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Category Archives: home-ownership

3 Things to Consider Before Registering Your Home on a Short-Term Rental Site

Once upon a time, the idea of renting out your home to a stranger while you left for vacation was considered quite odd.

Today, renting a room in your house (or the entire house) to unknown travelers isn’t an outlandish concept, thanks in part to online services such as Airbnb, FlipKey and VRBO. Short-term rentals provide an income opportunity for owners and a unique way for visitors to experience a city. What better way to get the local experience than staying with – or renting from – locals?

If you think you’re up to being a host of a short-term rental, here are three things to keep in mind.

1. Legality

The rise in popularity of Airbnb and other sites hasn’t been without its controversy. There are concerns that short-term rentals threaten the jobs of hotel workers, and that a short-term rental doesn’t have to pass the same certifications and inspections of regular hotels.

Some cities have enacted restrictions against short-term rentals. You may need to register and get a permit or a license – or you may not be able to host at all. Check with your local government to make sure you understand the laws.

2. Taxes

You may not need to report the money earned from the short-term rental of your home if you meet both of these requirements:

1. You rent it out for fewer than 14 days a year AND

2. You live in it for more than 14 days or more than 10 percent of the total days you rent it out during the year (this determines if the property is seen as a residence or a rental property by the IRS).

Still unclear about the taxes on your short-term rental? TurboTax provides some more information, or you may want to consult with a tax professional.

3. Additional Costs

Renting out your home could mean an extra insurance bill. Check with your insurance agent to learn what your current policy covers regarding short-term renters. They may recommend increasing coverage. Airbnb does provide free primary liability coverage for up to $1,000,000 per occurrence, and many of the other sites have partnerships that make it easy to take out additional coverage, if needed.

In addition to insurance, you’ll have to pay a percentage of the rental income to the website: Airbnb and FlipKey both charge a 3% host service fee, VRBO has an option to pay-per-booking or an annual subscription fee.

Start your first home buying experience off the right way by finding a real estate agent who works for you at remaxallpro.com.

 

A Plan for First-Time Homebuyers: Go from Prepared to Purchase

 

If you’re a first-time homebuyer who has succeeded in saving enough for a down payment (remember, you don’t necessarily need 20%) on your very first home – congratulations! You’ve tackled one of the hardest parts of the home buying journey with success, but you haven’t crossed the finish line to homeownership just yet. Now it’s time for the follow-up work that can take you from prepared to purchase.

Credit Check

Do you know your credit score? If not, it’s time to request a copy of your credit report from TransUnion, Equifax and Experian to find out your score and what it means to your future financial picture. Start working to resolve any errors or outstanding debts before it’s time to make an offer on a house. It’s important to determine your DTI, or debt-to-income ratio, by reviewing assets and debts. The higher your DTI percentage, the riskier the investment is for lenders – which can lead to higher interest rates.

Prepare the Paperwork

Begin gathering all necessary documents now to make the process run smoothly. Depending on your situation, this may include income documentation, proof of assets, personal documents, pay stubs, tax returns, bank statements, IDs, previous addresses and Social Security numbers. Study the documents as you collect them to familiarize yourself with your financial situation, motivate your home search and keep your debt-to-income ratio low.

Get Pre-Qualified or Pre-Approved

After you find the right agent, the next step is to make an appointment with a loan originator (find one near you). A loan originator can help you with pre-qualification or pre-approval. Keep in mind that many homeowners borrow less than the maximum to account for other expenses and opt into lower monthly payments. Revisit your financials with these new numbers in mind and, if necessary, make any final edits to your budget and payment plan.

Start your first home buying experience off the right way by finding a real estate agent who works for you at remaxallpro.com.

Millennial Monopoly: 4 Real Estate Trends In 2019

What’s behind the rise in homeownership? Growing interest from millennials. Here are the 2019 millennial real estate trends you need to know about this year.Empowered with Knowledge
First-time, homebuying millennials are much more informed when it comes to renovations, repairs and real estate process than other generations. Growing up during the development of the internet has made them very tech and research savvy and able to find ways to access important information such as listings, neighborhood reports, HGTV home renovation videos and other types of industry information on their own. In 2019, they will rely on real estate agents to share information that they can’t find online such as neighborhood developments, local market forecasts, local housing regulations and more.

Buying homes – despite rising rates
Millennials continue to make up the largest segment of buyers, accounting for 45 percent of mortgages, compared to 17 percent of baby boomers and 37 percent of Generation Xers. While first-time buyers will struggle, older millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up most of the millennials who close in 2019. As their housing needs adjust over time, millennials are on track to make up the largest share of homebuyers for the next decade.

Sweat Equity
Many millennials grew up watching renovations and makeovers on HGTV, which means many of them are ready to invest sweat equity in their new home. Millennial homebuyers, overall, are more aware of the costs, work and implications of renovations than the previous generations. This is good news as interest rates rise and buyers should be prepared to settle for homes in need of TLC.

New Buying Strategies
Social media continues to impact millennial homebuying habits. They rely on online reviews to make purchasing decisions, and a strong online reputation for real estate professionals is a must in catering to this market. In fact, a recent study showed that millennials would prefer to buy a house from a real estate agent influencer over a traditional real estate agent. Showcasing a home on social media, especially on visual-heavy platforms like Instagram, is essential for appealing to millennial buyers.

Research your way to the right real estate agent who can make all the difference. RE/MAX agents are more recommended because they recommend what’s right for you and your future. Find an agent today at remaxallpro.com.

Good News for Buyers and Sellers This Spring Selling Season

Whether you’re planning on buying or selling a home, there’s good news to report as the spring selling season approaches. Slowing sales and growing inventories benefit buyers while record prices benefit sellers, according to data in this February’s RE/MAX National Housing Report.“Trends of five months or more often indicate significant shifts, and the year-over-year trends in declining sales and rising inventory have both reached that length now,” said RE/MAX CEO Adam Contos. “The big picture supports an ongoing return to more balanced conditions, which is beneficial to buyers and sellers.”

Inventory Bounces Back
Inventory grew 5.8 percent over February of 2018, marking the fifth consecutive month of growth following a decade-long trend of shrinking inventory. Of the 54 metro areas surveyed in February 2019, the overall average number of home sales is down 4.2 percent compared to last February.

Rising Median Sales Price
Bucking downward trends, the Median Sales Price increased to $240,000, a year-over-year gain of 5.5 percent and a February record in the 10-year history of the report. Four metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Boise, Idaho; Cincinnati, Ohio; and Wilmington/Dover, Delaware.

Home Sales Down
Home sales in the 54-market report have declined year-over-year for seven consecutive months, though February’s downturn of 4.2 percent was the smallest since the 1.1 percent drop that started the streak in August 2018. Leading the month-over-month sales percentage increase were Houston, Texas; Birmingham, Alabama; and Raleigh-Durham, North Carolina.

“The next few months will determine whether the shift brings a wave of buyers into the market for the spring selling season,” added Contos. “Members of our network are reporting high local demand along with a need for even more inventory. The optimism for a solid spring exists — and a more balanced market certainly contributes to it.”

Whether you’re a buyer or a seller, find an experienced, top-producing agent on remaxallpro.com.

4 New Year’s Resolutions to Help You from Prep to Purchase

If you’re on the hunt for a new home in the new year you don’t have to wait for the ball to drop – you can start acting on your new year resolutions now to prep for one of the biggest purchases of your life! RE/MAX has put together some top tips if your goal for 2019 is to become a homeowner.

  1. Pinch Those Pennies
    Saving for a down payment on a new home is one of the most important parts of the home buying process. It’s important to plan out your savings now if your goal is to purchase a new home in the future. The median sales price of a home in the U.S. is now $235,000 – you may need at least 20 percent as a down payment or close to $50,000.
  2. Check Your Credit
    Make sure there are no surprises on your credit report. One of the first things your mortgage lender will do is check your credit to determine your debt-to-income ratio to determine how much of a mortgage loan you qualify for. According to credit-rating company Equifax, a score of 690 or higher is considered “good.” If your credit needs clean-up, start working on it now so that your score is up to par before you start the pre-qualification process.
  3. Lock in Your Pre-Approval
    Sitting down with a mortgage lender now can save you time later. Securing pre-approval on a mortgage will usually lock in an interest rate for 90 days and allow you to focus on homes that are in your price range. 
  4. Hold Off Hefty Purchases
    Curb any shopping sprees you may have planned. Big purchases like a new car or a family vacation before buying a house can affect your debt-to-income ratio and can affect how much money a lender is willing to lend to you.

Working with the right real estate agent who has experience in your local area can make all the difference. RE/MAX agents are more recommended because they recommend what’s right for you – and your kids. Find an agent today at remaxallpro.com.

Should You Sell Your Home Or Rent It Out?

Sometimes, you decide exactly when you’d like to move. Other times, life swoops in and decides for you. Your company might transfer you, a family emergency might require relocation, or you might finally find the love of your life—three states over. Should you sell your house or hang on to it as a rental property? Here are 5 important considerations.

1. Are you gone for good?

Or do you need an exit strategy? If there’s a good chance you’ll return to your current home in a year or two, the money and time you spend selling your home and then buying a new one might make renting it out a smarter option.

2. How’s the rental market?

Look at online rental sites to see what properties in your neighborhood and in similar condition to yours are renting for. Are there a lot of listings? Think about what you might charge and what you might have to do to bring your property up to the market standard. You can then get an idea whether your potential rental income will cover your expenses.

3. Where’s the neighborhood heading?

A lot of factors feed into property values, from national trends to long-term construction plans. An agent can help you understand your property’s potential for appreciation and whether or not it might pay to hang onto it.

4. How much is the hassle of being a landlord worth?

Unless you pay for a property management company (about 10 percent of the rental income), dealing with issues, emergencies and uncooperative renters (sometimes all at once, often in the middle of the night) can be trying. Ask yourself if it’s worth the stress.

5. What are the tax implications?

Each situation is unique, so before you decide to rent out your home consider talking with a tax professional. They can help you figure out how much you can expect to pay in taxes on the rental income.

If you’re ready to sell, a RE/MAX All-Pro agent is ready to help. Find an experienced professional to work with – visit RemaxAllPro.com.

6 Decisions to Make Before Your Home Search

 

In the market for a new home but have no idea where to start? There are several decisions you should begin to make before you even start your home search. By asking yourself the right questions, you can quickly pinpoint what you want – and can afford – in your next home.

1. What’s your budget? See how your finances stand up to the 28/36 rule, which lenders use to see what you can afford to pay each month. A financial adviser or your real estate agent also can help you crunch the numbers. Going through the mortgage pre-approval process lets you know how much lenders will allow you to borrow – plus it helps you show sellers that you have the funds to backup your offer.

2. What do you need in your new home? How many bedrooms or bathrooms do you need? What about a large kitchen, a home office or a playroom for the kids? How many cars need covered parking? It’s critically important to ensure the home you select meets your family and lifestyle needs.

3. Do you want a condo or single-family home? Condos come with much less maintenance. You typically won’t be shoveling snow in the winter or replacing the roof, but you’ll likely pay monthly association fees to cover services and repairs in the community. Houses, on the other hand, come with more privacy and freedom to customize. They also come with full responsibility for maintenance.

4. How do you feel about living under covenants? Depending on where you buy, you may have to pay homeowner association (HOA) fees in addition to your mortgage. There are benefits to HOAs, such as maintenance, community centers, and maybe even a pool or gym. But you also could be faced with more restrictive rules about the look of the outside of your home, down to the color of your front door, types of window coverings, and whether you can plant flowers in your yard.

5. What school district do you want to be near? Even if you don’t have children in the house, local schools will affect your property value. Prospective homebuyers tend to search with education in mind. Do your research on the schools in the areas you’d like to live in.

6. Should the home be move-in ready? Ask yourself how much elbow grease you’re willing to put into a home – or how much you’ll pay someone else to do the work. Fixer-upper homes can be great after the work is done, but you’ll want to figure out your renovation budget before you start your home search. A203k home-renovation loan might be the right resource for you. If you’re not ready for the extra financial commitment of rehabbing a home, or you can’t or don’t want to wait for remodeling projects to finish up, then a home that’s move-in ready might be right for you.

After considering all these factors, you’ll be ready to start the home search with a clearer picture of where you’re headed. When that time comes, let a RE/MAX agent guide you all the way there.

Five Things to Know: Millennials and Home Buying

Millennials are now major players in the home buying arena, according to the recent Home Buyer and Generational Trends report released by the National Association of Realtors:

1. Millennials accounted for 35% of buyers in 2015. This is up from 32% in 2014, and is the third year in a row Millennials have composed the largest group of recent buyers.

2. In 2015, the number of Millennials purchasing in an urban or central city area decreased to 17% from 21% in 2014. Suburbia-phobe? Perhaps not.

3. They have help getting their foot in the door. Twenty-three percent of Millennials used a financial gift for (or toward) their down payment.

4. An online search was the first step for 56% of Millennials, whether they were looking for properties or searching for information about the home buying process.

5. Almost 90% worked with a Realtor to buy their home.

Are you a Millennial looking for your next home? Work with an agent prepared for the changing marketplace. Find one here.

6 Reasons Why Autumn & Early Winter Might Just Be the Best Time to Purchase a Home

5 Tips for a Safer Backyard

Every year in the U.S., more than 50,000 kids are rushed to the emergency room for home playground equipment-related injuries, according to the U.S. Consumer Product Safety Commission. To keep kids safe, remember the following tips when it comes to creating and maintaining play space in your yard.

1. Soften the fall
If you have a play set in your yard, consider upgrading the ground around and below it, as kids will inevitably be landing on it from a tall height or at high speeds. About 60 percent of all playground injuries are caused by falls to the ground, and a more shock-absorbent surface can reduce the risk of serious injury. Consider sand, wood chips, pea gravel or shredded rubber.

2. Keep a safety zone
If you install equipment like swings or a trampoline, be sure to place them a safe distance from fences, trees or your house in case kids accidentally (or not!) launch themselves in that direction.

3. Go with a pro
While it’s great to have friends or family members offer to help assemble and secure your backyard play equipment, it can pay to invest in professional installation. This will help ensure the fort doesn’t collapse during your kid’s birthday party or the jungle gym doesn’t go sailing the next time the wind kicks up.

4. Inspect your equipment regularly
Standing up against the weather – and kids – can take its toll, even on the highest quality play equipment. Check the hardware and wood to make sure bolts and screws remain secure and rot (or splinter-causing flaking) doesn’t begin.

5. Beware of lawn treatments
Know what’s in any lawn treatment to make sure it’s safe for kids and pets to roll around in.

Wondering how much value your backyard adds to your home’s potential sale price? An expert who knows your local market can help calculate what your land may add to the listing price. Find one here.