Real Estate

To Buy or To Rent?

Deciding between buying or renting your next home?  It’s true that home values have gone up quite a bit, but so have rents. In fact, the largest landlord in the US, Invitation homes, said that rents have gone up 14% since last year.  And that’s not all – they forecast that rents will continue to go up about 6% annually. So, while it’s true that initially purchasing a home will be more expensive, your mortgage payment will remain relatively stable into the future.  Whereas your rental payments will likely rise significantly in the years to come. There are other amazing benefits that come with buying a home, including pride of ownership, more freedom in renovating and design, and of course building equity.  And because of increasing demand and tight supply, it looks as if home values will be well supported, and many are forecasting home prices to move higher. I can give you a complete analysis with statistics for your specific zip code so you can make accurate comparisons and see which choice is best for you. Give us a call today to learn more.
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Buying is Tough…Renting is Tougher

We know it's tough buying a home, but is renting even tougher? We have discussed in the past how it’s a challenging time to buy a home with low inventory and high competition from cash buyers, but the alternative to rent is just has hard, with fewer benefits. A recent report found rental prices continue to go up about 14% year over year. Utah has the 23rd highest rent in the country, with average rent being about $1,465 a month. The Apartment List National Rent Report for July found a 2.5% increase in rental prices from June. Prices went up by 10.3% compared to this time last year and up 9.4% compared to the pre-pandemic level from March 2020. Price hikes are a frustrating reality for renters. For many it feels like every time they turn around their rent is going up. At least with a home purchase your payment remains fixed. More renter frustration comes from knowing that the money they pay could be going toward an investment of their own but instead pays for someone else’s mortgage and equity. Renters don’t get the benefit of paying towards principal. Renting comes with a lot of other issues too. I've heard many stories from clients who had dreadful renting experiences. One client’s roommate situation did not work out and they had to find a new place to move to in less than a month. Another client’s landlord decided to capitalize on the market and sell their house, giving them less than two weeks’ notice to find somewhere new to live. Another client I recently worked with shared with us their push into purchasing came from their A/C breaking in the middle of 100-degree summer day and their landlord refused to fix the issue immediately. With a home purchase you don’t have to worry about fixing issues on someone else’s time, it’s all up to you. The rental market is pretty competitive as well. It can be a struggle to even find an available rental, let alone one in a neighborhood you prefer and in your price range. Affordability is a big reason why many people think can never become homeowners. But the average mortgage is significantly less than the average rental. Other renters worry they won’t qualify for a purchasing due to student loan debt or medical bills. However, you’ll never know what you qualify for unless you contact a mortgage professional like me. I can review your situation and if now isn’t the time for a pre-approval we can set up a plan to get you on the right track to homeownership. Now is the time to get out of the rent trap! Give me a call and let's get you started on the path to homeownership.
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Investing in Vacation Rentals

Purchasing a second home and using it as a vacation rental is a big decision. When done right, it can be a lucrative investment opportunity. If you have an interest in real estate investing, a vacation rental is a great place to start. Vacation rental properties can be a way to earn consistent income and begin building long-term wealth. Making money with vacation rentals has become much easier, thanks to vacation rental websites like Airbnb and Vrbo. A recent report found that on average, Airbnb hosts earn $900 a month. Hosts in the most in-demand cities reported making four times that amount, if not more. A survey by rental marketplace HomeAway, found the average owner who rents out their second home collects more than $33,000 a year in rental revenue. A recent client of ours, Nate Goth, worked with us to purchase a few vacation rentals of his own. Goth said he was first intrigued by vacation rentals when he saw the quick return on investment they offer, “if you purchase in the right community, you can get a positive cash flow fairly quickly.” The income you receive from your rental will depend on which city you buy in and the type of home you offer. If you buy in a high-demand area you are likely to see a high return on investment. Currently there is high demand for vacation rentals as more and more people are flocking to the outdoors and catching up on the trips they weren't able to take during the pandemic. A vacation rental can present a better experience than a regular hotel room, as they offer a home away from home experience for travelers. In fact, a recent study found that post-pandemic, many people prefer to stay in vacation rentals over hotels. Another benefit is like any other real estate investment, a vacation property is subject to appreciation and the property will increase in value over time. In St. George alone, home values went up 21.7% over the past year. Pair high demand from consumers with the strength of the current housing market and a vacation rental makes for a profitable return on investment. Real estate statistics can help you to identify which local markets have the best neighborhoods and properties to invest in. Southern Utah, specifically St. George and Moab, have become popular places in Utah to purchase a vacation rental. It’s important to note that each city has their own rules and regulations when it comes to vacation rentals so it’s crucial to become familiar with them before you make a decision to purchase. In Goth’s experience it can be challenging to land a vacation rental in the right place. “They are not allowed everywhere, and certain places have local ordinances and a very selective process when it comes to owning them.” For example, the Southern Utah vacation rental market has very tight constraints. If you are serious about getting into the vacation rental game, you’ll need to do your research and become familiar with local rental policies before jumping in. Another important note to remember is like with any investment property, there are costs and downsides when it comes to purchasing and operating it successfully. For example, unexpected expenses that can accrue from breaks or repairs. When this happens, you as the owner are responsible for paying to fix it. You will have to keep up with regular maintenance as well as the set up before and after each guest’s stay. Goth has found success with his properties by outsourcing his property management. If you have the means to do so a property management company will take of your day-to-day rentals and maintenance. Like with any investment opportunity you should list out the pros and cons, to see if this is an opportunity that makes sense for your situation. Before you decide to buy, you will want to consult with me about available financing options.
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3.8 Million Homes Needed to Close the Affordable Housing Gap

A recent Freddie Mac study on the U.S. housing supply found that approximately 3.8 million additional homes are needed in order to close the affordable housing gap. The ongoing housing shortage is large and rising, due in part to the effects of the pandemic, as well as the high demand for homes coming from eager buyers rapidly entering into the purchasing market. Even before the COVID-19 pandemic and current recession, the housing market was facing a substantial supply shortage. In 2018, it was estimated that there was a housing supply shortage of approximately 2.5 million units, meaning that the U.S. economy was about 2.5 million units below what was needed to match long-term demand. Using the same methodology, it was estimated that the housing shortage increased to 3.8 million units by the beginning of 2021. The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes as builders struggle to meet exploding demand. In 2020, it was estimated that there were only 65,000 new entry-level homes completed—less than one-fifth of the entry-level homes constructed per year in the late 1970s and early 1980s. "The U.S. is currently experiencing an increase in housing demand that is well beyond what record low mortgage rates would typically yield as many people are spending more time at home. This high demand has driven the housing supply shortage even higher and has caused home prices to rise over 12% from a year ago." Freddie Mac experts do not expect housing demand to decrease any time soon.

*Source: Freddie Mac- Perspectives & Research*

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Buy First, Sell Later

Buying a new home after your current home has gone under contract and only having less than a week to find a new home can be an extremely stressful situation. One way to make the process of buying a new home easier is to buy first and sell later. Meaning buy your new home, move into it at your leisure, then once your old home is empty, list and sell it. There are many benefits to this strategy. Firstly, this makes it so you only have to move one time and won't have to deal with expensive storage fees or doubled moving expenses. You’ll also have a cushion in case something goes wrong during the process of purchasing the new home. Like in the unfortunate case of a deal falling through, you’ll still have your old home to stay in. It also gives you time to make improvements or repairs on your old home before listing, which can help ensure you receive top dollar offers from interested buyers. To make this type of financing happen there are two major considerations to work out: your down payment AND qualifying for both mortgage payments. Qualifying for both payments can be tough. If you qualify for both payments right away, it’s smooth sailing. If by chance you don’t qualify for both, there is still an option for you. You can convert your existing home to a rental property and use 75 percent of the home to a rental property and use 75 percent of the rental income to offset the existing payment. This strategy works great if you are wanting to acquire rental properties and grow your real estate portfolio. Figuring out the best strategy to purchase and sell your home can be a bit complex and difficult at times. So, you never want to go at the process alone! It is always better to have a trusted mortgage professional on your side. There is never any harm in discussing your situation with a mortgage lender, like me, who will be able to tell you after running a few numbers whether you can make the buy first, sell later strategy work. If you think this is something you would like to look into, give me a call and let's discuss it further.
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Stop Waiting, Start Saving

Every year, households across the country make the decision to rent for another year or take the leap into homeownership. They will consider their budget, their desire to move, commute times, and many other factors. However, there is a financial advantage to owning a home that is often forgotten when making this decision – the significant wealth one can build through equity while owning a home. The typical gain in home equity has increased significantly over the last five years. According to a recent report, the average homeowner gained $17,000 in equity in just the last year alone. As you make your plans for the rest of the year, be sure to consider the equity benefits of home price appreciation as you weigh the financial advantages of buying over renting. When you do, you may find this is the perfect time to jump into homeownership. If you’re ready to buy your first home for a great rate, let me know. I’ll take the time to guide you through it. Are you already a homeowner and just on the fence about refinancing? Even though Mortgage Rates are slightly higher than their all-time lows, it may still be very favorable to refinance. In many cases, you can significantly reduce your interest rate, monthly payment and even take off your costly mortgage insurance. It might be tempting to play the market and see if interest rates come back down to the all-time lows we saw at this time last year. But even if the rates eventually do go back to those historic lows, you will have already missed out on banking significant savings by refinancing today. It would likely take several years before a potential lower rate in the future would catch up to the savings you could start seeing right away. There is no guarantee that rates will move lower, like I always say you have the choice between the rate today or the rate tomorrow. We can’t predict the future, but we can see what we can do with what we have today. Odds are you could benefit in some way from refinancing today. It’s time to stop waiting and start saving, reach out to us if you want me to run the numbers to see how much you could save with a refinance or if you are curious to see what you qualify for when it comes to purchasing a new home.
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Seller Confidence is Growing Due to Vaccines

Last fall, a published Zillow report found that 29% of homeowners reported that their life or financial situation was too uncertain to enter into the housing market. The share of homeowners feeling this uncertainty dropped to 25% at the beginning of this year. This is a sign that potential sellers are growing more confident thanks to the continued demand for homes, rapid home appreciation and vaccine distribution. Homeowners who decided to sell their homes during the uncertainty of 2020 were rewarded with offers above list price, shorter selling times and buyer demand that has lasted well past the traditional “peak” selling season. That trend is likely to continue into 2021 as vaccine distribution continues to help re-jump the economy. The vaccine rollout will likely bring a boost of inventory that the market desperately needs, as sellers become increasingly willing to move now that the pandemic is more under control. This will result in a greater number of new listings beginning this spring. This increase in inventory will give buyers much needed breathing room and more options in an extremely competitive market. The pandemic triggered a buying frenzy, at first with wealthy city-dwellers wanting to get away to suburban life. As companies have continued to let more of their staff work from home, people have realized they can live far from the office, in whatever location suits their desires. These flurry of activity will die off eventually, but for now it continues to be a motivating factor. Economists are forecasting a pretty hot market in 2021, driven by historically low mortgage interest rates and a surge of young buyers approaching prime home buying years. If you’re feeling overwhelmed or uncertain about the current market, the best thing to do is to talk to a mortgage professional who can answer all of your questions. We can tell you what kind of mortgage you qualify for, and the best strategy to help you achieve your real estate goals. Contact us today with any questions you have about buying or selling. 801.206.4343

**Source: Zillow Premiere Agent & MBS Highway**

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Get the Loan, Skip the Appraisal

We are always looking for ways to save you money when it comes to your home purchase or refinance. One of the ways we do this is to check whether your property is eligible for an appraisal waiver – which could save you hundreds in appraisal fees! Also known as a property inspection waiver, an appraisal waiver allows a homeowner to forgo hiring (and paying for) an appraiser to perform an appraisal on their current or prospective home. Instead of someone coming out to walk through the property, we will use automated information based on data such as recent home sales in your neighborhood, to get the appraised value. Appraisals can cost anywhere from $500 to $1000, so having it waived can save you a lot of out-of-pocket money. It also helps to alleviate the stress of an appraisal potentially coming in low. When an appraisal does come in low, buyers typically have to bring additional funds to the closing table to cover the difference. An appraisal waiver immediately removes this stress from this part of the transaction for both the buyer and seller. No more having to wait weeks to find out if you are going to be able to close. In fact, with an appraisal waiver it’s possible to close in 15 days or less! An appraisal waiver does require a 20% down payment to qualify, and I have to run the address through a system called DU prior to submitting any offers. Not all homes are qualified for an appraisal waiver but checking to see if a property is qualified is easy, just reach out to me with an address! Appraisal waivers can save you money and time, which is crucial in today’s market. Reach out to me today see if you qualify for and let me show you how great working with ALV Mortgage can be.
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Smart Way to Spend Your Stimulus Check

You may be wondering how to best use the $1,400 payment you may have received as a result of the latest round of stimulus relief. One thing may folks will be doing with their stimulus money is investing it! A recent survey shows that retail investors on average plan to put 37% of their stimulus into stocks. For those investors ages 25-34, the intended share is close to half. Data from the Census Bureau show that of all Americans that received a payment, 15% were putting at least some into savings or investments. One of the best ways to build wealth is by investing. Investing allows you to put your money into accounts that have the potential to bring you a strong return. If you don’t invest, you are missing out on opportunities to increase your financial worth. There is the downside that you have the potential to lose your money in investments, however, if you invest wisely, the potential to gain money is significantly higher than if you never invest. When it comes to investing you don't just have to invest in stocks. You can invest in real estate either through owning your own home, purchasing a home as a rental or vacation property or purchase an investment building. When you invest in real estate, you are putting some of your money into the equity of the property, which is like a forced savings account that can bring you a strong return down the road. Plus, with homes expected to appreciate by 6% in 2021 you could be looking at an amazing return on your investment! Have questions about investing in real estate? Reach out to us by email or give us a call at anytime.
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Now is the Time to Buy

The housing market will remain hot this year as favorable interest rates and sky-high demand continue to drive the market forward. Although we are seeing a small rise in rates they are still near all-time lows. The main worry for today’s market is the low inventory of houses on the market. Sure, you can sell your home no problem, but what are you going to move into? Supply is extremely tight and inventory levels are dramatically below anything we have seen in the past. New construction is not keeping up with demand, and the pandemic shutdowns took a huge chunk out of builders’ production, as they were not able to put anything on the market for six months. However, thanks to low interest rates, they were selling more than they ever sold before. The market was already struggling with inventory but due to this decrease in builders’ supply inventory got even tighter. Plus let’s not forget, with low inventory comes higher home prices since more buyers are competing for the same homes which drives up a seller’s price. A recent report showed home prices grew by about 10% in 2020 and show no signs of letting up in 2021. We won’t begin to see price decrease unless there is an is an excess inventory. The good news for the housing market is we are definitely not over built. Builders are more in demand than ever and are working quickly to build new inventory for the market. As new inventory comes onto the market and more people decide to sell their homes, buyers looking to buy this spring could be entering into the market at an amazing time. Fitting perfectly into a sweet spot where there is more inventory and fewer buyers, since a handful of buyers will be bowing out to wait to for the market to slow down. But the thing with real estate is you don’t want to wait. You could be missing out on major appreciation gain. Currently high demand and tight supply are pointing towards 6% appreciation for homes in 2021. For instance, if you buy a home for $600,000 with 10% or $60,000 down, a 6% appreciation on that home equals a 60% return on that down payment investment. You can’t expect an appreciation gain like that if you try to wait for the market to slow down. If you're shopping for a home, with rates near historic lows and home prices appreciating nationwide, there is an amazing opportunity to build wealth for your family through real estate. Contact me today and let’s discuss your situation.
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