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Homeowner’s Net Worth is 45x Greater Than Renter’s Net Worth

Every three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a Forbes article the National Association of Realtors’ (NAR) Chief EconomistLawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.

The graph here demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

graph

Put Your Housing Cost to Work For You

Simply put, homeownership is a form of ‘forced savings’. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, meet with a real estate professional in your area who can guide you through the process.

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5 Front Yard Landscaping Tips To Wow Home Buyers

Your front yard is the red carpet inviting buyers into the beauty that is your home. If it’s rugged, messy and unkempt, buyers will take one look and then keep on driving to the next property on their list. Don’t let that happen by making your front yard luscious and as amazing as the inside of your home.

What areas should you focus on in your front yard? Where do you start? To help you break down the revitalization of your front yard, here are the steps you should take:

 

1. Cut the grass.  

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Buyers don’t want to trudge through high grass as though they were in the Amazon or on a safari in Africa. This means the lawn mower needs to be out at least once a week if not every other week, keeping it trimmed and maintained. It also needs to be green so it looks alive and lush. Water so the sun doesn’t dry out the lawn and turn it yellow or brown. A professional landscaper can help maintain a balance of trimming and growth so it looks just right for buyers.

2. Plant more shade trees.

One or two trees in the front yard are all right, but if you want to really add some shade, plant more. Shade trees will detract from the glare of the sun, and it can help decrease the temperature of the house if they’re placed close to windows. It also will help keep the lawn green with moisture. You can plant trees that are shorter and will grow by the time the new owner buys the home, but be sure they’re strong and can handle the climate.

3. Install outdoor lighting.

Outdoor lighting is a good way to both illuminate the house at night and accent parts of your yard. Depending on where you install the lights, your house will look very appealing at night to those buyers who might not have time to do their shopping during the day. Outdoor lighting also helps to illuminate a path like a sidewalk to get from the curb to your front door for easier navigation. It helps to accent the beauty of your landscaping which all together increases the beauty of your home.

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4. Consider adding flowers for more color.

If your front yard has a lot of greenery, you should increase the yard appeal by adding more colors. Flowers are a great and simple way to do this, as well as shrubbery with different blooms. Perennials are the best for this because they last for more than a year, which means less maintenance for the seller and the new homeowner. They come in a wide variety of colors and types so the yard can be decorated with any number of them while still requiring less maintenance.

5. Keep everything clean!

In addition to keeping the lawn trimmed, everything else should be clean. Anywhere that can build up dirt or grime – siding, porch, front door, driveway – should be cleaned on a regular basis. Buyers don’t want to see a lot of dirt and mess, and it will detract from them wanting to walk into the house. So take a broom, a power washer and a few hours on the weekend to keep everything sparkling clean. Don’t have a power washer? A professional power washing service can cost as little as $293.


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Flipping or Renting: Which is a Smarter Choice?

flipping_or_rentingPurchasing a home is a huge investment even if you might have plans to live on the property for a lifetime. This is because the real estate market has made a comeback and the price of homes will continue to progress in the coming years.

With the real estate market making a comeback, investors are also stepping back in to discover ways of how to turn selling homes into their advantage. In buying a home for investment, you actually have two options: either you rent it out or flip it. In this article, you will know which the better option is by looking through each of their strengths and weaknesses.

Reason behind the Flipping Discount

Most of the properties that are marked for flipping are normally fetched at a price that is Foreclosure_sale
much lower than its original market value because they are distressed properties. Distressed properties are those properties that are under foreclosure. Hence, when you buy them, your rights are subject to the foreclosure of the bank and you will end up doing a lot of paper works to put it back in the market. Depending on the circumstance and with the right contractor, flipping properties could give you a good return on your investment.

Renting for Profit

Buying a property so you can rent it out to outsiders does not always mean you’re going to get a better deal than flipping. There’s a possibility that the monthly rental fees are not enough to cover the mortgage curving you to a financial fall down. But if you have a good renter and a good rental price, it’s easy to pay off the mortgage and gain equity. Later on, as majority part of that loan is reduced, you can sell it out for a higher price.

apartment-for-rentRental versus Buyer’s Money

Flipping is quick but the process of earning profit can be long and tedious. If you want to make money flipping properties, it means you have to be on the watch. Once you find a property, you set up the cash deals, make some minor repairs, and put it out in the market again for an improved price.  If you sell the house, then it is profit on your side. You’re going to do the same steps over again.

The downside is that there is no guarantee that you are going to have it sold for the first month. It could happen the other way around, which means that you need to gather a lot of patience until a buyer comes in.

With renting a property, you are sure that you are going to receive something at the end of the month. But if you are someone who has other businesses around the world, and you can’t be sure to keep up with house maintenance, this might not be a good option for you. There are rental property management who can take over the management while you are away but they are going to charge you some fees.

Which is More Revenue Generating?revenue

Rental can basically give you a stable revenue stream. Let’s say you have a mortgage worth $1,000 per month, you can rent out your property for $1,500 a month, so you can pay the $1, 000 for your mortgage and keep the $500.

Flipping properties can give you more than what you can from rental properties but you are going to wait for a while. You’d really need to have some passion for waiting. The bottom question is are you prepared for this?

Whether you will opt on renting or flipping properties, the advantage will always depend on a lot of factors. But whichever path you choose, make sure you weigh all your options.