Buy Now, Move Later?

In recent weeks, I have been contacted by many potential clients who are thinking of purchasing a retirement/second property. Of course living in FL, this is nothing out of the ordinary. What’s new, is their timeline.

These particular clients are considering purchasing a property now that they would not actually use fro between 3-6 years. They may not be ready to retire yet or still have kids in high school, so they are not ready to make a huge move just yet. They are concerned; however, that they may miss the boat on favorable prices and interest rates if they wait until they are ready. I understand their fears, because who knows what the prices and interest rates will like 5 years from now. So they ask me this question, “If I buy now, can I cover the carrying costs of this new property by renting it out?”

This is a loaded question, and the answer is property specific. For each property that a client is considering for this type of scenario, I have to take into account many factors. I have to first look into any lease restrictions in a particular area/community.  Some homeowners Associations have rules regarding the length of leases.  If there are not restrictions impeding leasing the property then we can move on to comparing expenses and income.

First we have to gather and consider all of the costs associated with carrying the property:
Mortgage Principle & Interest
Real Estate Taxes
Homeowners Association Dues (where applicable)
Maintenance Costs
Homeowners Insurance
Property Management Fees (if applicable)

Once I have to calculated all of these, I then research the rental market in that particular property’s neighborhood to see what kind of monthly rate they could expect to get. Depending on the costs and the rental income, I can then say whether or they should buy now. It is certainly a viable option to buy now and cover the costs in order to take advantage of the market and the interest rate, but potential buyers need to do their homework (or have a trusted Realtor do it for them) and be educated on the real estate market enough to ask the right questions.

How much rent can you get?
How much rent can you get?

Overprice or Underprice – What is better???

pricetagThere is an art to pricing a property appropriately.  You want to get the most money for the sellers as possible but not price it out of the market.  A really attractive price will certainly draw lots of attention, but you do not want the sellers to leave money on the table either.  It can really take a lot of thought to come up with the just the right number.  Some people use the argument that underpricing a property can cause a bidding war and drive the price upwards.  I usually lean in the exact opposite direction.  I tend to think that overpricing properties, just a little bit, actually brings in greater revenue for my sellers.

As it turns out, I am not the only one who has drawn this conclusion.  Florida Realtors recently put out an article that agrees.  According to data published in the May issue of the Journal of Economic Behavior & Organization, new research suggests that pricing a property 10-20% under market value actually netted the sellers less money.  Often times it did cause a bidding war but not enough of one to make up the substantial difference caused by underpricing it initially.  On the other end overpricing the property by around 10-20% did net the sellers a slight gain.  The study also indicated that when buyers were presented with a slightly higher purchase price they often looked for positive attributes to justify the price.   The same was true on the other end.  When the price was lower, they wondered what was wrong with the property.

Of course, there are many factors to consider when pricing a property for sale.  One of them is the timeframe in which the seller needs to sell.  You don’t want to be priced too high if you need to move your property quickly, and long market times increase the sellers’ carrying costs which eat in to their profit.  The long of the short is that you need an aggressive, knowledgeable professional to price it for you.

A Nectar Real Estate professional is always ready to help you with your real estate needs.  Feel free contact us any time!

A Great First Impression Starts with the Foyer

The foyer is the gateway into your home, and if people don’t like what they see upon their first entry, they may not chose to proceed. This first impression will stick with potential buyers should they continue through the property. Sellers want to make sure that those potential buyers are put into the right mood right away. They want them to feel invited in to tour the rest of the property.

This can be achieved by making sure that the foyer and entryway are first and foremost clutter-free. We know that everyone needs a place to store their stuff, but there is a right way and a wrong way to do it. Also that right place is never the FLOOR! The foyer should also be well-lit. Buyers do not want to feel like they are entering a cave.  Here are some fabulous ideas for creating attractive storage space and showcasing a bright entryway.

Great cubbies for every member of the family to store their stuff.
Great cubbies for every member of the family to store their stuff.

foyer foyer3 foyer4 Foyer5

New Construction Without the Long Wait

Who doesn’t want something shiny and brand new? Everyone, of course! Real estate is no different. People love the idea of being the first homeowner in a property, of having a home warranty to fall back on from the builder, and the ease of a move-in ready property. Often times the only drawback to new construction can be the long build times.

One of the best options for people wanting new construction but needing to be in something by a certain time is Inventory Homes. These are homes that the builder already has under construction when you visit the development. Sometimes they are homes that the original buyer has decided not to purchase but more often they are just started by the builder to keep up with demand. What is nice about these is that they are already underway, have been permitted, and will not take the typical 5-6 months to complete. You can almost always still pick the finishes and colors, and sometimes you can negotiate the price a little bit. The builder wants them sold as soon as they are finished, so they have incentive to move them.

Just a few miles from Celebration is an area called Champions Gate. It has some very nice hotels including the Omni Orlando Resort at Champions Gate and the Reunion Grande, and multiple championship golf courses. It is a great place to live, own a vacation home, or purchase property for investment income. Lennar Homes is currently constructing a neighborhood there called Stoneybrook at Champions Gate, and they have homes ranging in price from $255,000 to $373,000 and 1880 sq feet to 4259 sq feet. They have recently reduced some of their inventory homes, and there are multiple floor plans to chose from with completion dates between August and October 2013.

Here are all of the amazing amenities at Stoneybrook at Champions Gate:

Aerobics Studio

Clubhouse
Community Center
Equestrian
Fitness Center
Fully Maintained Lawns
Gated
Golf Course
HOA
Playground
Security
Splash Park
Sport Court
Swimming Pool
Tennis Court
Tot Lot
Volleyball Court

Plaza, Spa, Restaurant, Bar, Fitness Center, Tiki Bar, Cabanas, Tennis Club, Tennis Clubhouse, Stadium Court, (6) Tennis Courts, Golf Club, Golf Clubhouse Grill, Locker Rooms, Golf Shop, The Oasis, Resort-Style Pools, Family Pool, Lazy River, Water Slides, Swim-Up Bar, Water Falls, Beach Entry, Spa, Splash Pad, Grill, Bar, Fitness Area, Theater, Game Room, Tiki Bar, Cabanas, Performance Area, Trolley.  So much to do and you’re only a fewmiles Walt Disney World!

We have assisted so many clients with new construction contracts and been their liaison throughout the process. If this is something you are interested in, please don’t hesitate to contact us today!  Also if you are looking for new construction in another area of Central Florida, email me to get a list of what is available in your area.Champions GateStoneybrook at Champions GateStoneybrook at Champions Gate