Rents Are on the Rise

Good Stuff I Learned this Week
Greensboro

Rents are on the rise in Greensboro, NC.  According to a report by CNBC,  in Greensboro-High Point, NC.  The rise in renters is more than 11%.  The number of homes for sale in Greensboro has decreased by 12% from a year ago, and the number of newly listed homes is down by 22%

According to the Triad BizJournal, the average vacancy rate for apartments in the Triad is 9 percent as of March. That’s down from last March when the rate was 12.6 percent.  In another BizJournal article,  I read that long-term mortgage rates have fallen to their lowest level in six weeks on more weak housing news.  A 30-year fixed-rate mortgage averaged an incredible 4.78 percent last week!

Home prices have double dipped nationwide. Well, actually, that’s something we have been aware of for weeks but we knew the national media would be a bit behind investors in confirming it.  According to CNBC, however, the announcement is now official.  Their article ends by stating; “The last time home prices fell at this rate, three years ago, they were then boosted by government stimulus in the form of a home buyer tax credit. A note of caution to those looking for a strong end to 2011: The last time no incentives were in place and distressed inventories were this high, home prices fell sharply.“  Ugh!  When will this end??

REO’s accounted for more than one third of all national real estate sales in the past year. National home prices have fallen 11.5 percent in the past nine months, a rate not seen since 2008.  Add short sales to the mix, where the bank allows the borrower to sell for less than the value of the mortgage, and you have some explanation for the second dip.

40 percent of the Chicago market is foreclosures, 43 percent in Cleveland and 51 percent in Minneapolis.

Broccoli takes about 48 days from planting to producing!

Our new website went live though it’s not complete yet!  AllPropertySolutions.com

“Many of life’s failures are people who did not realize how close they were to success when they gave up.” Thomas A. Edison

Things are tough out there and it looks like they will be for some time to come.  But always remember Thomas Edison and his 10,000 failed attempts at the lightbulb.  As long as you don’t give up, you haven’t failed!

 

 

 

Rent Prices are on the Rise – Should You Rent or Should You Own?

Reis Apartment Vacancy Rate

This great graph comes from Calculated Risk.  It is yet another confirmation that rental vacancy rates are plummeting so we can expect rental prices to be on the rise.

In Good Stuff I learned this Week, I wrote that roughly 10 million more individuals will be renting in the next 5 years as more people lose their homes and become renters.

So what does all this mean to you? As a landlord, your monthly rental amounts will increase; as a seller it will be more difficult to find a buyer as many people now have a fear of homeownership; as a buyer you should continue to find discounted prices because there are fewer of you out there; as a tenant well, sorry, but rents are going up.

So, should you buy or should you rent? 

Read more…

State of the Real Estate Economy

House

Facts and figures are coming at us from everywhere.  The important thing for you to know is what’s happening in your market, in your economy.  Those are the numbers that will really affect your property values, what you can pay when you buy and what you can expect when you sell.

That being said, here are some interesting recent figures from Standard and Poor’s and the US Census Bureau.

According to David M. Blitzer, chairman of the index committee at Standard & Poor’s, average home prices across the country are now at the levels they were in the fall of 2003.

“It still looks possible that the housing market might bounce along the bottom for the foreseeable future before showing any real improvement that will filter through to the rest of the economy,” Blitzer stated.  This statement, by the way, seems to be the one that I read most consistently, no matter what the source.  I, personally, believe it will be three more years before we see a measurable turn around in the real estate market.

Data just released by the US Census Bureau states that the U.S. homeownership rate dropped to 66.9 percent during the second quarter of this year, hitting its lowest mark in more than 10 years.

Read more…

Is it Better to Buy or to Rent?

Calculator

The New York Times Business Day put out a great calculator that I hope they never take down!

It shows costs accumulated for 6 years for both buying a home and renting a property.

What they determined (and I will argue with some of their conclusions in a minute) is that it is better to rent if you’re staying less than 6 years but better financially to buy if you plan to stay in the home longer than 6 years.

I do agree with their original premise that whether renting is better than buying depends upon many factors including how fast prices and rents rise and how long you stay in your home.

This is a very detailed calculator and I love it. A word of caution when you check it out because, as it’s set up, the default that you first see leaves out a few points I consider very important:

Read more…

How is Your Ecomony Holding Up?


Highlights from an interview by Meredith Whitney currently on CNBC:

* A double dip in housing is a certainty
* State economies are plunging and are $200 billion underwater, will lead to 2 million in state-level layoffs leading to a low-end impact; raising taxes at state level will impact the top-end
* Retail sales have been stronger only due to consumers not paying mortgages, retail sales have already topped as is
* Second quarter bank results will finally catch up with accelerated mortgage foreclosures; charge-offs and delinquencies in credit cards are better due to mortgage non-payment cash flow going to other obligations. This will soon top as well.
* Structural employment issues in the US won’t get better any time soon

The experts are saying that the economy is going to get worse. How’s your personal economy? What are you doing to prepare and care for your family?

Again, if you’ve paid attention to global economics, I hope you’ve taken care of your personal finances. I focus on my own micro economy because I’ve done what I can to set myself up to ride this economic wave.

What have you done to prepare?

National Landlord Tenant Guides

Scales of Justice

Thanks for viewing my site.  I put a lot of time and effort into getting important information that I really believe will be helpful for you.

Have you ever clicked on the “LINKS” tab located in the upper right hand corner of this page?  You’ll find a ton of great links.

The one I want to talk about here is the National Landlord Tenant Guides.  This is a FABULOUS site for landlord/tenant laws.

I just used it again, this time to see if tenants are allowed to simply call and tell me they’ll “be out by the weekend”.  That’s better, of course, than when they don’t say they’re leaving or when they simply don’t pay and we have to go through the eviction process, but I did wonder when it happened again recently.  I’m pretty lenient with anyone who has been a good tenant and a good payer, but I want to know my rights as the landlord.

So, I clicked the tab on the links section of my site and here’s what I read:

Abandonment of Lease:

Read more…

Equity – New Work for Equity Requirements

equity. new work-for-equity requirements

Well, we recently got caught in another regulation change on our way to closing. Are you aware that there are new work for equity requirements? Do you even know what that means?

We do a lot of lease to own contracts for selling. We buy homes and put tenants under lease to own because they’re unable to get traditional financing. We work on their credit and give work for equity credits to help them raise their needed down payment. That’s been working beautifully for years. As with everything else in the 2010 finance regulations, new requirements!

1.  For existing construction, which is generally our area: only repairs or improvements listed on the appraisal are eligible for work for equity. Any work or materials not included on the appraisal are not eligible.                                                         

OK, so here’s the problem. What appraisal? This means that, before I put a tenant in with work for equity opportunities, the lender wants me to get an appraiser to look at the work they will be doing and set a price for it. Ugh.

Then, the appraiser must look at it after the work is done to confirm the work and the value. Ugh.

Read more…

Carbon Monoxide Detectors – required after 1/1/10

North Carolina map

Because we have rental properties, this applies directly to us and our business.  Because so many of you also have rental properties, I’m posting this information I received from the City of Greensboro.

If you live or own outside of North Carolina, please be sure you keep track of the ordinances in your area.  Real estate related laws are changing at lightening speed!

CITY OF GREENSBORO

FOR IMMEDIATE RELEASE

New State Law Requires Carbon Monoxide Detectors in Rental Properties, Homes

GREENSBORO, NC (December 18, 2009) – Carbon monoxide is a silent killer. It’s odorless, colorless and tasteless, and according to the Centers for Disease Control and Prevention, more than 400 people in the US die from carbon monoxide poisoning each year.

Because of the dangers of this toxic gas, beginning January 1, 2010, a new state law will require carbon monoxide detectors to be installed in all existing rental units with fossil fuel appliances or fossil fuel fired heating systems.

Specifically, the law requires that:

  • Owners of existing rental units shall provide at least one carbon monoxide detector on each level of each unit.
  • The detectors can be electrically hardwired or battery-operated.
  • All detectors must be approved by a nationally recognized testing laboratory.

Also, beginning January 1, 2011, all new homes being constructed must have a carbon monoxide detector installed outside of each separate sleeping area in the immediate vicinity of the bedroom(s).

For more information about this new law, call the City of Greensboro’s Engineering & Inspections Department at 336-373-2155.

Vacant House Insurance

Vacant Home Insurance

Do you have a vacant property? Has it been vacant for more than 30 days? If so, you may not have insurance coverage.

Some insurance companies cover vacant properties for up to 90 days. Ask your agent about your vacancy coverage.

Vacant house insurance is generally more expensive than regular homeowners insurance for a number of obvious reasons. First, there’s no one living in the house to watch and protect it. Vacant properties tend to be a target for thieves, vandals and vagrants. And, the potential for water damage and infestations of animals or insects goes up.

If you can have someone check on the house daily,  the risk factor of insuring the home decreases significantly. Also, if you can maintain active security systems, your property is more protected and your insurance rates are lower.

Read more…

Owner Financed Homes Qualify for $8000 Tax Credit

$8000 tax credit

There’s a lot of action going on with the $8000 tax credit and we’re getting lots of questions concerning whether or not our Agreement for Deed qualifies.

“Yes”, is the answer! We close with an attorney and submit a HUD-1 with the buyer’s tax return so the return can be amended.

The following comes from the IRS web site:

Q. Can a taxpayer claim the first-time homebuyer credit if the purchase is pursuant to a seller financing arrangement (for example; a contract for deed, agreement for deed, installment land sale contract, or long-term land contract), and the seller retains legal title to secure the taxpayer’s payment obligations?

A. If the taxpayer obtains the “benefits and burdens” of ownership of a residence in a seller financing arrangement, then the taxpayer can claim the credit even though the seller retains legal title. Factors that indicate that a taxpayer has the benefits and burdens of ownership include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property. (New 7/2/09)

So, if you’re in a lease-to-own situation, you may be able to give the owner a nice downpayment that enables them to owner-finance and qualify you immediately for the $8000 tax credit.

*Start owning today!