Monthly Archives: September 2016

Know More About Second Houses and Investment Properties

Second homes are a great choice whether you’re looking for a summer retreat or an investment property. There is a laundry list of considerations to think about before making such a huge investment, however. Make sure you’re informed about all your options before you buy.

A Smart Purchase No Matter What You Use It for
There are two reasons most homeowners buy a second home: as a vacation property or investment. Regardless of what you use your new house for, any second home can easily be both of the above. Real estate is one of the safest and most profitable long-term investments a person can make. And if you’re careful about where you purchase your new home, there’s no reason it can’t be a weekend getaway for you and a money making rental property as well!

Rent When You Are Away or Keep It To Yourself
A smart purchase in a desirable area means your new vacation home can double as a place to rent out to others when you’re away. By charging a reasonable rate to pre-screened, short term renters, you can easily make enough to pay for your new mortgage payments and even pocket a little bit extra on the side. Of course, not every homeowner wants to deal with the hassles of trusting their home to strangers. If that sounds like you, don’t fret. By being smart about where you buy and what you purchase, you’ll end up with a home that is attractive to both renters and future buyers. Either way, purchasing a second home is a win/win proposition.

A Few Things to Consider
Here are a few ideas to consider as you begin your search for the perfect new house:

Look for homes with great views and ones that are close to parks and open space. Not only will these features make them more attractive to renters looking for a vacation getaway, but they also increase the re-sale value of your home. Unobstructed views of mountains and oceans can add up to 60% to a home’s value, while proximity to parks and open space can raise property values up to 20%.

Calculate possible rental rates before you buy, whether you plan to rent or not. You might change your mind later about renting out your home when your away, but even if you don’t, a house that demands higher rent makes it more attractive to future buyers.

Think about selling your current home and buying two new homes! If you’ve been paying down your mortgage and have lived in your current home for a while, think about using the equity you’ve built up in your current residence to help purchase your second property. And if you’re close to retirement and the kids have all flown the coop, think about downsizing to a smaller home for your primary residence as well. You could easily end up owning two homes for about the same price you were paying for the first!

Look for a Low Maintenance Home. This is important for several reasons. For starters, you won’t be there all the time to keep up on maintenance chores, and when you are there you won’t want to waste your vacation working on the house. Secondly, most vacation homes are in areas where the elements take their toll. Whether it’s a seafront property or a mountain getaway, these climates tend to wear on a house quicker than in other areas.

Top 10 Reasons to Buy a Home

Many people—especially singles and young couples who are just starting their careers–have mixed feelings about purchasing a house. They worry about getting tied down and taking on a lot of debt.

Here are 10 compelling reasons why anybody who can afford it should consider buying a home:

1. House prices tend to rise over time, so a house is one of the best investments you can make. Home prices in the U.S. have risen three percent to six percent a year for the past 20 years. That trend is likely to continue. So if you buy a home now, you’ve put your capital in a safe investment where it is likely to grow.

2. You’ll pay less tax. You can deduct the interest you pay on your mortgage from your taxable income. The value of this tax break depends on factors like your personal tax bracket, the size of your mortgage, the rate of interest you pay on it and how long you’ve held the mortgage. As a rule, the newer the mortgage, the greater the amount of interest you pay each month and the bigger the tax break. Therefore, recent buyers with young mortgages tend to get the greatest benefit.

3. You’ll be buying a piece of real property rather than putting money in a landlord’s pocket each month. The real cost of renting is higher than the monthly payment. There is also an opportunity cost equal to the amount you would gain by using the money to purchase a home instead. Even if the house you purchased did not appreciate in price, you would be able to sell it and recoup some of the money you put into it.

4. Interest rates are currently very low. This makes it relatively inexpensive to take out a mortgage. The lower the interest rate, the less you actually pay for your house and the sooner you can pay the mortgage off. Use our calculator to see how different interest rates affect the total cost of your mortgage and the time it takes to retire it.

5. You’ll be able to use the equity in your home for low-cost loans for other purposes. You can access the paid-up equity you accumulate in your home in the form of a home equity loan or a home equity line of credit. Because they are secured, home equity loans and lines of credit generally carry a lower interest rate than other types of consumer loans, such as auto loans. The interest on them is generally tax-deductible, as well.

6. You’ll have the stability and emotional security of owning your own home. No more worrying about dictatorial or negligent landlords, rent increases or the possibility your building will be sold and redeveloped or turned into a condo. You’ll be able to live in your house as long as you like, fix your monthly payments for as long as 30 years and you’ll be in charge.

7. You’ll be able to redecorate and renovate any way you like, any time you like. Rules about the paint colors you can use will be a thing of the past. And you’ll be able to tear out walls, install a powder room and make any other improvements you want. Best of all, if you decide to sell, you’ll recoup at least part of the cost of the improvements.
8. You can have a garden. This is one of the big pluses of ownership–a little piece of land you can call your own, where you can grow tomatoes or roses, barbecue, and play with your kids and pets.

9. You’ll be able to put down roots in a community. When you’re a homeowner, you’ll get to know your neighbors, participate in street sales, meet potential baby-sitters and play Saturday-morning touch football in the park. Renters tend to live more insular lives.

10. You’ll have a greater voice in community affairs. Local homeowners generally have more clout–individually and through ratepayer’s associations–when it comes to development proposals, school issues, changes to traffic control and routing and the like. Because renters tend to be more transient than homeowners, they have less influence on policymakers.

More Information About Small Home Emergencies

There are many small home emergencies when attended to properly can quickly become big home emergencies. Don’t panic though. There are solutions.
Q: What kinds of plumbing emergencies could possibly occur?
A: If a water pipe were to break in the house, a homeowner should know where the main water shut-off is located so they can terminate the water at that point. Normally this is located outside the home in the front or rear where there is a hose bib connection. If a homeowner cannot find it because it is not exposed and accessible, we suggest calling the local water department (you find that phone number on the water bill statement).

In the case where the water leak is at a specific plumbing fixture, the best approach is to shut off the water immediately at that location. All plumbing fixtures, including toilets, sinks and basins, have shut-off valves located under the fixture against the wall. If a bathtub or shower is leaking, it is necessary to shut the water off at the main water shut-off and call your plumber.

A leaking water heater can be shut off at the top right pipe leading into the water heater. For safety reasons, the gas must also be shut off at the water heater; that valve is usually found on the gas piping at the lower left side of the water heater.

Q: What if I smell gas and suspect a leak?
A: If you have an idea where the smell is coming from, such as a water heater, stove, oven, gas dryer or furnace, you can turn the gas off at the appliance. These valves are located within three feet of the appliance on the gas piping system.

Gas valves, called gas cocks, have a straight blade-type handle and are on when the handle is parallel with the pipe and off when the handle is perpendicular to the pipe. Therefore, only a 1/4 turn is required to turn gas cocks off.

If you have no idea where the gas leak is coming from, it is always best to turn the complete system off and call the gas company. The main gas shut-off valve is located on the inlet side of the gas meter. In most cases, this valve is on the vertical pipe left of the meter. It is necessary to use a crescent or pipe wrench to turn this valve off, again, making the handle perpendicular to the pipe with a quarter turn. You may want to hang a crescent wrench next to the main valve to avoid searching for the tool in an emergency. If you have any questions about the location of the gas main, call your gas company.

Q: What should I do about an overflowing toilet?
A: First, turn off the water at the valve under the toilet. If it’s a case of too much paper or other matter causing a stoppage, a plunger should work. If the toilet is not operating because the sewer is stopped up, a homeowner can help prevent overflowing by opening their sewer clean-out (located outside the building) to relieve the pressure on the system. Then call your plumber or a drain-cleaning company.

Q: What if I don’t have a sewer clean-out?
A: It’s important to understand that the sewer line is the main drain which receives the waste from all plumbing fixtures in the house. When this pipe is stopped up, every plumbing fixture will be affected. Water seeks the lowest level and any water permitted to enter the plumbing system at a higher level, such as a kitchen sink, will back up at a lower fixture, such as a toilet or shower. So when this happens, do not allow any more water to run into the system from anywhere in the house until you have had a plumber clean the sewer line.

Q: What if my garbage disposal doesn’t work?
A: If the disposal makes no noise when you turn it on, press the reset button located on the bottom of the unit.

If it makes a buzzing noise but doesn’t operate, turn the unit off. Look inside and see if there is a spoon or other object inside. Usually, a small object such as a pull tab from an aluminum can, apricot pit or coin is jamming the blades and needs to be dislodged. Before putting your hand or anything else into the disposal, unplug it. A broom handle usually works very well as a prying tool to free the blades from their locked position. Try inserting the handle at an angle, catching a raised portion of the cutter blade, and using leverage to turn it clockwise or counter-clockwise. If that doesn’t work, call a plumber.

Q: What if my faucet is running too slowly?
A: If both hot and cold water are affected, probably the aerator is congested with rust and corrosion. The aerator is located on the end of the faucet spout to introduce air into the water as it come out of the faucet to prevent splashing. On newer faucets, it also restricts the water flow to conserve water.

Try unscrewing the aerator by hand or with a wrench. Disassemble all the parts, being especially careful to lay the parts out in the order they are removed. Clean the rust or corrosion from each part and reassemble in exact order. If that doesn’t work, the problem is in the faucet or the plumbing piping system and you need to call your professional plumber.

Q: What precautions should be taken in case of an earthquake?
A: As a result of the 1989 San Francisco earthquake, the Uniform Plumbing Code (in California) requires that all water heaters be earthquake strapped. This will reduce the likelihood of a water heater breaking away during an earthquake, breaking water and gas pipes which could lead to serious property damage and loss of life, according to State of California guidelines with an approved earthquake installation kit.

Some Reasons Your House Isn’t Selling

It’s heading towards late summer and your house still has that “For Sale” sign out in the front yard. Remember, it’s not your house anymore, so you may have rearrange a few things in order to make it seem like somebody else’s dream home. Here are the top five reasons houses don’t sell, and how to go about addressing these particular predicaments.

It’s a Buyer’s Market

All real estate is local. So depending on what part of the country your house is in, it could be that the buyer’s have the leverage in that area or neighborhood. A high price can quickly turn off a buyer and prevent them from entering the door. It’s the hardest thing you’ll have to ever do but don’t be afraid to lower the asking price. You or your realtor will need to check what recent, comparable homes have sold for in the last few months to get an accurate picture of what buyers will pay for your home. In areas where it’s a buyer’s market, you will need to aggressively price your home in order to catch the eye of the limited amount of buyers. Keep in mind that it is the market and facts that dictate how much your home is worth, not what you think it should sell for based on the money you’ve invested in it.

Adverse Investments

You’ve spent a lot of time fixing your home, but did the money go to the right places? For example, there’s nothing wrong with sprucing up your landscaping, but if you have a backyard full of decks, fountains, and streams, yet your kitchen is dated and falling apart, you may be not be getting the proper mileage out of your remodel. Even an outdoor pool isn’t a great bargaining chip since only 20% of buyers (aside from the Southwest) look for this in a house. So if you’re struggling to sell and still have equity built up, think about renovating a few key areas. The biggest sellers are kitchens and bathrooms. Other rooms may take a fresh coat, but these two areas are crucial. And don’t get crazy with granite counters or hardwood floors (this could actually inflate the price, making it less marketable). Instead, refinish the cabinets. Replace a vanity with a pedestal sink. Get a couple new appliances. These small investments instantly double the appeal of a room.

Don’t Live in the Dark

You have a great house but can anyone see it? It’s amazing how sellers spend time and money on renovations only to not highlight these selling points. What’s even more remarkable is what a little light can do to a room. Open up the space by adding natural light or larger windows (even if this means just opening the drapes). Take down the dark, busy wallpaper and wood paneling: not only is this stuff probably outdated, it can make a room feel claustrophobic. Repaint the walls a lighter shade and install light fixtures (or add more if needed). Install spotlights in your yard or track lighting under the cabinets to highlight counter space. Buyers want their future house to be open, airy, and inviting, so just a few brightening installations can help a small room become roomier.

That Is So You!

Two words you never want to hear at an open house: “That’s . . . interesting!” Yes, you’ve made your house a home. You’ve made it part of your personality. That’s great, but when you’re selling it’s not about you. Therefore you have to remove your life from the space and allow the buyer to imagine their life moving in. It’s hard to cut the apron strings, but keep your as home neutral as possible. This doesn’t mean you have to paint every wall white (this sterile remodel can actually decrease its value), but strange never sells. Take down the animal heads from the study. Remove the keg fridge from the kitchen. Most people don’t own a ping pong table, so get it out of the living room and into the garage. Get rid of the leopard-print rugs. Take down the “interesting” art pieces. Eliminate anything that appears unusual to the rest of the general population.

You’re On Stage

Staging is important to conceal the blemishes and highlight the features. It’s not unethical to put your best foot forward. You’re just trying to get buyers interested; inspections and negotiations come later. So hide the eyesores: put a slip cover over an old couch, cover the A/C unit with a window treatment, or place a rug over a stain. Then enhance the selling points: clean the windows, cut the grass, set out flowers in the kitchen, and light candles in the bathroom. And if you’re already moved out, rent furniture for the open house: a furnished home always looks bigger and better than an empty space.