With Market and Interest Rates Down – Does That Mean Property Investment Is a Good Idea?
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So many people are wondering these days whether it is a good time to invest in property. It’s no secret that interest rates are at an all-time historic low and when combined with the low housing prices we are still seeing these days, more and more people are considering real estate investment.
How can you tell if it is the right thing for you? And if you do decide you want to venture into buying property for the sake of investment, how do you go about it and what type of dwelling makes the most sense?
The answer is largely dependent on your individual investment goals.
Overall Appreciation Perfect for Long-Term Security
The easiest way to enjoy significant returns on investment is through the purchase of a single-family home. Historically more popular, these properties are easier to rent out, entail less day-to-day management and they can be assumed as primary residence at any given time the investor would so choose, providing an added sense of security. Home values do appreciate with time and single-family homes typically rise in value faster than other rental property types.
It is important that the property is located in a desirable location and also that it is easily rentable. Your Realtor can assist you with an analysis of the area’s statistics in term of rent versus buy situations as well as a look at what other similar properties are renting out for.
Slow and Steady Monthly Income
Rental units that comprise of anywhere from 2 to 12 (or more) family units within the property are perfect for monthly real-time cash flow. While they may not appreciate as much as single-family homes, they provide the comfort and safety net of steady monthly income. If increased cash flow is the goal then opting for multi-unit rental properties may be the best route to take.
Demographics play a key role in determining your investment. For instance, if you live in a college town then a rental home near the college or downtown would be ideal for many senior or grad level students that prefer easy access yet quality housing. Conversely, resort homes are also attractive and as long as they are located near some tourist attractions you may be able to yield decent rental income. Rental units in big cities are also popular in the more bustling areas of town.
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Given the increase of rental units and investment properties being rented out, there has been an influx of property management companies set up. Ideal for the silent investor or someone that does not have a lot of time to put into the actual management of properties, property management companies handle anything from market analysis, finding and screening tenants plus managing the move-in process to handling day-to-day affairs like collecting rent or property maintenance.
If you can afford it and have investment goals that line up with some of the returns that are apparent with property investment, contact your Realtor to get a feel for what is available out there. This is definitely a very interesting time to pursue an investment property.
Getting Through a Tax Appeal; How To Request Property Taxes Reassessment
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Now that the holidays are over, what comes next? It is the beginning of tax season. And property taxes are no stranger to this time of year. As expected given the tumultuous past years we have collectively faced after the real estate bubble burst a while back, many homeowners want to make sure they are paying the right amount of taxes on their property. If you are unsure as to whether your property taxes accurately reflect the current value of your home, you can request the County Board to reassess the current taxes you are paying.
Even though it may sound like a lot of time between now and April 1st, the deadline to submit your application can creep up very quickly, leaving you in the dark with not enough time to prepare. Here are some valuable tips on how to prepare for a tax appeal request along with some important links that will provide further information on the process.
For Tax Appeal Success, You Need Evidence
Until and unless you provide the board with valuable, viable information that supports your claim to have your home’s value reassessed it likely that you will not be too successful. The key is providing evidence demonstrating that other, like kind properties in your area have recently sold for amounts that are far less than your current property value.
In the real estate industry agents and other professionals often deal with “comparable sales” reports. These are detailed reports that derive what the value of a home should be based on other similar homes that have the same profile. This profile could be amenities, number of bedrooms and bathrooms, square footage, type of structure, type of garage, location, school district – a number of factors. Realtors aptly perform a comparable sales analysis since they are well versed in the area and have a vested interest in understanding their neighborhoods’ property values.
Realtors know and understand the ins and outs of such procedures as applying for a reassessment of property taxes. Both agents are attorneys, for different reasons, offer valuable insight and experience into the process. Important details like the fact that comparable sales must include sales that took place in the year preceding the current tax year and only through October 1st, can be missed if not managed by a professional. For this reason, it is always a good idea to have that professional backing when you are filing for a tax appeal.
How Can a Professional Help With Filing a Tax Appeal?
Whether assisting homeowners will filling out the petition of appeal form submitted to the board, coming up with a tax record sheet showing the current assessment on the land and building or establishing the perfect comparable sales data – working with a Realtor (supplemented with an attorney) is ideal. Not only do your chances of successful reassessment significantly improve but also if there are any roadblocks along the way you have knowledgeable support alongside you.
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If you have decided to pursue a tax appeal, keep in mind that just like filing federal and state income taxes, the closer you get to the deadline the longer it can ultimately take for processing.
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Here is an important and useful link that will guide you through many aspects of the tax appeal process. If you have any questions, please do not hesitate to contact us and we would be glad to take this on for you!
- http://www.kcgov.us/
Seven Reasons That An Overpriced Home Can and Will Backfire In a Buyers’ Market
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It is fair to say that everyone listing a home on the market would like the home to sell. If not, why would they put it up for sale in the first place? But if you think about it, sellers that are not savvy and choose to ignore selling basics will end up suffering the consequences. To help you avoid becoming one of those people that commit serious pricing mistakes, we have explained seven ways overpricing would negatively impact your chances of a successful sale.
As a requirement of virtually all lenders, an appraisal is part of the loan approval process. And since almost all buyers obtain some form of financing the likelihood of finding an interested buyer that remains engaged in the transaction where the appraisal value doesn’t match the selling price is slim. In short – the selling price must line up with the appraised value and the market will determine the appraised value at the time.
Uninterested Buyers
No one will line up at your door when it comes to open house time. Today’s savvy buyers simply will not want to waste time on properties that seem way out of their league, appear to be listed with no room for negotiation or may end up taking more time overall.
The Property Is Flagged As a “Bad Choice”
People shopping for properties spend a lot of time searching many listings and eventually in the process, they end up with a system that quickly eliminates the bad picks and holds on to the potential ones for review later. A home that has been overpriced immediately raises a red flag and the potential buyer drops it off the list, labeling it as a “bad pick”.
Competition Gets the Upper Hand
When there are several similar properties for sale in the same vicinity, chances are buyers will look at most or all of them. If one or two of them are clearly priced more than others with the same square footage, amenities, neighborhood and other features, buyers will simply move away from your listing and go to other homes in the neighborhood.
The Home Becomes “Stale”
After a while, the same buyers looking for the same type of home will end up seeing the same homes that stay on the market and don’t sell. Since overpriced homes don’t sell too well, neither do they attract much attention and they end up looking like a lifeless vacant home. In fact, buyers begin wondering what is wrong with the property since it hasn’t sold, causing even fewer buyers to express an interest.
Wider Gap to Fill During Negotiations
Once there is an offer on the home there will be negotiations to contend with. Buyers being very knowledgeable and resourceful these days will have a fairly good idea of what your home is really worth. Together with their agent, they will leverage many factors during negotiation, including the appraisal value, other properties in the area and the current slow rate of appreciation in the housing market. With a wider gap to fill during negotiations (buyers starting out at market value and sellers’ starting point much higher) it will be difficult if not impossible to come to reasonable middle ground.
So often the perfect buyer, at the right time, is ready to make an offer on the home that has everything they want in it. But if that buyer never gets to see your home, they will never know that it is the perfect one for them. By listing your home way over the market value, you stand to risk losing the opportunity to meet the one buyer that is ready to buy your home.
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All of these can easily be avoided – simply by meeting with your Realtor to have a detailed consultation and determine the best price for your home, in its condition, within its location and relative to other properties in the area. Since many factors determine how much you can reasonably list your home for, it is vital that you meet with a professional that can make an accurate price determination for you. Remember, the more effectively your home is priced will result in a more positive and financially fruitful experience.
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