By: Mary Hogan

It sounds crazy during a national pandemic, but I have continued to consistently get requests for showings for my rental listings.  Leases end, inventory is low, relocations, and a myriad of other reasons cause folks to find new housing…again, life and time continues to move forward no matter what the obstacles we may face. 

So, this would be a great time to really consider becoming an investor and purchasing rental properties rather than placing your money in the market that doesn’t translate to tangible needs. If we are headed for a recession, real estate can be one of the safest ways to invest your money and renting for a while may be a safer bet for some if their financial situation has changed, driving demand up and then rental prices. When fewer people are buying, more are renting: everyone needs a place to live. Conversely, if we are not in a recession but housing purchase costs are high, with inventory low, folks turn to renting as well, in order to buy time until purchasing is more within their grasp.

There are two kinds of investment properties to consider: multi-family and single family. Rental income will be diversified for multi family homes (more tenants=more rental income, less possibility for full vacancy) unless the investor already has multiple single family homes.

A single family home may be manageable and economical for the individual investor to take care of themselves. With a single family, there is more to singley maintain: one roof, one basement, one yard, one sidewalk per rent check.  With a multi-unit, you still only have one roof, one basement, one yard and one sidewalk. If you hire a rental management company, the fee is usually per unit and runs about 7-12% of the rental management fee. While their repair people usually charge less than you’d find on your own, they do charge to manage those repair people and/or keep them on salary so those costs aren’t included in that management fee. 

Multi-units aren’t usually maintained like you’d find single family homes maintained–typically investors will put bandaids on things to make them most profitable.  That may or may not be how you will proceed, but you should lower your expectations of what to expect during an inspection if you’re purchasing something that’s been rented.  Some areas may have different costs for multi-unit buildings as well like licensure, tax rates and in Philadelphia County, landlords must pay a $300 trash fee that single family homes don’t require.  Your agent is a great place to start to ask these questions. 

Typically single family homes have a broader base for resale.  There are far fewer buyers for multi-unit homes than single family houses. If short-term appreciation is your goal, it may be easier and cheaper to both buy and sell a single family home. Maintenance, as noted above, will be typically more though because it’s standalone.  Beyond that, certain types of homes make more sense to buy than others: skip the ornate, unique houses that everyone loves and go for easy to maintain, easy to update and in desirable or soon to be desirable neighborhoods close to public transportation and amenities.

If it’s your first go at investment properties, a single family home may be the easiest starting point. Ask yourself the following questions to help determine the best investment strategy for you:

• How much rental income do I hope to get every month, if any, or is appreciation my goal?
• What can I afford in terms of a down payment? (Multi-units may require 25% down, single families usually require just 20% down, over 4 units require commercial financing and those terms are quite different than residential mortgages)
• Can I handle rental property management on my own or do I need a professional?
• Do I want to buy and hold the rental property or am I seeking appreciation to sell it in the real estate market sooner rather than later?

Once you have answered these questions, you can begin your search for the right properties for you. If we are headed into a recession, know that homeownership definitely decreases and the demand for rentals increases. Being flexible with your renters in terms of lease length and reasonable market rents will also help retain good tenants to carry you through. If we aren’t and the market stabilizes, more and more tenants will continue to not be able to afford increasing prices and stay tenants longer. 

So, in conclusion, stay optimistic, use this down time to do some research and figure out what works best for you and your long term goals. We are here to advise and guide your search into becoming an investor.

By  Consuela Franks

Many of us are spending a lot more time in their homes than ever before. We have dogs, cats, the random gerbil, bird or ferret as well as children and significant others sharing our space. While it can be a time of connection, it can also be pretty eye-opening about what needs we have that our current homes just can’t provide. That dog is constantly underfoot with no yard, these kids really need to have a space of their own to retreat to, that corner in the living room for a home office just doesn’t cut it. These now sometimes glaring needs may have been previously glossed over in our rush to get from one place to another and check off our to-do lists. 

During these uncertain times the thought of moving, even for the second or third time, may seem daunting. It doesn’t have to be. While the safety and well-being of ourselves and our families has never been more at the forefront of our psyches, taking the time now to think about and plan for what you are looking for in a new home and how to best situate your current home to sell quickly and at the best price now could pay off down the line when life is back to full swing. Whether that looks like being at work all day and a calendar full of social events or running to and from kid’s activities and appointments, we are all in a space where we have more at home time to consider the steps involved in gaining a home that we love. 

If you have already decided that it is time for a larger space or a house with a yard or to be closer family, the first consideration is budget. There are fees and costs involved in the transaction to consider and speaking with a knowledgeable Realtor and lender will help you navigate the best way forward for your particular situation. The amount that you are able and willing to spend can vary greatly per individual, so getting a handle on that now is a great idea. In order to make the best move financially, things to consider include whether this is seen as a step up to your next home and you plan on moving in a few years or whether you’d like to consider your next buy your forever home. You and your agent can craft a plan to get you into a home that meets your physical and financial needs best if you have some idea of what you want from the start.   

Selling a home is a process. You need to consider many factors that range from removing clutter and possibly staging to making sure that any updates you decide to undertake will pay you back for your efforts. Although a home consultation from an agent is not currently possible in person, a facetime or video conference can be just as valuable in helping you and your agent converse about your current home and how to present it in the best possible light to buyers. Small projects that can be done now may be a great way to occupy downtime and start getting things lined up and ready. 

Making the decision on whether to buy a home first, sell your current home first or try to tee it up so both can be done in conjunction with one another varies greatly depending on your home and financial situation. If you have a house full of people that would make keeping the home show ready difficult and have the financial means to do so, buying first may be the best option. If you find yourself in a situation where it would be a financial hardship to purchase first, there are plenty of other options that your agent can explain. Hope that you are staying safe and healthy in these uncertain times. Feel free to reach out with any questions, I’m happy to help no matter where you are in the process, dreaming, planning or otherwise!

By Brooke L. Willmes

Congratulations! You’ve taken the first step in deciding to buy a house. Now, where do you begin?  You may be hesitating calling us because you’re not sure if you need an approval to do that. Maybe you don’t know how much you can afford, you’re clueless about if you have enough money saved, you don’t want to waste our time and you might not know if you can afford to buy what and where you want.

Welcome to being a typical home buyer!  No, seriously! All of these concerns are valid and the truth is that you may not have many of those answers until you talk with a lender.  BUT should you do that first?

If you do decide to reach out to a lender first, reach out to us (or if you’re not using us for some odd reason—ok, you’re buying a house on the west coast—then reach out to your agent) for a lender they trust. It just makes things easier during the offer process to work with a lender that we have a great rapport with to get quickly updated figures and change scenarios on the fly. But by all means, you can feel free to get approved before we discuss home buying!

Conversely, don’t feel like you have to be preapproved! We love being able to sit down (or FaceTime) with clients, talk about broad strokes of wants, needs, the process and types of financing available and go over the basics and send you off on the way to a lender so you can feel more confident about what to expect. Then once you’re approved, we can fine tune neighborhoods, budget and set up a search for you based upon intuitive parameters and get you to hit the ground running!

You can expect the process of preapproval to take anywhere from 2-7 days, depending on how complicated your financial situation is and documentation you’re asked to provide. Once you have this approval, we can officially use it to submit an offer so it’s something you absolutely want to have the moment you visit your first home. We can have the lender revise the numbers to suit an offer for a particular house with its specific taxes and the current interest rate when it’s offer time.

Just because you use a particular lender’s preapproval for an offer submission does NOT mean that you need to use them for the loan—you can shop around the moment you’re under contract and it’s the first time you can lock your interest rate so it doesn’t make sense to do when you’re getting your first preapproval!