Flipping Houses – Pros and Cons


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Flipping Houses – Pros and Cons


Flipping Houses – Pros and Cons

Flipping houses has been around as long as real estate has been around.  But lately, it has become a field all unto its own.  There are seminars you can attend that will tell you how to make millions of dollars flipping houses.  And while it is certainly true that money can be made by buying, fixing up houses, and then selling them for a profit, I caution potential “house flippers” that it is not quite as simply as many of the seminars would have you believe.

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I receive an unbelievable amount of emails advertising how to make money flipping houses.  There are TV shows about it, magazines and yes, blogs.  I received one this week for a two hour FREE seminar on how to make money flipping houses.  A little research into the organization and you will learn that the two hour FREE seminar is simply a sales pitch to sign up for their day long seminar for $197 on how to make money flipping houses.  The day long seminar tells you that if your really want to make money you need to sign up for their mentor program where a member of their staff will mentor you personally on the art of flipping houses to make millions!!  The fee for the mentor program is $40,000.  The only money that is being made is by signing people up for these programs.

All to often, people believe that if you buy a house and put some cosmetic touches into the property someone will buy it.  All to often that is true.  I read an article a while back that stated that if you put granite countertops and stainless steel appliances into a home it will sell for a profit.  But there is much more to that when flipping a home.  All to often, house flippers (if there is such a word) simply do cosmetic remodeling and ignore serious, structural problems with the houses.

If you are thinking of flipping houses, my advice is to commit to quality building for each structure.  More than any countertops or appliances is the reputation that you will develop by flipping houses for a profit.  If you seriously want to make money buying and selling houses, it is imperative that you commit to the long term reputation.  If you are handy and qualified, and can do the work yourself, all the better.  If not, make sure you connect with a contractor who has the same mindset of building your reputation, not just a house.

If you are looking to buy a house that has been flipped, I strongly urge you to have a qualified home inspection done on the property.  It is important to look past the cosmetic touches that have been done to make the house look pretty.

Whether you are looking to buy a house to flip or one to call home, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

For up-to-date real estate information and listings, visit http://www.RolandLow.REALTOR.

Roland

Happy New Year ! – Now it’s tax time…


Happy New Year ! – Now it’s tax time…

In a couple of days we will be celebrating a new year – 2016. That means that tax time is right around the corner. Homeownership has always had the benefit of building wealth in the long term and quite often in the short term also.

1. Homeownership builds wealth. Homeownership does build wealth over time and is quite often the major financial wealth of a family. In the last few years, however, the turbulence in the housing market has led some to believe that homeownership is a risk – and it is to some degree, but in the long run it is a very low risk in my opinion.

2. You build equity every month. When you make mortgage payments, as opposed to rent, you build equity in your home every month. This increases your net worth and over a period of time can be substantial. This increase in equity does not include the increase in wealth that is included by the price of your home increasing in value – that adds to your net worth.

3. Tax Benefits are substantial. The tax code allows homeowners to deduct the mortgage interest from their tax obligations. For many people this is a huge deduction for a good portion of the life of their mortgage.

In addition, the points you paid when you first purchased your home are deductible. It does not matter if you paid the points or the seller paid the points, they are the homeowners to deduct. Points may also be referred to as origination fees and may be 1% or more of the mortgage.

Your property taxes on your primary residence and your vacation home are also fully deductible.

4. Home Equity Lines are also Tax Deductions. In addition to your mortgage interest, you can also deduct the interest you pay on a home equity loan or line of credit. This is substantial if you have credit card debt that you want to pay down.

5. Home Owners get a capital gains exclusion. If you live in your home for more than two years, you qualify for a capital gains exclusion when you sell your home. If you are single, you can exclude $250,000 if single or $500,000 if married from capital gains. In the last few years the housing market has taken a beating and many people may not visualize realizing that much gain in the sale of their house, but in time those days will return and that exclusion will be a big plus.

6. A mortgage is like a forced savings plan. Many people find it difficult to put money in a savings plan. But paying down a mortgage is just that, while paying for your place to live, you are increasing your net worth each month. In time there is a large nest egg that you can rely on if needed.

7. Long term, Buying is cheaper than renting.  In the first few years after buying, it may be cheaper to rent, but over time, as rent increases, your mortgage payments on a fixed mortgage will stay relatively stable.  In addition, with homeownership you have the tax deductions you do not have with renting.

Whether your buying your first house or your tenth, buying a home is a complicated process. If you are thinking of buying or selling, talk to a professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

For up-to-date real estate information visit http://www.RolandLow.REALTOR.

Roland

Listing Your Home Over the Holidays


Listing Your Home Over the Holidays

Listing your home for sale is difficult any time of the year, but listing your home over the holidays, or winter in general, can be even more of a challenge.  Here are a few tips to help with listing your home this time of the year.

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  1. Its important to keep your house warm – not hot – but comfortable.  If you leave to go to work for the day, I suggest that your maintain a temperature in your house that would be comfortable if you were there.  If not, you run the risk that potential clients will remember the cold house, not what you want them to remember.  Of course, the same holds true in the summer time.  Maintain a temperature that is comfortable to prospective clients.
  2. Be sure you home is well lighted.  My approach is every light in every room every time.  Walking through a strange house is uncomfortable to begin with, but walking into rooms, down hallways or downstairs that are dark makes it even more uncomfortable.
  3. If you live in an area that is prone to snow, make sure your walkways and driveways are free of snow and ice.  If you’re going to be out of town for a while make arrangements with a neighbor or company to keep your walkways and driveways clear.  Again, this holds true throughout the year.  I have shown houses where the sellers have parked a car blocking the sidewalk to the front door.  The sellers may not use the front door but an agent showing your property will undoubtedly take clients to the front door.
  4. If your agent has placed a sign in the front yard with fliers make sure that there is a pathway to the flier box so buyers can get to the fliers.  All too often with the first snowfall a plow will come through and deposit an unsurmountable pile of snow in front of the fliers.  One other thing on the subject of fliers: In the day and age of the Internet, fliers are used less and less often.  If there is a flier box, be sure that there are fliers available.
  5. If you list your home over the holidays, try to avoid having pictures taken with your Christmas decorations up.  As delightful as they may look, the day after Christmas the photos represent “old” pictures and can be a deterrent.  In addition, the idea of showing your home is to allow potential buyers to visualize themselves in your home – your personal Christmas decorations can detract from that experience.
  6. My greatest pet peeve is the scents I experience when showing a home.  First and foremost the home MUST smell clean.  To me, clean basically means free from any odors.  All too often sellers will overwhelm their home with various scents equating that to “clean”.  My suggestion is avoid any odors as much as possible.  The rule of thumb is that what one person finds pleasant, another person may find offensive.  I for one have an awful time with scented candles.

One last thing I would like to point out.  Selling your home in the winter or over the holidays may be more of a challenge, but its important to remember that there are typically fewer homes for sale at this time.  There are still people who are looking to buy and it may make it easier to sell the fewer homes that are on the market.

If you are thinking of buying or selling talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Feds Raise Interest Rates


Feds Raise Interest Rates

This afternoon, the Federal Reserve raised the interest rate .25%.  This is not an unexpected event.  The FED has been dropping subtle (and not so subtle) hints about raising the rates for several months.  The last time the Fed raised interest rates was in 2006.

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The good news is that the Feds are raising the rates at this time because they are confident the economy is healthy enough to begin increasing the rate to market rates.  This is not a large increase and according to Janet Yellen, Fed Chief any further increases will be in gradual increases.  She also stated that the rates will remain low “for some time.”

New home buyers will face an increase in their mortgage payments although the increases will be rather minor.  A .25% increase in mortgage interest will increase your payment  approximately $2.50 for every $1,000.

Mortgage interest rates are only one factor to purchasing a home.  If you are thinking of buying or selling, talk to a REALTOR® who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Home Inspections – 101


Home Inspections – 101

When buying a home, especially your first home, you will often times feel like leaving your check book at the front door with a bunch of blank checks already signed ready for the next person who needs you to pay for something – it would just make things quicker!

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Having a home inspection may be one of those things that home buyers add to the list of things to pay for.  But having a home inspection by a qualified home inspector is one of those steps you do not want to forgo.  There are several reasons why a home inspection by a qualified home inspector is so important.

  1. Be sure to select a home inspector who has had training in the inspection of homes.  A construction contractor who has spent x number of years constructing homes may or may not have the experience to objectively inspect homes.  Your REALTOR® will be able to help you find a qualified inspector or you can search for a qualified inspector.  Don’t be afraid to ask about the training they have had; the cost of the inspection, what all they will examine and what type of report they will provide.  I also suggest that you ask upfront that if there are repairs that need to be made, will the home inspector come back out to re-inspect and the cost of any re-inspection.
  2. Any inspection of a home will identify numerous issues.  These issues may range from a loose face plate to a structural issue in the basement.  Even new homes will have a list of items identified from a home inspection.  The key is to identify those issues that relate to the safety or integrity of the property.
  3. The cost of a home inspection is relatively inexpensive.  I know at the time of buying a house, homebuyers are dishing out a lot of money, but compared to the size of the investment and the headaches that it can prevent, it is well worth getting a home inspection.
  4. In addition to identifying items that may not be working, a home inspection should also be able to give you somewhat of an idea of what expenses you will be facing in the future.  If your roof is 20 years old, a home inspector may report that there are no indications of leaks, but realistically speaking you may be looking at replacing roof in the near future.  Armed with this kind of information you can start budgeting for a new roof or a heating unit as the need may be.  That being said, home inspectors do not have a crystal ball and can not firmly predict when something will go haywire.
  5. Depending on the contractor that you hire, they may or may not check for any type of pest infestation of the house.  Some mortgage companies require a pest inspection, specifically terminate inspection.  Depending on the age of the property, a pest/inspect/termite inspection is a good idea.
  6. Radon is a colorless, orderless and tasteless gas that is more prevalent in some parts of the country than others.  Over exposure to radon can cause serious medical problems including lung cancer if exposed to high enough concentrations.  Most home inspection companies do not include a radon test with their regular inspection, but may offer it as an add-on.  I would suggest that you check with your local health department to determine if radon is prevalent in your area.  Maryland has a high level of Radon.  I would strongly suggest that homes be tested for radon.
  7. Depending on what the home inspection uncovers, buyers can always go back and negotiate the cost of the repairs.  I had a seller-client one time that the buyer’s inspection identified some face plates that the screws had loosened slightly.  The buyer listed those in the repairs he wanted done.  I have had other clients who shrugged their shoulders at items I considered major repairs.  Its all negotiable.
  8. If the repairs are more extensive, and the market does not lend itself to multiple offers, the buyers may want to try to renegotiate the price of the home.  Although the buyers should make sure that they have the option to walk away from an unacceptable home inspection before trying to walk away, it can be a negotiating strategy.
  9. One of the biggest hurdles that are faced during a real estate transaction is overcoming the home inspection.  One of the benefits of the home inspection is that it may provide an “out” for someone who has cold feet and does not want to go through with the transaction.  Although this is rare, it does happen and can be a safety net.
  10. The last item I would mention is that a home inspection can offer peace of mind for a large purchase you are about to make.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Now May Be The Time To Buy Real Estate – Really!


Now May Be The Time To Buy Real Estate – Really!

Ask any sales person and they will tell you, ‘Now is the time to buy’ – whatever it is they are selling. Whether its a new car, a suit or even real estate, sales people are there to sell their product.image

Real estate is no exception, and there are a lot of factors and considerations that come into play when buying or selling real estate. There are, however, strong indicators that now really might be a good time to buy your next home.

For the last few years mortgage interest rates have been at historical lows with 30 year fixed rates hovering around 4.0% to slightly below. Of course there are many factors that are considered when obtaining a mortgage which may result in different results. But these low interest rates have enabled many people to buy a home. It is only a matter of time before those cyclical rates begin to trend upward again. The Fed is indicating that those rates will most likely be trending upward in the near future.

There is another factor that will make buying a home sound financial advice – especially first time home buyers – and that is the dramatic increase in renting. A recent study by Harvard’s Joint Center for Housing Studies indicated that nearly half of all renters are struggling to pay their monthly rental payments. To make matters worse, rent costs are skyrocketing compared to wages. From 2001 to 2014 inflation-adjusted rents climbed 7% while the average household income fell 9%. This not only makes it difficult for renters to continue with their rent payments, but makes it more difficult to save for the cost of buying a home.

One of the major perceptions of buying a home is that buyers believe that they need 20% down to buy a house. That is simply not true. Ideally, people will be better off by putting 20% down, but mostly because they can avoid the PMI insurance and obtain a slightly lower interest rate. However, their overall financial strength will more likely be better with owning a house than not owning one.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision. As always, if I can help with any of your real estate needs, please feel free to text me at 301-712-8808 or email me at RolandLow1@gmail.com

Roland