Stuart Rental Home Appeal Might Have Three Explanations

08.13.15 by

Stuart Rental Home Appeal Might Have Three Explanations

For an increasing number of Stuart residents, what used to be a slam dunk assumption—that owning your home is preferable to opting for a Martin County rental home—is no longer so self-evident. The powerful reasons for owning are still there: ownership still means that you are building equity over time; it still means you are free from a landlord’s control; and it still means you have the psychological benefits of being the possessor of the place where you live, and the standing in the community that accrues to the permanence that implies.

Those are powerful inducements to forgo a rental home in favor of ownership, for sure—yet according to the numbers, the number of Americans who own their homes has been declining since the advent of the housing crisis (at the moment, fewer than 2/3 of households now own their homes).

You might assume that the reasons for the increase in popularity for rental homes are simply financial, and to some extent, that’s the case. The economy, while improving, is doing so painfully slowly, wages are not rising as has been the norm in prior recoveries, and mortgage loans, while still at attractively low interest rates, can still be difficult for some Treasure Coast borrowers to obtain.

Yet those dollars-and-cents arguments don’t paint the whole picture. Some of the reason why rental homes in Stuart are being chosen are due to changes in American lifestyles. Forbes contributor Beth Braverman offered some insights in last week’s article entitled “When Renting is More Expensive, But It’s Still the Right Move.”

Her first reason is not a new one: rental homes offer more flexibility. What is new is how Americans—particularly the group we call Millennials—increasingly value that freedom. Some of that has to do with the difficult labor market—and the premium breadwinners are placing on being able to ‘go where the work is.’

Next reason had to do with the relative illiquidity of the asset value a home represents. This looks like the first cousin to Reason #1: for someone who needs to move for professional reasons, being able to just pick up and move from a Stuart rental home can de-complicate the situation. For those who are reasonably sure they will be in town for long enough to offset the costs of acquiring and selling a home, the financial benefits may outweigh this one.

Last reason given was, “You’re not financially ready”—which is certainly the most longstanding one of all. Even if a current rental home occupant qualifies for one of the new programs (some can make the down payment as minute as 3%), it’s still possible that the ‘all in’ costs will strain resources. You have to agree with Braverman that in those circumstances, it’s probably best to build up savings, even if it means remaining in a rental home for an extra year or two.

All in all, any increase in the popularity of Martin County rental homes is good news for area investors who are (or soon will be) landlords. It’s also a great reason to give me a call this summer!

Stuart Rental Home Appeal Might Have Three Explanations

U.S. Report & Our Treasure Coast Real Estate Investment Outlook

07.25.15 by

U.S. Report & Our Treasure Coast Real Estate Investment Outlook

 

Last week’s reporting showed the same kind of upward movement that’s become commonplace for Treasure Coast real estate investment news watchers. A standout: Corelogic’s finding that national home prices in May increased by 6.3%, marking the 39th consecutive monthly year-over-year increase.

Actually, to a lot of us, that looked stronger than expected: the steady increase in U.S. sale prices had seemed to have leveled off in the 5% range for the most part…Corelogic’s own Chief Economist had prognosticated, “We expect house prices in our national index to be up about 5 percent in the next 12 months” just 30 days ago.

Those who track U.S. real estate investment performance for its Stuart FL implications, two other interesting observations were noteworthy. First, even including distressed sales, prices have now risen to within 8.4% of the April 2006 peak—what is generally considered an unsustainable “bubble.” Yet it’s impossible to find any expert who believes the current price levels are indicative of anything of the kind; nor that the expected continuing rises would expose those making residential real estate investments to equivalent risk levels. Except in a very few localities, there is scarcely any “bubble” speculation to be found—even as national price increases continue to outpace inflation.

Part of the reason is that supply continues to be tight; distressed property sales continue to decline; and overall U.S. economic conditions are perceived to be improving, however gradually. Corelogic also keeps track of sales and momentum for different price ranges, which perform differently, as real estate investment analysts know. The lowest-priced tier, which represents to most modestly priced 25% of homes, has now actually surpassed its pre-crisis peak…and the highest end of luxury residences (the top 25%) are within 5.7% of their peak.

The second point made in last week’s reporting was continuing good news for those whose real estate investment portfolios include rental properties. Apartment vacancy rates “are down to their lowest level since the 1980s” according to Economist Frank Nothaft. “Rents are up, and apartment building values are at or above their prior peaks.”

The robust performance wasn’t confined to multiple-unit housing, either. Following the housing crash—between 2006 and 2013—3,000,000 detached single family homes were added to the nation’s rental stock. They now make up 40% of the market. In terms of their real estate investment performance, the combination of rising rental rates and shrinking vacancy rates are exactly what investors hope to see. For regular homeowners, too—even those with no plans to sell anytime soon—those 39 straight months of steady price appreciation is comforting news. And if you are watching this summer’s Treasure Coast real estate listings for the investment opportunities they represent, I hope you’ll give me a call!

U.S. Report & Our Treasure Coast Real Estate Investment Outlook

Four Skills to help turn a Port St Lucie Property into Rental Gold

06.01.15 by

Four Skills to help turn a Port St Lucie Property into Rental Gold

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Become a landlord!

Be your own boss!

Build equity that someone else pays for!

These may sound like the kind of come-ons that you tune out when you hear them on the radio or TV, but, surprisingly, they’re actually more reality-based than not. Whether you’re buying a Port St Lucie property for its rental potential, or preparing to turn a currently-owned property into an income-producer, the game plan is straightforward. Locate a suitable local property: one with the rental potential to create cash flow either as income, or to build real estate equity…or both!

So what’s the catch?

In fact, there is one. Becoming a successful landlord has more to it than spotting an appropriate Port St Lucie property and sitting back, waiting for someone to nail up an ‘Easy Street’ sign. In order to make the most of the opportunity a Treasure Coast rental property represents, you need to either already have, or develop, a requisite set of skills. Chief among them:

  1. The relationship between landlord and tenant, and landlord and the tradespeople he hires, should be purposefully professional. Your tenants may also be fellow Port St Lucie residents (or even neighbors), yet skillfully establishing and maintaining an amiable yet businesslike relationship takes dexterity and finesse. Substituting an overly personal relationship instead of the more proper businesslike one can result in counterproductive consequences…like tardy rent payments or superfluous demands.
  2. As much as any other business, successful landlords are usually ‘people people’: they don’t shy away from interactions on a face-to-face basis. Whether it’s dealing with renters’ concerns, interviewing potential tenants, or handling the personnel who help maintain a Port St Lucie property, great landlords have great leadership skills. They have the knack of bringing positive energy to everyday dealings. Good landlords exhibit authority without being overbearing, and they allow their tenants to feel the right degree of investment in what is their home, if only temporarily.
  3. It may seem as if turning a property into an income-producer is an extremely simple task, but in fact it takes organizational skills to accomplish it efficiently. There are laws that have to be observed, and documentation to be maintained. People who cultivate clarity in such matters are nicely suited to the demands of running a rental property.
  4. There are unavoidable time availability demands that mustn’t be ignored. A tenant with a maintenance emergency needs to have it addressed. Now. It’s one thing that even the most people-oriented, organizationally proficient business titan should be prepared to attend to without delay.

But suppose you lack some (or even all) of these traits? Should you just walk away from a Port St Lucie property—even after you’ve spotted one you know has great potential? Actually, there is a Plan B, which is to hire a property manager—a professional practiced in all the requisite skills. To explore the current crop of Treasure Coast property listings with serious potential, just give me a call!

Q: Is buying a home the best investment?

01.25.11 by

Q: Is buying a home the best investment?

A:  Home buying is not always the best investmentis buying a home the best investment

Buying a home is often called the American dream. But for those who buy with a 3.5 percent down payment (or for those who can find it with no down payment at all), it can be a poor proposition.

A Harvard University study of home sales in Philadelphia, Boston, Denver, and Chicago found that sellers of low-priced homes lost money up to 40 percent of the time once transaction costs were included.

Economists at Wellesley College say whether home ownership is a good or bad investment often depends on the time of purchase. The odds of taking a loss are higher if the seller bought after home prices had already risen and if the buyer stayed in the home for only a few years.

Regular investing in stocks and bonds could be a better alternative. Returns on housing tend to be lower than returns on stocks. The risk of losing money is high when most of a family’s wealth is tied up in a single asset.

Some Factors to consider:

* When satisfactory rentals are not available, buying a family home could be the best option in any case.

* Owning a home can cost more than renting when house payments, taxes, insurance, and maintenance are considered.

* For those who don’t plan to stay in a home for seven years or more, the risk of losing money on a home sale is higher.

* Lower-income buyers may not benefit from the tax deduction for interest because their standard deduction is a better deal.

* Home-equity loans could mean little forced saving or equity building.

* Those who make a small down payment may pay higher mortgage interest rates and the cost of mortgage insurance.

Over time, buying a home can be a good wealth-building strategy. When housing prices rise, the owner benefits. But housing prices don’t rise very much in some areas, and many people don’t stay in a home long enough to build equity.

For more information, visit our website or call us at (772) 888-2885.
Our market reports are here!

Most owners still think a home is their best investment!

10.01.10 by

The idea of “home, sweet home,” is generally the same as it used to be.

A survey of homeowners by Bankrate.com shows that an amazing 90 percent of homeowners have no regrets about the purchase of their current home.

One reason: They like their homes. Though there may be lower values in many areas, and bargains on mortgage interest rates they didn’t get, they are still satisfied with their own place. home, sweet, home

The second reason: They like the fact that they add equity to their homes every month. In years to come, they will have saved enough through monthly payments to have their big investment free and clear.

Some financial experts say paying off a mortgage is like having an annuity. That is, instead of getting maybe $750 a month from the annuity, you don’t have to pay $750 a month on a mortgage.

Another survey, this one by lender Fannie Mae, indicates that 70 percent of consumers still see a home as one of the best investments to make.

Their survey shows that 64 percent of those interviewed also think this is a good time to buy a home.

Buyers today are also more knowledgeable about mortgages, according to Fannie Mae. According to their survey, only 8 percent didn’t know what type of mortgage they have, compared with 26 percent of mortgage holders surveyed just two years ago.

In her new book: Buy, Close, Move In! How to Navigate the New World of Real Estate, Safely and Profitably, and End Up with the Home of Your Dreams, author Ilyce Glink answers questions about how much home buyers can afford, how to buy an investment property and how to buy a foreclosed property from a bank.

Your real estate agent has the answers to these questions and many more, but sometimes it’s fun to sit down with a book and dream about a new home.

Glink claims that almost anybody today can make money by flipping, selling or refinancing a home even after a short period of ownership.

We won’t guarantee that but it’s worth thinking about, especially if you’re handy with a paint brush.

Presented for your consideration by

the Gabe Sanders real estate team