Chance Gates' Blog

Source: “Rent vs. Own Ratio to Flip in 2011?” Fortune (Jan. 4, 2011)

Rents have surged as home prices have dropped, which have prompted some to ponder whether homeownership is really worth it. Moody’s Analytics data has suggested that it makes more financial sense to rent than buy in many U.S. cities, but Moody’s chief economist Mark Zandi now says that is about to change.

“By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country,” Zandi says.

Home prices are expected to fall further, making more homes affordable, whereas rent prices are expected to continue to rise this year.

The following are a few of the top cities where it makes more sense to buy than rent, according to Moody data. (Experts often recommend buying when the price-rent ratio is below 15 and rent when it’s above 20.)

▪ Cleveland: 11.43
▪ Pittsburgh, Pa.: 11.71
▪ Detroit: 12.32
▪ Phoenix: 12.35
▪ Atlanta: 12.82
▪ Tampa, Fla.: 13.08
▪ Orlando, Fla.: 13.1
▪ Cincinnati: 13.74
▪ Las Vegas: 13.89

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.com or  http://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney. For a free copy of my blog titled  “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page
Source: Dallas Morning News research

Image by www.urbancityarch.com via Flickr

By Paige Tepping

RISMEDIA, September 11, 2010–Finding the home that is right for you can be a time-consuming process. The experts at Move.com offer the following tips to help make sure you don’t just settle for a home, but instead find the home that is perfect for you.

Once you’ve settled on a couple of neighborhoods where you would like to live, it’s time to pick out a few homes to view. Your wish list can remind you which features are absolute requirements and which amenities you’d like to have if possible. When narrowing down your home search, consider:

-Types of homes
-Home purchase considerations
-Home comparison chart
-What to do when you’ve found the right home for you

Types of homes
In addition to single family homes (one home per lot), there are other forms of home ownership to consider as you begin looking for the next place you will call home:

-Multifamily homes: Some buyers, particularly first-timers, start with multiple family dwellings, so they’ll have rental income to help with their costs. Many mortgage plans, including VA and FHA loans, can be used for buildings with up to four units, if the buyer intends to occupy one of them.
-Condominiums: With a condo, you own “from the plaster in” just as you would a single house. You also own a certain percentage of the “common elements”—staircases, sidewalks, roofs and the like. Monthly charges pay your share of taxes and insurance on those elements, as well as repairs and maintenance. A homeowners association administers the development.
-Co-ops: In a few cities, cooperative apartments are common. With those, you purchase shares in a corporation that owns the whole building, and you receive a lease to your own apartment. A board of directors supervises management. Monthly charges include your share of an overall mortgage on the building.

Home purchase considerations
Most buyers’ first consideration, after neighborhoods are chosen, is the number of bedrooms. As you begin to view homes, keep the following purchase and resale considerations in mind:

-Weigh your needs, budget and personal tastes in deciding whether you want a home that’s a newly constructed, an older home or a home that requires some work—a ‘fixer-upper.’
-One-bedroom condos are more difficult to resell than two-bedroom condos.
-Two-bedroom/one-bath single houses generally have less appeal than houses with three or more bedrooms, and therefore less appreciation potential.
-Homes with ‘curb appeal,’ (a well-maintained, attractive and charming view-from-the-street appearance) are the easiest to resell.
-When resale is a possibility, don’t buy the most expensive house on the street, or anything that is unusual or unique. The best investment potential is traditionally found in a less expensive, more moderately sized home on the street.

Home comparison chart
While house-hunting, it’s a good idea to make notes about what you see because viewing several houses at a time can be confusing. Create a comparison chart before you begin looking at homes so you can keep track of your search, organize your thoughts and record your impressions.

When you’ve found the right home
Before you begin the home buying process, resolve to act promptly when you find the right house. Every Realtor has stories to tell about a couple who looked far and wide for their dream home, finally found it, and then revealed that “we always promised my Dad we’d sleep on it, so we’ll make an offer tomorrow.” Many times the story has a sad ending—someone else came in that evening with an offer that was accepted.

Resolve at this point that you will act decisively when you find the house that’s clearly right for you. This is particularly important after a long search or if the house is newly listed and/or under-priced.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most of Northwest Nevada neighborhoods.  I can be reached by email @  chance at ballard-company.com or  http://www.myspace.com/chancegates

Image via Wikipedia

By Paige Tepping

RISMEDIA, May 26, 2010–When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

1. Compare property values and rents
Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a must.

2. Pay attention to tax laws
Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize in something you know
Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know the costs before getting started
Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know where your tenants are coming from
If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.

6. Assess the tax situation
Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.

7. Investigate insurance coverage
If a seller’s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm utility costs
Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.

9. Consult your accountant
Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect
Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

As a Reno/Sparks real estate professional; I encourage all questions and comments, on the Reno/Sparks real estate market or any of the articles posted in this blog.