For many months, potential homebuyers in popular neighborhoods have bemoaned a shortage of inventory, the volume of homes available on the market.
But a slowing of home sales in November, as reported by the National Association of Realtors, could mean a gradual rebuilding of inventory levels in some of the hottest communities. In 2016 there may be many more starter homes available if the economy continues to improve.
More inventory could translate to more choices for homebuyers. But surprisingly, the prospect of more home choices is not one that thrills all buyers. Some people find decision making harder when there are more options. They can feel paralyzed by what they perceive as over-choice.
More often than not, the buyers who make the best choices are those who define their search criteria carefully, rather than simply visiting an indefinite number of places. There’s an art to creating a short list of houses to visit and then examining each one on your short list very carefully.
Here are a few screening tips for buyers:
Start by comparing houses on the basis of square footage.
Though it’s surprising to clients, it’s common to find a small home could cost significantly more per square foot than a midsize property in the same neighborhood, and over time, the midsize home should be worth more.
If for any reason the square footage isn’t shown on the listing in the Multiple Listing Service, ask your agent to prescreen the place and take measurements for you.
Factor in bathroom count when deciding which homes to visit.
Once it was common for several family members, particularly the children or teenagers in the household, to share the same bathroom.
But the current ideal is for every member of the family to have his or her own bathroom.
Of course, homes in older communities are likely to have fewer bathrooms than those in recently built subdivisions. But whether you’ve targeted an older community or a newer one, it’s wise to favor homes with more bathrooms. The best-case scenario is to find a place with ‘his and her’ bathrooms off the master suite, a feature that today’s buyers greatly appreciate.
Consider homes within their neighborhood context.
One online tool for placing homes within their neighborhood context is Google Maps, which uses satellite imagery to pinpoint the location of properties simply by typing in an address.
This way you can quickly see if a house is located on a busy, cross-through street versus a dead-end avenue or a quiet cul-de-sac. You could also tell, for example, how close a property is to a ‘big box’ retailer.
Think through your lifestyle needs when comparing floor plans.
When touring homes, trust your instincts about the impression a place makes after you’ve first entered the front door.
A good floor plan gives the visitor a feeling of harmony. The rooms and major features are all in proportion. For example, window sizes are in proportion to overall floor space, neither too small nor too big.
You should also think carefully about the layout of any home you’re visiting, because a floor plan can be influential in helping shape your lifestyle.
For instance, an empty-nest couple that often holds dinner parties will likely want a formal dining room that’s well positioned within their home. But families with young children typically place more emphasis on a large family room that flows into a country-sized kitchen.
Don’t let yourself get wowed by a home’s shallower attributes. Rather, think of a place that will underscore your happiness for as long as you choose to live there.
Originally posted at: Lafayette Real Estate News
INGREDIENTS:
There are several variable costs of owning rental property that can cut into your net income. For example, property taxes and insurance costs change every year — and usually not in your favor. Maintenance expenses can vary dramatically over time, as you can have several trouble-free years and then suddenly be forced to complete an expensive repair, such as replacing an HVAC system.
If you rent out a vacation home or other property that you use for residential use, then you can qualify for a special exemption that prevents you from having to report the income that your rental generates. The maximum period for which you can rent the vacation home over the course of a year and still qualify is 14 days, but if you stay at or below that level, then the ordinarily extensive reporting requirements essentially disappear. Many people take advantage of the 14-day rule with second homes, especially if they happen to be located in areas where certain annual events regularly happen.
Depreciation is a real estate investor’s best friend. Over time, the tax code allows you to depreciate the value of a home to zero, even though it is more likely to have gone up in value than gone down. Thus a home purchased for $150,000 would create $5,455 per year in depreciation expenses against the rental income it generates for the next 27.5 years.