Much of the west coast of the United States (and even as far north as Vancouver B.C.) is experiencing historically high rentals brought on by an drastic increase in demand.
While the true reason behind this is not known, these cities are attractive for their jobs, the climate, and for many cases their perceived liberal politics. Not to mention things like fantastic dining and drinking options.
Add in placement on multiple "best of" or "best for" lists such as this one from Movoto that has Portland, Seattle, San Francisco, San Diego, and Las Vegas in five of the ten spots, and it is easy to see why these cities are attracting so many new residents.
This of course has led to hundreds of arguments over "greedy landlords," who are raising the rent and pricing poor people out of the market.
Recently though, an article came to my attention that talks about the costs landlords are incurring. The author did a great job of lining out the true costs of buying, rehabbing, and renting out a property and how much rent per a unit has to be just to break even.
I encourage you to read it! The costs may be surprising!
Saturday, July 25, 2015
Sunday, June 21, 2015
Interest rates going up - buy now!!
If you haven't been following the real estate market at all, but have been toying with buying a home soon, now is the time to do so!
Rates are expected to go up very soon as the Federal finally raises the interest rate that was dropped to historic lows after the 2008 recession. Many economists feel that it is time to start raising it back up - slowly of course.
What does this mean?
Well, take the the average of a $300,000 home in my area. Under an FHA loan with 8% down ($24,000) you can expect to get an interest rate between 3.75% and 4.75% percent assuming good credit. This makes monthly payments between $1590.70 and $1752.25 a month (including average taxes, PMI, etc.)
If the rate goes up it can go up anywhere between .05% to 1.5%. Most people think it'll be the low end, but either way the rate will start rising slowly over the next few years. This means the same loan will now be 4.25% at the low and and 5.25% at the high end, giving us payments between $1670.25 and $1836.58 a month.
That is not a lot of difference per a month, but adds up over 15, 20, or 30 years. But lets assume mortgage rates go back to where they were in June 2008 at 6.32%. That same loan will cost $2024.46 a month! That is a minimum of $272.21 a month difference!!! Granted, we probably won't see those types of rates for at least a year, but it will be happening again soon.
A lot of my clients are seeing these rates and purchasing homes as investments. A few clients are flipping them yet (which I've always maintained is a BAD idea unless you really know what you're doing,) but a lot more are holding on to them as rental properties until the time is right to sell.
The bad news is that this is shrinking the market even further. A local home was on the market at $344,000. It sold SEVEN DAYS later at $380,000 due to people bidding on it because of it's location.. I have the feeling that if the listing agent had put it at $365,000 or even $370,000 that bidding would have hit $400,000 for a home that last sold in 1972 for $34,000 and has had very few updates since then.
So as you can see, now is the time to buy a home! Visit your local real estate office right now!
Rates are expected to go up very soon as the Federal finally raises the interest rate that was dropped to historic lows after the 2008 recession. Many economists feel that it is time to start raising it back up - slowly of course.
What does this mean?
Well, take the the average of a $300,000 home in my area. Under an FHA loan with 8% down ($24,000) you can expect to get an interest rate between 3.75% and 4.75% percent assuming good credit. This makes monthly payments between $1590.70 and $1752.25 a month (including average taxes, PMI, etc.)
If the rate goes up it can go up anywhere between .05% to 1.5%. Most people think it'll be the low end, but either way the rate will start rising slowly over the next few years. This means the same loan will now be 4.25% at the low and and 5.25% at the high end, giving us payments between $1670.25 and $1836.58 a month.
That is not a lot of difference per a month, but adds up over 15, 20, or 30 years. But lets assume mortgage rates go back to where they were in June 2008 at 6.32%. That same loan will cost $2024.46 a month! That is a minimum of $272.21 a month difference!!! Granted, we probably won't see those types of rates for at least a year, but it will be happening again soon.
A lot of my clients are seeing these rates and purchasing homes as investments. A few clients are flipping them yet (which I've always maintained is a BAD idea unless you really know what you're doing,) but a lot more are holding on to them as rental properties until the time is right to sell.
The bad news is that this is shrinking the market even further. A local home was on the market at $344,000. It sold SEVEN DAYS later at $380,000 due to people bidding on it because of it's location.. I have the feeling that if the listing agent had put it at $365,000 or even $370,000 that bidding would have hit $400,000 for a home that last sold in 1972 for $34,000 and has had very few updates since then.
So as you can see, now is the time to buy a home! Visit your local real estate office right now!
Sunday, February 1, 2015
Becoming a Real Estate Agent
Becoming a Real Estate Agent is really not that hard.
The question is "Why do you want to become a Real Estate Agent?"
Are you looking to get rich quick?
If so, stop right there. Yes it's possible to get rich, but like everything else it takes a lot of time. Just the education to get your license can be substantial depending on what state you live in. Then many Brokerages require additional education and training. Three years is not atypical.
And the real money is in Commercial Real Estate anyways, which means more education and more licenses. But the downside to that is that it can months to years to close a deal depending on how complex it is.
The nice thing about being a Real Estate Agent is that startup costs are actually pretty minimal. The basics can be done for about $2000 total. But do you want to join the National Association of Realtors so you can be a Realtor instead of just a real estate agent? If so, more money and more time.
It's not. I know a lot of people who are becoming real estate agents with this in mind. In theory it's a great idea. You get access to all the houses coming on the market. You can keep the commission on the house for yourself to add to the down payment.
But you need to know the area and the market. In my neighborhood there have been roughly ten properties on the market in the past two years. Of those, three have been purchased by flippers and remodeled. Two of them very nicely, with one being a nice triplex. The rest have all been on and off the market since then with little to no interest from buyers. Prices on these properties have fluctuated all over the board. Some are even at pre-recession price points!
All of the properties purchased by flippers are currently sitting empty. The Triplex has been empty for over six months now, not including the six months worth of renovations. Imagine the lost profits those flippers are looking at!! They still have to pay the mortgage.
On the face of it, my neighborhood is a great place to buy houses. It's got a great Walkability score of 85%. It's near a major city that is growing fast. Its full of older homes with established families. It has good schools.
But, it's bordered on two sides by major roads and a major freeway on the other all of which are bad traffic corridors during commuting times. This also means there is a lot of cut through traffic as commuters try to avoid the traffic. Bus routes have been slashed drastically over the past few years. Nearby restaurants are either low quality or VERY ethnic meaning very little walk by traffic actually enters them. Grocery stores are a bit far away for most people. Most properties still are still appraised higher then their actual value by the tax office.
All of these factors drastically affect the the sale of these properties, and is a reason why there have been few sales in the past couple of years.
First step is to take some classes. Contact your local real estate company and your local community colleges. Both usually have classes or access to resources that do provide real estate classes. Talk to a few different real estate agents and find out where they recommend classes.
Second step, usually while you're taking the classes, is to find a brokerage you're wanting to work with. Again, talk to agents and find out who seems to enjoy the companies they're working with.
Third, and by far the most important step, build your contacts list. Hand out cards to everyone. Expect to do a lot of leg work to build up that list. Make sure friends are referring you. And once you do land a client, treat them like gold. If they like you, they will recommend you to someone else.
And lastly, expect to be available on weekends and during weeknights to clients. This is when most of them have time to deal with buying properties, so you need to be ready for that also.
So in closing, Becoming a Real Estate Agent is not a get rich quick scheme. But it is a rewarding career that involves a lot of work, and a bit of luck!
The question is "Why do you want to become a Real Estate Agent?"
Are you looking to get rich quick?
If so, stop right there. Yes it's possible to get rich, but like everything else it takes a lot of time. Just the education to get your license can be substantial depending on what state you live in. Then many Brokerages require additional education and training. Three years is not atypical.
And the real money is in Commercial Real Estate anyways, which means more education and more licenses. But the downside to that is that it can months to years to close a deal depending on how complex it is.
The nice thing about being a Real Estate Agent is that startup costs are actually pretty minimal. The basics can be done for about $2000 total. But do you want to join the National Association of Realtors so you can be a Realtor instead of just a real estate agent? If so, more money and more time.
Flipping
Based on all those reality TV Shows and the radio ads blaring all over the country, you'd think buying distressed houses, refurbishing them and selling them is easy.It's not. I know a lot of people who are becoming real estate agents with this in mind. In theory it's a great idea. You get access to all the houses coming on the market. You can keep the commission on the house for yourself to add to the down payment.
But you need to know the area and the market. In my neighborhood there have been roughly ten properties on the market in the past two years. Of those, three have been purchased by flippers and remodeled. Two of them very nicely, with one being a nice triplex. The rest have all been on and off the market since then with little to no interest from buyers. Prices on these properties have fluctuated all over the board. Some are even at pre-recession price points!
All of the properties purchased by flippers are currently sitting empty. The Triplex has been empty for over six months now, not including the six months worth of renovations. Imagine the lost profits those flippers are looking at!! They still have to pay the mortgage.
On the face of it, my neighborhood is a great place to buy houses. It's got a great Walkability score of 85%. It's near a major city that is growing fast. Its full of older homes with established families. It has good schools.
But, it's bordered on two sides by major roads and a major freeway on the other all of which are bad traffic corridors during commuting times. This also means there is a lot of cut through traffic as commuters try to avoid the traffic. Bus routes have been slashed drastically over the past few years. Nearby restaurants are either low quality or VERY ethnic meaning very little walk by traffic actually enters them. Grocery stores are a bit far away for most people. Most properties still are still appraised higher then their actual value by the tax office.
All of these factors drastically affect the the sale of these properties, and is a reason why there have been few sales in the past couple of years.
Ok, so how do I actually do it?
That being said, it's a fun job. Especially if you're a people person, are willing to make contacts anywhere you can, and are willing to live without a pay check for periods of time.First step is to take some classes. Contact your local real estate company and your local community colleges. Both usually have classes or access to resources that do provide real estate classes. Talk to a few different real estate agents and find out where they recommend classes.
Second step, usually while you're taking the classes, is to find a brokerage you're wanting to work with. Again, talk to agents and find out who seems to enjoy the companies they're working with.
Third, and by far the most important step, build your contacts list. Hand out cards to everyone. Expect to do a lot of leg work to build up that list. Make sure friends are referring you. And once you do land a client, treat them like gold. If they like you, they will recommend you to someone else.
And lastly, expect to be available on weekends and during weeknights to clients. This is when most of them have time to deal with buying properties, so you need to be ready for that also.
So in closing, Becoming a Real Estate Agent is not a get rich quick scheme. But it is a rewarding career that involves a lot of work, and a bit of luck!
Thursday, January 29, 2015
Cool Blogs to Follow
Cool Blogs to Follow
A list of current blogs that I follow on a regular basis.Travel
Adventurous KateNomadic Matt
Pacific Northwest Travel
Travel with Bender
The Expert Vagabond
Real Estate
A Student of the Real Estate GameCalculated Risk
Flipping Junkie
Flipping Smart
Music
A Music Blog, yea?Mr Weird and Wacky
NPR Music Blogs
History
Oregon School House ProjectAwesome Real Estate Tewantin Australia
Awesome Real Estate Tewantin Australia
Another odd request across my desk recently. A home in Tewantin Australia. It's a city of about 10,000 people on the Sunshine Coast, about an hour and 45 minute drive north of Brisbane. It's a suburb of Noosa.
"Why would you want to live there?" I asked myself. After looking at a map, I can easily see why.
- Golf
- Fishing
And scenery! Wow... some awesome scenery!
Photo from Salt Property Management
From Tourism Nootsa
Not to mention Great Sandy National Park, Conondale National Park, Toolara State Forest, Tewantin State Forest, and dozens of other nearby natural areas.
From Wikipedia: The name Tewantin is an anglicised version of the Aboriginal name for the area, dauwadhum, meaning place of dead logs.Tewantin was originally a timber town. In 1869, Tewantin was the river port for the Noosa area.
In 1871, Clarendon Stuart surveyed a town site for the Tewantin
settlement. Tewantin was a thriving small town with a reliance on the
gold, fishing and timber industries
Absolutely stunning location, I'm going to have to find a way to get out that way myself someday.
For some awesome Real Estate Tewantin - look here
Yes, it rains that much in the Pacific Northwest
One of the biggest questions I get from clients is "Does it really
rain that much in (Portland, Seattle, Lincoln City, Olympia, etc.) ?"
In my barely out of teen age years, a girl friend and I were visiting Disney World, specifically Epcot and the Around the World Showcase. Suddenly a rainstorm came in. Huge drops the size of quarters. Everyone started running for shelter. Restaurants and doorways were crowded with those trying to stay dry. Disney Cast Members started handing out cheap plastic ponchos to everyone who wanted one.
My girl friend, a true bred "Valley Girl," with, like, an accent, like and all that, from the heart of Los Angeles took one, but was amazed that I refused. Why should I take one? It was only water. And it was warm! That was more novel to me then the rain itself and I wated to revel in it! A Cast Member tried to foist one off on me anyways.
"Oregon," was my only word to him. He simply nodded his understanding before shuffling off to another hapless tourist.
"Does it really rain that much in Oregon?" my girl friend asked.
Yes it does. Even our first explorers complained about the amount of rain. In early tourism books it was expounded upon and alluded to as the reason for bountiful crops. There are jokes about the rain here. You're a true Native when you say 'The Mountain is out," (meaning it's visible through the clouds.) Other jokes include punchlines about moss growing on roads (true) and webbed feet. (not true. Mostly)
The rain in the Pacific Northwest is hard to explain to those who have not experienced it. Southern climates tend to get warm rains with big fat heavy drops that disappear after a few minutes. Other parts of the country get medium sized drops that might last for hours or days before the weather clears up a bit and the sun comes out to dry everything up. But the Pacific Northwest gets a fine cold mist with occassional bigger drops. There are times when it feels like the rain is coming in sideways. But it doesn't rain contiounsly for days at a time. Usually.
The real killer for many moving here is the perpetually grey skies that may occassionally allow a dim peek of the sun. If we're lucky, (and this winter has started out that way,) we'll get a few days of actual sunlight! The grey feels close to the ground and seems to always envelope you. Yards, sidewalks and streets can stay wet for hours or days after a rain storm. Mushrooms, slugs, moss, algae and slick and wet surfaces, and dogs shaking water out of their fur are all common hazards.
Seasonal Affective Disorder/Winter Depression definitely affects people here. In my unscientific experience people who move to the PNW are affected by it for at least the first two or three years. Some get over it. Others invest in SAD Therapy Lamps. And the sad truth is that a lot end up leaving, forever cursing the Pacific Northwest and happy that they were able to "get away from the rain."
The number of people I've heard trying to move here who say "Oh, I love the rain!" is the same number of people I hear a few months later saying "Oh, I HATE the rain!" once they've truely experienced it.
The follow up to this question is usually "Do I need raingear?" The answer is "Not really." Umbrellas, while useful, are a pain to carry and frequently get lost. I've been through at least two dozen. If you really need one, you can usually find them on the bus or in tourist heavy areas sitting on park benches. Or just go to your local stores' lost and found.
Most people wear a cloth hat of some sort, or just a lite jacket or sweat shirt with a hood. There is no need to purchase heavy duty rain gear unless you're going to be actively working out doors on a regular basis. Rain boots? Hah, I have a pair somewhere but I haven't seen them in years. I just wear a pair of plain old sneakers and avoid the deeper puddles.
So yes. It really does rain that much in the Pacific Northwest. But if you know what you're in for, it's easier to be prepared for it.
In my barely out of teen age years, a girl friend and I were visiting Disney World, specifically Epcot and the Around the World Showcase. Suddenly a rainstorm came in. Huge drops the size of quarters. Everyone started running for shelter. Restaurants and doorways were crowded with those trying to stay dry. Disney Cast Members started handing out cheap plastic ponchos to everyone who wanted one.
My girl friend, a true bred "Valley Girl," with, like, an accent, like and all that, from the heart of Los Angeles took one, but was amazed that I refused. Why should I take one? It was only water. And it was warm! That was more novel to me then the rain itself and I wated to revel in it! A Cast Member tried to foist one off on me anyways.
"Oregon," was my only word to him. He simply nodded his understanding before shuffling off to another hapless tourist.
"Does it really rain that much in Oregon?" my girl friend asked.
Yes it does. Even our first explorers complained about the amount of rain. In early tourism books it was expounded upon and alluded to as the reason for bountiful crops. There are jokes about the rain here. You're a true Native when you say 'The Mountain is out," (meaning it's visible through the clouds.) Other jokes include punchlines about moss growing on roads (true) and webbed feet. (not true. Mostly)
The Rain
The rain in the Pacific Northwest is hard to explain to those who have not experienced it. Southern climates tend to get warm rains with big fat heavy drops that disappear after a few minutes. Other parts of the country get medium sized drops that might last for hours or days before the weather clears up a bit and the sun comes out to dry everything up. But the Pacific Northwest gets a fine cold mist with occassional bigger drops. There are times when it feels like the rain is coming in sideways. But it doesn't rain contiounsly for days at a time. Usually.
The real killer for many moving here is the perpetually grey skies that may occassionally allow a dim peek of the sun. If we're lucky, (and this winter has started out that way,) we'll get a few days of actual sunlight! The grey feels close to the ground and seems to always envelope you. Yards, sidewalks and streets can stay wet for hours or days after a rain storm. Mushrooms, slugs, moss, algae and slick and wet surfaces, and dogs shaking water out of their fur are all common hazards.
Seasonal Affective Disorder/Winter Depression definitely affects people here. In my unscientific experience people who move to the PNW are affected by it for at least the first two or three years. Some get over it. Others invest in SAD Therapy Lamps. And the sad truth is that a lot end up leaving, forever cursing the Pacific Northwest and happy that they were able to "get away from the rain."
The number of people I've heard trying to move here who say "Oh, I love the rain!" is the same number of people I hear a few months later saying "Oh, I HATE the rain!" once they've truely experienced it.
Rain Gear
The follow up to this question is usually "Do I need raingear?" The answer is "Not really." Umbrellas, while useful, are a pain to carry and frequently get lost. I've been through at least two dozen. If you really need one, you can usually find them on the bus or in tourist heavy areas sitting on park benches. Or just go to your local stores' lost and found.
Most people wear a cloth hat of some sort, or just a lite jacket or sweat shirt with a hood. There is no need to purchase heavy duty rain gear unless you're going to be actively working out doors on a regular basis. Rain boots? Hah, I have a pair somewhere but I haven't seen them in years. I just wear a pair of plain old sneakers and avoid the deeper puddles.
So yes. It really does rain that much in the Pacific Northwest. But if you know what you're in for, it's easier to be prepared for it.
Tuesday, January 27, 2015
Best Real Estate Agent Websites
Best Real Estate Agent Websites
Actually, I don't have a list of Best Real Estate Agent Websites. But what I can do is tell you how to find a good, local, real estate agent.
Google is your friend!! Search for "Real Estate Agent" and the city you want to purchase in. Google will handily come up with a list of agents in the area with a cool little map of where they're located.
Even better, Google also includes "Google Reviews" for agents. Note that this is not always complete and can be very inaccurate. So I also rely on Yelp to find agents in the area. Usually there are reviews there.
And if all else fails, I'll find listing of recently sold homes and contact the buyers to ask who they used and how the experience went.
Yes, it takes some leg work to find the best Real Estate Agent. But in the long run it's well worth it! This person will be helping to make your dreams come true and likely be helping to to make the most expensive purchase of your life.
Actually, I don't have a list of Best Real Estate Agent Websites. But what I can do is tell you how to find a good, local, real estate agent.
Google is your friend!! Search for "Real Estate Agent" and the city you want to purchase in. Google will handily come up with a list of agents in the area with a cool little map of where they're located.
Even better, Google also includes "Google Reviews" for agents. Note that this is not always complete and can be very inaccurate. So I also rely on Yelp to find agents in the area. Usually there are reviews there.
And if all else fails, I'll find listing of recently sold homes and contact the buyers to ask who they used and how the experience went.
Yes, it takes some leg work to find the best Real Estate Agent. But in the long run it's well worth it! This person will be helping to make your dreams come true and likely be helping to to make the most expensive purchase of your life.
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