Raleigh-Durham Real Estate Blog

New Year Resolutions (a thought for the weekend)

Happy New Year! Whether you are who likes to start the new year with resolutions, or you prefer to set occasional goals for yourself despite holiday influences, don’t forget to include real estate investing as part of your financial goals for the new year. A few ideas to get your real estate goal-setting started:

1. Set a goal to let 2010 be the year that you benefit from low property prices, low interest rates, and property ownership tax benefits by purchasing an investment property. Recent reports show the real estate market is taking a turn for the better. Don’t miss out on the low-price deals and low mortgage rates currently available. They won’t last forever!

2. Create both short and mid-term investment goals to augment your (early) retirement goals. Example:

Short-term: Give yourself an instant $6000 raise. How? Buy 2 cashflow properties that each net a minimum of $250 per month in cashflow after expenses. ($250 per month cashflow on 2 properties = $6000 per year in your pocket). Also leverage these 2 properties to provide interest expense write-offs, depreciation and other tax shelters for the upcoming year. Your CPA can fill you in on all of the benefits of rental property ownership.

Mid-Term: Buy 2 properties each year for the next 5 years. (10 properties in total). In 5-7 years, if the market allows modest appreciation, sell 5 of the properties and use the proceeds to pay off/ pay down the debt on as many of the remaining 5 as possible (hopefully at least 2). This will allow you to pocket the full rents received on the paid-off properties and the additional cashflow from the other 3 properties with mortgages remaining.

3. Set a goal to solidify your investing team. A team of reliable professional can make or break your investing experience. Key professionals you will need on your team include a property manager, repairman, inspector, lender, and of course the world’s best Realtor (but you can call me for that). Visit www.tiffanyelder.com/serviceprofessionals for a few names to start with.

4. If you haven’t yet purchased a primary residence, you’re leaving money on the table. $1000 per month in rent totals $12,000 per year down the toilet. However, a $1000 mortgage for a qualified buyer at today’s rates can potentially buy a home worth $140,000. But, the homeowner will have a net housing payment of only $835 after the tax write-offs associated with homeownership (assuming a 25% tax bracket). So not only can homeownership be less expensive than renting,  homeownership provides the potential for appreciation and equity growth. Finally, for first-time buyers under contract by 4/30/10, you can have an additional $8000 in your pocket this year from the first-time homebuyer tax credit. Existing homeowners who want to sell their homes and purchase another home can get $6500 if they have owned their existing home for at least 5 years. Call today to get on the road to homeownership. Also, be sure to check out the “Rent vs. Buy” calculator at http://www.tiffanyelder.com/MortgageCalculators to see how homeownership can change your financial outlook in 2010.

In a Sign of Confidence, Downpayment Standards Eased (article c/o the Wall Street Journal)
In what’s sure to be good news for many potential homebuyers, some mortgage insurers and lenders are beginning to relax their downpayment requirements. The changes, which are being done on a market-by-market basis, mean buyers in some parts of the country can now borrow 95 percent instead of 90 percent of a property's value. http://www.ncrealtors.org/news_display.cfm?nid=1158

Tiffany Elder noted in Businessweek Magazine

Many of you know that I am a real estate broker, general contractor and investor, and that I strive to consult my clients from the standpoint of one who faces the same opportunities and challenges that they do with regard to investment real estate. Many of my personal investing activities center around new construction and historic restoration tax credit projects, with a focus on sustainable (i.e. “green”) building methods. In 2009, I was fortunate to participate in the BASE Program at UNC’s Kenan Center for Sustainable Enterprise, which was featured in Businessweek Magazine’s “Incubator Options” article. Yours truly was interviewed for the article @ www.tinyurl.com/bizweektiffanyelder  It's just a brief mention, but exciting for our team nevertheless. To learn more about our team’s construction/development activities, visit www.legacygreen.com  Don't hesitate to call the office if you want to learn how "greener" renovations and eneregy-efficient new construction investing can benefit your wallet.

Durham Crime Mapper

In the office, we are often asked about the prevalence of crime in different areas of the Triangle, especially from investors considering the purchase of an investment property. The following links are for the Durham and Raleigh Online Crime Mappers. At each site, you can enter an address and see crime statistics in the surrounding area. I typically tell clients to put in their home address and use that as a baseline since it is an area they are already familiar with. Look at the crime stats in your home area and compare it with your personal experience in that area. Then go back in and pull up other areas and see how they compare. I hope this helps with better understanding the communities in which you will be investing.

Durham Crime Mapper:

http://www.durhampolice.com/crimemapper.cfm

Raleigh Crime Mapper:

http://imaps.co.wake.nc.us/imaps/main.htm?mservice=ralcrime&msize=425

Happy Investing!