Vacation Homes Are the New Starter Home for Millennials

Millennials are changing the way they buy houses and why they buy the ones they do. The usual path to homeownership and multiple homes was purchasing a single-family home to live in, then purchasing a second property as either an investment or a vacation home. But Millennials are changing it up by going out of order and buying their vacation home first. 

Why Are Millennials Buying Vacation Homes First?

One short-term rental platform discovered that millennials make up 40% of vacation homebuyers, an increase of almost 10% compared to 2019. It’s the largest share of any generation! Millennials cite reasons like extra income, building wealth, and having a property to vacation at as reasons why they purchase a vacation home as their first property. They get “the best of both worlds” as they continue to save for a down payment for their live-in home while also having an investment property to help pay the rent and mortgage. 

Remote work is a massive factor in this trend as the pandemic forced many workers to work from home. And working from home is an increasingly common work environment for younger Americans. With flexibility over work location, many Millennials seek a new location for vacations and remote work. Hence why vacation homes are taking a priority. 

Home prices are another factor as home prices have surged in many cities and metropolitan areas. Buyers consider new regions and locations to purchase a place, like in a rural location. Other living expenses are rising too, especially in popular cities. Homebuyers in high-rent markets use their vacation home as a loophole to avoid high home prices while still investing in real estate. 

Why Millennials Should Buy an Investment Property Home in Austin

Austin has ranked as one of the top U.S. cities for remote workers. Austin is known for its warm sunny temperatures and outdoor activities, making it a popular location for Millennials. With popular attractions like Lady Bird, Barton Creek, Lake Travis, and Zilker, there are endless opportunities for outdoor activities to choose from! 

It’s also quickly becoming the best city for employers as large entities like Facebook, Apple, Google, Tesla, and Oracle are expanding and relocating to Austin. More employers moving into the city will bring more residents moving for their jobs at these companies. And that means there will be more renters in the market for a home. 

Plus, Austin is already the #1 housing market for Millennials. A homebuying platform collected data of the 100 largest metro areas to find the best home markets for Millennials, Gen Xers, and Baby Boomers. Austin ranked #1 with Millennials and #1 for Gen Xers. The study found that Austin has 40 times more new millennial residents on average compared to the other 99 metros in the study. 

Contact us if you’re ready to buy your first investment or vacation home! Reach out to TALK Property Management–we are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

What Does A Homebuyer Pay for in Closing Costs in Texas?

Home prices have begun to stabilize in Austin! According to the Austin Board of REALTORS® July stats, the median home sales price is $480,000. This is $2,364 less than the previous month. If you’re ready to buy as a homeowner or an investor, read what you’re paying for in your closing costs. 

Title Company Fees for Homebuyers in Closing Costs

These are the following fees your title company will charge you and what you are responsible for paying as the homebuyer. 

Escrow Fee

The buyer and seller will pay their own escrow fee to the title company to process the sale’s closing. 

Endorsements

Endorsements are expanded coverage with a title company’s insurance policy to help cover the specific needs of the transaction. Depending on your title company and unique situation, this price can be as low as $30 or as high as hundreds or thousands of dollars. 

Recording Fees

Once the sale is finalized, documents need to be sent to the county. This can range from $120 to $160, but it will depend on the county. 

Appraisal Fee

The buyer typically pays for the appraisal, and it can range from $500 to $700. The lender you choose will most likely want an unbiased third party to appraise the property to ensure the property’s value matches the contract price. 

Credit Report

A buyer will pay the $50 to $75 fee for their credit report to be pulled.

Lender’s Document Preparation 

This $100 to $120 fee is paid to the lender for creating and organizing all the closing documents. 

Escrow Accounts for Homebuyers

If you’re putting down less than 20% for a down payment, the lender will require you to place your taxes and insurance into an escrow account at closing. As a homeowner, you will pay your taxes and monthly insurance to your lender directly using the escrow account. When the taxes and insurance are due, the lender will use the money from the escrow to pay them on your behalf.

Homeowner’s Insurance

Depending on the property and the coverage you choose, the price can range from $900 to $2000 per year. 

Property Taxes

At closing, the seller will pay the buyer a year-to-date prorated amount for taxes. For example, if the closing happens on October 1st, the seller will give the buyer credit for ten months since the seller owned the property for ten months of the year. The buyer is then responsible for paying the difference between the credit and the total tax bill at the end of the year. Your lender will require several months of taxes in the escrow account. 

If you’re ready to buy or invest in Austin area real estate, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com

Why You Need To Invest In Austin Real Estate Now

In the Wall Street Journal/Realtor.com’s Emerging Housing Markets Index, Austin won second place. The report looks at the return on investment and the livability of the country’s 300 most populous metro areas. It also looks at the metro’s real estate market like real estate supply and demand and median list price and economic health like unemployment rate and daily commute times. The ratings help identify locations that are good places to invest and where you’ll enjoy living. Here are a few reasons why you should invest in Austin real estate now. 

Businesses Are Relocating to Austin

The Austin Chamber of Commerce has listed about 50 companies expanding in Austin or moving to Austin. Some of them are popular ones like Amazon, Tesla, and FedEx. Apple is continuing to grow with its 1 billion dollar campus. Zoho, a software company, is moving its headquarters to Austin. 

Even without businesses relocating, Austin is home to major employers like Apple, Ascension Seton healthcare headquarters, Cisco Systems, eBay, Facebook, Google, and so many more. 

Austin’s job market is constantly growing and bringing people in as businesses continue to relocate and set roots in Austin. 

Population Is Growing

The U.S. Census found that Austin is one of the fastest-growing major metro areas in the country. According to CBS Austin, our beloved city has also been #1 in population growth for eight years in a row. From that same Austin Chamber of Commerce list, at a minimum, each company creates ten new jobs. Just the Amazon Fulfillment Center in San Marcos is expected to bring in 2,000 jobs! Apple’s new campus is expected to bring in 5,000 jobs. Zoho’s relocation is bringing up to 500 people.  

It’s been estimated that about 100 people move to Austin each day. Austin’s population has doubled every 20 years. Austin’s population is expected to double by 2040 and reach 4.5 million residents. 

Home Prices Are Increasing

Currently, we’re in a seller’s market as inventory in the Austin-Round Rock area reaches 0.4 months, according to the Austin Board of REALTORS® March statistics. A seller’s market works in favor of sellers as they now have the option to accept the best offer. This usually means buyers will try to outbid each other, and the seller will receive multiple offers, most offering over the list price. The median sales price has increased almost 30% to $425,000 compared to March 2020. These prices aren’t stopping anytime soon as supply is still low, and it won’t be changing soon. That’s why you need to invest now; get the best deal now before it’s too late! At TALK property management, we are dedicated to providing you with the best service. And as your real estate agent, I can help you find the smart investment properties that will give you a return on investment. 

 

If you’re ready to start your investing journey with me, contact me today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

What Fees Are In Closing Costs When Buying Property

While everyone is most familiar with saving for a down payment when buying property, closing costs are almost just as expensive! Closing costs are the thousands of dollars spent on closing the deal when you purchase assets. They will vary depending on loans, taxes, and fees, but it is equal to about 1 to 4% of your property’s value. I’ll break down some of the fees included in closing costs. 

Loan Origination Fee

The loan origination fee is what lenders charge to set up a loan. This fee will cover courier fees, underwriting fees, appraisal costs, administrative fees, and more. While it will depend on the lender, it will be close to 0.5-1% of the loan amount.

Application Fee

The application fee will cover your application process for a loan, the cost of running a credit report, and additional administrative fees. Again, it will depend on the lender, but it typically ranges from $300-$500. 

Mortgage Broker Fee 

Closing costs are how brokers make their money. This is why it’s crucial to research brokerages when first looking for a lender. It will vary depending on the brokerage you choose but expect it to be between 0.5% and 2.75% of your property’s purchase price. 

Loan Fee

If you have a loan with the Federal Housing Administration, they will charge a premium of 1.75% of the loan amount. 

Property Tax

Property taxes pay for schools, road construction, fire and police departments, and local services. These are included in closing costs, and it can be as little as $500 to as high as $8,000, based on the area and the property. 

Homeowner’s Insurance

Just like buying a car, sometimes lenders will require homeowner’s insurance before closing. Depending on your coverage and premium, it can range from $800 to $1,200.

Title Search Fee

A property title search will uncover all available information about a property and is commonly performed during the closing process. Typically, the title search fee will be between $75-$200 but will fluctuate depending on your property’s value and the company you work with. 

Title Insurance

Title insurance will help you from a financial loss if there are issues in the title, and it can happen at any time during the buying process. It usually costs between a couple of hundred dollars to $2,000. 

 

If you need helping with the costs of buying property this year, contact us so we can get started! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

How TALK Property Management Can Help Investors Reach Their Real Estate Goals for 2020

A new decade means new opportunities and new investments to be made. 2020 is the year you can make a big change and see huge results. It’s never too late to add some simple additions to your New Year’s resolutions and set achievable real estate goals to set you up for the next decade. We’re here to help keep you on track and set you up for success!

1. Expand Your Horizons

Just as the times change, so do trends in the market. Investing in real estate allows you to learn so much about a variety of topics and makes you a well-rounded person, but it’s never too late to expand your vision and learn something new. Ask questions about a real estate investment type you’ve never tried, research short-term rentals, or dig into where the next up-and-coming neighborhood will be. If you need help researching, don’t hesitate to give TALK Property Management a call.

2. Focus on Time Management

The more investment properties you have, the larger your scope of responsibilities to take care of your tenants and maintain the property. As your portfolio and the number of properties you invest in grows, it becomes more and more important to build a team you trust to help you spend your time wisely. With TALK Property Management, we help you take care of all the day-to-day duties of owning a property and come with a great team you can always rely on.

3. Stay Informed

You never want to lose touch on how your properties are doing, what the current tax exemptions are, or any coming changes that could affect you. When you partner with TALK Property Management, we always keep you in the loop, and we’re never more than one phone call away to answer all of your questions.

If you’re curious about the services we offer to help anyone investing in real estate, check out our About Us page. We’re here to make sure your real estate investment is a success, so let’s get 2020 started off on the right foot! Give us a call at 512-721-1094.

A Look Back at Austin’s Construction Projects Throughout the 2010s

Since 2010, there have been a ton of new projects and developments springing up throughout the city. With the start of a new decade almost upon us, we thought we’d take a look back at some of the buildings that weren’t around to add to our skyline just a few years ago.

The Austonian
From 2010 – 2018, this was Austin’s tallest building. The Austonian was the true start to showing how important and lucrative high rise residential buildings can be in Downtown Austin. The skyline wouldn’t be the same without the 683 feet condominium tower.

The Independent
In 2019, the Austonian was usurped in height by the Independent, standing at 690 feet, the building became the tallest in Austin and the tallest all-residential building in the United States west of the Mississippi River. The unique design is always brought up in architecture talks for its Jenga-like look.

Robert B. Rowling Hall
The University of Texas campus is beautiful and has a huge impact on the city year after year, but the new graduate business facility is an even bigger fixture. The 497,500 square-foot building connects to the AT&T Conference Center and Hotel.

Northshore
The 424-foot building has 38 stories, 439 apartments, and is a quintessential mixed-use development. The building comes with a private lounge, pool, concierge, and a variety of great amenities.

70 Rainey
The last ten years have brought particular change to the Rainey District. The tallest of the new towers to the historic Rainey Street is 70 Rainey, and it’s sure to be one of many luxury buildings to connect Rainey to the rest of Downtown.

The last decade has brought a variety of changes, and we know the next ten years can really evolve the city dynamic and skyline even more. If you ever have questions about where we see Austin going and what the changes can bring for your investment properties, don’t hesitate to reach out to TALK Property Management at (512) 721-1094.

5 Real Estate Investment Property Red Flags

There are a lot of excellent investment properties out there, and while there are some factors that make a property great, there are also some red flags that may help you narrow down which ones you should avoid altogether.

  1. Is the floor plan functional?
    If a home is listed as a four-bedroom home, you want to make sure that all four bedrooms are adequately sized. If one bedroom is particularly small or awkwardly shaped, it may be hard for you to find tenants for that space. You’ll also want to consider the number of bathrooms. It’s unlikely that you’ll find tenants ok with sharing a four-bedroom home with only one bathroom.
  2. What neighborhood and school district does the home fall in?
    No matter how beautiful the home, if it’s in a bad neighborhood or zoned for a school district that doesn’t have a great reputation, you’re going to have a hard time finding tenants. Is the area in a high flood zone, close to loud businesses? These are all factors you’ll want to look into.
  3. Are there structural issues and damage to the property?
    Pay attention to if a property has uneven floors, cracks on exterior walls, etc., as this can be a sign that there are bigger problems with the structural integrity of the home, which can be costly to fix. You should also be looking for roof leaks and checking under countertops and sinks in the bathroom and kitchen for signs of water damage and mold, as this can be another sign that there are major repairs that need to be made.
  4. Have you been asked to waive your right to inspect the property?
    We can’t stress this enough. If a seller asks a potential buyer to waive their right to inspect and back out of the deal if they don’t like what they see, turn tail and run. This is a huge sign that something isn’t right with the property. It’s common for a seller to sell a property as is without making any repairs, but it’s not common to ask a buyer to lock into a deal without an inspection.
  5. Are you being met with resistance to see the inside of the property?
    If you’re having trouble nailing down a date and time to see a property or are even being kept from checking out the whole property, it’s a big sign that the seller is hiding something. The golden rule to live by: Never buy an investment property without seeing 100% of what you’re getting into and after receiving an inspection that gives you an idea of what the property will need maintenance-wise.

If you still have questions on investment properties, don’t hesitate to reach out! We’re more than happy to share some of the knowledge, tips, and tricks we’ve picked up over the years to make sure you make and maintain a great investment.

The Domain is Going to New Heights!

It is said Domain Tower 2 will be 24 stories and have 330,000 square feet of office space. This second tower is a continuation of the plans to make The Domain Austin’s second “downtown” hub. As huge technology companies are seeing a need for larger space in close proximity to amenities they can offer to employees, construction companies are meeting those demands by expanding The Domain.

Overall, The Domain is about 300 acres of land split amongst a variety of offices, retail spaces, and residences. There are more projects coming soon, including a 20-story, 345,000 square-foot Domain Tower 3, and a proposed 22-story Domain Tower 4. The plan to continue development of The Domain includes a 15 phase plan, and Domain Tower 2 is just one step in the overall goal of bringing 3 million square feet of class A office space, 2,500 multifamily units, 50,000-square feet of restaurants, and a hotel to the area.

While no one has yet signed on to take over the office spaces in Domain Tower 2, there’s no doubt there will be a variety of companies interested due to its great location and competitive markets. The demand is strong and only continues to grow in this area. If you’re curious about how the area in North Austin has changed with the expansion of The Domain, give our team a call. We’re happy to give you a glimpse into how the area has changed and how it will continue to do so in the coming years.

How to Know if a Property is a Good Investment

Deciding to jump into real estate investment is just the beginning of a variety of decisions you’ll have to make. You’ll be surrounded by questions and things to ponder and consider. So, what is it that makes a property worth buying in order to rent out to tenants? What should you be looking for in a great investment property?

  1. Quick turnaround time – By this, we mean that you should be looking for homes that you can buy and have a tenant living there in no time. It can be costly and unwise to invest in a property that will need a ton of renovations before you can rent it out. It’s recommended to look for properties that will generate enough rent in 10 months to cover all costs or follow the “2% rule.” This is the financial rule that states that your monthly rent should be at least 2% of the total purchase price of a property.
  2. Check out the number of days homes are staying on the market as well as what other rentals are offering – If a neighborhood is seeing a decrease in the number of days on the market for homes being sold, this shows that the housing market in that area is heating up and could be especially desirable. On the other hand, if you see rental properties offering discounts and deals, this could be a sign that landlords are having a hard time filling the spots they have open and that the neighborhood isn’t ideal for tenants.
  3. Look into what else is available in the neighborhood – Big businesses spend a lot of money to scout out desirable neighborhoods that will sustain their company. If a Starbucks, Whole Foods, or trendy business is moving in, it’s a great sign that the area is booming and will bring tenants looking for a place to call home. If you’re looking at places in a college town, you need to know that you’re more likely to have a high turnover of tenants – people looking to stay for 1 – 4 years while they finish a degree. If you’re targeting millennials in a city, target your home searches to walkable neighborhoods that are close to public transportation and restaurants/businesses.

If you ever have any questions about real estate and investment properties, don’t hesitate to reach out to our helpful team. We’re here to ensure that your properties and investments are well taken care of.

Loan-to-Value Ratio Explained

If you’re considering buying a home, there will be a lot of delving into your finances in order to qualify for a mortgage. One of, if not the most, crucial factor to be approved for a mortgage will be your loan-to-value ratio. The loan-to-value ratio is pretty straightforward. It’s simply the amount of money you borrow from your lender, divided by the purchase price of the home in a percentage format.

The loan-to-value ratio is extremely important for lenders as it gives them a better insight into the risk they face loaning money to a prospective homebuyer. The higher your loan-to-value ratio, the higher the risk to the lender, which may play into the mortgage terms and interest rates the lender can offer you. While lenders also look at your credit score, they want to make sure that you have equity in your home and are willing to make a sound investment that you can afford.

Many lenders require that borrowers have a loan-to-value ratio of 80% or lower before they approve a loan, which means that they’re really looking for borrowers to put in 20% for the down payment.

If you’re worried that you could fall under the high loan-to-value client group, there are a few ways to lower your ratio and increase your chances of being approved and getting great terms for your home loan.

One way to lower your loan-to-value ratio is to save up more money in order to have a larger sum to put down for your home. If you can offer up 20% or more of the home’s value, you’ve already lowered the loan-to-value ratio and made yourself less of a risk to the lenders by proving you have a stake in your home. The other way to lower your loan-to-value ratio is to look at more affordable homes. Choose a home that you would need a smaller down payment for, and you’ve immediately taken care of reducing the loan-to-value ratio.

If you ever have questions about your loan-to-value ratio and choosing a property that fits your budget, give our team a call. We’re here to make real estate processes simple and easy to understand for everyone.