Rental Property in Florida

How long should I hold on to my investment property?

ROI (return on investment) varies based on many factors, your costs to maintain the property; taxes, HOA, insurance, etc. If the investment property carries a mortgage, the interest rate is a factor as well. There is never a guarantee that a property will increase in value, but let’s say you did some solid research, purchased your property in a desirable location at a good price. This is where the old real estate adage applies; location, location, location. You can now assume your property value will hold, and most likely will increase by about 2%-3% per year. Yes, this is a modest increase, but in today’s real estate market this is a reasonable expectation. Markets do change quickly, and your investment property value rises or falls dependent upon geographical stability, age and condition, size and improvement, population movement, taxes, and the surrounding neighborhood. It is always a smart move to closely watch all investment properties to be certain that your investment is providing the return you anticipated. Of course, if your investment property is generating an income; it pays to hold that property until you have achieved your personal goal. I have many clients who purchase homes in anticipation of living or retiring to their investment property in the future. In the interim, the client has a home in a great location, purchased at a good price, that is generating an income. When they are ready to retire to Florida their home is ready to live in and enjoy.

Many clients also rent their Solivita home for the winter season; usually November thru April. During the other six months, they visit, vacation, and enjoy the benefits of owning a home in the award-winning community of Solivita. If you were to choose this option in Solivita your property would not generate an income but instead would cover the ownership costs and provide you and your family a great place to relax and vacation while you try out the fabulous Solivita lifestyle.

Not to be forgotten in the equation is the tax benefits of a rental property. However, you choose to manage your investments, home ownership is always a good choice to consider.

buying-a-home-in-florida

Read This Before Buying A Home In Florida

What You Need to Know Before Buying a Home in Florida Buying a home in Florida sounds like, well, vacation and it basically is. But, there is a lot you should know before buying a home in Florida paradise. It is critical you know everything you can about the residency before spending your hard-earned money and […]

first-time-home-buyers

First Time Home Buyers: Making The Process Enjoyable

Buying a home in central Florida is exciting, but it can also seem overwhelming for first time home buyers. Understanding the process that is involved will make it easier. There are many steps that have to be completed in order to purchase a home. Understanding what is involved can reduce stress and actually make the process one you enjoy. Read more

mortgage-qualification

Mortgage Qualification: 5 Factors That Determine How Much Mortgage You Can Qualify For

Mortgage Qualification Factor #1: Know Your Credit Score. Beef it up.

This is the single biggest mortgage qualification out there. Why? Because it’s proof that you can pay back what you owe. Your credit score is the combination of all of your loans, credit cards, and your payment histories. If you haven’t got all your ducks in a row, there are all kinds of tools out there to help you when you want to improve your credit. The most simple goal to aspire for is to make sure you’re making payments on time, and that no bill collector is trying to collect on things you owe.

Credit is complicated. The first thing to do to get bad credit back on track is to check your credit reports through the main credit companies: Equifax, Experian, TransUnion; Get everything you owe paid up-to-date. It can take a while for your credit to clear out, so the goal is to be vigilant. The best way to raise your scores is by establishing your credit history through a single lender with a small debt while building savings and assets. Another huge factor for your credit is your current income.

BOTTOM LINE:
With a high enough credit score, you can secure much lower interest rates on your mortgage than someone with poor credit.

Mortgage Qualification Factor #2: Loan-to-Value Ratio

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It wouldn’t make any sense to put a huge chunk of money down on something that was never going to bring a solid return on your investment. Imagine if your friend had a bike that sold at the local big-box store for $125, but they needed to borrow that amount from you to purchase the bike. You don’t know if they’re ever going to be able to completely pay you back, but you can take their bike if they don’t pay you- the catch is, you can only expect to sell it for 50 to 75 percent of what you spent on it. This means that you’d automatically take a $40 to $62.50 loss if your friend doesn’t pay you back and you end up taking the bike.

If this friend was a good friend, you might invest the money in him/her to get a nice shiny bike, but most mortgage lenders aren’t there to be your friend – they’re there to make money. This is why mortgage lenders use a ratio called the Loan-to-Value Ratio to establish a person’s credit. Obviously, this isn’t the only factor that a mortgage lender is going to use, but larger loans are seen as a larger risk (this can be said of smaller loans too) and therefore bring higher interest and payments.

BOTTOM LINE:
If the house you really want is going to require you to take a mortgage over 75% you should probably consider another house.

Mortgage Qualification Factor #3: Debt-to-Income Ratio

America is all about working and proving your livelihood to improve your lot in life. Plus, you have to expect to grow and expand if you want to raise a family, be successful and expand your life. If you haven’t got these expectations for yourself, don’t worry the bank does!

Typically speaking, when you’re looking to get a mortgage, you should have a debt-to-income ratio around 43% or lower. What debt-to-income ratios show lenders is how you are personally able to manage your payments on the money you’ve borrowed in comparison to your finances that you earn. A rough example of this is to assume you’re paying $1,000 a month on your mortgage, $200 on your shiny new car, and another $800 for all of your other debts (school loans). Take the sum total ($2,000) and divide it by 0.4. You should make this amount (in our example it’s roughly $5,000 a month) for a bank to give you the best deal on your mortgage. If you don’t, the bank might still give you your mortgage, but it won’t be a qualified mortgage.

BOTTOM LINE:
Cut out your extra debts or increase your income to get the bank on your side when you’re looking to get the best mortgage out there.

Mortgage Qualification Factor #4: Housing Cost-to-Income Ratio

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You don’t buy a car without expecting to change a few parts after years of owning it, why would you do any differently with your home? Lenders see houses as huge investments. They assume your goal is to make an investment that makes you money and this requires you to take all the necessary steps – paying your mortgage principal, your interest payments, property taxes, hazard insurance, mortgage insurance, and fees. If all this exceeds over 28% of your income, you’ll probably have to find something more affordable.

Banks or lenders might still lend you money, even if your front ratios are too high. These types of negotiations typically require co-borrowers to lower initial payments, but if you have a mortgage that’s too high and you can only afford to pay the bare minimum because of your debts, and housing costs aren’t low enough compared to your salary, you’re going to find yourself swimming in a debt that just keeps getting bigger and bigger.

BOTTOM LINE:
You might forget about your bills and expenses, but banks don’t. If you aren’t making enough so that your salary is higher than projected housing costs, you might have to look into something more affordable.

Mortgage Qualification Factor #5: Down-payment Amount

A down payment is your ace in the hole. The more cash you can put down, the lower your payments are going to be, which plays a huge factor in deciding your other ratios. A good rule of thumb is to try and put a sizable chunk into the amount you’re trying to borrow. It helps to consider the principal of your loan, and the amount of time that you plan on taking to pay it back, plus sometimes lenders will give you additional incentives when you put money down in the form of rebates, that can definitely add up over the long run.

BOTTOM LINE:
The best thing to do is to try to put down 20% on your initial mortgage. This means if you’re trying to borrow $100,000, you should aim to put at least $20,000 in. Not only will you get lower interest rates, your payments will be drastically smaller. If you can’t pay 20%, experiment to see how lower amounts of down-payments can affect your costs.

It’s a New Year and a New Brokerage

IT’S A NEW YEAR AND A NEW BROKERAGE

Just when I thought we could start winding down after all the holiday celebrations, gift giving, food, fun, and visits with friends and family we are pleased to announce that Lee and I have opened a new realty company – Bella Verde Realty.   Translation – Beautiful Green. We are grateful and thankful for each and every client, friend, family member and neighbor that has helped us achieve this goal. We could not have done it without you. Thank You.

OPEN FOR BUSINESS: REAL ESTATE BROKERAGE

We are ready to list, show homes, show commercial spaces, assist you in your move to Florida or just find a new home for you around the corner from your existing home. The past does dictate the future, and we remain happy to provide each of our clients with a beautiful new home space to hang their hats in.

Lee is our Commercial Space Expert and will be happy to assist you in locating commercial space for the relocation of your business or assist you in securing space for a new business venture.  I will continue to concentrate on the residential side of real estate sales, as I find great satisfaction in finding clients the home of their dreams.

Our office is set up and running and we are pleased to say the phones have been busy.

Please call us with any of your real estate needs, questions, or concerns. Or, we invite you, your friends and your family to join our newsletter – a great way to stay in touch with me and to stay in touch with what is going on in Solivita and real estate. Sign up today to see what is new in Solivita, Photos, the Latest Information, Fun Ideas, Reviews, Recipes, Articles, Etc. We publish the Newsletter once per month and I will be delighted to add you to our list.

May 2017 bring us all Great Health, Peace and a Beautiful Year!

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buying-or-selling-without-agent

Every Reason You Need to Avoid Buying or Selling Without an Agent

Many things are doable with a little bit of research and time, but is buying or selling without an agent a gamble you are ready to take? A real estate agent has put hundreds and hundreds of hours into market research, developing skill sets, and creating systems that will allow them to out perform other agents in their market. Your greatest ally and strategy for buying or selling is to have an expert agent by your side. If you’re still not convinced, here are 5 reasons buying or selling without an agent is something you want to avoid: Read more

Take The Home Buying Preparedness Quiz

Buying a home? Take the quiz to see how prepared you are! You might learn a thing or two.

Downsizing Your Home In 5 Smart Moves

Cashing Out When Downsizing Your Home

The kids are out of the house, up-keeping the home has begun to take more and more time, and you’re looking for a setting where you can live smooth and easy. Do these symptoms sound familiar? Downsizing your home often gives homeowners a big break after decades of cash tied up in equity. When you sell your home, you’ve got tons of purchasing power that most home buyers don’t –  this means striking better deals and beating out competitors. You may also have enough cash left over to use as a buffer between you and your retirement savings. How does all of this magic happen? (1)Make the following 5 smart moves and (2) work with a realtor who knows the ins and outs of the area you’re looking to downsize to.

1. Stage Your Home

The most minimal and cost-friendly upgrades can make all the difference. Replacing old, out-dated bedding and bath towels, for example, can give your home a new look with minimal effort. Also, remove clutter that you have held on to for a decade or more – put it away in storage or get rid of it completely. De-cluttering will also make life easier when moving into your smaller home!

If you’ve got a higher-priced home, you might want to look into getting a professional stager. A stager can really shine new light on your home and help get you top dollar. Costs for hiring a stager can vary, but a NAR survey revealed a median cost to be $675. The NAR survey also revealed that 90% of sellers’ agents said staging resulted in an increase in price buyers would pay.

2. Consider a Town House or Condo

If you’re looking to keep more of your cash for retirement savings, consider moving into a town home or condo. Prices for these rose just 3.1% in 2015, NAR says, vs. the 7.2% growth among single-family homes. Other perks, besides more money in your pocket, include less upkeep – landscaping, repairs and service to major appliances, and more.

Though, town houses and condos do have some drawbacks.; the biggest being high HOA fees and surprise costs. Working with a realtor who knows the ins and outs of the area you’re looking to downsize to can help with avoiding some of those surprise costs.

3. Build a Mortgage That Is The Right Size For You

Cashing out your home puts money in your pocket, and this means you can put down a larger down payment which will reduce your monthly mortgage. Were you thinking of paying off your new home? Think again! Having a mortgage at this stage in life isn’t a bad idea, as 30-year loan rates are below 4%, and it’s tax deductible.

4. Take On Cosmetic Repairs

This is where purchasing power and time come together to strike gold. The likelihood of finding a real bargain in a home that is perfect for you is high if you are willing to take on some cosmetic upgrades.

You can find bargains because younger buyers are still trying to find their way in life and cannot take on such a project. Also, you most likely have more time at hand to manage a contractor who will make the needed cosmetic repairs. In turn, the money you save on the new home because of its cosmetic shortcomings will almost always keep you well under what you would have paid if the home was up to par. What kind of numbers can you expect? NAR survey found savings of 15% to 55% for homebuyers who opted to buy a fixer-upper.

5. Try It On For Size Before You Buy

Have a particular square footage or home style in mind? Don’t rush into something you might deem unfitting later on. Consider renting something with the square footage you have in mind. You may find that it’s just not enough space for you, or that the style of home wasn’t quite what you needed.

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Kissimmee Florida Homes Sales Summary

April 1st marks the opening day of the real estate major league season, or at least that’s what I like to call this busy 4-month period. Kissimmee Florida homes sales peak between April and July, making it the busiest season of the year for many reasons. For people with kids, school is or has wound down and they are looking to make the move during the Summer months while the kids are out of school. For people who have an empty nest and are in retiring mode, they have had enough of the snow by April and get into relocating mode. What ever your situation may be, the following information is one you should take into consideration if you are buying or selling a home in 2016.

Kissimmee Real Estate Cold Hard Facts

According to a recent news report, this January, the Orlando Metro area housing market outperformed the state of Florida’s. In the Orlando metro area, buyers paid a midpoint of $202,000, which is $3,000 higher than the current median price throughout the state of Florida.

A report by Florida Realtors stated that a tight job market along with a thinning inventory helped boost Orlando’s real estate market up by more than 14 percent over the past year. Over the course of the past year, the state’s 13 percent price growth was surpassed by Central Florida’s market.

The region’s strong price growth wasn’t hurt by its pace of sales. The Orlando metro area accounted for 2,000 single-family home sales in the month of January, a 4.3 percent increase from January of 2015.

However, not every price range was selling according to Florida Realtor Chief Economist Brad O’ Connor. Affordable home sales dropped by 17 percent and the inventory of houses through- out Florida decreased from a supply of 5.9 months in 2015 to 4.5 months of supply just last month. The demand for such home prices was maintained, even with 30-year mortgage interest rates rising to nearly 3.8 percent.

What Does This Mean If You’re A Seller?

Make repairs now – gutters, squeaky doors, leaky faucets, broken moldings, paint touch-ups, pressure washing, new roof (if approaching the 12 year mark), add fresh mulch, weed flowerbeds, and any other simple repairs or improvements that could be an excuse for a buyer to submit a low bid. Keep curb appeal closely in mind as a clean, bright driveway and maintained landscaping will create competition for your home and thus being able to sell closer or above your asking price.

What Does This Mean If You’re A Buyer?

Be flexible. Things can begin moving rather quickly during this time and you must be ready for calls, face-to-face meetings, and other things that may come up during this process. Expect to exceed the asking price. In these types of market conditions, chances are the seller has several good bids and yours may not make the cut if you try to bid cheap. Get in touch with the seller and show him/her your interest in creating a home out of their space – they may prefer to sell to you even if your bid isn’t the highest because they can relate to you. Have at least two areas you would want to live in. The market is tight so we may need a back up plan.

What You Need To Know About Your Home Closing In Solivita

Finishing Strong: What You Need to Know About Your Home Closing

For many home buyers, first-timers especially, closing can be the most tedious and harrowing part of the process. Tedious because it often puts buyers in the cross hairs of both the legal system and the real estate paperwork tangle that’s required to complete the purchase.

The harrowing part is a separate issue entirely. Many of the deadlines associated with closing real estate seem ridiculously arbitrary, and missing one or forgetting a crucial piece of paperwork can delay or hinder the purchase in ways that seem impossible to anticipate.

But it doesn’t have to be that way. What follows is a set of broad guidelines about what to expect during and before a home closing, including an outline of the process, some information about the timeline and some of the requirements for different parts of the purchase.

It’s important to note that the nomenclature and procedures described here can vary slightly from state to state, so you need to know which minor variations matter most.

Before the Home Closing

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One of the best ways to prepare for a closing is to thoroughly understand what it’s about. The overall goal is to transfer the title of the home from the seller to the buyer, and some critical paperwork must be exchanged or verified for that to happen. The actual time required for the closing can be anywhere from a few hours to an entire day.

But much of the process takes place before the actual date of the closing. It starts when you sign the contract for the house. After that there are several important pieces that come into play.

One is the verification of the loan. Before most closings, the lender has three days to provide the buyer with an estimate of the closing costs, along with a booklet describing the process. (This booklet is also called a settlement in some parts of the country.)

In addition, the bank must do an appraisal of the property, which is normally paid for by the buyer. If the appraisal is lower than the agreed-on price, the difference must be accounted for in the financing plans in case the bank ends up foreclosing on the home.

Another important element is the title investigation, which also starts once you sign the contract. This investigation, which is normally conducted by a company or agent specializing in doing this, verifies that the title is in fact free and clear and the previous owner owes no taxes or liens on the property or the home itself.
Homeowners must also get title insurance, which helps protect both you and the bank from any undiscovered liens or taxes associated with the home and the property.

And then there are the inspections. These include a general inspection of the home, a pest inspection, environmental inspection for issues such as asbestos and mold, flood reports, and boundary verification for some rural properties.
Finally, the seller’s disclosures must also be approved. Notification of these disclosures is required in advance, and this helps the buyer become aware of any problems with the property or the home that weren’t outlined in the original listing.

At the Closing

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Paying for the house itself is a separate process that’s usually verified at the closing. The previous mortgage must be paid off if that’s part of the process, and that payment must be verified. The money you’re paying will be put into an escrow account, which is verified and monitored by an escrow company, which becomes a neutral third party in this part of the transaction.

The most important piece of paperwork in the closing is the HUD-1 form, which verifies the terms of the loan and the closing costs. This is compared to the initial estimate, and should be checked for any discrepancies in fee amounts as well as mistakes.

A final walk through of the property is usually part of the closing. This includes a review of appliances or fixtures, and buyers and sellers may pressure each other to back out of an agreement if there are problems with this part of the process.

Insurance is an important element of the transaction as well. Buyers must have homeowners insurance and hazard insurance, and these are normally verified during the closing as well.

This rundown describes most of the basics. It’s important to have an array of qualified professionals helping you, from the real estate agent to your lawyer, title agent, etc. With all of this in place, its much easier to anticipate any curveballs and make the process much smoother and less stressful.