energy efficiency by upgrading your windows, which is certainly value over time for a homeowner, but it’s also increased value for a home seller. Energy efficiency is a significant draw for buyers, and will improve the value by more than its cost, even if you aren’t reaping the rewards of it yourself. Kitchen remodels almost always pay for themselves. Homeowners spend a lot of time in their kitchen, and they want it to suit their needs. Figure out what people are looking for in a kitchen right now, and make it happen. A rather expensive upgrade is a stone veneer. You won’t recoup the entire cost if you sell immediately, but you’ll get back most of it. This is one that you’ll want to have accrue value over time.
Photo by Adeolu Eletu on Unsplash
Conventional wisdom says you should eat three meals per day, one when you wake up, one at midday, and one in the evening. This convention, though, is actually rather new. And not at all backed by science — it’s based around standard work schedules more than anything. You eat before work, you have a meal during your lunch break, and you come home and eat with your family. However, your meal times should be limited to a smaller window.
Fasting is actually a very necessary process to help repair damage to the body. Of course, this can include the normal eight hours of sleep. But for a healthy body, eight hours should actually be the time that you’re eating, and you should fast the rest of the day, or at least twelve hours. It is possible to do this while still eating three meals, but the standard work schedule makes this difficult. You don’t need as much food as you’re probably eating, though, and you could even just eat one meal per day if you really wanted to. Breakfast in the morning used to be reserved for wealthy people who could afford to eat that often. Skipping breakfast and waiting until your lunch break to eat is actually not a bad idea, even if many people nowadays only do so because they lack the time. For a while, you’re going to be hungry in the mornings, but this is a psychological effect because your body is used to eating at that time, and is temporary. The same thing would happen if you shifted to a new work schedule and had different meal times. It doesn’t actually mean your body needs food.
Photo by Ben Kolde on Unsplash
Property management is a practical field to enter if you are worried about economic stability. It’s incredibly recession proof, as housing is a necessity and therefore people will be renting properties regardless of the economic conditions. But you can’t just decide on a whim to be a property manager — it has legal requirements and best practices.
In the vast majority of cases, being a property manager requires a broker’s license. There are certain cases in which it doesn’t, but they would not apply for rental properties, which are the bulk of managed properties. If you don’t want to get a broker’s license, though, you can consider managing commercial properties, but there would still be many restrictions.
First Tuesday, a real estate journal, has assembled a Property Management 101 infographic, complete with links to articles and PDFs for additional explication. This contains more specific details about the legal requirements, other applicable laws, and market information. You can find the infographic here: https://journal.firsttuesday.us/property-management-101/82682/
Photo by Towfiqu barbhuiya on Unsplash
You’ve heard of first-time homebuyers. You don’t hear as much about first-time homesellers, even though of course they must exist. But now there’s reason for them to make the news. It turns out a significant number of homeowners in the younger generations — Gen Z and Millennials — are already looking to sell, despite also being the predominant first-time homebuyer generations. This includes 44% of Gen Z homeowners and 35% of Millennial homeowners.
With both first-time homebuyers and first-time homesellers being mainly between the ages of 18 and 41, agents really need to focus their marketing efforts if they want to do business with them. That requires knowing what people in this age category are looking at in terms of marketing. 59% of Gen Zers and 65% of Millennials consider social media marketing to be important for a real estate agent. Fortunately, this isn’t likely to ostracize other cohorts, since 58% of Gen Xers and 60% of Baby Boomers are in agreement. Agents that don’t have social media presence and are struggling to find deals may want to rethink their strategy.
Photo by Bram Naus on Unsplash
Attempting to sell your home yourself, without paying an agent, may seem tempting. Especially if this isn’t your first sale, you may think you know everything. The fact of the matter is, you probably don’t; moreover, FSBO presents problems even if you understand the process.
In order to sell your home, you’ll need to take time out of your day to show your home to prospective buyers. This could be a colossal waste of time if the buyers aren’t actually interested and just want to look. There’s also a large amount of paperwork involved. That also takes time, and it’s easy to make mistakes. Maybe you think you’ve done all the paperwork before and know how it works, but the laws could have changed or this sale could involve paperwork the previous sale didn’t require. Even professional agents make mistakes sometimes — but they have errors and omissions insurance. You probably don’t. That can lead to lawsuits. In the unlikely situation that you’ve done all your research and know exactly what to do, it’s still likely that you’ll receive fewer or lower offers. Agents tend to be wary of FBSO sales because of all the issues they can present, and so are unlikely to show them to their clients.
Photo by Pedro Ramos on Unsplash
Spring tends to be the hottest season for the real estate market, which means heavy buyer competition, especially while inventory is still recovering. These tips, including some lesser-known ones, can help you stay in the running.
It’s not unusual for homes to be listed low in order to garner interest. While this may not be necessary with higher demand than supply, it’s good to know that you may want to look lower than your expected budget. Even if an offer is accepted near the list price, that just means you have a bit extra for repairs or updates. Alternatively, you could put it towards a higher earnest money deposit, which shows the seller you’re actually serious. Getting an actual approval letter, and not just a pre-approval, will do the same thing.
There are also a few contract terms you can change to appeal more to sellers. A good agent can advise you on matters related to your current situation to see which contract terms are best for you. These include various waivers, particularly an inspection waiver; a lease-back for sellers who are also prospective buyers; and a relatively unknown thing called an escalation clause. An escalation clause, also called an escalator, lets the seller know as soon as they receive your offer that you are willing to increase the offer if outbid, and defines an upper limit. This can prevent a situation in which the seller sees your offer, sees an offer higher than yours, and accepts the higher offer, without realizing that the higher offer is actually lower than what you are willing to pay.
Photo by Steven Weeks on Unsplash
What buyers want and what they’re able to get isn’t always the same thing. Buyers nowadays are frequently settling, due to high prices. However, their search keywords are a decent indicator of what they want, even if it’s just wishful thinking. And what they want right now is outdoor living, except from the comfort of their home.
The number 1 most searched home feature is a swimming pool. In fact, buyers currently seem rather obsessed with water. If they can’t get a pool or hot tub, many are happy with a view of the water, and it doesn’t necessarily need to be an ocean view. The second most searched term is a view of rivers, and beaches, waterfronts, lakes, or really any kind of water is a popular view. Buyers are also looking for other types of outdoor amenities, such as horse facilities, boating facilities, golf, tennis, and basketball. And of course, they search for a large lot or outbuildings to accommodate all these features.
Photo by Kristina Laskova on Unsplash
Tax season is upon us. You may have already started working on your taxes. But perhaps you haven’t thought about everything you may be able to deduct. Some of the most significant costs of homeownership can be tax-deductible.
Many people are aware that their property taxes may be tax deductible — if you didn’t, well, now you do. But did you know that the interest on your mortgage always is? Your lender should have this line separated out, so it’s easy to find and deduct from your taxes. Another homeownership cost that is sometimes tax deductible is home repairs. Significant repairs are probably tax deductible. Be sure to check with a tax professional to determine which of these you can actually deduct. They may even be able to find more tax-deductible expenses you weren’t thinking of.
Photo by Sharon McCutcheon on Unsplash
With home prices as high as they are, qualifying for a loan becomes more difficult. This is especially true if your household is single-income. But that doesn’t mean it’s impossible. There are options available for low-income households.
As always, it’s important to check your credit score before attempting to get a loan. You can check it for free once per year from any major credit bureau. If your credit looks good enough to qualify for a loan, you can advance to searching for loans. For low-income households, the best place to look is government loans, since these usually have lower thresholds for down payments. Some FHA loans require only 3.5% down. Your specific region may also have government loan programs. If your credit score is low, however, consider looking for a co-signer for your loans. The co-signer doesn’t necessarily need to be the one paying, but if their credit score is better than yours, it will help improve your chances of loan approval and possibly even get you a lower interest rate on the loan.
Photo by Towfiqu barbhuiya on Unsplash
Realtor.com has released their Best Time to Sell Report for 2022, and the predictions land on April 10-16. Spring is usually a hot season for the real estate market, and this year is no different. Demand is going up, prices are still high, and inventory is still low. Homes are already selling quickly after listing.
It’s not going to last for too much longer, though, which is why the window is so small. Mortgage rates are increasing, which will reduce buyer demand or cause them to look for lower priced listings. Inventory is also starting to recover as construction is accelerating. Also, if you are planning to sell in order to buy a new home, keep in mind that the best time to sell is frequently not a good time to buy.
Photo by Sixteen Miles Out on Unsplash
Multigenerational homes are becoming more common recently. But what exactly does that mean? And why? A multigenerational home has a rather simple definition. It includes any home in which two or more generations of adults live in the same building. This doesn’t include children, but children can be present as well.
Common examples of multigenerational homes are parents of young children living with the children’s grandparents and adult children moving in with their parents. The former is frequently in order to give parents some extra help raising their kids. Moving back in with your parents, or vice versa, can be done for a couple reasons. A common one is recent college graduates wanting to have a place to stay while they pay down their student loans. Sometimes older parents move in with their children because they need help taking care of themselves.
Photo by 𝔥𝔦𝔩𝔩𝔞𝔯𝔶 𝔭𝔢𝔯𝔞𝔩𝔱𝔞 on Unsplash
There are two main reasons to refinance your home. One is to reduce your monthly payments in order to free up cash, and the other is to pay off the loan more quickly. But refinancing doesn’t just simply do this automatically; you have to choose a new mortgage with terms that work for you. Figure out what your goal is and pick the right mortgage.
Reducing your interest rate is the surest way to free up cash, but it can also simply be used to pay off the loan faster. With a lower interest rate, a greater percentage of the principal is reduced each time you make a payment. However, this only works if you can qualify for a lower interest rate. If you don’t qualify normally, consider reducing the length of the mortgage. This will probably result in higher monthly payments, but will also likely allow you to qualify for a lower rate, and almost certainly allow you to pay off the mortgage faster as long as you make the payments. If you have plenty of cash on hand and just want to save money in the long run, consider replacing your mortgage with one that allows you to make larger payments on your principal. This is more costly in the short term, but would allow you to pay off the loan early and thus spend less on interest, reducing the overall cost.
Photo by Morgan Housel on Unsplash
Sellers who haven’t done their research, especially first-time sellers, are prone to certain errors when selling their home. Many of these involve wanting to get as much money as they possibly can. What sellers don’t realize is that they may need to either temper their expectations or spend some money to make money. Besides these sorts of issues, sellers also sometimes don’t have a new place lined up for themselves for when the sale goes through, which can cause them to spend unnecessary money on temporary rentals.
Especially in a hot market, sellers tend to overprice their homes. It’s true that prices are high right now, but listing your home at exactly market value isn’t going to draw attention. List lower, and let market competition do more of the heavy lifting. More competition also means more serious offers, but do keep an eye out for offers that seem too good to be true — they probably are, and would be a waste of time. Time is something you don’t want to waste when trying to sell your home, since interest will wane and home values may change. The best offer isn’t necessarily the highest offer, either; look at contingencies and down payment percent as well.
“For sale by owner,” or FSBO, can be tempting because it cuts out the middleman. If sellers don’t have to pay an agent, they keep more of the profit. Seems simple, but as it turns out, their profit will probably still be higher with an agent representing them. Agents have better marketing tools, more experience with pricing and staging, and the ability to host open houses or get in contact with photographers and videographers to create virtual tours. FSBO sellers can decide to do these things themselves, but the cost comes out of their pocket, so they don’t manage to skip out entirely on costs.
Photo by Ibrahim Boran on Unsplash
Kids can complicate the process of moving. Young children may not understand what’s happening, or just not understand the reasons why. Older kids that know what’s going on may simply have strong emotions about significant life changes such as this. Parents wish they could do something to make the transition smoother. Well, it turns out they can: Involve the kids in the process.
A large factor in kids’ reluctance to move is that they feel a lack of control. It’s simply something that’s happening and unavoidable, rather than something they’re doing. Take them to open houses with you, so they can familiarize themselves with their potential new homes. Ask them to help pack — you may think your kids aren’t going to want to be given tasks, but if it helps them feel like they are an actor rather than observer, they will feel more in control. Hosting a goodbye party for the kids, and not just for adults, can also help to add closure.
The process doesn’t end with moving out. There is more to do after moving in. Unpacking is just as important as packing. Let them help choose paint colors and the arrangement of furniture, especially in the room that will become their new bedroom. Once you’ve settled in the new house, go meet your neighbors, and take your kids with you.
Photo by HiveBoxx on Unsplash
Some property owners don’t like the idea of allowing pets on their property. However, it’s probably a good idea to consider offering a pet-friendly rental property. 72% of renters own pets, so pet-friendly rentals are in high demand. This ensures you’re more likely to find a tenant and also allows you to charge more for rent. You can also ask for a pet deposit, in addition to the normal security deposit.
You also shouldn’t be too worried about property damage. Yes, pets can cause minor damage to property, but it’s actually more likely that costly property damage is caused by young children or even adults. In addition, you can reduce property damage by replacing carpets with linoleum, vinyl, or laminate floors. These are more resistant to damage and easier to clean. It may also be a good idea to install pet doors and gates.
Photo by Andrew Neel on Unsplash
Many people are blindsided by rising mortgage rates after getting a preapproval, thinking that the preapproval has locked their rate. It hasn’t. The first opportunity to lock your mortgage rate happens when your final loan application is approved, though you don’t even have to lock it until shortly before closing on a purchase, if you think rates will go down. In addition, the lock period is not indefinite. It usually lasts anywhere from 15 to 60 days, and it could definitely take longer than that to find a home.
There are ways to mitigate the issues presented by shifting mortgage rates. Rates don’t tend to change much during a typical closing period, but you want to lock early when rates are rising and late when rates are falling. Consider budgeting for a loan lower than your preapproved amount in order to account for fluctuations in mortgage rates. Different lenders also have different locking policies. Make sure to shop around and ask about lock periods, renewing options for locked rates, and the possibility of locking out rising rates but not falling rates.
Photo by olieman.eth on Unsplash
Some routine expenses may not seem like they’ll break your bank individually, but they aren’t just one-off expenses, and there’s often a cheaper way. You may notice these things more easily if you record your budget in a spreadsheet. This is a good practice for tax season anyway, and it could open your eyes to a whole lot of unnecessary spending.
Many people start their work day by grabbing a cup of coffee from someplace like Starbucks or a donut shop, then at lunch time, pick up a ready-made sandwich. Both of these things can be done at home. It takes more time, but it doesn’t have to get in the way of your morning, and it’s far cheaper. The coffee machine can be prepped at night and turned on when you wake up, and you can prepare and bag a sandwich in the evenings as well. You can also probably save on groceries by creating a list and sticking to it. Impulse buys are not uncommon, and while you may simply start adding some of these items to your list, they probably won’t all make it there. Another cost saving measure, this time unrelated to food, is ditching cable service. Streaming services can cover the same channels for a fraction of the cost.
Photo by Andrew Valdivia on Unsplash
Almost everyone has a few smoke detectors and a fire extinguisher somewhere in their home. If you don’t, you definitely should, and are required to by law in California. Unfortunately, that’s as much care as many people take in their fire safety. That may not be enough.
Smoke detectors should be spaced around your home so that they can be heard regardless of where you are. California requires smoke detectors in certain areas of the home. This includes every bedroom, every hallway that leads to a bedroom, and at least one per floor in a living area. Check to make sure that you are conforming to code, and that your smoke detectors have working batteries. If your home is large, you may also want to consider additional smoke detectors above the minimum requirements to cover more area.
Homes are only required by law to have one fire extinguisher. However, this is the bare minimum and not ideal. You want to have easy access to a fire extinguisher regardless of where you are. The suggested number is one per floor. If you live in a multi-family building, every unit should have easy access to a fire extinguisher. This doesn’t necessarily need to be inside the unit, if there are hallways with access to multiple units. But having just one for the entire building isn’t a good idea, even if there are only a few units.
Photo by Andrei Slobtsov on Unsplash
Airbnb is a commonly used method for vacation-goers to find lodgings. It’s usually — though not always — cheaper than a hotel, and often significantly more flexible and easier to book. All of this makes it attractive to people going on vacation. But what about the other party? Is Airbnb a good investment over traditional income property? Well, that depends.
If your property is in a heavily touristy location, it can probably earn quite a bit as an Airbnb rental. Part of this is the per night costs, which add up quickly if you have guests most nights. In addition, cancellations aren’t as backbreaking as losing a tenant. However, overhead costs may be higher, with Airbnb taking a cut and the high likelihood that you’ll be paying for utilities and housekeeping. You don’t want long periods of inactivity with high overhead costs. Unfortunately, such periods are likely because vacations are frequently seasonal.
Photo by Francesca Tosolini on Unsplash
We’re currently either at or approaching the top of the market, which means it’s generally not a good time to buy. Sometimes it’s inevitable, but that just means you need to be prepared for losses if you don’t keep your home long enough to gather equity. When you buy at the top of the market, your home’s value will go down before it goes up, so you’ll need to wait a while in order to sell at a profit.
If you’re an investor, don’t look at flipping right now. It’s just not going to provide the return on investment that you want, especially with construction costs being high. Instead, look at purchasing rental property, as rent prices are also on the rise. You can collect rental income now and sell much later down the line when the cycle completes itself.
Photo by Félix Lam on Unsplash