by The KCM Crew on December 19, 2013
There has been a lot written about how buying a home is less expensive than renting one in most parts of the country. Rents are skyrocketing and homes are still at great prices. These two situations are also causing some sellers to consider renting their home instead of selling it. After all, a homeowner can get great rental income now and perhaps wait until house values increase even further before selling.
This logic makes sense in some cases. We at KCM believe strongly that residential real estate is a great investment right now. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for.
Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family.
10 Questions to Ask BEFORE Renting Your Home
1.) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back to-school time when families with children have extra expenses).
2.) Because of the economy, many homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?
3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?
4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
5.) Will you allow pets? Cats? Dogs? How big a dog?
6.) How will you actually collect the rent? By mail? In person?
7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?
8.) Do you have a list of craftspeople readily available to handle these repairs?
9.) How often will you do a physical inspection of the property?
10.) Will you alert your current neighbors that you are renting the house?
Again, renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.
Why You Should Sell Your House Now
by The KCM Crew on December15, 2013
Many now realize that it is a great time to buy a home. It might also be an opportune time to sell your house. Here are the five reasons we believe now may be a perfect time to put your house on the market.
1. Demand Is High
The most recent Existing Home Sales Reports by the National Association of Realtors (NAR) show a double digit percent increase in sales year-over year; sales have remained above last year’s levels for over 25 months. There are buyers out there right now and they are serious about purchasing.
2. Supply Is Beginning to Increase
Total housing inventory is again approaching historic norms of a 5 month supply compared with 4.3 months in January. Many expect inventory to continue to rise as 3.2 million homeowners escaped the shackles of negative equity in the last 12 months and an additional 1.9 million are expected to enter positive equity in the next 12 months. Selling now while demand is high and before supply increases may garner you your best price.
3. New Construction Is Coming Back
Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.
4. Interest Rates Will Again Rise
Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by this time next year.
Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
5. It’s Time to Move On with Your Life
Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?
You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.
San Diego is a city like no other! Details coming…