Craig Della Penna, Realtor®'s Blog
Build-to-rent is a major term right now for investors. The industry has seen a serious leap in interest in just the past year, making nearly everyone in the real estate space sit up and take notice. We'll look at the special nature of these properties and which attributes make a property more valuable than another.
The Hot Spots
Build-to-rent generally refers to a single-family property built to be used by renters rather than owners. It's popular because it's difficult to profit off of a new build, especially when you take into account the price of the land, materials, and permit costs. The areas that are exploding with these properties tend to be affordable cities with plenty of available infrastructure.
Atlanta, Houston, Charlotte: these hot spots are attracting young renters who may not have a sizable down payment saved for a new house, but they're still willing to pay for the right amenities. It's making it relatively easy for investors to recoup their money (and then some).
The History of Build-to-Rent
This trend got its start after the recession churned out countless foreclosures and short sales, but has since morphed into its own asset class. Once home prices started to creep back up, investors saw that there was plenty of money to be made in renting even after the economy returned. Today, the build-to-rent industry is largely driven by new homes. Developers may build several dozen homes in a single area, making it easier for property managers to respond to renter requests and perform regular maintenance.
What's Behind the Success
The most successful build-to-rent properties are those in highly popular areas that would otherwise be too expensive to the everyday renter. Less than half of all millennials have any kind of substantial savings to put toward homeownership, and even the Baby Boomers are starting to turn toward renting (whether they need to or not). In addition, home appreciation has slowed over the past few years and new tax rules don't exactly make it an open-and-shut case that owning is the best choice available.
Investors who have the opportunity to get involved in build-to-rent will likely be happy they did. The key is to look for properties that are sensible in nature. Avoid those in areas that make it difficult to build (either through expensive permits or restrictive building codes). Opt for properties in nice areas made with affordable, durable materials. This will cut back on maintenance and increase your profits in the long run.
Looking to put together an offer on a house? Ultimately, you'll want to submit a competitive first offer. By doing so, you can speed up the process of acquiring your dream residence.
When it comes to submitting a competitive home offer, however, it is important to understand what differentiates a "fair" proposal from a subpar one.
To better understand how to submit a competitive proposal, let's take a look at three best practices that every homebuyer needs to consider before making an offer on a house.
1. Evaluate the Housing Market
If you plan to buy a house, you'll want to examine the real estate market closely. That way, you can identify housing market patterns and trends and plan accordingly.
For example, if you find there is an abundance of high-quality houses available, you may be entering a buyer's market. In this market, there likely is a shortage of homebuyers, which means a competitive offer at or near a home seller's asking price is sure to grab this individual's attention.
On the other hand, if you notice that homes are selling quickly in a city or town, you may need to prepare for a seller's market. If you pursue houses in a seller's market, you may need to act quickly due to the sheer volume of buyers competing for the same residences.
Clearly, a comprehensive housing market analysis can make a world of difference for homebuyers. With in-depth housing market insights at your disposal, you'll be better equipped than other buyers to submit a competitive first offer on any residence, regardless of the current real estate market's conditions.
2. Get Your Finances in Order
What good is a competitive home offer if you cannot afford to buy a residence? If you secure a home loan, you can narrow your home search to properties that you can afford. Then, you'll be able to submit a competitive offer that ensures you won't have to break your budget to purchase your dream residence.
Also, if you're unsure about how your financial situation will impact your ability to buy a house, you should consult with banks and credit unions in your area. These financial institutions can help you get pre-approved for a home loan, establish a homebuying budget and much more.
3. Collaborate with a Real Estate Agent
When it comes to submitting a competitive home offer, it pays to receive expert homebuying support. Fortunately, you can hire a real estate agent who is happy to help you put together a competitive home offer.
A real estate agent can provide housing market data that you may struggle to obtain elsewhere. Plus, this housing market professional can offer unbiased home offer recommendations to ensure you can get an instant "Yes" from a home seller.
Collaborating with a real estate agent is a great option for homebuyers in all cities and towns. Reach out to local real estate agents today, and you can get the help you need to submit a competitive offer on any residence.
If you have always wanted to own a second home in the mountains, near the beach or just about anywhere else, now may be the ideal time to transform your dream into a reality. The housing market offers many opportunities for property buyers – even those who already own a residence. If you understand what it takes to navigate the homebuying journey, you could quickly and effortlessly purchase a second house that matches or exceeds your expectations.
Ultimately, there are lots of things you can do to streamline your search for a second residence, such as:
1. Get Your Finances in Order
If you still have a mortgage on your current residence, there is no need to stress. In fact, by consulting with a mortgage specialist, you can evaluate your home financing options as you prepare to search for a second house.
Mortgage specialists are available at banks and credit unions, and they understand the ins and outs of home financing. Thus, mortgage specialists can help you analyze your current mortgage, establish a homebuying budget and determine the optimal financing option for a second house.
Of course, if your current house's mortgage is paid in full, mortgage specialists can still help you get ready to launch a search for a second residence. If you collaborate with mortgage specialists, you can get the help you need to immediately obtain financing to acquire a second house.
2. Narrow Your Home Search
You know you want to buy a second house – now, you just need to hone your house search based on your individual needs. If you focus on residences in a select group of cities and towns, you may quickly discover a wonderful house that you can enjoy for years to come.
As you consider potential cities and towns where you want to purchase a second home, think about your short- and long-term goals, too. By doing so, you can boost the likelihood of finding a second house that will suit you perfectly both now and in the future.
3. Consult with a Real Estate Agent
For those who want to acquire a second home sooner rather than later, hiring a real estate agent is a must. Because if you have a friendly, knowledgeable real estate agent at your side, you can minimize the risk of encountering roadblocks that otherwise could slow down your homebuying journey.
A real estate agent is happy to teach you about the housing market in your preferred cities and towns. Plus, he or she can offer expert recommendations about how much to offer to pay for a residence you want to acquire. And if you have concerns or questions as you pursue a second home, a real estate agent is ready to respond to them right away.
Take the guesswork out of finding and purchasing a second residence – use the aforementioned tips, and you could speed up your search for a second house.
Buying a home will likely be one of the largest financial decisions you will make in your lifetime. While this may seem scary at first, it’s worth noting that buying a home can also be a valuable financial investment.
When it comes to preparing to buy a home, many people just wait until they run out of room in their apartment before deciding that they need to upgrade to a home. A better approach, however, would be to start planning for your first home a year or more in advance.
Saving for a down payment is a vital step to making the best long-term financial decision. A larger down payment can help you pay off your home sooner, pay thousands or tens of thousands less in interest, and start using your home equity as an asset.
But, saving for a down payment is easier said than done. So, in this post, we’re going to talk about some of the ways you can aggressively save for a down payment so that, when the time comes, you can achieve long-term financial security from your investment.
Setting your savings goals
The first thing you should be thinking about when saving for a down payment is what your goals are in a home. Setting realistic goals in this phase will make saving for your down payment more feasible and less discouraging.
Think about what you really need from a home at this point in your life and compromise where you can.
Remember that on top of your monthly mortgage payments, you’ll likely also be paying for taxes, insurance, utilities, homeowners association fees, and more.
Save on a timeline
When setting your savings goal, make sure you’re aware of the timeframe you’re working with. If you want to buy a home next year, you’ll need to focus on short-term savings options. However, if you’re okay with renting for the next 5 years, investing your money could be a better option.
Lock away your savings
Treat your down payment savings like an emergency fund. Open a separate account, automatically deposit a portion of your pay into the account, and never withdraw from it. To do this, you will, of course, need to already have an emergency fund with a month’s expenses in it.
However, once you’ve established your emergency fund, start immediately depositing into your savings account.
Pay off credit cards
It may seem like saving for a down payment is more pressing than paying off old debt. However, the numbers will show that making interest payments on your credit cards is essentially throwing away money that could have been used toward your down payment savings.
Adjust your spending habits
While it isn’t easy to start spending less once you’ve built a standard of living, there are ways to spend less money and still lead a fulfilling life. Think about where your money goes each month, including bills and services you might pay for.
Now could be the best time to cut the cord and start using a service like Hulu to save $50 or more each month.
Time for a raise?
If it’s been some time since your last pay raise, now could be an ideal time to speak with your employer. To improve your chances of success, don’t discuss reasons outside of work that might be influencing your decision to ask for a raise (such as saving for a down payment). Rather, back up your request with evidence of your accomplishments at work.
Purchasing a home should be fun, memorable process. However, many homebuyers struggle with fears as they embark on the process of acquiring their dream homes.
Some of the most common homebuying fears include:
1. I will pay too much for a house.
Overspending on a house is a common fear among homebuyers nationwide.
If you pay too much for a house, you may struggle to afford the monthly payments for the duration of your mortgage. Perhaps even worse, your house may lose value over time. And if you eventually decide to sell your home, you may be forced to accept less than what you initially paid for it.
Ultimately, an informed homebuyer will understand the differences between a buyer's market and a seller's one. He or she will be able to determine whether a home is affordably priced and proceed accordingly.
An informed homebuyer also will know the importance of getting pre-approved for a mortgage. With a mortgage in hand, this homebuyer will understand exactly how much that he or she can spend on a house.
2. I'll wait too long to submit an offer on a residence.
If a homebuyer is uncertain about buying a particular house and waits too long to submit an offer, he or she risks missing out on this residence altogether.
Fortunately, there is a simple way to avoid this problem.
A homebuyer who knows what he or she wants to find in a dream home can narrow a home search. Then, if the homebuyer discovers a home that matches or exceeds his or her expectations, this individual can submit an offer right away.
Don't forget to submit a competitive offer, i.e. one that accounts for the needs of both a homebuyer and home seller, as well. A competitive offer will stand out from other proposals and increase a property buyer's chances of securing his or her dream residence.
3. I'll buy a home that will fail to maintain its long-term value.
What you pay for a home today is unlikely to remain the same over the course of several weeks, months or years. But a homebuyer who employs an expert home inspector can learn about a house's strengths and weaknesses and ensure a property is a viable long-term investment.
A home inspector will conduct an assessment of a house after a property seller accepts a buyer's proposal. At this point, an inspector will examine a house's interior and exterior and identify any potential issues. Lastly, a home inspector will issue a report with his or her findings, and a homebuyer will have a final opportunity to modify or rescind an offer on a house.
For homebuyers, it is important to work with a trusted home inspector – you'll be glad you did. This home inspector will go above and beyond the call of duty to evaluate a house before you finalize a home purchase.
Working with an experienced real estate agent may benefit a homebuyer too. With a top-notch real estate agent at your side, you can get the support you need to acquire a first-rate home that will maintain its value both now and in the future.