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What to Expect for the Real Estate Market in 2023

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On January 9, 2023

In Investing, Real Estate

The real estate market has changed drastically over the last few years. The pandemic brought a surge in demand for houses, followed by a freeze in the market as inflation and interest rates rose. That begs the question, what should we expect from the following year?

Most experts believe 2023 will bring a new semblance of normalcy. That means the market will settle down and return to more normal levels. Inflation should reduce or at least balance out, while interest rates will slow down. Let’s take a closer look at what to expect this year.

Housing Prices

Experts are quick to weigh in with their opinion on housing prices and values. Unfortunately, not all experts agree on this. For example, Realtor.com believes that housing prices will increase by another 5.4%, while Zelman believes the value will decrease by 5.1%. Ideally, these two extreme estimates will land in the middle, providing us with a stable market.

In other words, if we balance out the expert opinions on prices, it indicates little change. This means we’ll see a flat or neutral appreciation in 2023. This is good for sellers and buyers, as the market will not change drastically. 

Rate Lock-In Phenomenon

Mortgage rates hit a record low a couple of years ago, countering the current higher rates we’re seeing. This results in homeowners with a low rate (below 6% in most cases and below 4% in exceptional circumstances). That’s great for those homeowners, but they will unlikely consider selling their homes with an average mortgage above 6%. 

Homeowners are unwilling to give up their low mortgage rate in exchange for a higher interest rate. Some homeowners will sell regardless, either because of need or desire. But a large percentage will stay at their current home to wait out this shift.

Ironically, this is going to affect another market. Homeowners that wait out this shift may choose to work on home improvement projects. This will ultimately encourage a stronger contract market and increase home values – if done carefully. 

Reduction in Building

There will likely be a reduction in the number of homes built over the next year or two. Specifically, experts believe that builders will cut back on the number of new single-family homes they are constructing. Likewise, building permits will likely decline as homeowners settle in and wait for rates to change. 

What to Know Before Renting to College Students

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On December 15, 2022

In Investing, Real Estate

Landlords, as a rule, rent their properties to many different subsets of people, including students. However, there are certain things that landlords and property owners must know before renting to students.

Renting to a student is a great way to quickly fill a vacancy, give a young person a chance, and potentially make a difference in the community. The downside is the higher risks associated with this sort of rental. Here is what you need to know before you get started.

The Risks

As mentioned above, there are certain risks associated with renting to students. For example, most students will only need to rent a space seasonally, so renting to them may create vacancies in the summer. Likewise, most students will not have an extended credit history, putting them at higher risk financially.

There are other risks to consider, such as their lack of experience (including a lack of experience paying bills) and potential noise concerns (consider the stereotypical student behavior, and this one is clear). 

Students may also not understand basic tenant responsibilities, such as how to file a maintenance request. This may result in a little problem growing in scale when it otherwise could have been prevented.

The Positives

Don’t worry; there are positives to help balance these additional risks. There is a generally higher demand for student housing, especially near school towns and properties. So filling vacancies shouldn’t be an issue. This has a secondary benefit as it reduces the need for expensive advertising. Word of mouth will do that for you.

Since students have little experience renting properties, they will not go into this process with inflated expectations. In other words, they’ll be happy to get an apartment and won’t demand all the latest bells and whistles. They will happily accept a simple property with no upgrades.

Finally, the possibility of multiple roommates in a property can help to mitigate any financial risk. The more people on the lease, the easier it will be for them to make their monthly payments. As this is a common social expectation for students, frequent arrangements are already in place for this sort of thing.

Lowering Risk

There are additional steps a landlord or property owner can take when renting to students. These steps will help reduce the overall risk. For example, requesting a cosigner or guarantor will minimize the risk of property damage and ensure that the rent gets paid. Likewise, periodic inspections can help spot damage or other repair needs before they become a more significant problem.

Finally, it is critical to set expectations in the lease. This means laying out any rules, regulations, or rules to follow. Doing so in writing will protect you and make it easier for the students to find information as they need it. 

3d Printed Neighborhood Coming To California

3D Printed Neighborhood Is Coming to California 

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On April 16, 2021

In Finance, Investing, New, News, Real Estate, Uncategorized, Welcome

There is no doubt that technology and industry will continue to evolve in many forms. Many futuristic sectors are currently being developed. Initiatives such as the robotic and the internet of things are becoming more and more of a factor. 

 Another industry that is emerging very quickly is the 3D Printing industry. 3D printing is emerging in various aspects of society. It has become abundantly clear that 3D printing has become a part of the housing industry as well. 

 As hard as it is to believe, there is a desert in California set to become a neighborhood constructed entirely via 3D printing.

 In this piece, we are going to examine this fantastic occurrence in greater depth.

 The location of this potentially historic neighbor good will be the Coachella Valley. Thanks to a partnership between an organization specializing in sustainable real estate development and a construction technology firm, 5 acres of land will become a community of 15 3d-printed houses.

 The construction technology firm is named Mighty Buildings. Mighty Buildings considers this project as a realized fulfillment of its vision for the housing industry’s future. 

 Mighty Buildings is based in Oakland and specializes in creating homes with the use of 3d printers that are pretty sizable.

 The material used by the construction company is designed to harden instantaneously. Thus, roofing and insulation can be done in one seamless process. 

 Mighty Buildings can automate 4/5th of the home construction process while achieving cost savings in manpower. Their approach allows environmental waste to be significantly reduced.

 According to the company’s chief sustainability officer, Mighty Buildings can build a 350 square foot home in a day. 

 The 3D-printed homes will have a modern look. All homes will be 1450 square feet and will consist of three bedrooms and two bathrooms. Also, each home can have another 2 BR/1 BA residence on the premises. 

 Each home will have a pool in the backyard. Individuals can opt for amenities such as hot tubs and fire pits. 

 Prices for the primary 3 BR/2 BA 3d-printed home start at $595,000. If one opts for a two-home setup with enhancements, the price is $950,000.

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How Your Credit Score Affects Home Buying

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On March 16, 2021

In Finance, Investing, New, News, Real Estate, Uncategorized, Welcome

Credit score has several impacts on people’s lives, among them being home buying. It is a measure of personal credit files that dictates the worthiness of an individual. Let’s look at some of the impacts that a credit score can sum up.

 

Lending and Payment

Apart from a rock-solid financial history, a credit score also matters a lot in approaching lenders. It has an impact on the amount of loan you qualify for to purchase a house. They look much into applicants who have a good record with other lenders, especially on payment duration. Thus, it is also an indication that the respective borrower will be accountable and meet the obligations.

A good credit score implies that the borrower will repay and in the speculated duration. This varies depending on your credit report’s information that brings together your history of borrowed money and payment habits.

 

Mortgage Rates and Credit

For you to acquire the best mortgage rates, your credit score should be high enough. Persons with a low credit score will end up paying more money during the term of their mortgage. This is attributed to the increased interest and monthly payments.

Generally, a credit score of 700 and above will place you in the best position for mortgages and with the best rates. However, there are still better options for credits below 700. Below is a summary of the scores and statuses. 

800 or higher is an exceptional credit, 740 and higher has excellent credit, between 700 and 739 is good credit, and between 630 and 699 results in a fair credit. But for 629 and below results to poor credit.

 

Down payment Amount

When your credit score matches the desired range, you will be in for a reasonable down payment. Additionally, there will be favorable terms such as a lower original fee. Also, borrowers who bring in more cash on the table reciprocate their potential of delivering and fulfilling the agreement terms. 

Borrowers with a low credit score will raise trust issues and will be an accomplice of higher requirements. Such conditions can be incorporating private mortgage insurance into their loans which is results in extra costs. This is pragmatic, especially for new home buyers who need to create a reputable note.

Why Your Properties Should Be Pet-Friendly

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On September 27, 2017

In Real Estate

W Darrow Fiedler

Pet owners consider their pets to be part of their family. If you’ve ever known someone who owned a pet, you would know it’s almost impossible to convince them to give up their beloved Fluffy to move into a home where they’re not wanted. As a landlord, here are some reasons why you should transform your properties into pet-friendly homes.

Fill Vacancies Faster

Many of your prospective tenants come with pets. According to the 2017-2018 National Pet Owners Survey, about 85 million families, or 68% of U.S. households own a pet. They say that owning a pet reduces one’s stress level. Allowing pets can create a more home-like feel for your properties. If you allow your properties to accept pets, your properties will become increasingly more attractive to the eyes of searching renters.

Keep Great Tenants

Pet-friendly options are not always easy to come by. Tenants with pets are more likely to rent from you longer simply because it’s easier to stay than trying to find another place that allows pets. Additionally, a responsible pet owner is more likely to be a responsible tenant and respect their living quarters.

Pet Rent

The practice of charging rent for a pet is becoming increasingly popular and is widely accepted by renters. The recurring monthly charge, that’s often determined by pet size, simply gets tacked onto the tenant’s rent. Check with your local laws regarding pet rent and research what other landlords in your area are charging. Common fees for cats and small dogs, such as Chihuahuas or Shih Tzus are between $25-$45 a month. If a tenant owns a large dog, like a St. Bernard or Mastiff, the fee can be up to $100. If you own ten properties and they all have a small pet rent fee of $25, that’s an additional $3,000 of additional revenue to you.

Pet Deposit

Similar to a security deposit, a pet deposit can help cover the costs of any damage done by the pet. This protects you as the landlord from paying out of pocket to fix the damage. A typical pet deposit is around $250. Again, check your local laws and the going rate in your area before you settle on a set amount.

Not only will creating your properties to be pet-friendly lead to more revenue but you will also create a stronger relationship with your tenants. Besides, each pet you allow is one less that ends up in a shelter.

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