Investment Property Part 1

Your Real Estate Today
Saturday, October 14th

Paul discusses investment property basics.


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Advice provided on the following program is on an individual basis list and should not consider today's discussion as a recommendation for any of us. And she carefully evaluate before investing. This is your realistic today and knows how he'll. WBZ. Hello and welcome to the show you real estate today we are so glad that your weather center and unfortunately today we are not alive. But. We have about thirty minutes together. And so I'm gonna take advantage at this time with you the show you real estate today. Keeps on trucking and even though Carolina likes to play football. We still like to talk of a state and we're gonna do that and I've got lots of things prepared for you today and excited to talk what you. About real estate so remember. My name is Paul Jamison Jamison realty with Keller Williams I also own Jamison property management. And we are here to talk about real estate have things having to do with your home buying selling investing. And today show we're gonna talk a little bit about stats on millennial so I got a lot of calls after the show last time in regards to these stats it's pretty interest and and that we're gonna talk about investments today we're gonna talk about investing in realist. And I think it's important to know. You know there's a lot of people out there. That's Holmes didn't sell. And they've got a piece of property that's sitting empty. There's a lot of people out there that have a family home. That they're not sure what to do win and so it just sits there. It's amazing. The amount of folks that I know that. You know maybe a family member has pastor parents have passed and I've got this house and the siblings have this and you know they don't know what to do maybe one family member wants to do one thing one wants to do another or they just. You know. Don't know what to do next and I get a lot of calls with that so if you're in that position right now and you have a home that she didn't sell that empty here you need some options. Or. You've got a family home or a piece of property your home you used to and it's sitting there and you want to look at the options of turning it into an investment property. And what that looks like. And what can wrench you can get or what it's worth if you sell one of the option what's needs to be done and what can how can you optimize it what can you do. Man I'm telling you right now we would love to talk to you and not just go ahead and give my numbers are 846. 8463663. And we can talk to you about that but. Today we're gonna talk about investment property but we're also gonna talk about Milan heels Mawae meals. Our. What they considered to be be up and coming. Buyer in our market the next generation so to speak well. That would be true to a certain extent but also oh. Oh forget us old people out here we are a huge. Portion of the market and we're on the move. We're moving downward move in and more moving around. And we are still. Big rock and part of it but let's just talk a little bit about millennial and buying a founding stats. Very very interest. Okay and I'm just kind of throw him out there and you can you know put your finger on your chin or lower lip area and go and if you like. But it's an interesting stuff that about it don't forget that we got podcast if you wanna go back and listen to the show again or listen to some of the older shows. Jump bonded WDT dot com under the show section. We have podcast you can listen to us on the road on your phone. Anywhere that you like and you wanna catch up on some of the other shows that we have or on the show if you don't catch at all and wanna hear everything else I had to say. Don't forget to jump on and get those podcast WBT dot com going to shows. And then your real estate today and give us analysts are. Millenniums. So 63%. Amoled meals. Are concerned. About. Having enough money for down payment 63. Per cent. 48%. Don't even know where to start in the home buying process can you believe that stat that amazing. So where do you think 56%. Of the millennial start there home buying process 56%. Start. On Google. 43% of the millennial population. Has poor credit. And 38%. Have too much existing debt to even consider buying a home. I know awhile ago I shared with you all the statistic about. Education loans college loans. That the average college graduate. Especially in the millennial population has an average college debt per month of 360. Dollars. Per hour. Millennium. And so if you have a young couple at 720. Dollars a month go one torts college. But. You buyer pretty nice house for seven point. You know pretty amazed I. So this data comes from lone deep bow. And half of these folks that were surveyed. Believe that are not already had a mortgage. So you're data. From people that have been through the process are gone through the process half of them had already been there and they're still concerned parent. So 27%. Of the millennia cells. Surveyed. Said they knew exactly what to do where they were in the no models they didn't need. They watched it on YouTube videos. 47%. Felt they wished they knew more about different types of warrant. You know there are more loans in the thirty year fixed. Whom Billy McKay. 47%. Also felt and were surprised. By closing costs. And what they call PM hi private mortgage insurance. Private mortgage insurance for those that don't know is if you don't put at least 20% down. You're gonna pay private mortgage insurance. And that's an additional chunk every month. Gone. Out of your pocket. And I. So 54%. Of the millennial survey. Plan. To ask their parents. For advice. It does come back around does it. Okay. Our. Technology. Well. Technology. According to. Blows. Has been and our lives and certainly streamlined a lot of processes right. Our member of the day's drive around and having a major would that was high tech page it would go up I'd go to the pay phone. Insert my fifty cents into the pay phone at one point it was a dime we're gonna talk about those days. And make a pro golf course now it's so much better. But they say well technology can certainly streamline the loan process. Well. For most of us it really doesn't. You gotta you've got a copy all those odd documents she got a upload them. It takes a good amount of time and technology has been key to the home buying process. But when it comes to the loan process. For now in ain't get much easier so. Let's just say you don't buy it right now what is the median rent. You think. For housing in our market right now what do you think the median and if you look at ranked overall bottom the top. Media brand in our market is 1404. Dollars. A month. And even though demand has slowed down in the rental market. Rent has gone up one and a half percent. Median rent for an apartment now remember that first that was houses the second stat is apartments. Median rent for apartments. Has also gone out the half a percent believe it or not this is gonna blow your mind folks. Apartments median rent 1551. Dollars them. Horror at recruiting. That's crazy. This will blow your mind and 2016. 20%. Of the homes in the US. Were rented. What do percent that's up thirteen and a half percent from ten years ago. So we're gonna talk about investment. We're gonna talk more about the rental market and what's going on in our area they show your realistic today I'm Paul Jamieson. I know he can't call of the day. But you can call me after 846. 8463663. State witness on 1110. WB. Team we will be right. Compressed version of your real estate today here are. A lot of them that ABC. 99 point three we are here to talk on the show your real estate today if you're just popping on whether us we have a compressed version. For you Carolina fans and wanna listen the football yet a instead of talking about real estate yea WAA. Oh we love talking about real estate were pre recorded unfortunately we cannot take calls today. But I am Paul Jamison your host. With Jamison realty Keller Williams and Jamison property management I'm always available for your calls at 846 done 8463663. Her on the web at mine Jamison homes dot com and that's Jamison with a and I don't seem now like the whiskey it's. Jamison with a guy. Our self. Now. I just have been working on stats and our rental market would you all and I just shared that 20%. Of the homes. In 2016. Were rented. In the US and that's up 13%. From ten years ago Generation X. Age 38 to 52. Are from are significantly. More likely to rent a single family home. And just over 40% of that generation does. 25% of Maloney knows those are the ones eighteen to 37. Rent a home and 10%. Of those Silent. Generation. I don't QB talking about a silent generations too much. Silent Generation. That is 73. And over generic. Over 50% of millennial and 62%. Of the Silent Generation rent apartments. Aren't. So. What should if you have a home out there. What should be your rent be all right so let's say right now you have a home that you want to rent. Or I'm renting a home for you and our property management company and you say Paula. What should I charge. For rent. Well let me give me some basic. Guidelines. To think about. First of all what is ranked. Not. Going to be based on. A it is not going to be based on. Your mortgage payment. Feed. It is not going to be based on. What you paid for the house. It's going to be based on some very simple things. Number one. It is based on a scale of what is the proper price. And what is the proper price in the area that gets home rented in thirty days or less. Right so when I do what they call it got competitive market analysis source CMA. On. A rental. How does two things one a look at sales trends of that piece of property over. A period of time to see how it appreciates. And then second. I look at the rental trends and I try to go back. About a year if I have to go back farther I can and see increases and trends. But I try to find if there are other rentals in the area like kind like schools like areas like type. And that home gets rented. In thirty days or less. That's a good market rent. If its fifteen days or less. It's too. So I shoot fern optimal targeted to go fifteen to thirty days because usually if it's your one or two days. It's definitely La. But you have to incorporate a couple of other factors right this is not just a Linear process. School's. Location. Time of year. You know if you put her on the market December widener. And it's in some of the top ranked schools in her. Char lot ski well guess what's gonna happen. It's gonna take longer. OK but if you do it in. May eighth. When everybody's movement. May June April may June. Guess what it's gonna happen a lot faster. So. Does price matter when it comes to that. Yes it does let's say you came to me and it's December 1. And you have how she weren't. The optimal rent. During the school season as a thousand dollars a month. Okay. And first of all I don't ever price and thing like got to price it at 998. Psychological pricing is all and ever and well. Thank you Wal-Mart. So. Let's say you price at that 1998. And its December 1 that is market rent. So what do you do do you digging your heels and say 99. And you sit there for three months trying to get your 998. Okay. My idea is this. Real flexible. Because it's really all about the math right. First of all when it comes to the financial base and I'm not talking about the screening peace because a lot of house sit for a year to get to write ten. And I don't mean that figuratively I mean that I mean that realistically. Until that right Tenet comes they're not go in anybody's house. Because how bad tenant. Can make any investments. Go south. Make sure you get the right tenant in the right place. And again I've never had a how's that for years I'm trying to put out point screening. Means more sometimes than money. And that has to be taken into effect so okay cell. Here's the thing. So go back toward nine 99. If you could knock. A hundred dollars off that price. And give it rented. Among third. Does that benefit. Wolf. Do the math. Absolutely attest. 'cause the 600 dollars you would lose. By letting that homesick for three months. Is made up for. Just in the eight. Team. The 1919896. Dollars you'd made in the two months. But you gotta read it early. I didn't go to that math thing what does that math math wizard is something that you guys advise on that themselves you know sorry. My brain is not a calculator I'd have to sit there and do it that. Maybe I need to go to magnesium or something and B words and numbers faster but. I think yo get my point right. Given a little bit of a discount during that period of time. First of all make sure you got the right person but second of all that may that be the difference that little bit of incentive. In getting that home at a faster or half off first on Trent. Something like that can very easily. Take care of getting. The home. Rented. Faster so how you price it. Think about it that fifteen to thirty day window. Second of all look at time of year look at look at. If you need to get something red quickly offer a one time incentive half off one of the month's rent. And make sure that it's communicated and marketed. Correctly do not market it on Craig's list. OK not so. Let's talk a little bit about. The renal market overall. So we have our median rants and we know there are fourteen to 15100 based on house or apartment. Is this really a good time. To get into the rental business. I can remember I talked at the beginning of the show he got a lot of people like got a lot of houses sitting empty. You know. You may wanna explore the option of four rent rental public and what to return looks like purses and empty house an empty house has come electric car and it's it's their right. It needs. Activity it needs the doors open and the door. Slammed NH VAC on and the heat on and movement and no water running in the toilets flushed and all of a dishwasher run and all that kind of thing. An empty house deteriorate. Quickly. So. It needs to breed to so make sure that you don't leave the house too long it's not good for you just this. OK so is it a good target Barbara house is at a good time to be an investment real estate. Yes it is. So. I was talking to a fellow the other day and it was saying you know what. My CPA. Recommended. That I purchased my first home for rental 200000. And hello now this this person could easily pay well more than that and I said why did they say that. And he said bull I don't know. And I thought to myself. Okay. That 200000. And below is the absolute. Hottest. Section of our real estate market right now for the first time home buyer who doesn't have anything to buy right now also if you're gonna lie in that bracket. You're gonna pay. Big Kahuna dollars for that house. And you're gonna you're going to take the opportunity for the return on that investment slightly. So occasionally you get deals out there yes but if you're gonna buy and that bracket be prepared to spend some extra cash. To fix it up. So fits are ready ready and able to go house right away. Make sure. That she's got extra cash to fix it up because if you're gonna buy and that's segment of the market. Where you're gonna find the most opportunity because remember they don't have the cash they don't have the cash they don't have the cash he's millennial feast first time homebuyers. Find something that needs a little bit to fix up and have the cash ready to do that. And it makes it okay so. If you have the cash pay cash if you don't you know you can easily get alone and that price point and and even. Have enough money left over if you so choose to do the leverage to up. Get some things fixed up so the answer to that question in a roundabout way is under 200. You're gonna do some Texan by your rental property with work to do second. If it's over 200 you think schools schools and more schools to prepare for the spring season and also. Those are always in the highest demand but the footnote is. You never know what's EMS and Union County schools. Tired of schools. You never know what they're gonna do with redistricting. So make sure that's not the only reason. Pitcher by. A guy. Amenities. Future trends the train. Tracking demographics price increases to all those things. Play. Into. Whether it's a good time divide. Clark thirty minutes went pretty quick that. It went very very quick today. We love to talk to you about investment property we'd love to talk to you about the return on those. If you're out there look at the flip. I wish you the best of luck it's hard right now musher in the upper end. If you look at for investment. It's a great time policy Jamison and 846 done 8463663. Here on the web at my Jamison homes dot com. Have a great Saturday.