It's a Good Time to Buy a Vacation Rental

Right now, the languishing housing market offers some lingering upsides for those who have a pot of investment dollars to burn.

Home prices are low, financing is cheap and inventories are bulging.

The planets have aligned over vacation rental acquisitions.

The road's been rocky for real estate in recent years, but that means it's a buyer's market and good time to grab a piece of the American Dream as a solid, long-term investment.

"Vacation homes are almost always a good investment," says vacation rental guru Christine Karpinski, director of Owner Community for HomeAway.com, the global leader in vacation rentals, hosting some 540,000 vacation rental listings.

"First, if you're looking for a good long-term investment, real estate tends to be a good bet. Second, vacation properties have the ability to pay for themselves, and owners often earn a profit in rental income. Third, the investment comes with the desirable perk of having a place at the beach or in the mountains to call your own," says Karpinski, a vacation rental owner herself and author of "How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment" (Kinney Pollack Press, $26.00).

Vacation rental space is the place more and more travelers opt for when they want a bargain getaway with accommodations that provide all the comforts of home.

According to Karpinski, here's why you want to move on that vacation rental now.

Prices are as low as they are going to go.

Property prices are as low as they've been in ten years. Procrastination won't keep them low. Analysts say the housing market is scraping bottom and poised to move up.

"I don't take the plunge now, I'll look back ten years from now and say, 'Why the heck didn't I buy back in 2010?'" says Karpinski

Interest rates are likewise as low as they are likely to go.

Erate.com had the interest rate for 30-year, conforming fixed rate mortgages at 4.23 percent on Oct. 25 and says rates on non-owner occupied properties is about a half a percentage point higher -- with a virtually mandated 20 to 30 percent down payment.

Markets are flush with inventory.

The slow economy and even slower housing market has left vacation markets brimming with buying opportunities, from sellers looking to move on or up, to foreclosures that warrant careful scrutiny.

"One caveat: Before you let yourself fall in love with a property, make sure it is legal to rent it out as a vacation home. Some areas and homeowners' associations do not allow short-term rentals," Karpinski warns.

Good help is easy to find.

The recession weeded out incompetent, fly-by-night real estate people who jumped on the booming market bandwagon. Those who survived have been around the block a few times and know the game.

Say Karpinski, "Real estate professionals still working today are the top in the business," says Karpinski.

Renting a vacation property is easier than ever.

Vacation rentals are more popular than ever, thanks to their home-away-from-home allure but also because the Internet has made them eminently more visible.

"More and more consumers are choosing to stay in cozy condos, cabins, and chalets instead of cramped, impersonal hotel rooms when they travel. And as market demand has surged, organizations like HomeAway.com have sprung up to help connect vacation homeowners with these potential renters," Karpinski said.

The online vacation rental portals help owners market homes by posting photos, descriptions, testimonials and other marketing information to attract vacationers.

HomeAway.com also offers vacation rental owner support. It's Owner Community offers property owners expert information about proven best practices, setting up your business, upgrading amenities on a budget, handling complaints and cancellations and more.

After the Gulf oil disaster, HomeAway.com set up the unique HomeAway Gulf Coast Response Center to fill a void left by major media and to help Gulf area vacation property owners through the lost income claims process, to provide insight from experts and to offer a forum for sharing concerns, stories and frustrations.

"Ten years ago vacation rental owners were on an island, but now it's easy to get the support you need," said Karpinski.

Buy now, beat the 2011 peak season rush.

The longer you wait to buy, the more likely mortgage rates and prices will rise and the good properties will be snatched up.

Buy now and you've got plenty of time to prepare yourself and your property for thepeak rental season. Seasoned vacation property owners' rental fees generated during the twelve weeks between Memorial Day and Labor Day pay their mortgages for an entire year. Most inquiries come in between January and March.

"By buying now, you will have a cushion of time to get the home ready for your guests, take great photos for your property listing, and start marketing it to potential renters," said Karpinski.

Published on Realty Times
Written by Broderick Perkins
November 25, 2010

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

10 Tips For New Buyers

It is a great time to buy for many would-be homeowners. The market offers historically low interest rates, as well as affordable home prices.

Here are 10 steps that buyers can take to make home dreams a reality!

1. Savings. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a downpayment and closing costs.

2. Downpayment options. Do you qualify for downpayment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a downpayment gift? Many financial experts recommend a downpayment of 20 percent, so be sure to explore your options!

3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.

4. Get Preapproved. It's time to talk to a lender! Pre-approval will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?

5. Get Prequalified. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are prequalified.

6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.

7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".

8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in rural Kansas costs a fraction of one in New York City. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search.

9. Hire an agent. An agent can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.

10. Start the search! The MLS is a wonderful place to begin your search. Eighty-four percent of buyers now start their search online, so you'll be in good company.

Written by Carla Hill
November 17, 2010

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

For the fourth consecutive month, price reductions have increased for home listings currently on the market in the United States. The reductions are now at an all-time high of 27 percent, according to Trulia.com

The record-high reductions amount to more than $30.7 billion nationwide. In a press release, Trulia concludes that there has been "a continual and dramatic price reduction increase in many cities that began in June 2010."

Anxious sellers, watching prices decrease, have gotten aggressive in their pricing. "We would normally expect to see a seasonal uptick in price reductions between June and October, as motivated sellers whose homes are still on the market after the summer selling season aggressively cut prices in an effort to get their homes sold before the holidays," said Tara-Nicholle Nelson, consumer educator, Trulia.com.

This is like Christmas coming early for buyers who are hoping to capitalize on a bargain-buy before the year's end. "Comparatively speaking, we've found that seasonal considerations combined with a lack of urgency on the part of would-be buyers and continued job market doldrums nationwide have led to more significant reductions during this time period than during the same time frame in 2009," said Tara-Nicholle.

Low interest rates and great deals on houses is making this an ideal time for some buyers to purchase a home. However, while buyers may think it's "their" market, it's important to remember that if you're an ill-prepared buyer, you could lose the deal of a lifetime and the home you really want.

Here are a few tips to keep you prepared for that perfect sale in the new market conditions.

Even if you're just browsing, get your pre-qualification for your loan. You might think, you're not really ready to buy but let's go shopping any way. Don't make this crucial mistake. Know your price point. Understand how much home you can afford and browse in that market range.

Since the mortgage crisis, getting loans and buying a home has gotten more complex and can take even longer than before. That shouldn't discourage you but rather encourage you to get everything in order to make the close of escrow simpler.

Act now. Timing the market and waiting to see if you can get the absolute rock bottom interest rate, can cause you to lose the home you love. Of course, we all want to save money and get the best deal but understanding that when you find a home you really like, trying to wait to see if the rates/price will drop, could cost you the deal. Certainly negotiating is always part of real estate, but just keep in mind that if you're not careful you could time yourself out of the home you really want.

Stay on top of your home sale. If you're in a situation like many buyers are where the purchase of their new home is depending on the sale of their current home, then you must stay on top of your home sale. Contingency sales are sometimes easier to negotiate in a buyer's market.

Keep in mind that the house-hunting process for your new home, is, of course, only part of the deal. That means that keeping up your own home while it's on the market is vital. Sometimes buyers get so busy shopping for their next home that they end up leaving their current listed home a mess. This could turn off a potential buyer; it happens all the time. So do the juggle--keep an eye on how appealing your home is to a buyer while shopping for your new dream home. 

Written by Phoebe Chongchua
November 5, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Most Say it's a Good Time to Buy

Most Americans believe the housing market has hit the bottom and that it's a good time to buy, in part because many also think rents will rise faster than home prices.

Fannie Mae's latest nation housing survey found that 70 percent of Americans think it's a good time to buy a home, up from 64 percent in January.

By an overwhelming majority, 78 percent, also believe home prices will either hold steady or increase over the next year, compared to 85 percent believing the same thing about rental increases.

While Americans expect rents to rise by 3.6 percent on average, home prices are expected to turn up only by 0.9 percent, Fannie Mae found.

"Given the remaining level of shadow inventory, as well as the high number of adjustable rate resets still looming which could in turn lead to further defaults, it is difficult to see the supply of housing falling in an amount sufficient to move prices upwards in many parts of the country," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Also 67 percent believe housing is a safe investment, down three points since January and down 16 percentage points from a similar 2003 survey and the largest drop by far among all investment types tracked since then. Housing ranked second behind putting money into a savings or money market account (76 percent).

"Our survey shows that consumers see a mixed outlook for housing and homeownership," said Doug Duncan, Fannie Mae's vice president and chief economist.

"These findings indicate a return to a more balanced and realistic approach toward housing. While this will likely weigh on the housing recovery in the near-term, it should, over time, help to build a stronger and healthier market focused on sustainable homeownership," he added.

The Fannie Mae National Housing Survey polled homeowners and renters between June 2010 and July 2010 and compared the findings to similar surveys released earlier this year and 2003.

The survey also found:

• Mortgage borrowers (74 percent) and underwater borrowers (69 percent) are more likely to say owning a home is a safe investment than delinquent borrowers (57 percent) and renters (54 percent). However, this measure has fallen among all sub-groups since January, with delinquent borrowers and renters showing the largest declines, down eight and seven points, respectively.

• More than 70 percent of all respondents believe it will be harder for the next generation to buy a home, up three points from the beginning of the year.

• Fifty-four percent think it would be very difficult or somewhat difficult to get a home loan today, down six points since January.

• Thirty-three percent of all Americans said they would be more likely to rent rather than buy if they were going to move, up from 30 percent in January.

• Among renters, 60 percent said they would rent again if they were to move, up from 54 percent in January. However, 69 percent of renters think it makes more sense to buy a home than to rent.

• Mortgage borrowers (83 percent) and underwater borrowers (77 percent) remain bullish on housing and said they are more likely to buy in the future than rent — both groups increased two points from January.

"If you couple this (high inventories and rate resets) with the reality that it is far more difficult to obtain a mortgage as well as a job, when selling a home to someone who presumably needs financing to buy it, housing is still facing a conundrum." Osborne added. 

Written by Broderick Perkins
November 4, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Value in Homeownership

Is there value in owning a home? The recently released 2010 National Association of REALTORS® Profile of Home Buyers and Sellers brings us some promising results. Today homeowners are living in their homes longer, and after several years of price declines, are seeing rises in home equity gains.

It was only earlier this decade that so many buyers jumped on the investment bandwagon. They bought and sold within incredibly short time frames, and walked away with profits. But as the booms busted, many sellers found they had bought at the top of the market and as prices corrected, they lost more than just dollars. Foreclosure rates skyrocketed. Historically, however, homeownership is a long term investment, and one that brings many rewards.

"Sellers who purchased at the top of the market and had to sell in a short time frame were hurt by the price correction, but the vast majority who are able to stay for a normal period of home ownership generally built enough equity to make a trade-up purchase," NAR 2010 President Vicki Cox Golder said. "Despite swings in the housing market in recent years, the fact is most long-term owners see healthy gains in the value of their property."

Golder also says the pattern of home buyers taking a long-term view has solidified over the past few years. "This underscores two simple facts – home ownership encourages stability, and the longer you own, the better your investment."

Current market and economic conditions have created a shift from the house flipping ways of the boom. "The primary exception is for experienced investors, many of whom pay cash and are making renovations or improvements after a careful study of properties, neighborhoods and market demand," Golder explained. "The house flipping and quick gains which occurred during the boom period were abnormal, driven by risky, easy-money financing that should never have been allowed in the market."

American are still buying, however. And surveys have found there are particular reasons behind these purchases. These include the desire to own a home, the desire for a larger home, a change in family situation and taking advantage of the home buyer tax credit, a job-related move, and then the current supply of affordable homes.

And once they buy, homeowners are staying put longer. A typical seller has been in their home for 8 years, but the survey reveals first-time buyers are planning to stay for 10 years, and repeat buyers for 15 years.

Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase, while sellers who were in their homes for 11 to 15 years saw a median gain of 40 percent. So, once again buying for the long-term is steering its way back into value. 

Written by Carla Hill
November 9, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Real Estate Prices Fall, Will Sellers Take Note?

For the fourth consecutive month, price reductions have increased for home listings currently on the market in the United States. The reductions are now at an all-time high of 27 percent, according to Trulia.com

The record-high reductions amount to more than $30.7 billion nationwide. In a press release, Trulia concludes that there has been "a continual and dramatic price reduction increase in many cities that began in June 2010."

Anxious sellers, watching prices decrease, have gotten aggressive in their pricing. "We would normally expect to see a seasonal uptick in price reductions between June and October, as motivated sellers whose homes are still on the market after the summer selling season aggressively cut prices in an effort to get their homes sold before the holidays," said Tara-Nicholle Nelson, consumer educator, Trulia.com.

This is like Christmas coming early for buyers who are hoping to capitalize on a bargain-buy before the year's end. "Comparatively speaking, we've found that seasonal considerations combined with a lack of urgency on the part of would-be buyers and continued job market doldrums nationwide have led to more significant reductions during this time period than during the same time frame in 2009," said Tara-Nicholle.

Low interest rates and great deals on houses is making this an ideal time for some buyers to purchase a home. However, while buyers may think it's "their" market, it's important to remember that if you're an ill-prepared buyer, you could lose the deal of a lifetime and the home you really want.

Here are a few tips to keep you prepared for that perfect sale in the new market conditions.

Even if you're just browsing, get your pre-qualification for your loan. You might think, you're not really ready to buy but let's go shopping any way. Don't make this crucial mistake. Know your price point. Understand how much home you can afford and browse in that market range.

Since the mortgage crisis, getting loans and buying a home has gotten more complex and can take even longer than before. That shouldn't discourage you but rather encourage you to get everything in order to make the close of escrow simpler.

Act now. Timing the market and waiting to see if you can get the absolute rock bottom interest rate, can cause you to lose the home you love. Of course, we all want to save money and get the best deal but understanding that when you find a home you really like, trying to wait to see if the rates/price will drop, could cost you the deal. Certainly negotiating is always part of real estate, but just keep in mind that if you're not careful you could time yourself out of the home you really want.

Stay on top of your home sale. If you're in a situation like many buyers are where the purchase of their new home is depending on the sale of their current home, then you must stay on top of your home sale. Contingency sales are sometimes easier to negotiate in a buyer's market.

Keep in mind that the house-hunting process for your new home, is, of course, only part of the deal. That means that keeping up your own home while it's on the market is vital. Sometimes buyers get so busy shopping for their next home that they end up leaving their current listed home a mess. This could turn off a potential buyer; it happens all the time. So do the juggle--keep an eye on how appealing your home is to a buyer while shopping for your new dream home. 

Written by Phoebe Chongchua
November 5, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Real Estate Outlook: Existing-Home Sales Rise Slightly

Are the economy and housing market finally showing marked improvements on the road to recovery?

The National Association of Realtors' latest survey shows that existing-home sales rose again in September, a positive sign that the market is moving in the right direction.

Lawrence Yun, NAR chief economist, said, "A housing recovery is taking place, but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions."

Helping the market on it's way back to health are historically low interest rates, nearly half what they were a decade ago. And, according to NAR President Vicki Cox Golder, "Home prices are running about 22 percent less than five years ago when they were bid up by the biggest housing rush on record."

This means housing is affordable, with many areas seeing monthly mortgage payments less than monthly rent.

Lower home prices, however, have been linked with the foreclosures crisis. The uncertainty over the legal status of foreclosed homes in the nation could further depress home prices and delay the recovery of the housing market, the Obama administration said last week.

Distressed homes still accounted for 35 percent of sales in September. They were just 29 percent a year ago.

And the government's Troubled Asset Relief Program's special inspector general reported last week that 5.5 million homes had been the subject of foreclosure filings and that 1.7 million homeowners had lost their homes since January 2009.

Major banks held their own internal reviews of foreclosure policies and procedures in the last several weeks. But Federal Reserve Chairman, Ben Bernanke, remarks, "We have been concerned about reported irregularities in foreclosure practices at a number of large financial institutions. The federal banking agencies are working together to complete an in-depth review of practices at the largest mortgage servicing operations. We are looking intensively at the firms' policies, procedures, and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures."

Hopefully these reviews will slow help in the housing market's recovery. In the face of this crisis, consumer confidence remains tepid.

Lynn Franco, Director of The Conference Board Consumer Research Center, says, "Consumer confidence, while slightly improved from September levels, is still hovering at historically low levels. Consumers’ assessment of the current state of the economy is relatively unchanged, primarily because labor market conditions have yet to significantly improve." Though new filing for unemployment have dropped to the lowest level since July.

She continues that "despite the uptick in Expectations, consumers continue to be quite concerned about the short-term outlook. Both present and future indicators point toward more of the same in the coming months." 

Written by Carla Hill
November 1, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

First-Time Buyers Do's

If you are ready to buy your first house, congratulations! This is an exciting time that can bring you sweet rewards. It's also a time, however, full of questions. Here are a few do's and don'ts to get you started.

Before you shop, you must decide what type of home is best. Are you looking for a condo, with a strong sense of community, extra amenities, easy maintenance, and willing to pay a monthly HOA fee? Would you prefer a larger house in the suburbs, even if it means a longer commute? Are you looking for older charm or newer construction?

After you've decided this, write down a list of your wants and needs. This is a time to be honest with yourself. Rarely does a homebuyer get everything they "want" in a home. You will need to compromise. For example, you may need 3 bedrooms, but want a fenced back yard. If push comes to shove, you may have to forgo the fenced yard to get the bedrooms.

When you begin to shop, have a budget in mind. While prices are always negotiable, you don't want to waste your or a seller's time. Be realistic about a home's price. Let your real estate agent compile a list of homes to visit that fit your criteria, as well as your budget. As you make your way to and through the homes, be sure you don't judge a home until you've been through the entire place. There are homes that seriously lack curb appeal, but with a few cosmetic enhancements can be real showstoppers.

Pay close attention to what repairs the home may need. Don't get swept up by fantastic staging. Keep your list of criteria in mind the entire shopping process.

Once you have decided on a home, it is time to begin negotiations. Do not hesitate. Desirable homes don't sit on the market for long. Hesitation may translate into missing out on a property that you really love. That said, you must be confident with your decision. This is not a time to buy a house simply because you feel pressured.

Your agent will help you put in an offer. By researching area comparables (that's other homes that have sold or are selling in the area), they can come up with a reasonable amount to pay. How much are you willing to pay for this home? Set a top number in your mind and don't let emotion push you to buy past your budget. And leave room in your coffers for closing costs, a down payment, initial repairs, as well as a home inspection.

Home buying can be a stressful process, but keep the end goal in sight and you'll do great! 

Written by Carla Hill
October 27, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com