Tag: Austin Real Estate

3 Popular and Affordable Home Improvements to Add Value in 2021

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Home improvement projects were all the rage during quarantine as more and more people spent time indoors. But the trend isn’t stopping yet. Many are taking advantage of the savings from lockdown and improving their home’s comfort. Discover Home Loans survey revealed that 58% of people are planning home improvement projects this year. 83% of those said a more comfortable home was their primary motivator. Here are the most popular and affordable home renovation trends for comfort this year. 

Bathroom Improvements

According to a HomeAdvisor survey, a bathroom remodel is the most popular planned renovation this year. The bathroom is a place we spent a lot of time in, so it must be comfortable, efficient, and practical. Modern toilets, faucets, and showerheads are aesthetically pleasing and also help conserve water and lower costs. 

The average bathroom remodel cost last year was $13,401, according to HomeAdvisor’s True Cost Report. While this may seem like a lot, this is more economical than a kitchen renovation that costs an average of $35,000. 

Interior Painting

HomeAdvisor reported that interior painting was the most popular project and the second most planned project this year. This project has an average cost of $2,007, which is the best inexpensive upgrade that significantly impacts the home. 

If you’re painting to sell your home, it’s best to choose neutral colors. Neutrals will work with any style and help the buyer visualize their furniture in your home. 

New Flooring

This popular and affordable project is the third most planned renovation project this year. It has an average cost of $4,680. Replacing old and worn carpet, tile, or wood will increase the home’s comfort and add a unique design feature. This is beneficial since it makes the home more attractive if you’re selling. 

If you need help choosing materials or what high return on investment projects to implement, contact me! 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

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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.

6 Kitchen Design Trends from New Products Coming in 2021

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Whether you’re selling, buying, or looking for ways to increase your ROI on a property, these new products this year will influence kitchen design. These products come from the virtual 2021 Kitchen & Bath Industry Show. Here are the ten kitchen design trends and the products that affect them. 

Engineered Countertops and Backsplashes

1. Light-colored marble looks

Light colors are in because they give a sense of cleanliness and optimism compared to dark colors. And this desire is sticking this year, which is why you’ll see many new collections focused on warm, welcoming whites with marble looks dominating. 

2. Concrete and other worn looks

In new engineered-surface collections, concrete-look and other worm styles showed up frequently. Inspiration for one collection was taken from industrial-style dwellings found in New York, Detroit, and London. 

Faucets

3. Touchless

Touchless appliances are taking off since people are now more than ever about how germs spread from surface to surface. Many faucet manufacturers are adapting and integrating a touchless option as a standard in their new lines. Some are even making it available in older styles. 

One style by Kohler is a voice-activated faucet. It can sync with Amazon Alexa, Google Home, or Apple HomeKit devices and can be controlled by voice commands. Most styles need a wave of a hand to activate the faucet. For those with voice commands, you can set up preferences in an app for temperature and the amount, and the faucet will fulfill the demand. 

4. Two-tone finishes

To find harmony in dark and light, two-tone finishes were the balancing solution. Many products balance rough and smooth textures, matte and polished finishes, and warm and cool tones. This trend doesn’t just apply to faucets either. Many appliances are also following a similar finish. 

Rohl’s new line of kitchen faucets allows for mixing and matching four finished for the spout, four finishes for the inner knob, and six finished for the outer ring for the knob. Several other companies now offer the stylish matte black and brass tow-tone combination. 

Appliances

5. Slim appliances

Several manufactures released a new line intended for small homes and apartments, rental properties, and empty nesters or retirees who have downsized. Miele’s new dishwasher offers a quick wash-and-dry option that only takes 58 minutes. Thor introduced a 24-inch-wide gas range oven and stove. Fisher & Paykel’s released a new 24-inch refrigerator with a bottom-mount freezer as a skinny solution. 

Cabinet Storage

6. Drawer and cabinet organizers

People have utilized inserts, rollouts, pullouts, and dedicated dividers in their drawers and cabinets, and manufacturers have noticed. Hardware Resources created a pullout with a magnetic knife storage insert. Wellborn Cabinet utilizes the pull-down option, allowing users to bring items in upper cabinets down to a reachable level. You grip the handle and pull for the shelves to swing out and down for access. 

 

If you need help implementing these technologies and products in your home or want advice on how it will impact your home value, contact me so we can get started! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

 

Part One: Should I Rent Out My Home Instead of Selling?

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Selling or renting is the age-old question for property owners, and there is no right or wrong answer. Let’s look at what the market is doing now and then discuss factors to consider to make the best choice for your situation. 

The Market Now

The Central Texas housing market continues to be strong for many reasons, including our high quality of life, relatively low cost of living, and even the coronavirus pandemic. 

COVID-19 has altered the way we search for homes, show homes, and buy and sell homes. It has also kept some local home sellers out of the market–those who don’t “have to” move–likely because they’re waiting for the effects of the pandemic to dwindle. That means that local demand for housing outweighs supply, so homes are selling for a higher price. This process is called a seller’s market. But, the real estate market is dynamic, and this could change at any time.

Additionally, mortgage interest rates remain at historic lows, motivating buyers to make a purchase now.

The local and national economies impact the housing market as well, so you’ll need to assess items that can increase or decrease city growth. People could be relocating for jobs, which can cause job losses and increases. Are businesses moving into the area? Are houses being fixed or abandoned? Each aspect will help you get a better understanding of where the market and economy are going. 

Lastly, rent prices have increased over the years, with an increase in Millennials and Baby Boomers demanding affordable rental housing. But, this is a trend that could change now due to the economy. 

What to Consider

Do you want to be a landlord?

Managing a property is a time consuming and challenging job. Consider if you have a team to help you, like a handyman or real estate agent, or do you need to hire them? Ask yourself if you have the time and effort to screen tenants or if you’re willing to hire a third party to do so. 

It’s essential to factor in where you’ll be living. If you’re out of state, you’ll need a property manager. If you’re staying local, then you need to know what that requires. Not only will you need the time, effort, and cash to be a landlord, you’ll need to be knowledgeable in the local, state, and fair housing laws. 

Read my owner’s resource for “5 Things You Should Know Before Becoming a Landlord”.

 

Are you buying another property while renting the other?

To get a second mortgage, lenders will consider rental income, usually up to 75%, to be counted as income sources. But, with low mortgage interest rates, this might be the time to refinance and pay an even lower mortgage payment. 

 

Will home values increase in your area?

While it’s impossible to predict the market, it’s smart to follow it to see where your home’s value could be in a few years. Suppose you expect the market to work in your favor in a few years and increase the value. In that case, you might want to consider renting it now and selling later to take advantage of the appreciation. Conversely, if you think this is the best the market will do for your house, then sell now. 

To calculate the potential return on your investment property, you’ll need to know your cash flow and equity. To read an example, read my investor resource “How to Calculate the Potential Return on Your Investment Property.” 

A cost market analysis (CMA) will help you answer what your house is worth right now. It will also help you understand the current housing market and the price of other similar properties. Get a full CMS explanation here.   

 

This is part one of a two-part series. In the next blog, I’ll share the specific costs of renting and selling. Check back in December for part 2! 

10 Tips for Finding A Reliable Home Contractor

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A contractor is a crucial member of your investment team, so you have to make sure they’re the best and most qualified for the job. You need someone capable of keeping projects on budget and schedule. A good and reliable contractor will make your investments successful, and when a property is successful, you’ll see more money.

So here are ten tips to help you find a reliable contractor. 

1. Use a reliable source.

Ask real estate agents (hey, that’s me!) and other investors about their experiences with their contractor. This is the first source you should go to. Since they have had one on one experiences with the contractor, they’ll be able to go into specific details about the contractor and the job. Employees at hardware stores could be a source of knowledge as well. 

If you don’t have those networking connections, Angie’s List and Checkbook are reliable online services. Always check the Better Business Bureau website to ensure they’re legit and to see their score. It will show their customer reviews, customer complaints, BBB rating, and BBB accreditation. It will show you how long they’ve been accredited and an overview of the BBB rating. 

Online reviews are not replacing checking for references. Suppose there are many negative reviews over a long period. In that case, that should be a red flag but not one singular negative review.

2. Interview several contractors

Once you think you found a good match, interview them! You should interview at least five and ask lots of questions. You need someone with a specific skillset for investments. If a contractor only specializes in the kitchen or bathroom, then don’t ask them for a quote about anything outside their expertise. It’s a lot of work, so you need someone familiar with the investing process. From this interview, you’ll also be able to see the contractor’s approach, budget, timeline, and relationship with other contractors in the area.

3. Ask for references

To narrow down the choices after an interview, ask for references from previous clients. You’ll want to ask questions about how the contractor handled changes, the budget and timeline, and how they treated the job site. These are crucial answers you need before giving them your business. 

4. Ask for a formal bid or estimate.

ALWAYS review an estimate of the project’s cost before signing an agreement with a contractor. If you’re still choosing between a few, a bid could be a way to narrow it down. If you’re comparing offers, make sure each one includes the same materials and tasks, so it’s a fair comparison. In addition to the budget and timeline, talk with them about materials and possible subcontractors who might be brought on.

Acknowledge that plans change and repairs could be needed on the go, so be realistic with the bid as well. You could ask for a price with two or three scenarios and play around with what needs to be added and doesn’t. Be a smart investor and expect to spend 15% more than estimated to cover unexpected costs. 

If the price doesn’t work in your budget, you need to focus on the service they provide and then find a fair priced contractor in that subset. Cheap does not always mean a good contractor and vice versa. 

5. Verify their license.

Check that your contractor is legit and has the proper license from our local and state governments. Ask to see their license to make sure it is up to date or request a copy. 

6. Do a background check.

Again, check the BBB website for complaints and violations. Suppose your contractor doesn’t disclose legal issues before signing. In that case, you’re within your rights to ask or do the research yourself in our local court records and the Texas disciplinary board. Better to be safe than sorry, right?

7. Search for subcontractors.

Research what companies or service providers like electricians, plumbers, or carpenters your home contractor uses. Learn about this before to know more about the other vendors who will complete the project and the team.

8. Ask about insurance and permits BEFORE.

Nearly all renovating projects require a permit. So, a contractor will need to secure the proper permits, licensing, and insurance before taking a tool to anything. Find out which permits Austin, and the state of Texas require and check with your contractor. If you work without a permit, you’re violating local ordinances, and you are liable for the consequences if caught. Consequences range from fines to not having the work be inspected by the city once completed, which will cause problems when you want to sell. 

While acquiring a permit can slow down your project and be a pain, the correct permit will have your contractor following the law. A permit also confirms that a city official will inspect it to ensure it is up to code once the project is completed. It’s pretty standard for a project to start months after an agreement, too since contractors have consistent work and need to finish their current projects. 

For insurance, you’ll need to know what is covered by your homeowner’s insurance and what is covered by the contractor’s insurance. I recommend getting a copy of the contractor’s insurance policy. 

9. Draw up a contract.

Now that you have chosen a contractor, create a contract that covers the project’s details like budget, timeline, detailed list of building materials, and all subcontractors’ duties. The contract should also include ground rules like the hours for the contractor to work on the property, what kind of notice you’ll get, what bathroom workers will use, where they’ll park, and what will be cleaned up at the end of the workday. 

If something comes up during the project, ask to sign an addendum and see a new project estimate that includes new work, materials, and cost. 

10. Be smart with payment.

Naturally, contractors ask for an upfront payment that will go to their total fee before beginning work. The most common advice is not to pay more than 10% of the price for an extensive renovation project. But smaller upgrades with custom work could require a 30 to 50% upfront payment. 

Only pay the rest of the fee once the project is completed. The price should be clearly outlined in your contract. The schedule should be updated each time a problem arises or a new repair is needed.

These are my tips to help you build your investing team. But it’s essential to be realistic as well, so you’re not a “nightmare” customer for them. After all, it’s just one person or team, and they can only do so much. If you follow my tips, you should find one superhuman to help you real your investing goals! If you need a real estate agent on your investing team, I’m here to help (512) 721-1094 or dbrown@talkpropertymanagement.com. 

Photo by Milivoj Kuhar on Unsplash

Property Management Write-Off’s in 2020

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Owning an Austin rental property in 2020 during the pandemic will continue to be both challenging and an opportunity. Economic changes could create unrest for tenants, and shifts in leasing requirements have proven to provide unique hurdles for landlords. When it comes to handling your property, you need to know what you can do about write-offs.

In 2020, you can still deduct mortgage interest and real estate taxes on your rental properties as well as all of the typical operating expenses. Keep careful track of your spending, and make sure to deduct accurately to avoid paying higher taxes than need be. 

Also, consider your depreciation. A tax-savings can be found on residential buildings over the age of 27.5 years, where you can depreciate the cost even when the value is increasing. There are additional depreciation opportunities with commercial buildings over the age of 39 as well as expenditures on nonresidential building roofs, HVAC systems, and alarm and security systems.   

These are the most simple deductions, but there are many other, more complex tax matters to consider. If you are managing properties, be sure to speak with a qualified accountant about your options. If you need a trusted referral, please contact Dona Brown. 

If managing properties in Austin is getting overwhelming, it might be time to try a local, professional Property Manager that can help boost your return on investment. Contact Dona Brown, Talk Property Management, to discuss your needs and options. 512-721-1094.

Single-Family Residences, Built For Rent Homes, Meet Austin’s Home Seeker Needs

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Trends that began last year have recently resurfaced. Buyers’ and renters’ priorities are shifting as the economy continues its journey through the tumultuous year, uncovering unique opportunities. Austin’s single-family-built-for-rent market will most likely expand as we move further into 2020. What are SFBFRs? They are the comeback trend from 2019 that could help housing affordability and challenges to homeownership due to COVID-19 effects. With demand for single-family homes outpacing supply and even as individuals and families prefer the stand-alone home, not everyone can or wants to buy right now.

With unemployment rates increasing, down payment challenges are also on the rise. Meanwhile, low inventory continues to push home prices upward, and many home seekers are widening their search to include rentals. Renting affords the opportunity to live in specific geographic areas or communities with little commitment and less out-of-pocket cash. However, especially while health concerns have many people avoiding high-density housing, moving into an apartment does not tend to fit the needs of a large portion of the rental market. Professional millennials, those in transition (divorce, downsizing, upsizing), or empty nesters all have something in common: they want the convenience of renting with the privacy and quality of life of a single-family home. 

In the first quarter of 2020, SFBFR activity increased from the previous year across the nation. Its share of build-to-rent homes is taking a larger chunk of the new-home market and many in Austin are seeking such an opportunity, in the form of both renters and builders. Projects such as Urbana, part of Goodnight Ranch in Southeast Austin, are building new homes with high-end finishes and private yards specifically to go directly on the rental market. These upgraded units for lease are a step above apartments, don’t require a long-term mortgage commitment, but still provide the amenities people want and need, such as washers and dryers, spacious floor plans, and someone else to manage the repairs. It’s a win-win. 

Successfully investing in Austin real estate requires paying attention to the market and the demands of home seekers. As we head deeper into 2020 and monetary priorities shift for Austin buyers and renters, it’s critical for those looking to purchase rental property to adjust to them. If you need guidance on the current real estate trends or have questions about managing properties, contact Dona Brown. Her years of experience can save you time and money when investing in Austin. 512-721-1094. 

Mortgage Rates June 2020 and Investing in Austin

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Stay informed of Austin’s investment opportunities and real estate market trends with a quick look at the latest mortgage rates. Mortgage rates continue to linger near the bottom of the graph as the gap widens between home inventory and buyer demand. Even after a slight uptick in rates the first week of June 2020, they are still just .13% above the all-time low. The 30-year fixed mortgage rate landed at 3.18% in early June as the economy heads to the recovery ward. 

Freddie Mac’s national average report shows all rates are trending downward from this time last year:

  • 30-year fixed-rate mortgages: averaged 3.18%, a decrease from the 3.82% rate in June of 2019.
  • 15-year fixed-rate mortgages: averaged 2.62%, down from the 3.28% rate from this time last year. 
  • 5-year hybrid adjustable-rate mortgages: averaged 3.10%. In 2019, these 5-year adjustable mortgages averaged 3.52%.

While rates are still incredibly low, buyers and renters are starting to take advantage and dive back into the home search. Not without precautions, however. In a recent industry survey, management professionals revealed their top priorities are focused on new technology and paperless leasing to meet the concerns and demands of current home seekers who need to know its safe. Technology is allowing the market to keep moving with virtual tours and remote signing solutions.

Investing in Austin can be fruitful, but it takes diligence and market knowledge to maintain a top return on investment. Relying on an experienced and professional property manager can help you avoid the high costs of new technology but keep you relevant in the 2020 rental market. If you have property management questions or are considering hiring an Austin professional this year, contact Dona Brown. Her experience can help you navigate investing and managing. 512-721-1094. 

Also, check out these recent blogs for more Austin investment resources:

 

When is it Time to Hire an Austin Property Manager? | Cost Versus Return

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Investing in Austin real estate is a great way to earn additional income. Once you’ve purchased a rental home, made any repairs necessary to ensure it’s safe and up to code, and secured renters, managing one or two homes can be simple for the experienced investor. But as your portfolio grows, managing more than a couple of properties or expanding your investment area can be overwhelming. When is it time to hire a professional to manage your Austin rental property?

If you are managing properties, you are most likely looking for the highest return on investment and watching your costs carefully. Balancing costs with investment takes careful consideration, and property management companies are both a cost and an investment. Here are factors to consider when determining when to hire an Austin property manager:

Time Versus Money

Rental homes require attention, attention involves time, and your time is valuable. It’s easy to recognize that managing one or two properties requires less attention than working with three, four, or more units. If you have the time but not the money, managing your own rental homes makes the most sense. If you have the money but not the time, hiring a professional should be on your to-do list.

Time Equals Money | Expanding Your Portfolio

The time it takes to manage multiple properties is time you can spend focusing on other ventures including a separate profession, searching for new rental properties, or higher-level management tasks. Instead of taking urgent calls, answering tenant questions, screening renters, or fixing toilets, your time can be spent expanding your portfolio, marketing, or networking. If your time is more valuable spent elsewhere, hire someone to take those management tasks off your plate, and increase the quality of your output. 

Expanding Beyond Your Current Geographic Location

Investing in Austin could be where you start, but if your sights start to focus further outside the city limits, your expertise, capability, and desire to travel may start to wane. Diversifying your portfolio is a smart investment but also requires diversification in management to help subsidize your knowledge base, maintain properties, and balance your time. Expanding geographically would be a time to hire a professional. 
Managing properties in Austin can be a lucrative business, but the best landlords and investors understand balancing costs, time, and knowledge. If you are managing multiple properties, are overwhelmed with management tasks, or considering expanding your portfolio, it’s time to hire a professional property manager. Contact Dona Brown, Talk Property Management, for a local Austin perspective that can help you navigate the area’s investment real estate market, manage your property with experienced ease, and set you on a course for success. 512-721-1094.

A Realistic Look at Austin Investment Opportunities in 2020

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If you are considering investing in Austin real estate as we approach uncertain times in the COVID-19 era, you need to be realistic and ask yourself the hard, honest questions. An economic downturn can offer opportunities for real estate investors where competition is lessened, and the number of those seeking rentals can increase. Investing in Austin requires a keen eye for opportunity, and now is the time to prepare to buy a rental property. 

First, an Austin investor needs to understand the current real estate market. Local REALTORS® have access to resources that an investor can use to study current trends. Consulting with an agent that works daily in Austin’s home buying and selling industry is key to making an informed decision. Recently, residential sales in the Greater Austin area have increased by 2.2% year over year, while the median price hit a spike of 11.7% compared to March 2019. The numbers indicate that the first of the year’s activities were on track to continue pushing the market to new highs. As the May selling kicks off, the housing market could start to see subtle or not so subtle changes due to COVID-19’s effect on the economy. No one has absolute answers, but we can strongly speculate a significant shift ahead. 

Second, those seeking to buy rental properties in Austin need to evaluate their financial situation honestly. Here are a few key areas to analyze:

  • Savings – can you cover at least three months of personal expenses, including having funds set aside for emergencies?
  • Job situation – are you in a stable position, or does your industry anticipate layoffs?
  • Assets – do you have assets that will become a burden and/or are you considering selling one or multiple assets first?
  • Liquidity – do you have readily available funds for a down payment, repairs, maintenance, and future mortgage payments?

2020 health concerns are creating unprecedented times but can also present opportunities for those intending on investing in Austin rental properties. For the realistic buyer, now is the time to prepare for those opportunities. If you need guidance from a local, experienced REALTOR®, contact Dona Brown and Talk Property Management. We serve in Travis, Williamson, and surrounding counties in residential sales and property management. Call 512-721-1094 for a free consultation.