8 Questions To Ask Yourself Before Buying A Second Home

Nationwide, hundreds of thousands of people are jumping on the vacation-home bandwagon. In fact, sales of second properties were up almost 30% in 2013 from the previous year, according to the National Association of Realtors. But although buying a second home can be tremendously exciting, the decision also comes with its own unique financial considerations. So before you put an offer on that bungalow by the lake, consider asking yourself these eight key questions to make sure your head’s in the right
place.

1. How much will a second home cost?

We’re not just talking about the sale price here — there are a lot of associated expenses you need to factor into the equation too. So while that vacation house you’ve been eyeing may be small, it still requires budgeting for a mortgage, property taxes, insurance, utilities, and maintenance fees — and some of those expenses are probably higher than you think. When you’re not living in a home on a daily basis, you often don’t have the ability to tackle small problems before they become big ones —and that can translate into higher maintenance costs in the long run. Budget about 1% of the home’s purchase price for annual maintenance.

So if you bought a $300,000 home, set aside $3,000 a year for such common pop-up costs as an emergency plumbing repair or a new furnace.  If you have an older home that could present more issues or if you plan to rent it, aim for 1.25% to cover extra repairs. Also, don’t forget to factor insurance into the equation. In general, insuring a vacation home will cost about 20% more than a primary residence.

2. Can you really, truly afford a second home?

Buying a second home is a money decision — not just a fun way to spend your leisure time — and it’s one you shouldn’t make until after the
rest of your finances are in tip-top shape. Are you mostly debt-free? Are you saving enough for retirement? Do you have at least 20% equity in your primary residence, plus enough cash on hand for a 20% down payment and 3% closing costs for the vacation home? While mortgage approvals for second homes typically aren’t as stringent as they were a few years ago, lenders will still be looking closely at
your debt-to-income ratio, which is how much money you have to pay each month for debts like student loans, compared to what you take home. In general, you should be able to accommodate all of your mortgage payments (including the vacation home) and the rest of your debt using no more than 36% of your monthly gross income. If you can’t make those numbers work, this probably isn’t the right time to spring for a vacation manse.

3. Are you buying it for the right reason?

Some people may view a vacation home as a cost savings tool — they see it as a way to save on the lodging fees they’re paying every year when they take a trip. Another perspective? View it as an investment — either as a place where you plan to retire or a property that you can sell down the road to supplement your retirement income. When evaluating the investment property’s long-term potential, it’s important to research how prices have appreciated over time in the market where you’re buying.

4. How do you plan to use the home?

If you’re buying the house for your own personal use, you’re free to purchase whatever strikes your fancy — and disregard what might attract tenants. But if you’re counting on rental income to cover the mortgage, you have to be more conscious of the home’s location and appeal to others. Also keep in mind that very different tax rules apply, according to whether your second home is for personal use or if you rent it. Given the complexity of tax considerations and reporting rental income, make sure to consult with a tax professional before you make up your mind.

5. If you do rent the home, is it the right property?

The first step is to think about how often you’ll want to rent, plus how long the potential rental season will be. “On average, people who are actively renting are doing so about 15 weeks out of the year,” says Eric Horndahl of vacation rental site FlipKey.com. “And they report, on average, that they make approximately $26,000 per year doing so.”

After marketing costs, that’s enough to cover the mortgage, taxes, and insurance on the average $360,000 home — if you put 20% down, Horndahl adds. For some perspective, the median vacation home purchase price in 2013 was $168,700, and the median down payment was 30%, according to the NAR. While you’re vacation-home shopping, take a look at similar properties in your area on FlipKey.com or HomeAway.com to see how active the rental market is, and how other places are priced on a nightly or weekly basis. “This will help prospective rental owners make assumptions on how many nights or weeks they will rent it out for, and project their rental income,” Horndahl says. Next, consider how attractive the home will be to potential renters: Is it close to local attractions, such as the beach or a vibrant downtown? Does the property have any unique selling points or great amenities?
“When they’re going on vacation, people are looking for a hot tub or swimming pool,” Horndahl says. “Also, people who rent vacation homes tend to be larger groups, so you also want to make sure you’re taking size into account.”Bottom line: Make sure there are a few characteristics that will help your house stand out from others in the area, making it a top choice for renters.

6. Will you need to hire a property manager?

If you’ve decided renting makes sense, you need to determine whether you’re willing to do all the work yourself, or if you’ll pay someone to tackle it for you. And by work, we mean everything from advertising, finding and screening tenants, cleaning, handling contracts and deposits, and regular maintenance and repairs.  You should expect to pay 20% to 30% of your rental income for property management services. Many people start out thinking they’re going to do it all themselves  until they realize how much time they have to put into finding tenants and dealing with paper work. If you live within a reasonable driving distance of the home, you’re handy and you have the time, you may be able to do the property management yourself. It also helps if your vacation spot is a condo — where some of the maintenance is done for you as part of your association fees — or it’s a newer home, which may have fewer issues.

7. Is the home located in a risky area?

It’s one thing to buy a vacation home near the shore. It’s another to buy one in a region that’s regularly hit by hurricanes. Only you can decide if the location and potential rental income are worth the extra insurance costs, plus the hassle if your home is damaged. If you do decide to buy in a riskier area, it’s key to budget for higher — and sometimes unexpected — costs.

8. Are you rushing into the decision?

As with any large purchase, make sure you’re not buying a vacation home based purely on emotion or impulse. Research the area and sleep on any big decisions before you make them. In other words, take your time and find the type of property that you really want — and can afford. Then leap.

For complete article visit http://www.learnvest.com/2014/07/buying-a-second-home/#ixzz37dOas9ar

Photo Credit: Richard Elzey Creative Commons License

Mary Zohar, is a long-standing member of the Coldwell Banker North Tampa Office and an active member of the Greater Tampa Associates of Realtors. Besides having a Bachelor in Science from the University of Florida, she holds: Certified Home Marketing Specialist, Certified Negotiation Specialist, e-Pro, Short Sale and Foreclosure, and Accredited Buyer Representative and Certified Residential Specialist certifications; and received the International Diamond Society Award this past year. She also is the representative of the North Tampa office for Coldwell Banker CARES.  And is current in Continuing Education and licensure for the State of Florida. Having lived in the Tampa Bay area since 1981, makes her an expert in the  community at large. If she doesn't know what you're looking for, she surely knows who to ask or how to find out. Watching Tampa Bay grow, after these years makes her knowledge priceless. She can be reached at 813-417-6696, and is eager to assist you with all of your Real Estate needs.

Getting Ready to Sell Your Home - 20 Tips From the Pros

Have you been wondering how to create a buzz among buyers and get top dollar for your home? The answer is showcasing, sometimes called staging by real estate professionals, the most attractive attributes of your property.

Here are 20 sure-fire tips from the pros to help you sell your home fast:

1. Remove clutter. Make rooms look larger by removing as much of the furniture as you can. In this case, less is always more. You can give it away to Goodwill Industries, sell it at a garage sale or get a storage unit and stockpile it there. Pay particular attention to doorways and hallways. They should be open and clear with no obstructions.

2. Employ counter intelligence. Go through the entire house and make sure all flat surfaces, such as the bathroom and kitchen countertops, are clear. Got old magazines? Throw ‘em out! Have too many knick-knacks? Pack ‘em away out of sight. All the counters must be clean and clear.

3. Follow your nose. Remember that your home needs to smell good to be appealing to a prospective buyer. There should be no obvious odors. That means no old cooking smells, no smoke from cigarettes, and absolutely no pet smells.

Ask a friend over, one whose judgment you can trust – to give your house a sniff test. To completely erase the bad smells, you have to get rid of the source of the problem. So, clean the air vents, thoroughly clean the whole house, and get rid of that old, odor-filled carpet and, if you’re a smoker, always smoke outside.

4. Always keep in mind that the person who buys your property won’t want to do any more work on the house than you do. So, if your home will need work, for example, if it has old wallpaper or shabby carpet, now is the time to get rid of it. By doing so, you will ensure that the only thing your buyers will have to look ahead to is moving day.

5. Do the baby test. If your desired market has young families with little kids, ask yourself the following question, “Would I let me child crawl on this floor?” If the answer is no, then fix the problem. If your home has grimy walls with handprints or smudges, it’s probably a good idea to paint.

6. Get rid of the cigarettes. Cigarette odors are particularly offensive to many buyers. That’s even true of smokers. The problem is that many buyers won’t even consider a home where there has been smoking. You don’t want to exclude a large number of potential buyers.

7. Make your home ageless. Be aware that an old house is not the same as a classic home. It’s going to be hard to sell your house if it has carpet, appliances and paint that look 40 years-old. Even if the home actually is 40 years-old, looking like it will make the home difficult to sell.

8. Let there be light. Keep in mind that most people love to buy light and space and that will sell your home.

Don’t assume that a house that is dark will be appealing. Maybe one room that is dark will be considered “cool,” but it’s a negative if the whole house is gloomy.

If you live where there isn’t much sunlight or it is a cloudy time of the year, give Mother Nature a boost and use flowers and other features that will give a sunshiny feeling.

During a spell of dismal weather, one seller showed that she really grasped the impact staging could have on her home. She raised the sun umbrella on the deck, found some colorful beach towels to throw over the deck railing and added a lemonade pitcher and drinking glasses.

9. Get a home inspection. Even though the majority of buyers will want their own inspection, this will give you a chance to make any necessary repairs before your house is up for sale. People like to know that their inspector didn’t find anything wrong. Usually, depending on your location, an inspector will cost about $200 to $400. A professional in real estate will be able to help you find a trustworthy inspector.

10. Learn to love white walls. Many people love to have color on their walls. Unfortunately, what one person likes may look just awful to the next one. Luckily, paint is a really low-cost way to make your home look fresh and clean.

So, stick to neutral colors if you’re going to have to repaint anyway. Besides, the color that makes rooms look large and is a great light reflector, is white.

11. Inspect the carpet. Make sure you have shampooed it to remove any odors or stains. Be honest with yourself, if it still doesn’t look or smell right, remove it. If you do, a great choice is using a laminate or wood instead.

12. Avoid controversy. Let’s face it, if you have the head of a deer on the wall, you should probably take it down. There are bound to be some buyers who are turned off by it. Watch what magazines and books you have on display when preparing your home for a showing. Keep away from anything that might potentially be offensive.

13. Replace deteriorating wallpaper. If you have wallpaper in your home, look it over carefully. If it is peeling, particularly in bathrooms, take it down and think about painting the wall instead. The same thing goes if the children’s rooms need an update. You don’t want your buyers to be judging your ability as an interior decorator rather than actually looking at your home.

14. Clean your closets. It is best to empty everything out of the closet and only put back half. That will make the space look roomy and that will sell the house. The same thing applies to kitchen cabinets. And, if you’re wondering what to do with everything you removed, you can send your surplus food to a food bank or shelter and donate extra clothes. That way, you won’t have to move them.

15. Harness flower power. If you’re on a budget, there is probably no better way to make a home look classy than to use fresh flowers and plants. Consider bouquets that are less expensive, in-season flowers from your yard or green plants.

16. Open the windows. Open the windows wide if it’s a nice day in summer. Or, if it’s a frigid, dismal day, light a cheery fire in the fireplace.

17. Don’t listen to everyone’s advice. The truth is that if a potential buyer drives by your home and it is impressive and inviting, even if they don’t like your colors, chances are they will be interested.

18. Keep it clean. People will turn around and walk out of a home that has trash, cobwebs or dust. Remember that people are looking at everything and will miss nothing.

19. Set your house apart. Do something to make your house stand out from all the other houses in your neighborhood that look the same. One study showed that buyers remembered the house with red roses in the living room. And they liked the home more because they were pleased with that detail. In other words, give people a reason to remember your home. Anything that will make it stand out in a good way will make a huge difference.

20. Keep it real. Don't worry if the house doesn't always look like the maid just finished her work.

Photo Credit: Chris Bone  Creative Commons License

Ramping Up Your Home's Curb Appeal

A property’s curb appeal naturally makes a critical first impression. If everything within the front

space is well-chosen and in perfect repair—from the mailbox and house numbers to the walkway and landscaping—buyers will think this house is obviously well-cared for.

Here are a few things to look at on your home before putting your house on the market: 

Front door

A front door can be a home’s focal point—but you don’t want that to be because of its peeling

paint or dinged hardware. Replacing an entryway door with a new steel door (which costs about $1,200) actually offers among the biggest bang for the buck at resale (an average of 73 percent of the cost may be recouped, according to Remodeling magazine’s 2011–2012 Cost vs. Value Report, which analyzed 35 remodeling projects’ payback potential).

Sometimes a front door can be salvaged with a fresh coat of paint. Just don’t overdo it: Vail recalls when her clients went too bold with their door’s hue—a vivid blue that didn’t

complement the home. It had dated brass handle and lock hardware, too. (Satin nickel and black or oil-rubbed bronze are more the trend these days.)

Windows 

Wash them—inside and out—and remove the screens for added sparkle. Then, try dressing up

the windows with flower boxes, suggests Peggy Johnson, owner of Redesign + More, a Charlotte, N.C., interior design and staging firm. Also, consider a new color for shutters. The trend is a shift away from high-contrast green, red, or black to more monochromatic palettes that blend with the rest of the house, according to the Paint Quality Institute.

Garage 

Depending on its orientation to the house, a garage can make a huge impact. Does the door need

paint or repairs? Should it be replaced? While sellers might not be willing to spend on a stylish new cedar wood door, they can find more budget-friendly options in metal or fiberglass. A new steel garage door can cost about $1,500, but sellers, in average, recoup nearly 72 percent of that investment at resale, according to the Cost vs. Value Report.

 Front porch

Don’t overlook this key selling point. “It’s an iconic symbol of American living,” Vail says. “‘Sell’ your front porch as additional square footage by staging it with as much care as you would other rooms. Invite buyers to ‘sit a spell’ with a pair of rocking chairs, Adirondacks, a porch swing, or even an outdoor living suite.” And don’t forget to “add a coffee and a side table for writing up contracts,” Vail notes.

Driveway 

Is the driveway covered with cracks and oil stains? If sellers can’t afford a complete resurfacing

(which may cost about $2,000 for concrete driveways), encourage them to look into patching up cracks using premixed concrete materials, Johnson says. Driveway cracks a quarter-inch or smaller may be able to be filled with asphalt or concrete that comes in caulk-like tubes. A patching compound for asphalt can be used for larger cracks. Some experts recommend kitty litter for removing oil stains, though hardware stores offer designated products, too.

After dark

Evening curb appeal also matters. “Conceal a couple of portable outdoor lamps and aim them at the house or a beautiful tree for low-cost, high-value impact,” Vail says. Have outdoor lights on a timer so they’re always on for nighttime showings. Interior lights, too, work to create a warm glow from the curb. If the home isn’t wired outdoors, line a pathway to the door with solar lights. “The technology has improved considerably over the past few years, and solar lights are much cheaper to install than hardwired lights,” Vail says. “Plus, sellers could probably take the lights with them when they move.

Original Article Source: http://realtormag.realtor.org/home-and-design/feature/article/2012/09/amp-up-curb-appeal

Photo Credit: Brian Gautreau Creative Commons License

Mary Zohar, is a long-standing member of the Coldwell Banker North Tampa Office and an active member of the Greater Tampa Associates of Realtors. Besides having a Bachelor in Science from the University of Florida, she holds: Certified Home Marketing Specialist, Certified Negotiation Specialist, e-Pro, Short Sale and Foreclosure, and Accredited Buyer Representative and Certified Residential Specialist certifications; and received the International Diamond Society Award this past year. She also is the representative of the North Tampa office for Coldwell Banker CARES.  And is current in Continuing Education and licensure for the State of Florida.

Having lived in the Tampa Bay area since 1981, makes her an expert in the community at large. If she doesn't know what you're looking for, she surely knows who to ask or how to find out. Watching Tampa Bay grow, after these years makes her knowledge priceless. She can be reached at 813-417-6696, and is eager to assist you with all of your Real Estate needs.

Does your Yard Leave You Cool?

The arrival of warmer weather usually signals when it’s time to head outside and spend time in your backyard. But what if your yard still leaves you cold?

Don’t let a bleak backyard turn your summer into a bummer. Perhaps it’s time to turn your attention to a new home where you can discover the outdoor space of your dreams.

Whether it’s with a cool pool, a sizzling outdoor kitchen, or an expansive outdoor living room where you can gather with friends and family, a new home can offer a range of awesome outdoor options.

We found photos of our favorite new backyards for inspiration. If you see a yard you can’t live without, just click on its photo to find out more about the home.

Click here for photos of our favorite new backyards for inspiration.

Mortgage Rates Fall to Lower Point Than 12 Months Ago

Fixed mortgage rates across the United States are lower than at this time last year.

The average rate on a 30-year fixed mortgage dropped to 4.14% from 4.17% last week, according to the latest survey from mortgage buyer Freddie Mac. At this time last year, the average was 4.46%.

“Mortgage rates were down following the release of first quarter real GDP final estimate, which fell at a 2.9 percent annualized rate, a steeper than expected decline and the worst reading since the first quarter of 2009,” Frank Nothaft, vice president and chief economist at Freddie Mac, said in a statement.

“Also, the seasonally-adjusted S&P/Case-Shiller 20-city home price index [PDF] was up only 0.2 percent in April from the previous month. On a year-over-year basis, prices remained strong in April up 10.8 percent, but slower than the 12.3 percent in March.”

The average rate on a 15-year fixed mortgage also registered a drop, to 3.22% from 3.30% last week. A year ago, it averaged 3.50%, according to Freddie Mac.

Averages for the two most popular hybrid adjustable-rate mortgages were also down. At 2.98%, the five-year ARM dipped slightly from 3.00% last week. The one-year ARM trended down slightly, to 2.40% from 2.41% a week ago.

After hitting record lows about a year ago, mortgage rates had been on the rise since Fed remarks spurred market speculation it could begin curbing its bond purchases. Last year at this time, rates spiked above 4%.

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