Have You Considered Investing In Real Estate?

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Have you ever considered buying a property as an investment? The property market is not reserved for experts and millionaires – you too could use it to make the most of your hard-earned savings.

A lot of people only buy a house as a family home and find paying off their mortgage before they reach retirement a big financial burden. Sound like you? However, buying a house as an investment (not living in it and instead renting it out) can make you a lot of money. In fact, it’s been shown that property outperforms other investments such as stocks, shares and savings accounts to bring you a nice fat profit in the long-term.

Yet somehow we’re all too cautious about hopping on the property investment train. Why? There are a few common apprehensions, questions and ‘buts’ people have when first looking at property, but there are good answers to all of them. So, before the words ‘finance’, ‘invest’ and ‘mortgage’ turn you off, have a read of the below to get clued in on what property investment can do for you and your piggy bank

But I don’t have the money to invest in property!

It’s a common misconception that you need to have all the cash up front. US banks may lend up to 75% of the property purchase price for investors, so for a $250,000 purchase (the average housing price in Lewisville according to Zillow) the total capital you need is $62,500. IRA’s and 401K’s are ways to get the down payment.

But I don’t want to take out another mortgage!

Before you panic about taking out a second mortgage, remember that the tenants who will be renting at your property will be paying off the mortgage for you, and that taking out a mortgage to pay for your investment means making more money.

But isn’t it risky?

As with all investments, there are low-risk and high-risk options.

But how can I make money from my investment if all my pennies are tied up in the property?

1) The increase in the property’s value over time. A well-chosen property and market will see the value of your investment jump up significantly over the course of five-to-ten years. You can then choose to resell at that higher price, keep it for longer to increase profits further or pass on the investment to your children.

2) The rent your tenants will pay you. This can cover the mortgage and/or provide you with an additional regular income – remember, rents will also increase over time as the area you invest in becomes more popular.

But I don’t want to be a landlord!

You don’t have to be! There are property management companies that exist to take that responsibility off of your hands. They can handle everything, from decorating and tenanting to taxes and reselling, and you’ll still be able to make a healthy profit.

When you’re ready to learn more or if you’re already clued in and want some more in-depth market advice, contact Jim Trump & Associates today! (214) 609-7123 or jtrump@kw.com

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6 Quick, Easy Steps That Help Get Your House Ready To Sell!

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Add These To-Dos to Your Presale Checklist

Before booking your market evaluation appointment to discuss listing strategy, here are a few things you can do to prepare for a speedy sale.

Handle Repairs – Take care of easily fixed repairs that may be potential red flags for buyers. Common quick fixes include repairing drywall, repainting walls and oiling hinges.

Declutter – Take this opportunity to get rid of those seldom used items that are cluttering up your home. Remember, it costs to move them, so now is the time to let them go!

Start Packing – Store seasonal clothing, sports gear and small appliances you know you won’t need before the move. Too much stuff crammed into cupboards and closets will make your home seem small.

Downsize Furniture – Consider removing extra or large pieces of furniture that make your home look smaller. You may want to stage specific rooms to highlight potential uses for the space.

Depersonalize – Tuck away family photos, collectibles and any other personal items. It’s important to make your home a “blank canvas” for potential buyers to imagine themselves in.

Check Curb AppealPlant colorful annuals along sidewalks and in containers, and remove any debris or clutter from around your home. Many buyers will preview a home from the outside before deciding whether or not to schedule a showing.

For professional real estate services, contact Jim Trump & Associates, (214) 609-7123 or jtrump@kw.com. “In Trump We Trust!”

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Is Buying A Home A Good Investment?

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A house is, with 100-percent certainty, an investment.

An investment is the outlay of money (i.e., a home down payment), usually for income or profit. Buying a home allows you to save on the monthly cash outflow you’d spend renting a comparable property. Instead, you’ll have a somewhat fixed, long-term housing cost thanks to your fixed mortgage payment until you pay it off, and then you’ll have no mortgage payment at all. You’ll also benefit through appreciation in your home’s value, possible tax advantages, mortgage amortization on the loan and not being burdened with housing costs in retirement.

Of course, while buying a home is an investment, that doesn’t necessarily mean it is a good investment. Avoid short-term real estate ownership, fixer-uppers, properties that are much more expensive to own than a comparable property would be to rent, and properties in poorly run homeowners associations.

The most important consideration when buying a home is your ownership time frame. Basically, the longer you own it, the better an investment it will be for you. The optimal holding period for most real estate purchases, whether it’s your personal home or a rental property, is your entire life.

Many homes do not have the best investment rates of return, and some, like fancy prize properties, should generally be avoided. However, two important aspects of investing in a personal residence do add value to your wealth picture (although, unfortunately, that value cannot be calculated):

  1. A monthly mortgage payment requires you to do something most Americans find challenging: Saving the money they earn.
  2. Individuals who retire with a paid-off home (or rental properties) are more likely to live a comfortable retirement than people who must pay rent or a big mortgage payment each month after they retire.

For those two reasons alone, most personal residences are a good investment, provided you hold them long-term. However, you must be sure to buy a home with a mortgage you can comfortably afford on your income, or that you can rent out later in life to a tenant who can pay the mortgage for you.

If you stick to those guidelines, you’re likely to reap the rewards of your real estate ownership.

You Cannot Please All Of The People All Of The Time

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You simply cannot please all of the people all of the time.

This adage is particularly true with real estate and putting your house on the market- because homes, locations, and such are so much a matter of personal preference, some people will find something to criticize about even the most perfectly staged, perfectly priced property on the market.

As a listing agent, my job is not to try to make your listing be all things to all people- but you do want it to appeal to enough buyers that you get one great offer (and multiple offers never hurt anybody, either!). That said, you don’t want your listing to be the house that nearly every buyer and agent sees, rolls their eyes at and utters the same few, predictable, deal-killing criticisms.

Fortunately, what is predictable is avoidable. Unfortunately, many of the things that make a listing susceptible to critics are issues on the seller’s side of the preparation for getting it ready to sell. Let’s explore the most common things buyers hate about listings they see.

House Critic Complaint No. 1: Odors

You might think I’m beating a dead horse or even preaching to the choir. But as long as house hunters keep asking me why, in the name of all that is Real Estate related, they keep viewing homes that smell like all sorts of mishmash, I’m going to keep repeating this!

Viewing a home sounds like it’s all about the visual, and mind you, visuals are critical- your listing should be at its Sunday best when it’s being shown, in terms of being spruced, staged and clutter-free. But when a buyer comes to see your listing, they don’t turn off the rest of their senses. There is nothing that can turn a buyer off from a home they’d otherwise like more quickly than a powerfully bad odor, in particular, cigarette, pet odors, and food smells in a house that seems to have been well-cleaned create the concern that those smells might be permanent and that the buyer might not be able to get rid of them without dropping some serious cash on cleaning or even removing wall, window and flooring.

If I am listing a home and you know that someone has been habitually smoking in it or that the seller has had a “challenge,” let’s say, with pet accidents, I cannot ignore the problem. Do not think that because you had the carpet shampooed or the drapes cleaned, or because YOU can’t smell anything, that the problem is gone. The human sense of smell very quickly gets used to smells that it lives with or is surrounded with on a regular basis.

It’s one of my toughest jobs as an agent to point out bad smells and odors, no matter how painful the conversation, and to make sure they are eliminated by any means necessary before you place your house on the market.

Critic Complaint No. 2: Overpricing 

There’s the one kind of overpricing that makes a buyer say, “Hmmm, seems a bit high, but let’s go see it anyway.” The other kind of overpricing is one that makes the buyer say, “I’ll wait until a price reduction,” or worse, hold their sides because they are laughing too hard!

It is common in our market for agents and sellers alike to say, “Let’s see if we can get it!”, and price a home a little above market value. However, when overpricing is glaring, many buyers and buyers’ agents are less likely to actually come out and see the place, especially if they weed it out online after comparing it’s pricing to all the other homes in the area. Often, homes this severely overpriced simply don’t sell, or at least not until after they have had some serious price cuts or have been on the market so long buyers begin to feel confident about making lowball offers.

The goal is the opposite- you want your listing to stand out as a property that is not priced so low as to throw up red flags but does present a good value for the money- that’s what motivates buyers to get out of their chairs and into the property for a viewing, and hopefully gets you, the seller, into a multiple offer situation!

I don’t set the price of my listings, I can only suggest. It’s obvious that the agent-seller conflict about overpricing is one of those battles that have been fought since Moby Dick was a minnow!

Here’s how to Critic Proof your home’s listing against this issue: Fixate on the comparables. Smart sellers deactivate their emotional attachment and the very human tendency to overvalue their precious homes by poring over the sales prices (not list prices) of similar, nearby homes that have recently sold. The buyer that wants to purchase your home doesn’t see the value in the fact that Jr. took his first steps in the Great Room, and won’t want to pay for it! Walk through this data — don’t forget to note the overpriced listings that are lagging on the market, and also any value-priced listings that have sold for way more than asking.

When I get a seller that simply won’t budge off a dramatically high list price, I have to consider whether this listing makes sense to take in the first place, or I will also use my wonderful office and the combined experience of the agents in my market center in a listing tour. If the agents overwhelmingly comment that they think the home is significantly overpriced, it is my duty to communicate this feedback to the seller. It doesn’t do either party any good to have a listing that is just sitting out there, not selling.

Critic Complaint No. 3: Dirt and/or Messes

Possibly the single largest source of Critic Complaints I’ve ever heard are the dirt, messes, and personal belongings that buyers find so distracting when they walk into a home for a viewing. Obviously, homes that are filthy from floor to ceiling are ripe for the picking for critics. What is underestimated is how often even savvy homebuyers are distracted (and disgusted) by relatively clean homes that just have a few outstanding messes, like piles of dirty dishes in the sink, piles of dog poo in the yard, or even piles of papers, mail, books or clothes lying out in plain view.

Will one or two such items ruin the sale of your home? It’s doubtful, however, a few of them (or more) can certainly distract a buyer enough that they fixate on the home’s messes and, in the process, fail to see what is so great about your property. As I see it, cleaning up faithfully before leaving for work every day and before every showing free-so it makes no sense to even run the risk of turning off a prospective buyer by letting messes get in the way of their ability to visualize themselves and their families flourishing in your home.

Make sure you brief the sellers in detail on what buyers expect, in the way of cleanliness. Also, set up a plan for giving them enough notice of showing appointments that they can do a quick, but thorough, house cleaning pass-through before every single viewing.

Critic Complaint No. 4: lots of little malfunctions

All of us tend to think our homes are in fantastic condition. After all, your sellers have had the furnace maintained regularly, they’ve installed granite and dual-paned windows, and maybe they even took your advice to have the floors refinished or the walls painted in preparation for putting the place on the market.

That’s all fantastic — all the noncosmetic work that’s been done to maintain and improve your listing should be trumpeted in your marketing materials, and the cosmetic items will (or should) speak for themselves. But here’s the thing: House hunters won’t be running the dishwasher or testing the furnace (at least not until inspections).

What they will do — almost unconsciously — is:

Flick light and fan switches.

Open or close window coverings, closet, room and entry doors.

Open and close drawers, cupboards, gates and fences.

Hold the handrails as they walk up and down the stairs.

They will hear leaky faucets and point out water spots from long-ago-repaired leaks, and they will notice (or potentially trip on) uneven exterior tiles, paths and walkways. And even though these items might be vastly less expensive to fix than the roof or sewer line you had replaced, they are much more visible and noticeable to a buyer. In fact, buyers don’t always even know that the little malfunctions and repairs that need doing are little or inexpensive. And when they notice a bunch of these sorts of things in a single property, they can jump to the conclusion that the whole place is rickety.

Since these little fixes are inexpensive to make, have them completed before you list, if at all possible. You might even ask your seller to walk through the property with you, pinpoint all the necessary little fixes and offer the a handyperson reference for someone you know works efficiently.

For professional real estate services, call me: (214) 609-7123 or jtrump@kw.com

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DO NOT DELAY!! Move Up To The Home Of Your Dreams!

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%.

However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease.

Here is a chart detailing this point:

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U.S. City Growth Is Slowing, But Suburbs Are Still Booming!

While cities are still outpacing suburbs, the gap is closing

The United States’ biggest cities grew more slowly last year as suburban areas population closed the gap, according to figures released by the U.S. Census on Thursday, suggesting that city-dwelling Americans may be looking to the suburbs again. While city growth overall is still outpacing the suburbs, the gap between the two is shrinking after several post-recession years in which downtowns and older urban cores around the U.S. saw significant population increases.

“The slowing growth in these urban cores and the increasing gains in the suburbs may be the first indication of a return to more traditional patterns of city-suburban growth,” said University of New Hampshire demographer Ken Johnson.

Of the 51 largest metropolitan regions in the U.S. in 2013, just 18 of them saw faster growth in cities than suburbs in 2013, compared with 25 in 2012.

The new Census figures show significant growth in suburban areas in the South and West. Almost all of the fastest-growing cities with a population of 50,000 or more were suburbs of major cities like Dallas, Salt Lake City, Phoenix, Nashville and Houston.

Texas suburbs saw the largest growth between 2012 and 2013, especially in areas around Austin, a city millennials have moved to in recent years for its tech jobs and cultural opportunities. The U.S.’s fastest growing city is San Marcos, whose population grew 8% in 2013. Cedar Park and Georgetown were also in the top seven fastest-growing cities, and all three Texas cities surround Austin.

“What you’re seeing, particularly outside of the northeast, is the growth of the ‘boomburbs,’” says Andy Beveridge, a demographer at Queens College. “But you still have substantial growth in the cities. Both are happening.”

Many of the nation’s biggest cities still saw the largest population increases, led by New York City, which added 61,440 people and remained the country’s largest with a population of 8.4 million. Houston, Los Angeles, San Antonio and Phoenix made up the top five in terms of population increases. One curious outlier was Chicago, the nation’s third-largest. Its population in 2013 grew by just 5,900, or 0.2%, to 2,719,000. That was smaller than the 8,600 it gained in 2012. In Chicago’s suburban Cook County, population growth was stable, and it increased in the city’s outer suburbs. Johnson points to Chicago as possibly suggesting an end to rapid city gains over suburban growth.

Historically, Americans have moved from downtown city cores to suburbs as they got older, had children and needed more space. Suburbs grew three times as fast as cities from 2000 to 2010, according to an analysis by William Frey, a demographer with the Brookings Institution. But the recession quickly reversed that as many older Americans felt frozen in place and decided to stay put, temporarily halting that city-to-suburbs flow. At the same time, those in their 20s and 30s have flocked to downtowns in that same period, often lured by jobs and the ease of commuting in an urban area.

Since the recession, city growth has largely outpaced suburban growth. From 2011 to 2012, city populations increased by 1.13% while suburbs increased by 0.95%, according to Frey. The new Census numbers show cities growing 1.02% and suburbs growing 0.96%.

But Frey says the U.S. is a long way off from the kind of suburban sprawl it witnessed throughout the 1990s and 2000s. Many of those living in cities have likely decided to stay put for good, Frey says, or are still financially unable to move or buy a house.

“We may never see that kind of suburbanization again,” he says.

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Why You Should Sell Your House NOW!!

School is back in session, the holidays are right around the corner, you might not think that now is the best time to sell your house.  But with inventory below historic numbers and demand still strong, you could be missing out on a great opportunity for your family.

Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market. These buyers are ready, willing and able to buy…and are in the market right now! As we get later into the year, many people have other things (weather, holidays, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market.

There Is Less Competition Now

Housing supply is still under the historical number of 6 months’ supply. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future. Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference). The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.

It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important. 

For professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com