A recent survey shows that most Americans would rather invest in real estate than in the stock market. On today’s State of the Market podcast, we discuss why we prefer investing in housing over publicly traded companies. But we also talk about the challenges that come with owning rental property. Plus, we cover breaking stories in the real estate sphere, including news of forbearance requests dropping to their lowest levels since March 2020.
Listen to today’s show and learn:
Normalcy starts to return to New York [1:37]
Skyline Tower sales on fire – signs of a comeback in Long Island? [2:48]
Lean pickings with twice as many agents as listings in Boston [5:22]
New forbearance requests at lowest level since March 2020 [8:57]
Oakland pushes to bring multi-family housing into single-family neighborhoods [12:38]
Texas court opens eviction flood gates [18:43]
Survey shows that people prefer investing in real estate over stocks [24:38]
Offerpad makes moving easier for sellers with 60-day extended stay [30:06]
Kelly Skeval
Kelly moved to Ithaca in 2005 after attaining her degree in Veterinary Technology and continued her career in veterinary medicine at Cornell University until her first child was born. Kelly had an active interest in real estate long before her and her husband, a Trumansburg native, decided to purchase their first home. When they did, they turned it into an owner occupied duplex and were able to use that foundation to further expand their real estate portfolio to include 5 properties and 10 units.
In addition, Kelly and her husband owned a home energy auditing business. Being a BPI certified energy auditor she was able to assess homes and building envelopes then make recommendations to homeowners on how to make improvements that would save energy and make their homes more efficient.
It is Kelly’s knowledge in many aspects of real estate including but not limited to single family buying and selling, rental properties, new construction, property management, building envelopes and business ownership that make her an ideal person to help you in your real estate endeavors. Purchasing or selling a home is a big decision and Kelly prides herself on offering quality customer service along with knowledge and compassion.
In her spare time, Kelly enjoys spending time with her husband and their two small children exploring the Fingerlakes region and all that it has to offer.
Related Links and Resources:
Thank You Rockstars! It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email. -Aaron Amuchastegui
With mortgage rates currently at 7.04%, many first-time homebuyers – typically millennials – will be forced to continue to rent.
But the U.S. housing market is not a monolith, so today we’re going to look at some markets where affordability is within the normal renter’s reach.
In a study published this week, First American economist Ksenia Potapov analyzed the share of homes that are affordable to the median renter in any given market. She defined an affordable market as one in which the median renter can afford 50% or more of the homes for sale based on the renter’s household income, the prevailing 30-year mortgage rate, and the assumption that one-third of pre-tax income is used for a mortgage with a 5% down payment.
Here’s what she found:
There are only four markets in the U.S. in which the median renter in that market could afford half or more of the homes – Buffalo (59%), Pittsburgh (56%), Detroit (54%) and Cleveland (54%).
Meanwhile, the least affordable markets were Los Angeles (1%), San Diego (2%), San Francisco (2%), Salt Lake City (4%), and San Jose, Calif. (4%). The California cities are stalwarts on lists such as these, but Salt Lake City — which attracted tech workers during the pandemic — is a new entrant.
“Pre-pandemic, Salt Lake City was an affordable market that fell in the middle of the pack out of the top 50 U.S. markets,” Potapov wrote. “However, rapid house price appreciation during the pandemic dragged Salt Lake City near the bottom of the affordability list. In the fourth quarter of 2019, the median renter could afford 69% of the homes for sale in Salt Lake City. Now, the median renter can only afford 4% of homes.”
According to data from Altos Research, the median home price listed in Salt Lake City last week climbed to $785,000, up from about $540,000 in the fourth quarter of 2019.
Jake from State Farm to California: Drop dead!
California markets like the ones listed above already face a number of challenges, but news over the weekend could make it even more challenging for buyers. Last week we talked about the cost of flood insurance going up by over 200% for some homeowners in the Southeast as both the federal government and private insurers determine how to price the soaring cost of climate risk, or abandon insuring them altogether.
Well, State Farm last week announced that it would halt home insurance sales in California. State Farm is the nation’s largest car and home insurer by premium volume. The insurance giant said it “made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.” Existing home-insurance policyholders won’t be affected, though this is clearly not a positive development for the state.
You might remember that a year ago, AIG notified 9,000 wealthy clients that it wouldn’t renew home insurance policies in California. The change was part of a plan by AIG to stop selling home policies in California through a unit regulated by the state’s insurance department. Policyholders were instead directed to another unit, where policies could cost three-to-five times higher than what clients paid under the old plan, with less-generous coverage to boot.
California has experienced record wildfires in the past six years. The state experienced eight of the largest fires in U.S. history and three of the top five deadliest fires.
I am not sure if we should even get into the reconstruction costs in California, which are so high they are almost beyond belief.
What does this all mean for Californians? For starters, I expect that other insurance companies are going to follow suit and availability is going to be a serious problem for homeowners and prove a problem for buyers and sellers alike. As is true in Florida, California has an insurer of last resort — FAIR Plan — for wildfires, but homeowners will still need significant wrap-around coverage. The premiums are quite high under FAIR, too and they cover the dwelling at actual cash value versus replacement cost value.
Cali LOs and agents: Have you had any deals held up because of home insurance issues? Let me know at [email protected]
In our weeklyDataDigest newsletter, HW Media Managing Editor James Kleimann breaks down the biggest stories in housing through a data lens. Sign up here! Have a subject in mind? Email him at [email protected]
Real estate can be a great investment if you take the time to educate yourself about the process and the best ways to get great returns. However, most people who are interested in buying rental properties or real estate as an investment never do so. People who don’t take the time to learn about investing in rental properties are missing out on a great opportunity. I own 11 rental properties that bring in approximately $5,000 a month in cash flow after all my expenses, including mortgage payments.
One thing I would have done differently is investing in real estate much sooner. I bought my first rental property when I was 31 and I am now 35. The great thing about rentals is the longer you own them, the better investment they become. Plus, when you are young you have more flexibility in life, fewer commitments, and can take more risk. If you wait too long to start investing, family, work, and life make it hard to learn about and buy rental properties.
What’s Ahead:
Why rental properties are a great investment
I love comparing rental properties to the stock market, because the stock market is the investment vehicle we are all taught to use. Whether it is individual stocks, mutual funds, index funds, or REITs, we are told the best way to save and invest is to put our money in the market. The problem with investing in the stock market is we are depending solely on stocks to increase in value. Retirement calculators are based on the stock market. They make us guess when we will die to determine how much we should save. We run out of money if we live too long or save too much money if we die to soon.
Some people invest in real estate for appreciation, but smart investors invest for cash flow.
Cash flow and real estate investing
Cash flow is the money you make from rental properties every month after all expenses are paid. The great thing about cash flow is it increases over time without ever eating away at your principal investment. It is like a stock where the dividend is so high that you never have to worry about the stock increasing in value to make great returns.
Cash flow will also increase over time because rents will go up with inflation while your mortgage payments stay the same. Eventually, you will pay off your loan and your cash flow will increase significantly.
On my rentals, I am seeing 20% cash on cash returns, which is not always easy to do, but possible depending on your location and amount of money you have to invest. Those returns do not include the tax advantages of rentals, equity pay down and possible appreciation which all increase your ROI. Here is a great article on how to calculate cash flow properly.
One way to make money on rental properties is to invest using sites like Roofstock. Roofstock is an online marketplace for real estate investing that charges half of the fees of traditional agents. The site makes it ridiculously easy to filter and search for properties in your price range.
Buying rental properties with little money down is easier when you are younger
Most banks will require an investor to put at least 20% down on a rental property.
That is a lot of money to most people, especially when you consider a property may need repairs, you have to pay closing costs and you want to have money in reserve in case something goes wrong. It can easily take 30% or more of the purchase price in cash to comfortably purchase a rental property.
If you buy a home as an owner occupant you can put no money down with certain loans (USDA, VA) and almost certainly buy a home with 5% down. You can’t rent out a home that you buy as an owner occupant right away, but you can rent it out after you have lived in the home a certain amount of time (usually one year).
There are some things to know about buying a multi-family property that you plan to live in. Most lenders require an owner occupant to live in a house for 12 months to satisfy the owner-occupancy requirement. That means you can buy a rental property as an owner-occupant, live there for 12 months and then rent the home out. If you are ambitious you can keep repeating this process every year although you will most likely only be able to use the no money down option once.
You can also buy a multifamily property that is between one and four units and live in one of the units to qualify as an owner occupant. After you have lived in the unit for 12 months, you can rent out the entire building and repeat the process.
When you are younger, it is much easier to move into a house that you want to make a rental property. When you have a family it is tough convincing your spouse and kids that you need to move every year and into a house that may not be up to their standards.
You can invest in real estate without buying property
One of the easiest ways to enter the real estate market is to do so as an investor. Today, there are many platforms that crowdsource the investment process. These platforms choose a group of expertly-vetted properties and have investors contribute to a collective pool, with each investor sharing in the reward.
You don’t have to be an accredited investor with Fundrise, and you can get started on real estate investing with only $10. Fundrise loans money to commercial real estate buyers, then bundles those loans, offering them as investments through its platform.
DiversyFund is yet another investing platform that allows you to invest in real estate without purchasing a property. The company offers investment funds of private market assets including real estate, and investors can start with as little as $500. They also feature zero management fees and a commitment to helping investors of all income levels grow their wealth, making it a great option for investors in their twenties.
CrowdStreet has two major options for real estate investors: choose and manage your own portfolio or let their team of real estate investment experts do the work for you. Either way, you join other investors in funding commercial real estate projects, each of which is carefully vetted by market experts. Minimum investment requirements vary from one project to the next, but you can choose the opportunities that best fit your finances.
Streitwise is another excellent starter real estate investment opportunity. There’s only a $5,000 minimum for private real estate investments, and its most recent dividend was 8.4%. Note that Streitwise isn’t a crowdsourcing platform. Instead, you’re individually investing in a real estate investment trust (REIT), which operates similarly to a mutual fund by grouping investments together and having investors buy-in. What sets Streitwise apart is that it allows you to fund your investment using cryptocurrencies like Bitcoin and Ethereum. Once you’ve signed up on the website, you can download the app to use on your iOS devices
This is a testimonial in partnership with Fundrise. We earn a commission from partner links on MoneyUnder30. All opinions are our own.
It takes time to get a great deal on rental properties that cash flow
It is not easy to find rental properties that will generate the returns I get, but I am not an aberration either. Many investors get higher returns than I do, but they have put in a lot of time and effort learning their market, learning about real estate, and learning about rental properties. The older you get, the less time you have with more job commitments, more family commitments, and more hobbies you discover. There is less time to learn about real estate, your market, and how to make money in this business the older you get (unless you get to retirement age).
I also fix and flip about 10-15 homes every year so I specialize in getting great deals on real estate. I buy most of my deals off the MLS even with rising prices and a lot of competition.
Here are a few tips on getting great deals:
I am a real estate agent, which helps me get great deals and lets me act very fast. I am not saying all investors should be agents, but it sure helps!
If you aren’t an agent spend a lot of time finding a great agent that will act fast for you and find you deals.
Spend time researching prices in your market and rental rates so you know what a good deal is.
Do not depend solely on a real estate agent to find you good deals. Many agents are not investors and won’t know what you are looking for.
Join a real estate investing club in your area to meet other investors and learn what they are buying and how.
The risks involved with buying rental property
There are definitely some risks and work involved with owning rental properties. The biggest mistake I see investors make is buying for appreciation with negative cash flow. It is great if my houses appreciates, but I love the cash flow. With cash flow, I have money in my pocket that I can use to buy more properties, invest somewhere else, or spend on something fun. If you have negative cash flow, there is a great chance things will end badly for the investor.
The problem with negative cash flow is most investors underestimate the money they will have to spend on their rental properties. There is also no guarantee prices will rise or when they will rise. Given enough time real estate will probably appreciate, but it could also go down in value before that happens. How long can you continue to pay money into a property every month? Eventually, people run out of money and are forced to sell, sometimes for less than they bought a property for. If you have positive cash flow, you won’t have to sell and you won’t want to sell, because it is putting money in your pocket.
Another issue that people forget about is maintenance. You have to budget for maintenance items every month. I figure 10% to 20% of my monthly rents will go to maintenance, depending on the age and condition of a property. If you don’t account for maintenance you may not make any money on your rentals.
On my rentals my average mortgage payments range from $400 to $600 including taxes and insurance and my rents range from $1,100 to $1,500 a month. After accounting for possible maintenance and vacancies my cash flow is about $500 a month.
It takes time to manage a rental property as well. You will have to find tenants, create a lease, account for expenses and income properly and make sure everyone pays on time. You could also hire a property manager to do all this for you for about 8% to 10% of the monthly rents, but you have to budget for that expense as well.
Conclusion
Rental properties can be an awesome investment that allows you to retire early. It is not a get rich quick scheme and it is not easy to do. Real estate investing takes time, flexibility, and ambition to make it work well. The sooner you get started, the easier it will be and the better off you will be later in life.
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Have you ever wondered what it would be like to have a million dollars?
The first thing that comes to mind might be the ability to purchase whatever you want, whenever you want. But do not let your imagination run wild just yet! There are many things beyond material goods that come with this kind of money.
We will dive into the life experiences that come with being independently wealthy. Plus, everyone will have a different number to be classified as independently wealthy.
You have probably heard that it is impossible to be rich and independent. While others truly believe they are capable of being wealthy.
Becoming financially independent might sound like an impossible goal, but with a little bit of hard work and determination, you are capable of reaching your dreams.
Independent wealth is a life state that you can have and maintain without having to rely on your job or family.
This post will help newbies become financially independent, so you will be able to live their best lives without any external pressures.
In the last few years, many people have taken up the idea of becoming wealthy on their own, without relying on a company or organization to make money. There are numerous ways in which one can become wealthy, but oftentimes it requires a great deal of time, effort, and dedication.
Let’s make sure you enjoy a life of independent wealth with these tips for success.
What Is Independently Wealthy?
Independent wealth is a term often used to describe people who are wealthy enough that their personal finances are not impacted by the economy.
These individuals have a certain level of financial independence, which can be accomplished in a variety of ways, including through saving, investing, or business ownership.
Financial Independence vs. Independently Wealthy
Financial Independence is when you are able to live a life of your choosing (with or without a job) and not need any support from external sources.
Independently wealthy is when individuals do not have to work another day and do not need financial support from any external sources.
Either way, you are in complete control of your money and not living paycheck to paycheck. It is possible to be financially independent without being independently wealthy.
To become independently wealthy, you need to have assets that generate income whether or not you are working.
The benefits of being independently wealthy
Many people believe that becoming independently wealthy is not just a pipe dream but is possible. There are many benefits to being rich, like being able to do anything you want with your money or help others in need.
The benefits of being independently wealthy are clear.
It is possible to achieve financial wealth, and the time and patience it takes to create such wealth are well worth it. Not only that, but those who amass great wealth can also create a powerful financial legacy for their loved ones.
Here are the benefits to enjoy the most:
You can freely pursue your passions without fear of having to conform to a certain type of lifestyle or do certain things in order to be successful.
Your mental and physical health will improve. There is less stress and more time to dedicate to your health.
You have a clear vision for the future. You know it is possible to reach your full potential.
You can experience time freedom.
There are very hardly any downsides to pursuing independent wealth. More often than not, you are the one blocking your path.
Misconceptions About Being Independently Wealthy
There are some misconceptions about what it means to be independently wealthy.
Though some may think that independently wealthy people must look a certain way or act in a certain way, this is not always the case. In fact, many of these people blend in with everyday society and go about their lives just like everyone else.
Furthermore, they are still human and have feelings; they simply have more money than most.
An independently wealthy person typically lives a comfortable life but nothing too showy. They drive nice cars that most people drive, that are reliable and affordable. They work hard and put their savings first always, so they can maintain their wealth over time.
You Don’t Need Millions
You don’t need to be born into a wealthy family or have millions of dollars to be financially independent.
It is possible to build your own wealth with consistency and time.
The amount you need depends on your current expenses and the number of people in your household.
Have All The Luxuries In Life
Wealth is relative and means different things to different people. People often think of flashy things when they think of rich people, but that is not always the case.
A person can be wealthy without having a lot of material possessions.
Money gives you options in life.
Signs You are Independently Wealthy
If you are able to support yourself with a portfolio of investments that pay for your lifestyle without having to work, you are considered to be independently wealthy. This typically means having a solid net worth and not needing to rely on a day job.
What qualifies as independently wealthy? Here are many signs that you may be independently wealthy including:
More free time
No bills to pay
No mortgage
Money saved in the bank
Practice random acts of kindness
You quit your day job.
More than anything, you have built yourself a nice cushion (AKA liquid net worth) and you are able to live off your savings.
You understand how to FI.
How to Become Independently Wealthy
There is no one-size-fits-all answer when it comes to becoming independently wealthy, but there are a few basic principles that hold true for most people.
The first is that money is a tool to be used, and should not be hoarded or worshipped.
Next, realizing wealth accumulation takes time and effort.
Lastly, it’s important to remember that financial independence is about more than just money – it’s about having the freedom to do what you want with your life.
Now, let’s dig into the steps to take to be independently wealthy.
#1 – Set Goals
Goal setting is a powerful tool that can be used to achieve anything you want in life.
By setting a specific date to achieve your goal, writing down what you need to do to achieve the goal, and taking action, you are well on your way to reaching your goals!
If you do not know where you want to go, then how can you use money as a tool to get you there.
Learn: How to set SMART financial goals.
#2 – Pay Yourself First
Pay yourself first is a financial concept that suggests you should save and invest most of your income before paying personal, living expenses. If you pay yourself first and don’t overspend, the money you save will be available for future use.
People find it difficult to save money because they tend to pay everybody else first, including bills, rent, and other necessities. By committing to “paying yourself first,” you make it a priority to put money away in savings or investments so you can cover your own costs down the road.
To become independently wealthy, you should start by saving at least 15% of your income.
Choose: one of our money saving challenges to kickstart your savings journey.
#3 – Increase Your Income
Increase your income in a few steps and move your life ahead. You can do this in one of three ways: find a higher paying job, start a side hustle, or create passive income.
Most people, look to increase their income as the best way to make money. This is definitely the fastest way to make more money. You can ask for a pay raise or look for another job that pays more.
Another option is starting a side hustle, which can be anything that doesn’t take up too much time and can be monetized. A simple way to bring in more money each week.
Passive income streams are income that does not require any effort from the individual who creates it. Passive income is generated by assets such as rental properties, stocks, or investments that produce a cash flow that is higher than the person’s expenses. This is a great way to diversity and increases your income at the same time.
Learn: how to make more money fast.
#4- Know Your Net Worth
Your new worth is a financial snapshot of your personal finances.
It will tell simply calculate your assets minus your liabilities to find your net worth.
Knowing your net worth is important, even if it’s negative. This number will give you an idea of how much debt you have and what assets you own. It can help you make better financial decisions in the future.
Knowing your net worth is important because it measures how wise with money you are. As you pay off debt and invest money into solid assets, your net worth will grow over time- so make sure you’re keeping track!
Figure out your net worth with Empower!
Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
#5 – Invest your Money
Investing in retirement and non-retirement funds is a way to finance your future. Though the investment strategy differs, both are considered to be asset investments because they provide you with a return on your money.
For way too many people, they shy away from investing which means they will never be able to become independently wealthy.
When it comes to investing for retirement, there are a variety of different options available. One popular option is to invest in a mutual fund. Mutual funds are collections of stocks, bonds, and other securities that are managed by a professional investment company. They offer investors the opportunity to buy into a diversified portfolio without having to purchase individual securities.
Another common retirement investment option is purchasing individual stocks or bonds. While this can be riskier than investing in mutual funds, it can also provide greater returns if done correctly.
Regardless of which option you choose, it’s important to start investing as early as possible. Compounding interest can make building wealth over time much easier.
Learn: how to invest in stocks for beginners
#6 – Educate Yourself on Personal Finance Topics
A great way to understand the complexities of personal finance is to educate yourself on how money works.
This can include learning about the following topics:
Budgeting/Finance Budgeting
Debt Management/Paying Off Debt
Investing
Retiring Early
Taxes
Income and Employment
Estate Planning (Wills, Trusts, and Estates)
Financial Freedom
This is one of the most important personal finance tips that I can give you. If you want to become a millionaire, you need to learn how money works. Period.
Check out: one of the top finance books.
#7- Stay Out of Debt
It might seem like common sense, but it is important to stay out of debt. In today’s world where credit cards are easily accessible and loans can be taken out without much thought, it is easy to find yourself in debt, and it can be difficult to get out of.
You have to make a plan to get out of debt and stay out of debt.
Until you have your debt paid in full, you will always be shackled by interest payments and unable to get much further ahead.
Learn: how to get out of debt.
#8 – Live Below Your Means
One of the most important things to understand is you must spend less than you make.
Live below your means is a phrase that was coined in the United States during the Great Depression and describes how it is possible to live on less than you earn. Live below your means refers to living on less than you make.
Living below your means is a great way to become independently wealthy.
You should spend money on the things that make your life more comfortable and enjoyable, rather than frivolous things that you don’t need.
Find out: how to live below your means.
#9 – Minimize Lifestyle Creep
Lifestyle creep can often be a subtle and dangerous thing.
As your income goes up, you may find yourself spending more money in other areas like vacations or entertainment. Most people do not even recognize it until it is too late.
Minimize lifestyle creep by setting specific boundaries and sticking to them.
However, it’s important to remember that you don’t need to completely avoid lifestyle creep and live on the same budget forever – you just want to make sure that your expenses are rising much slower than your income is rising. This will give you the best chance of reaching your long-term goals.
Learn: the signs to watch for lifestyle creep.
#10 – Think Long Term
The key to wealth is thinking long-term. When you have a clear vision for the future and are able to plan accordingly, you set yourself up for success both financially and in other areas of your life.
If you want to be successful in the long term, you must study and learn as much as you can.
Furthermore, if you’re looking to amass wealth over a period of years or decades, playing the long game is your best bet.
There will be ups and downs along the way, but with patience and perseverance, you can achieve great things.
Understand: the difference between rich and wealthy
How to Know if You’re Independently Wealthy?
The first step to knowing if you are independently wealthy is to determine your net worth.
There are a few signs that can help you determine if you are independently wealthy.
For one, you have enough money to cover all of your expenses without having to rely on anyone else. Additionally, being independently wealthy means that you can afford anything and everything you want without needing to rely on any type of income – whether it be passive or active.
You can go out and buy something just because you want to and not worry about the price tag.
Reasons to Strive for Becoming Independently Wealthy
There are many reasons to strive for independent wealth.
Achieving independent wealth is not impossible. Though it takes time, hard work, and patience, any person can do it by following a plan and taking specific steps.
Reason #1 – Enjoy Time Freedom
It’s a very rewarding feeling to be financially independent and know you’ll never have to work again.
You’ll gain more control of your life and finances, which will allow you more freedom to do what you want when you want.
This is something very few people actually get to enjoy.
Reason #2 – Less Stress
One of the main reasons people want to become independently wealthy is to avoid the stress that comes with full-time jobs.
Wealth can provide a sense of freedom and control that reduces stress and allows people to live happier lives.
Financial independence is a goal that many people strive for and when they achieve it, they find that the stresses of money-related problems are no longer a part of their lives. While achieving financial independence doesn’t mean all stress goes away, it does help with the stresses of not having enough money
Reason #3 – More Control
When you become financially independent, you gain a sense of control over your life and your finances. You are no longer at the mercy of others to provide for you or make decisions about your money. There are many ways to gain control over your finances, including creating a budget, investing in yourself, and automating your finances.
There are a lot of benefits to having more control over your finances.
One of the most important is that you can set money aside for emergencies without having to rely on credit cards. This means you won’t have as much stress if something unexpected comes up, and you’ll be less likely to fall into debt.
In fact, check out these billionaire morning routines to find quick success.
How Much Do You Need to Become Independently Wealthy?
It is difficult to determine how much money you would need to become independently wealthy because the amount of wealth that different people have requires an estimate.
For example, someone who earns $50,000 per year and has $100,000 in savings would be considered financially independent. However, they would need investable assets to cover their living expenses to be independently wealthy. Many experts say 20x your income, so approximately a million dollars.
There is no exact amount of how much money should someone have to be considered wealthy.
Everyone’s situation will be unique to them. Thus, your number will be different than mine as well as everyone around you.
Becoming independently wealthy does not happen overnight. It takes work, dedication, and a lot of patience. The first step to becoming an independent millionaire is by saving money in the bank account; this is the most important step in becoming an independent millionaire.
How to Become Wealthy in 5 Years?
Independent wealth means having the freedom to make choices based on what you want, not what you need. And that’s a goal worth striving for.
This is something you can achieve in 5 years or even 10 years.
In order to become wealthy in five years, the first step is to get a good education in personal finance.
In addition, one must work hard and avoid making dumb decisions. In order to become wealthy, you should be able to prioritize your goals and work towards them instead of wasting time on distractions.
There are many ways to become independently wealthy, but it takes time and patience to build up your assets.
You are in control of your destiny, so you must be willing to save more money and spend less money.
We gave you tips to make it happen. You must take action to make it a reality.
Know someone else that needs this, too? Then, please share!!
Are you thinking about renting a home for the summer? Similar to buying or renting a permanent home, it is necessary to do thorough research.
Follow our guide to help you choose the best summer rental:
Why Rent: Renting a vacation house or apartment is a fun way to get away and spend the summer somewhere new. Staying at hotels with your family can be pricey, but renting a space allows you and your family to make your own meals, explore the surrounding area, and have a space that feels like home.
Location: Choosing the right location for your family is the most important component of picking a summer rental. Do you and your family enjoy water sports? Choose a location near the ocean or lake. Are you looking for outdoor adventures? Find a cabin in the woods.
Property Type: There are many types of rental properties to choose from. Single family homes are a popular option for families with young children or larger families who need extra space. Condominiums or time shares require less maintenance and come with amenities.
Pricing: The cost of summer rentals vary depending on property type and location. Some things to take into consideration are maintenance fees, amenities, and size.
List out the features you’d like your rental to have and plan accordingly then call a CENTURY 21® Agent who can help you find your dream summer rental!
Have you landed a new job opportunity on the other side of the country? Maybe you find yourself scrambling to find an apartment on a tight turnaround.
Finding an apartment isn’t easy, and conducting a long distance apartment search has many more difficulties. Here are some things you need to know to cut down on the stress of making a long distance search.
Research the area and building thoroughly
Finding an apartment that might work is just the beginning. Apartment Guide makes the early part of seeking an apartment much simpler and more efficient. Finding the right price range, number of bedrooms/bathrooms, and proximity to certain neighborhoods is the easier first step.
Think about how much you don’t know when moving to an apartment in a different part of town. Now that you’re not even in the same general area, you don’t even know the things you don’t know.
Here are some of the next steps you’ll need to take:
Research the building, landlord, and management company: Google is your best friend for this part of the process. Check the Better Business Bureau, and anywhere you find reviews of apartment buildings (our listings have reviews for exactly that reason). Keep an eye out for the trends in reviews. One person’s experience can be an anomaly, but if several people are reporting the same issue, it’s something you need to seriously consider.
Find travel times to important destinations: How long will it take to drive to your job, your kids’ school, the nearest gas station, or the grocery store? Can you walk to any of these places instead of driving? While a long drive might not be a deal breaker on its own, it can have a negative effect on your quality of life.
Find the right timing for your search: Some places have different schedules for renting, such as heavy tourist areas and college towns. If you’re looking at the wrong time, you might not be able to find anything, or apartments won’t be available until much closer to the move in date.
Visit in person or find someone local
It’s always best if you can go out ahead of time to check out the apartment and the area around it in person. If you can’t, this is where it’s especially useful to know someone in the area. Reach out to your social networks. You might not know anyone who lives where you’re looking, but perhaps you have a friend who does. They can fill in the gaps about what areas you should look at, and start to answer the questions you don’t even know to ask. A local contact can check out the apartment and neighborhood for you and even send you photos and video.
If you’re relocating for a new job, ask your employer for help. It’s likely that they will have someone in HR or their relocation department who can provide helpful resources on finding a place to live. They can also put you in touch with local employees and other workers who have relocated from out of town.
Be ready to act
If you are able to make an in-person trip, it’s likely that your time will be extremely limited. You can’t afford to miss out on the right place should you happen upon it. Be prepared to sign a lease immediately. This means coming equipped with all the necessary documentation, including:
Driver’s license, passport or state-issued ID
A utility bill with your current address
Social security card
Checkbook (in case you need to put down a deposit)
Bank statements (in paper or electronic form)
A letter from your employer or recent pay stub
Take a virtual tour
With every passing day, emerging technologies offer new and more efficient ways of doing what previously seemed impossible. Searching for a place to live in a far away location is no exception. Video tours are a growing way to see more of where you’re going to be moving. An increasing number of owners of apartments and rental properties are offering high definition photos, video walkthroughs, 360-degree imagery and in some cases VR apartment tours that you can take from your laptop or smartphone.
Search on ApartmentGuide.com and look for links to slideshow, video or tour in the top right corner of any property page. See the image below for reference.
Lean on the leasing agent
If you can’t get yourself or someone you know out to look at the apartment, you’re not out of luck. In addition to virtual tours, request to set up a video call with the leasing agent. They can walk you through the apartment to give you a better idea of the looks and layout. Never hesitate to ask them other questions, either. Their job is to help current and prospective renters, so take advantage of that.
Be cautious about anything suspicious
When you’re moving to another city, you’re in a difficult and busy situation. It’s easy to miss something. Not everyone is unscrupulous, but you have to remember that you’re vulnerable to being taken advantage of. Be cautious about anything you don’t understand or that looks suspicious. Always ask those questions, and don’t sign something that makes you uncomfortable.
Use this helpful apartment hunting checklist or consider creating your own.
Look for a sublet or short term lease
While shorter-term leases tend to be more expensive, that flexibility can be worth paying for. This gets you somewhere to live in the area for a short time. During that time, learn what you really need to know, and make a more informed decision a few months later. Subletting can give you the same opportunity for less money, at the cost of a little added complexity.
Need more help with your search? Online Apartment Search TipsTips for Researching Neighborhoods Online
Get ready to unlock a treasure trove of invaluable insights and expert advice that will revolutionize your vacation rental property. In this Redfin article, we dive deep into the world of vacation rentals, revealing powerful strategies to make your property shine and leave guests in awe. From savvy investments that boost your property’s allure to crafting an unforgettable resort-like experience, forging strategic partnerships, and crafting personalized guest interactions, we’ll equip you with the knowledge to exceed expectations and achieve unrivaled success in the fiercely competitive world of vacation rentals.
Whether you own a vacation rental property in the enchanting city of Orlando, FL, or the picturesque town of San Marcos, CA, this comprehensive resource is tailored to elevate your rental business to new heights. Here are 18 transformational secrets to maximize guest satisfaction, earn rave reviews, and propel your property to the one of the most sought after homes in the area.
1. Make your rental stand out
“To maintain a five-star rental property, you’ll want to go above and beyond tenant expectations. Our data shows that including a washer and dryer, upgrading to newer appliances, and providing freshly painted walls in neutral tones will not only make your rental stand out, but also make the process of finding great tenants faster,” recommends Doorstead. “Moreover, by ensuring access to a responsive property manager, you can guarantee that all aspects of the home are well taken care of, truly enhancing the tenant experience.”
2. Pretend your vacation rental is a five-star resort
“The most important thing to remember about managing a vacation rental is that this is the hospitality business, not the landlord and tenant business,” shares Todd Ortscheid, Co-Owner of Revolution Rental Management. “You have to think of what you’re offering more like a hotel or resort than a traditional rental property. This means cleanliness, fast response time, desirable amenities, and a well-maintained property. The more you think of your property as a five-star resort, the better off you’ll be.”
3. Consider creating strategic partnerships
“We recommend partnering with a company that specializes in exclusive vacation rental portfolios. If your property is a top-tier, five-star rental, it’s essential to align it with a company whose branding and services cater to the discerning needs of luxury clientele,” recommends Gary Doss, Co-Owner of SoCal Vacations. “Larger companies that offer a broad range of properties may not be able to meet the high expectations and unique demands of this premium market segment.”
4. Personalize communication
“To ensure a successful guest experience, effective communication plays a pivotal role. It is crucial to make your guests feel genuinely welcomed, leaving a lasting impression. One way to achieve this is by remembering their return and incorporating delightful surprises. Consider offering their favorite snacks accompanied by a bottle of wine, arranging fresh flowers, and providing a personalized welcome message upon their arrival,” recommends Ellie Paget, CEO of HomeSlice Stays.
“Prompt responsiveness is of utmost importance when it comes to addressing guest requests or concerns. Aim to respond to them in a timely manner, never exceeding a 15-minute timeframe. This level of attentiveness demonstrates your commitment to their satisfaction and enhances their overall experience.
By prioritizing personalized communication, you can create an exceptional guest experience that fosters satisfaction and builds positive relationships.”
5. Decorate with style
“When it comes to guest experience and satisfaction, décor has the potential to make a significant difference in how guests perceive your rental property. To ensure an exceptional experience, it is crucial to infuse your property with chic and stylish decor, incorporating appealing color schemes and well-curated furnishings,” recommends Ellie Paget.
“To achieve a truly unique and captivating aesthetic, consider leveraging the expertise of our dedicated team. They can assist you in designing your home, helping you create an environment that not only catches the attention of potential guests through eye-catching marketing images but also provides a one-of-a-kind experience during their stay.
By investing in stylish decor and enlisting professional guidance, you can elevate your rental property’s overall appeal, command top dollar, and leave a lasting impression on your guests.”
6. Make sure you have security and safety measures
“To prioritize the safety and security of your guests, it is important to emphasize on security and safety measures. Install reliable locks, smoke detectors, and fire extinguishers. Provide clear instructions on emergency procedures and ensure your guests feel secure throughout their stay. A focus on safety gives guests peace of mind and contributes to their overall satisfaction,” recommends Damir Dumo from Chalet.
“Smart locks with rotating access keys for each guest are must-haves nowadays. We use a smart home automation system that can be remotely managed for all of our homes.”
7. Leverage guest’s reviews
“Pay attention to guest feedback and reviews,” says Damir Dumo. “Actively seek feedback from your guests and use it to improve your property and services. Address any concerns promptly and implement suggestions that align with your goals. By consistently evolving based on guest feedback, you’ll maintain a high level of guest satisfaction and enhance your reputation as a top-notch rental property.
Ask for a five-star review on the day the guest checks out. If it wasn’t a five-star experience, ask the guest to give feedback directly to you.”
8. Discover your secret formula to winning a rave review
“We’ve found that rave reviews are the secret to creating successful, five-star rental properties,” says ALL IN. “This begins with maintaining excellent communication with our owners, guests, and community management teams. Maintaining a meticulous standard of cleaning, offering modern amenities, and assuring attention to every detail are non-negotiables that must always be upheld as a standard.
We invite the input of our guests and respond promptly to their questions, needs, and feedback. Creating memorable experiences keeps them wanting to share their experience with others.”
9. Elevate your guest’s stay with tailored upsells
“When catering to today’s travelers, it’s important to go beyond providing accommodation and focus on creating memorable experiences. Enhance your guests’ stay by offering exciting upsells and activities that align with your property’s location,” says Kennedy Williams from Mount.
“For instance, if you’re near a beach, consider providing e-bikes, or if you’re situated by a lake, offer kayaks. By incorporating these quality add-ons and upsells, you eliminate the guesswork and reduce trip planning stress for your guests, ensuring your property is a memorable stay for all the right reasons.”
10. Elevate your guest experience through realistic promises and delightful surprises
“The top-performing property managers consistently prioritize the basics of a well-maintained property, comfortable beds, and clean linens to create a memorable guest experience. They also excel in attentive guest communication, providing timely and personalized responses that make guests feel valued and supported,” mentions Hostaway.
“They’re also careful in setting realistic expectations by promoting property highlights without overpromising, along with adding delightful touches like unique decor, outdoor games, or welcome gifts, further enhancing the guest experience.”
11. Thoughtfully prepare your guest’s needs before they arrive
“Take the time to think about your guest experience from their perspective,” recommends Floorspace. “By anticipating their requests, you can provide the amenities, information, and special touches that will make their stay seamless and memorable, while also reducing the amount of communication required.
It’s also helpful to keep in mind the benefits of providing a positive guest experience, which can’t really be overstated. Not only will you garner more five-star reviews, but you’ll also increase your chances of repeat and direct bookings.”
12. Set a competitive pricing strategy
“One thing that often gets overlooked is pricing strategy. You can have high occupancy throughout the year, but if your pricing is not competitive, you will not reach your highest earning potential,” recommends Humberto Pacheco, CEO of Naya Homes. “You will need to research similar listings in your area and take into account factors such as location, size, amenities, and seasonal demand.”
13. Automate communication
“Automating communication in a natural tone through templates or automated messages streamlines your interactions with guests while maintaining a personalized touch,” suggests Alex Withorn from Thorn Point Vacation Rentals. “This approach allows you to experiment with different messaging strategies, refine your communication based on guest responses, and deliver consistently excellent customer service without guests realizing it’s not manual correspondence.
Investing effort in repeat business can significantly contribute to ensuring another great review. By fostering strong relationships with guests and providing exceptional experiences, you increase the likelihood of them returning, resulting in positive reviews from satisfied repeat guests.”
14. Harness the power of preemptive reviews
“When you give guests a five-star review, specifically letting them know before they leave their own review can encourage reciprocity and forgiveness. By expressing gratitude and acknowledging their positive experience, you create a positive feedback loop that encourages guests to leave similarly favorable reviews,” says Alex Withorn from Thorn Point Vacation Rentals
“Being upfront about expectations and educating guests about the review process is crucial for ensuring positive reviews. Transparent communication sets the stage for mutual understanding and helps guests provide feedback that aligns with their expectations, leading to more favorable reviews.”
15. Ensure your guests have a streamlined experience checking in and checking out
“Being in the cleaning industry for so long, I found that attention to detail, open communication, consistency, and streamlined processes leads to a five-star rental experience,” says Celestial Cleaning Service. “Every little thing counts, from beginning to end. The way your entrance is presented with wine and chocolates and a personalized letter, to the ease of checking out. Ensuring all staff members associated with delivering a five-star experience is up to date with your standards in delivering a great experience is key.”
16. Create a cleaning schedule
“To ensure a consistently high standard of cleanliness and maintenance in your vacation rental, it is important to establish a comprehensive cleaning schedule. This schedule should encompass tasks that need to be performed daily, weekly, quarterly, and seasonally,” recommends Jacqueline Barbosa from Morfin Cleaning Services.
“Examples of such tasks include carpet cleaning, window washing, and high dusting. Consider small details such as re-caulking, checking batteries, lightbulbs, filters, and even painting the unit if necessary. It is crucial to use quality products and professional cleaning services to ensure that every area, including appliances and windows, receives proper care.
Attention to detail is key when managing a rental property. In platforms like Airbnb, linens and bedding should be in excellent condition, and all appliances must work properly. Guests should have access to all necessary amenities such as toilet paper and soap, and a complete set of cooking utensils should be provided. It is important to regularly inspect these details and replace anything that is worn or damaged.”
17. Conduct inspections
“To maintain a high-quality vacation rental, it is important to regularly inspect, maintain, and upgrade the unit, including appliances and amenities,” says Jacqueline. “Providing a comprehensive guide for guests, which includes information on internet access, streaming services, local attractions, and useful tips, enhances their experience.
“Essential amenities and toiletries such as toilet paper, soap, and dish soap should be provided and regularly restocked after every visitor. Maintaining open communication with guests, checking in upon arrival, and seeking their feedback throughout their stay are key to providing excellent customer service and ensuring a positive guest experience.”
18. Provide uninterrupted guest service anytime, anywhere
“Providing a smooth and memorable guest experience is essential to maintaining a five-star rental. This involves communicating promptly with guests (no matter what time of the day or night), solving guest problems in a timely manner, and giving guests the tools to create the vacation of their dreams,” shares Sam Ripley from LocalVR.
19. Provide perfectly maintained appliances, ample storage space, and an inviting ambiance for your guests
“When it comes to keeping a five-star rental property, I recommend that all appliances and technology be well maintained and in excellent working condition,” suggests Norma Reyen, Professional Organizer and Owner of Simply Fresh Interiors. “I also recommend making sure that there is enough storage space, such as drawers, cabinetry, shelving, and hanging options. Having an appropriate amount of storage allows for a clean and decluttered space that all guests can enjoy. Lastly, maintaining a fresh-smelling home with good lighting and an airy ambiance will make your rental home memorable.”
20. Monitor booking requests
“Be communicative and professional, but warm and friendly. Don’t allow anyone to book without maintaining a standard; for example, guests must have previous and recent positive five-star reviews,” recommends Michael Skomina, from Host Easy BnB. “Liaise with your cleaners and laundry service, as they are the crux of the business and the most important asset to your success. Follow up and inspect after cleans; if necessary, guide and provide feedback in positive ways to help your services provide the best possible standard that you desire.”
Oahu is known for its captivating blend of city living conveniences and laid-back island lifestyle. The pristine beaches, majestic mountains, and year-round warmth and sunshine can entice just about anyone to call the Aloha State home. Beyond the natural beauty, Oahu offers something even more special—the Aloha spirit, promoting a culture of kindness, respect, and connection, creating a sense of community that sets Oahu apart.
If you’re thinking about moving to Oahu, HI, or investing in property on the island, it probably comes as no surprise that the housing market is considered to be extremely competitive. With high demand and limited inventory, Honolulu’s luxury neighborhoods like Kahala and Hawaii Loa Ridge especially command premium prices. It’s essential to stay informed about current market conditions, including inventory levels, pricing trends, and buyer demand.
This Redfin article will delve into the 7 essential things to know about moving to Hawaii and buying a luxury home for those looking to relocate to the island.
1. Work with a local real estate agent
If you’re considering moving to Hawaii, it’s essential to develop a relationship with an experienced and local real estate agent. Buying a property in Hawaii presents unique challenges and considerations that may be unfamiliar to those outside the state. An experienced agent who is well-versed in the nuances of the local market can not only provide invaluable guidance and insights, but they’ll likely have an established network of contacts and resources to help expedite the process and ensure a smooth transaction.
If you’re seeking a luxury property, a Redfin Premier Agent will have in-depth knowledge of the luxury segment, including specific neighborhoods, market trends, and property values. There’s so much to know before buying a home in Hawaii, and partnering with a trusted local agent is a crucial step in successfully navigating the market and one of the most unique locations in the world.
2. Explore Oahu’s neighborhoods
Oahu is home to a diverse range of neighborhoods, each with its own unique charm and amenities. From the tranquility of Manoa‘s lush surroundings and the relaxed suburban vibes in Kaimuki, to the laid-back surf culture of North Shore, there’s something for everyone.
Oahu’s luxury real estate market epitomizes upscale coastal living in a coveted island paradise, offering exclusive properties in prestigious neighborhoods, featuring waterfront estates, high-end amenities, and privacy. In areas like Kailua, a budget of $1.5 million may provide opportunities for projects on smaller lots. However, in neighborhoods further from the city, such as Makaha, the same budget could potentially secure a home with ocean views.
The most expensive neighborhoods on Oahu include Diamond Head, Kahala, Hawaii Loa Ridge, and Kailua for single-family homes, while condos in Kaka’ako go for premium prices. These sought-after areas command high prices, often reaching the multimillion-dollar range, due to their proximity to the ocean or stunning views. Properties in these neighborhoods offer luxurious amenities and exceptional quality often featuring high-end appliances and finishes. You’ll also see outdoor living spaces, such as expansive lanais, swimming pools, and beautifully landscaped gardens, allowing residents to fully embrace the island’s tropical climate.
3. Be prepared to pay even more to live in paradise
Oahu’s home prices surpass those in other major U.S. cities due to limited supply of land, desirable location, strong demand from residents and investors, construction costs, and market dynamics. This is especially true for the luxury homes close to the coastline or with scenic views. The state’s strict housing regulations and zoning restrictions further limit the availability of affordable housing options.
In addition, Oahu’s popularity as a tourist destination and its vibrant economy contribute to the high cost of living, including housing. For example, in April 2023, the median sale price in Kailua was about $1,438,000. This amount is over a million dollars more than the median sale price across the U.S.
With all things considered, Oahu still offers an unmatched lifestyle that makes it worth the investment. Living on Oahu means embracing the Aloha spirit, immersing oneself in a vibrant island culture, and enjoying the countless benefits of paradise. It’s important, however, for prospective buyers to be prepared for higher price points and adjust their expectations accordingly.
4. Location, price, condition
On Oahu, location, price, and condition are key factors that significantly influence the real estate market. Location holds immense importance as certain areas, such as those close to beaches, popular neighborhoods, or convenient amenities, are highly sought after. Additionally, the condition of the property plays a crucial role in its value and appeal as well-maintained homes with modern amenities and luxurious upgrades tend to command higher prices. In the competitive Oahu real estate market, finding the right balance between location, price, and condition is key to making a sound investment.
Proximity to the beach impacts price and maintenance costs
In the Oahu real estate market, proximity to the beach has a significant impact on property prices. The closer a property is to the beach, the higher its value tends to be. Luxury beachfront properties are highly sought after due to their prime location and the lifestyle they offer.
However, it’s important to be aware of the maintenance challenges associated with beachfront living. Properties near the beach are exposed to salt air and moisture, which can lead to increased maintenance needs and potential issues like mold. Buyers should consider the additional costs and efforts required to maintain these properties.
5. HARPTA and FIRPTA tax requirements
HARPTA (Hawaii Real Property Tax Act) and FIRPTA (Foreign Investment in Real Property Tax Act) are both withholding tax requirements in Hawaii that affect real estate transactions involving non-resident sellers.
HARPTA applies specifically to Hawaii and requires buyers to withhold 7.25% of the gross sales price as a prepayment of the seller’s potential tax obligations to the state. FIRPTA is a federal law that applies to non-U.S. resident sellers and requires buyers to withhold 15% of the sales price as a prepayment of the seller’s potential tax obligations to the IRS. Both aim to collect taxes owed by non-resident sellers upfront during the transaction process.
The withheld funds are then applied towards the seller’s potential tax obligations. It’s important for buyers and sellers to understand these withholding requirements and consult with tax professionals to ensure compliance and proper handling of these taxes during the transaction.
6. Learn about short term rental regulations and policies
Oahu’s consistent increase in home prices, robust economy, and high housing demand make it an attractive investment option. The demand for short-term rentals, common in areas like Waikiki, Ko’olina, and Turtle Bay on North Shore, contribute to the growth of the luxury real estate market and offer opportunities for income generation.
However, the City and County of Honolulu are implementing regulations to restrict short-term rentals to a minimum duration of 90 days, addressing concerns about housing availability and affordability for local residents. Hawaii’s local statutes also prioritize owner occupancy, offering property tax exemptions to homeowners who live in their primary residences. These exemptions financially benefit homeowners and promote stable communities.
Airbnb and VRBO properties are subject to certain regulations and restrictions
In most residential neighborhoods on the island, these short-term vacation rentals are not permitted or allowed without proper certification. The City and County of Honolulu has implemented laws and regulations to control and manage the operation of these rental properties in an effort to balance the needs of residents and maintain the character of residential neighborhoods.
Hosts must obtain the appropriate permits and certifications, such as a Transient Vacation Rental (TVR) or Bed and Breakfast (B&B) license. These licenses require meeting specific criteria, including compliance with zoning regulations, safety standards, and tax obligations. It is important for hosts to research and understand the requirements and limitations in their specific area before offering their property as a short-term rental.
7. Moving to Hawaii with pets? Expect to quarantine them
When bringing pets to Hawaii, strict regulations aim to prevent the introduction of non-native diseases. All pets must undergo a mandatory quarantine period when moving to Hawaii to help prevent the introduction and spread of rabies. Hawaii is a rabies-free state, and the strict regulations are in place to maintain this status.
There are a few pet quarantine options you can choose from, including a 120-day quarantine in a designated facility, and a “5-Day-or-Less” program for a shorter quarantine. It’s essential to thoroughly research these options in advance and ensure that your pet meets the specific conditions, such as health requirements and permits, associated with your chosen option. It’s important to begin the quarantine process early, seek guidance from the Hawaii Department of Agriculture or a pet relocation service, and ensure compliance with all regulations for a smooth transition.
Navigating Oahu’s luxury real estate market successfully requires an understanding of these nuances and working with experienced local real estate professionals who can provide insights and guidance. They can help buyers navigate the complexities, identify suitable properties, and negotiate competitive offers. Aloha!
All 12 Federal Reserve districts have seen issues with a lack of housing inventory, which is largely due to existing homeowners holding back on listing their homes after previously locking in low mortgage rates.
Demand from the buyer side has remained steady or increased, however, and new home builders have responded to inventory shortages by increasing speculative inventory production, according to the Federal Reserve Beige Book, released Wednesday.
The Beige Book is a compilation of data and interviews with bank and branch directors, community organizations and economists from on or before May 22.
“Residential real estate activity picked up in most Districts despite continued low inventories of homes for sale,” the report states.
The Beige Book also notes that “home prices and rents rose slightly on balance in most Districts, after little growth in the prior period.”
In return, the lack of inventory of homes for sale pushed demand for rental properties in some areas — including New York, Chicago, St. Louis, Kansas City Federal Reserve districts.
Following are excerpts of statements on housing conditions from each of the 12 Federal Reserve districts.
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Boston – Contacts around the District attribute the still-low sales numbers to low inventories more than to weak demand, as slightly lower mortgage rates have helped bring more buyers to the market.
House price appreciation has slowed on average but remains slightly positive, with the exception that home prices in Massachusetts (not including Boston) have experienced modest declines from a year earlier. The modest price growth in the Boston area marks a trend reversal from the preceding few months.
Contacts anticipate that, despite healthy buyer demand, home sales are likely to experience only a modest seasonal increase moving forward, owing to extremely low inventory levels.
New York – The residential sales market has been strong across the District. A New York City-area contact reports that the sales market in and around New York City has picked up strongly in recent weeks after a brief pause in early April, which was due to uncertainty in the banking sector.
After a slow start to the year, housing markets in upstate New York have also started to pick up, with bidding wars and multiple offers becoming more common. Inventory remains exceptionally low and is restraining sales activity in much of the District. A key factor suppressing new listings is the prevalence of homeowners with historically low interest rates on their existing mortgages, reducing the incentive to sell and move.
A strong economy and relatively high mortgage rates have pushed some movers to the rental market, boosting demand.
Philadelphia – High interest rates have continued to dissuade existing homeowners from listing their house and losing their low interest rate. Existing home sales have fallen moderately in this district, and prices have continued to rise as the market heats up again. New home builders have benefited from the unseasonably modest sales of existing homes as the resale market has slowed.
Cleveland – Demand for residential construction and real estate has stabilized in this District, and contacts attribute this stabilization to the arrival of spring and flattening interest rates.
Homebuilders have reported an increase in speculative construction projects in this District, as many buyers want to purchase and move into homes immediately, in part to avoid further rises in interest rates.
Richmond – Residential real estate respondents indicate in the report that the spring market is off to a good start, with sales prices continuing to appreciate, but not at the same pace as last year. For-sale inventory remains constrained due to fewer people putting their homes on the market, but buyer traffic has been steady while the days on market has increased slightly in the last month.
However, fluctuations in mortgage rates have caused buyers to pull back, with pending sales and closed sales both down in this District. Builders have been offering strong incentives to close deals.
Atlanta – Housing demand throughout the District has remained strong despite interest rate and home price volatility. Though home sales are down compared to a year ago, sales in many markets in this District have increased on a monthly basis, as buyer sentiment has modestly improved.
The supply of existing homes for sale has remained low as homeowners have showed increased hesitancy to list homes for sale, especially if they financed at a low interest rate. Home prices remain down from peak levels but have recently shown month-to-month improvement.
New home builders have responded to inventory shortages by increasing speculative inventory production, and some have begun to reduce buyer incentives.
Chicago – Residential construction activity has been down modestly in this District. Contacts report that high-interest rates have led some projects to be postponed or canceled and that while construction costs had fallen, the decline isn’t enough to offset higher financing costs.
Residential real estate activity has decreased modestly as well. Prices and rents have declined, and the low inventory of homes for sale has helped to prevent larger declines.
However, there have been reports of rising retail rents in some areas because of a lack of high-quality new construction.
St. Louis – Rental rates for residential real estate have increased slightly in this District. The number of new listings in residential real estate have dropped sharply in Louisville since our previous report, while new listings in the Memphis and Little Rock regions have remained unchanged. Seasonally adjusted home sales have remained unchanged since the previous report.
Minneapolis – Residential construction has remained subdued. Single-family permitting in April was more than 40 percent lower year over year in the Minneapolis-St. Paul region; most other large markets in the District saw even bigger declines. Discounts have started to appear for some speculative developments.
Closed (residential real estate) sales in April fell notably year over year across the District, with many larger markets seeing declines of 30 to 50 percent. Median sale prices have declined in western and central Montana and have been flat in several other markets.
Kansas City – Housing rental rate growth has remained elevated in several western District states, but the pace of increases has declined broadly and swiftly from the growth rate experienced during the past year.
Dallas – Housing demand broadly has held up in the Dallas District, though sales have continued to be weaker than a year ago. Contacts have noted a decent spring selling season, with prices largely stable, and builders have been able to raise prices slightly in selected areas.
Outlooks have been cautious, however, with some voicing concern about whether demand would hold up beyond the spring selling season.
San Francisco – Activity in residential real estate has slowed further in this District. Contacts across the District have reported stable demand for single-family homes, although high mortgage rates have restrained prices. Existing single-family inventory has been low, and owners appeared hesitant to forego their existing low-rate mortgages by listing their homes.
Despite reported improvement in the availability and cost of materials, construction of new homes has been flat-to-down as developers responded to higher financing costs.
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Berkeley Property Management: Understanding General Wear and Tear in Rental Properties + Precautions Landlords Should Take (2023)
The third quarter of the 2021 Market Medians Report indicates a significant rise in new tenancies in Berkeley, with a 104% increase (1863 new tenancies) compared to the same period in 2020 (913). If you own a residential property in Berkeley and are hesitant about finding a new tenant due to concerns about general wear and tear, it may be worthwhile to reconsider your decision.
As a landlord, finding reliable tenants for your Berkeley property management is crucial. It is essential to comprehend the natural deterioration in rental properties and the precautions landlords should take.
Did you know?
The total average rent ceiling in Berkeley for the year 2021 stood at $2,137.60.
The concept of ‘wear and tear’ usually refers to the expected deterioration of a residence and its fixtures due to regular and foreseeable usage over a period of time. It is common to encounter damages in any residential property due to regular, everyday usage. Examples include faded wall color or cracks in corners or on the floor. Such deterioration takes place throughout a tenant’s occupancy of the property.
It is typical for your property to experience wear and tear as a result of tenant usage, so you should anticipate the following damages.
Faded or cracking paint is a common occurrence in residential properties that are in use.
As part of your Berkeley property management responsibilities, it is important to address any damages or cracks in the flooring that you may encounter and ensure they are repaired.
The doors or door frames may suffer damage due to humidity.
It is common to discover cracked window panes in the house, which can be attributed to various reasons.
Over time, the color of the carpet may diminish due to cleaning and exposure to light or chemicals.
Regular usage can damage bathroom tiles, bathtubs, and other similar fixtures.
It is essential to be aware of significant damages that can be categorized as losses to your property. Furthermore, the tenants may have purposely caused the following damages:
Carelessness can lead to the breakage of windows or doors.
Unwanted stains on the wall or wallpaper may be present, which were not approved.
Mishandling can result in a broken sink or bathtub.
Habitability and Maintenance
As a Berkeley property owner, you must understand the concept of habitability and repairs. It is mandated by regulations that rental units must be in a condition suitable for living, meeting the habitable standard. A rental unit is deemed habitable when it meets the standards outlined by state and local building and health codes, ensuring its suitability for human occupancy and prioritizing the well-being and safety of tenants.
Did you know?
California law assigns different repair responsibilities to landlords and tenants. However, landlords ultimately bear the legal obligation to ensure the habitability of their rental units.
Maintenance Duties of the Tenant
Your Berkeley property management task won’t seem difficult if you are planning to find tenants if you are aware of the maintenance rules of the tenants. According to the law, tenants are responsible for maintaining the rental units in good condition. It includes keeping the areas clean and free from damage. Tenants are also accountable for repairing any damages caused by their neglect and addressing damages caused by individuals under their responsibility, such as family members and pets.
Did you know?
According to law, when a rental unit is uninhabitable, the landlord may not have a legal obligation to make repairs if the tenant has failed to fulfill their responsibilities.
Precautions That Landlords Must Take
Making Withdrawals from Security Deposits:
If you clearly understand the concept of general ‘wear and tear,’ you would know that it is a normal occurrence. If you come across any damages caused by tenants’ negligence, you can deduct the necessary amount from their security deposit. The leading providers of property management services always suggest that it is important to familiarize yourself with local laws before taking any action in this regard.
Have Before and After Images:
Prior to the tenant’s occupancy, it is essential to capture photographs of every area within the rental unit. Remember to share these pictures with the tenants when handing over the keys. Similarly, when the tenants vacate, take photographs of the previously documented areas and compare them. This will enable a discussion on any damages that may have occurred and facilitate finding a resolution.
Tenant’s Background Check:
Among your Berkeley property management responsibilities, you must perform comprehensive background checks to ensure that responsible tenants occupy your property. Additionally, you can review all prospective tenants’ complete eviction history report before making a decision.
Endnote
As a landlord, it is wise to make informed decisions regardless of who you choose to lease your residential property to. It is advisable to familiarize yourself with state and local laws for tenants and landlords. Furthermore, finding responsible tenants is of utmost importance, so it is recommended not to rush into decisions. If you encounter difficulties reaching satisfactory resolutions even after discussions, seeking assistance from legal experts is highly recommended.
Amazon and the Amazon logo are trademarks of Amazon.com, Inc, or its affiliates. Rental providers will not refuse to rent a rental unit to a person because the person will provide the rental payment, in whole or in part, through a voucher for rental housing assistance provided by the District or federal government.