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It's Not Just the Tax Benefits

by Michel Delos Santos
It's Not Just the Tax Benefits
When the standard deduction for married couples filing jointly was increased from $12,700 to $24,000 for 2018, there was some speculation that the bloom was off the rose of homeownership. The reality of the situation is tax benefits are only one of the components that make a home an excellent investment and it probably contributes the least of the top three.

Now is a Good Time

by Michel Delos Santos
 

Now Is A Good Time
Respondents to the National Association of REALTORS Q3 Home Survey overwhelmingly, believe that now is a good time to sell and buy a home.

Start Early and Live Happily Ever-after

by Michel Delos Santos
 

Start Early and Live Happily Ever-after

As storybooks go, the character is introduced, they meet their love interest, a villain thwarts their intentions, true love overcomes, they marry and live happily ever-after.  It's a very familiar formula.

Similarly, there is a formula that couples follow in real life.  They go to college, get a good job, rent a home, fall in love, get married and buy a starter home.  They start a family, move into a larger home, save for their children's education, start planning for their retirement and if they live within their means, they invest their surplus funds.

Financial Timeline.png

An alternative to this might be to start investing in rental homes early in their adult life before their standard of living becomes so expensive that they don't feel like they have the money to purchase rentals.  There are infinite possibilities but let's say a single person, after getting a good job, buys a small three or four-bedroom home with an owner-occupied, minimum down payment.  They move into the home and possibly, rent out the bedrooms to other singles who need a place to live.

At some point, they decide to buy another home to live in with a minimum down payment and either rent out their bedroom in the first home or rent the whole home to a tenant.  And they repeat the process again with the second home.

This could continue until they acquired several homes.  Let's say, that in the meantime, they have met their love interest, decide to get married and together, they buy a starter home for them to live in.

This concept advances the investment in rental homes from the latter part of their lives to the early part of their life.  The early investment gives them more time for appreciation and wealth accumulation.  A simple principle of investing is that sooner is better than later.  By delaying gratification to own your "dream home" early, a person may be able to accumulate more net worth in the same period of time.

Buying a property initially as owner-occupied permits a lower down payment of 3.5% compared to a typical down payment for non-owner-occupied properties is 20%.  By using more borrowed funds, leverage can increase the yield on the investment.

It may be too late for some people reading this article to adopt this strategy but if they have kids in college, it may be something for them to consider.

Outdoor Kitchen

by Michel Delos Santos
 

Outdoor Kitchen
Outdoor kitchens don't score high as a good investment to help sell a home.

Acquisition Debt

by Michel Delos Santos

Acquisition Debt
The new tax law has made changes to deductions that many Americans are very familiar and home equity debt is one of them.

Pre-Approval

by Michel Delos Santos
Pre-Approval
Pre-approval benefits buyers and sellers and should be the first step in the process of finding a home.

More Affordable

by Michel Delos Santos

More Affordable
It takes a lower percentage of the U.S. Median income to own a home than to rent.

Getting the "Right" Home

by Michel Delos Santos
Getting the "Right" Home
Finding the right home is still the biggest challenge buyers are faced with in today's market as is shown in the latest Confidence Index Survey. Pre-approval is an essential step that needs to be handled before buyers begin searching for a home. The benefits to the buyer fall into the category of confidence.

Burglary Deterrents

by Michel Delos Santos

Burglary Deterrents
Consider these suggestions to discourage burglary and protect your home.

Act Decisively

by Michel Delos Santos

Act Decisively

Whether it is hesitation or procrastination due to uncertainty, it can cost buyers by having to pay more for both the house and the financing.  This is one of those markets where most of the experts expect interest rates and prices will continue to rise through 2019.

The National Association of REALTORS? reports there is currently a 4.2-month supply of homes for sale which is close to the same as last year's inventory.  Normal inventory is considered to be a 6-month supply.

If during the period you're waiting to buy, the price of the home goes up by 5% and the mortgage rate increases by 1%, the payment on a $275,000 home with a 95% mortgage could be $233.80 more each and every month.  Over a seven-year period, the delay to purchase would total close to $20,000.

To act decisively, you need good information; a confused mind will not generally make a decision.  In today's market, you need to know exactly what price home you can qualify for and you need to know what kind of home you can expect for that price. 

You'll want a housing and a mortgage professional you can trust to give you the information you need to make good decisions for yourself and your family.  We'd like to be your real estate professional and can recommend a trusted mortgage professional.

To get a better idea about what it may cost you for a home in your price range, use the Cost of Waiting to Buy calculator.  If you have any questions, call me at  386 689 4684.

 
 
 
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Displaying blog entries 1-10 of 12

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