Real Estate Investing in a High-Interest-Rate Environment

With the exception of the real estate market in 2010 where interest rates and housing prices were both low, characteristically, interest rates and property values have an inverse relationship. For example, when housing prices are high, interest rates are low, and when housing prices are low, interest rates are high. For home buyers or private real estate investors who plan on keeping the property for at least seven years, it is advisable to buy real estate when interest rates are lower and property values higher because property values generally appreciate over time. Furthermore, a lower interest rate with a 15- or 30-year fixed mortgage keeps the monthly mortgage payment affordable.

 

High interest rates affect real estate investors regardless of whether the real estate investment is in the private market or public market. The difference between real estate investing in the private market versus the public market is the private market includes an investor purchasing a real estate property himself, while the public real estate market includes the investor purchasing a security in a publicly traded real estate company, most typically as real estate investment trusts, or REITs.

However, for a private real estate investor who can afford a larger down payment on the property and pay off the mortgage faster with larger payments, it is advisable to buy property with lower property values and high interest rates. This is because the investor can refinance the property when interest rates go down or opt for an adjustable-rate mortgage where the interest rate on the mortgage is below the market rate.

the home service club reviews

Biggest Mistakes While Buying a Retirement Dream Home

Without proper financial planning, committing to a retirement home can be a serious mistake with long-term implications. Here, according to financial and retirement advisers are some big mistakes people make when they buy a retirement home.

. Not having a plan

You must have a plan for what type of house you need and what are you looking for. I hear people all the time say they will sell their home and buy an RV. Have you even tried an RV? You should rent one. Maybe you don’t like campfires. I find it unusual that people will spend on thousands on an RV and haven’t tried it.

. Forgetting Friends

Not considering how important it is to be near friends and the social life you’ve enjoyed for years is “a problem I see people talk about the most,” said Larry Rosenthal, president of Rosenthal Wealth Management in Northern Virginia. “Even if they stay in same community, it may be across town, 20 minutes. Or across state. A lot of it revolves around social activities, families, friends, kids and grandkids. Those are the biggest mistakes. They may say I want to go to New Mexico and the kids end up in California with the grandkids” noted Rosenthal.

. Insuring properly

Heafner said most people, unless they have large incomes, don’t think much about a personal umbrella policy until it’s too late. “It is so inexpensive to shield yourself with a $1 million or $2 million policy.”

The home service club reviews

When to buy or sell a Home

Yes, real estate is seasonal. In some cities this is more apparent than others, especially places with harsh winter weather. In the D.C. area, however, many buyers jump into their home search in January instead of waiting until March or April as conventional wisdom dictates. When Redfin crunched the numbers over the past five years, we found that 51 percent of homes listed in the winter sold above asking price, compared with 50 percent in the spring. If you want the best shot at selling your home quickly and for the most money, list in the first half of the year. The percentage of homes that sold over asking price dropped to 44 percent and 43 percent in the summer and fall respectively in our region.

Spring and summer are the most active seasons of the year for real estate and property management alike. Most people use this time of year for moving because the kids are out of school on break and the weather can be counted on for clear skies and sunshine. Buying and selling a home this time of year can be exciting, whether the move is across town or across the Country. But, the process can also be hectic and overwhelming.

Be aware. Do some research, talk with friends and family. It is important for you to be knowledgeable and aware of what is going on with the housing market in your area. If homes in your neighborhood have sold recently, find out for how much and how closely the home resembled your own. If you are moving into a new area and you are shopping for a home, do some research on how long the home has been on the market and what it has sold for historically. After all, buying a home is the single biggest purchase most people will make in their entire lives. You want to make sure that your investment is protected and will continue to accrue.

If you are buying or selling a home this summer – congratulations and good luck with all of your future plans. Following these steps will help to make the process that much smoother.

For more - The Home Service Club Reviews

When to buy a house – A quick Guide

When is the best time to buy a house? The flip answer (no pun intended) is “whenever you can afford to do it.” But "afford" isn't as simple as what's in your bank account right now; a host of other financial and lifestyle considerations should figure into your calculations.

The seasons of the year can also factor in to the decision-making process. If you want the widest possible variety of homes to choose from, spring is probably the best time to shop. “For Sale” signs tend to spring up like flowers as the weather warms and lawns turn green.The reasons are obvious, especially when you consider families waiting to move until their kids finish the current school year.

The most recent Housing Opportunity Index report released by the National Association of Home Builders indicated that 61.8% of homes were affordable in Q3 2014. This is based on 30-year fixed rates, good credit and families earning national median income of $63,900.

When you factor in all these elements, “whenever you can afford to do it” starts looking more complicated than it first appears to be. But considering them now can prevent costly mistakes and financial problems later. Of course, there is one best time to pounce: When you find the perfect house in the perfect place for sale – at a perfect price.

 The home service club reviews