Before you even start to think about crunching the numbers you need to decide if being a Landlord is something you are prepared for. What if the Refrigerator or Air Conditioning goes out? What if you do not receive the Rent Check? You can always hire a property management company however this takes away from monthly cashflows, but may be worth it.
Crunching the numbers. If you do not need the money from the sale of your home to purchase a new one it can be very appealing to hold on to the existing home, collecting rent, to see positive monthly cash flow and potential equity growth. Real estate has been and appears will continue to be a very good investment. If choosing to become an investor and rent out the home you may want to get a accountant/tax professional that has real estate investor clients and is up on all and any new IRS guidelines when it comes to real estate. Also check with local agents and appraisers to see how is the rental market currently and how do you see it in the future? Is the amount of rent to be collected covering the expenses such as taxes, maintenance, reserves to replace items as they need replacing, utilities your including in the rent, current mortgage payments, HOA dues, ect ?
I personally have been very fortunate when being a landlord however the nightmares do exist. You need to establish a good screening process. This would include credit check, possibly a background check, and questions on how many people to occupy the home, pets, ect. Keep in mind that as people live in a home its going to depreciate, in some cases more than others.
With the help of a real estate appraiser you can get the current market value of the home as well as the current rental rate. The appraiser can also estimate the operating income and expenses illustrating cash flow.
There has always been that debate of whether to rent for a while or buy. It has always been a great debate. Everyone has there differing life situations and that will ultimately make the decision for you. For instance if you know you may not be in a location for very long due to job transfer or relocation for personal reasons, need to get your finances in order, just started a new position, and have no desire to maintain a home then renting may be a great fit. However when you own a home you have an opportunity to build equity (investment) and later sell at a profit. There are also tax benefits and the secure feeling that you have more control over your housing situation.
If you're thinking of becoming a homeowner at in the near future here are a few things to considered..
In late 2017, the Federal Reserve once again raised interest rates. With economic factors getting better every day there is no reason for the Federal Reserve to significantly lower rates any time soon. If you are considered a purchase or a refinance you need to lock your rate ASAP! Every fraction higher is more money out of your pocket every month. We all like to save money, right?
If for example you have excellent credit (meaning a score of 780 to 850), you might qualify for a 3.613% APR on a 30-year, $300,000 fixed mortgage. If your credit is good but not outstanding, you can snag a 3.835% APR on that same sort of loan. These are still extremely favorable rates compared to what we've seen historically, but we don't know how long they'll hold steady. Therefore, if you're thinking of becoming a homeowner at some point, 2018 is a good year to pull the trigger.
You should check with your accountant however as these items do change. Also if you take the standard deductions and do not itemize this may impact you tax benefits of ownership. Consulting with a good accountant can also bring to light many other deductions you may not have consider. These might be deducting the portion of the home you use as a home office for work related activities, do you ever AirBnB you home, improvements made to your home ect.
From the markets SunPointVMS services we have seen inventory shortages for the most part. This problem may be less dominant as rates rise and buyers qualify for less. In real estate most things are relative. For instance in a great market you may be able to sell your home quickly and for a awesome price only to find that your next ideal home is also priced higher and in high demand. When financing comes into the equation however this is never better for you to wait as rates are going higher.
Going from Renter to Owner is typically a great financial move, especially in a increasing market that we have experience in the past couple years. If you are ready to take the plunge let us know. We can direct you to one of our great Lender partners and assist you in making sure you are getting a decent deal on your new homes. Sun Point Appraisals 480.595.0188.
By Paul Johnson
When an appraisal is completed more times than not the results will be reported on a form. The actual appraisal is the data file and notes of the appraiser and the results and reconciliation are reported verbally or on some type of report.
Form reports are an efficient way to relay the information to the Reader/User of the report as it is layed out in a very organized format. If a User receives many appraisals of a similar type, say residential single family home for financing, then items and results are illustrated the same way in each report making their life that much easier. FNMA and FREDDIE MAC typically create the reports they prefer or require to see when an appraisal is to be used in a financial transaction that their agencies may back financially. Many software companies which provide report writing software to appraisers (ie Alamode, ACI) will have several of their own forms to use. Many times these forms are used when appraising for individual in the case when financing is not the end use. These forms are typically refered to as GP or GPAR forms. These acronyms represent "General Purpose" reports. It is common to see these in the use for Bankruptcy Appraisals, Divorce Appraisals, Pre Listing Appraisals, Estate Appraisals, and when individuals are just inquiring about the value of their home.
In most every case a professionally licensed appraiser is going to provide you with a complete and accurate report. Many times the more experienced the appraiser the better, but not in all cases. It is a good idea to interview the firm or appraiser a bit prior to scheduling. You can read reviews and get referrals from friends and real estate agents that service the market. Here a just a few things to think about when considering hiring an appraiser:
Hope this is helpful. If you have any further questions give me a call.
Prospect, headquartered in Sherman Oaks, Calif., Corvallis, Ore.-based Keller Williams Mid-Willamette and Ventura, Calif.-based RE/MAX Gold Coast violated the Real Estate Settlement Procedures Act (RESPA), according to the CFPB, which prohibits real estate agents and brokerages from recommending settlement services, such as title insurance, appraisals, inspections, and loan origination, to consumers in exchange for payment from service providers.
“Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals,” said CFPB Director Richard Cordray in a statement. “We will hold both sides of these improper arrangements accountable for breaking the law, which skews the real estate market to the disadvantage of consumers and honest businesses.”
One of the largest independent retail mortgage lenders in the U.S., Prospect Mortgage has had “improper arrangements” with more than 100 real estate brokerages from at least 2011 to 2016, including Keller Williams Mid-Willamette and RE/MAX Gold Coast, according to the CFPB, under the guise of desk-license agreements, lead agreements or marketing services agreements (MSAs). Prospect based payments to brokerages on number of referrals, and, in some cases, had brokerages require their clients to obtain a mortgage preapproval from Prospect, even if the client had a preapproval from another lender—a practice known as “writing in.” Keller Williams Mid-Willamette and RE/MAX Gold Coast accepted payments for referrals through these arrangements, according to the CFPB.
Prospect also established a similarly unlawful agreement with Meriden, Conn.-based Planet Home Lending in 2012, violating RESPA and the Fair Credit Reporting Act, for which the CFPB is also ordering payment, the Bureau stated. Prospect and Planet, which is not a lender, split the proceeds from the originations of refinance loans Planet persuaded consumers to obtain through Prospect, according to the CFPB, and Planet ordered “trigger leads” through credit reporting agencies that identified potential refinance customers for Prospect.
Prospect Mortgage is required to pay $3.5 million in civil penalties. Keller Williams Mid-Willamette is required to pay $145,000 in disgorgement and $35,000 in civil penalties. RE/MAX Gold Coast is required to pay $50,000 in civil penalties. Planet Home Lending is required to pay $265,000 in redress.
Phoenix Real Estate Appraisers Market Update 2016
Full Service Real Estate Appraisal Firm
SunPoint Appraisals, Inc. is a full-service “real estate appraisal firm,” offering both residential and commercial services. SunPoint covers the entire state of Arizona with satellite offices in Phoenix, Scottsdale, Mesa, Gilbert, Chandler, Goodyear, Sun City, Sun City West, Glendale, Carefree,Cave Creek, Rio Verde, Anthem, Payson, Prescott, Prescott Valley, Sedona, Munds Park, Strawberry, Happy Jack and so on. (480) 595-0188.
According to “Real Estate Appraisers in Arizona,” the 2016 Phoenix housing market forecast looks healthy. Anyone who lives in Phoenix, AZ knows we have come a long way since the real estate recession that began in 2008.
Real Estate Appraiser, Paul Johnson is forecasting a 15% jump in “new home sales, and a healthy boost in home values. The national forecast for home appreciation in 2016 is 3%, but the Phoenix area should see a value boost of about 5% overall.
AZ family .com is also predicting a promising housing forecast for the Phoenix Metro area. They see values rising a bit slighter than Arizona Real Estate appraisers throughout the valley do but higher values seems to be the consensus.
Single-family home sales rose 1 percent in May over April and 7 percent over May 2014, according to Arizona State University’s Center for Real Estate Theory and Practice at the W. P. Carey School of Business.