4 Reasons Millennials Should Buy A Retirement Home First

4 Reasons Millennials Should Buy A Retirement Home First There’s an idea running through marketing and business circles that anything that is popular, the opposite will likely be popular as well.

Consider that sugar and caffeinated beverages such as Coca-Cola have seemingly opposite products like Coke Zero. That product, in turn, is offset in the marketplace by high-sugar, high-caffeine energy drinks such as Monster and Red Bull.

In the housing industry, reverse living homes enjoy popularity. Basically, the bedrooms are downstairs while the kitchen, living room and other gathering spaces are upstairs. This concept of doing the opposite brings us to the idea about buying a first home.

The vast majority of potential buyers focus on starter homes as they build financial success. Some think about how that first home could be expanded to grow a family or sold when marriage and young ones come along. But Millennials enter the housing market may want to consider doing the opposite. What if you bought your last home first?

Consider these reasons for starting with your retirement home.

1: Lifestyle Suits Renting First

Millennials are flooding the job market and beginning to earn wages that prompt them to make major life purchases. But Millennial jobs tend to be different from the traditional ones of previous generations. Tech companies are trending in hip cities across the country and places with excellent weather. That means these first-time home buyers would either find themselves commuting through rush-hour traffic from the suburbs or paying urban real estate prices. Young Millennials may be better off renting and investing in property elsewhere.

2: Rent Out Your First Home

By taking your initial down payment and investing in a rental property, Millennials can make money or maintain a zero-expense real estate buy.

By purchasing your future retirement home in a vibrant community with a relaxed environment, it can pay for itself while strengthening your economic portfolio. The equity building in that first property will position you for a second home to live near work or build a family. That retirement rental may even put a few extra dollars in your pocket.  

3: Pursuing Career Opportunities

Whether you are fresh out off college, completed military service or rising in a company’s ranks, Millennials on the younger end of the spectrum can benefit from agility. Being able to seamlessly relocate to pursue emerging career opportunities or take a promotion in another city or state can help maximize your earning potential. Having a home is certainly nice, but you will be faced with a decision to sell and buy a new one or pass on an opportunity. Those are not necessarily the best considerations during prime earning years.

4: Downsizing Matters

The trend of valued elders is to downsize family homes as the enter their golden years. Ironically, many purchase the same type of starter homes all over again. The value of buying a retirement home first is that you will be able to cash out of any other property and apply that revenue to living expenses. In all likelihood, the initial real estate buy will be paid off. In the end, doing the opposite of common trends can prove to have improved long-term benefits.

If you are considering buying a property to rent and retire in later, contact your trusted mortgage professional to discuss your financing options.

Myths About Buying A Vacation Home

Myths About Buying A Vacation HomeAre you thinking about buying a vacation home? Maybe owning two homes is part of your retirement dream. Maybe you’d like to have a second home in your favorite holiday locale.

If you are thinking about taking this step, you might have talked to family and friends about it. Unfortunately, many people give well-intentioned, yet poor advice when it comes to buying a vacation home. Here are some myths — and the truth — about buying a second home straight from leading real estate experts.

You Can Buy A Vacation Home With No Money Down

You have probably seen advertisements about buying a vacation home with no money down. However, this is simply not the case and those advertisements are misleading. Unlike buying a first home, you will need a sizable down payment to purchase a second home.

The minimum amount down that you will need to buy a second home is 10 percent. In order to qualify for the lowest down payment, it would also have to be a single family residence and not an investment property.

So, if you plan to use it as a vacation rental, then you will need more money down – usually at least 20 percent due to the property being considered an investment property.

Renting Out Your Vacation Home Is Easy

Sites like VBRO, HomeAway and Airbnb have made renting out vacation rentals much easier. However, renting out a vacation or second home is not as simple as it seems. While renting out your vacation home is a great opportunity, you must run it like a business.

And remember, there are more expenses than just the mortgage payment and possibly HOA dues. Utility payments and amenities like internet and television services add to the monthly expenses and are desirable features to prospective renters.

Take some time with your trusted real estate professional and pencil out the total costs of maintenance. Then you will have a great idea of what it will take in rent to cover the costs.

You Don’t Have To Worry About Your Vacation Home When You Are Not There

Many people think that they can buy a vacation home and then forget about it when they are not using it. This is simply not the case. Vacation homes are often targets for thieves, so you’ll have to plan for a way to protect your home when you are not there.

Fortunately, the newer smart alarm systems make it easy to monitor a property from anywhere. Many smart home systems also include flood detection monitors so that you can be immediately notified if you have a water leak.

Owning a vacation home can be a very rewarding investment and a great addition to your long term financial plan. Once again, take your time and get your trusted real estate and mortgage financing professional involved to help you make the best decision possible.

 

How To Manage Investment Property While Working Full-Time

How To Manage Investment Property While Working Full-TimeIn 2017, upwards of 75 percent of independent rental property owners in the U.S. reportedly worked another job on top of being a landlord. That means the overwhelming majority of landlords are attempting to juggle more than they can handle at times.

There are organizational and strategic concepts that can maximize efficiency and profitability.

Consider the following tips that bring property management tasks under three basic headings: organization, automation and outsourcing.  

Organization Matters

One of the things that tends to overwhelm landlords is thinking about the rental properties as an extension of home ownership. The rental seems like it involves many of the same tasks such as maintenance and repair.

By rethinking rentals in terms of a small business, the way these and other tasks are approached can become radically different. If this were a Mom and Pop store or a corporation, the necessary resources would be brought in to handle niche labor. Organize all of the tasks that the rental unit(s) require under categories that may include the following.

  • Rental Advertising
  • Applicant Interviews
  • Background Checks
  • Legal Documents (leases)
  • Maintenance and Repairs
  • Rent Collection and Bill Paying

Accounting

With a defined set of tasks organized under specific headings, it becomes much easier to visualize the breadth of work involved and what supporting resources would be needed.

Automation Matters

Industries across the globe are moving to automation as a way to increase productivity and lower costs. There’s no reason landlords working other jobs cannot do the same.

While fixing a burst pipe may not be a good candidate for automation, there are numerous tasks property owners undertake that no longer require valuable time.

  • Advertising: Consider a process where an online advertisement is pre-written and posted when a lease expires.
  • Rental Payments: Consider automatic withdrawal from tenant accounts or having them direct deposit.
  • Bill Payment: Consider auto pay for every possible facet of the property, including utilities, taxes, insurance, mortgage and others.
  • Maintenance and Repair: Consider an online form for tenants to fill out that provides real-time notification.

These and other tools can streamline the amount of time required to manage a rental property without incurring significant expense.

Outsourcing Matters

People who work regular jobs and also manage rental properties are entrepreneurs by nature. That go-getter personality leads many to take on more tasks than there is time in the day. That’s why outsourcing is so important.

Outsourcing things like accounting or legal services are no-brainers because they require specialized knowledge. But other tasks such as applications, background checks and maintenance may be good things to put on someone else’s plate as well.

As noted in the beginning of this article, if a small business mindset were applied, many of these tasks would be assigned to a designated resource. Consider operating rental units in this fashion by running a cost analysis and outsourcing. Roll in the labor costs that make sense and take some time to binge watch a Netflix series while your investment turns a profit.

Contact your trusted mortgage professional to make sure that you have the most competitive financing on your investment property or to get pre-qualified if you’re ready to get started on this new real estate venture!

Thinking About Buying An Investment Property? 6 Tips To Ensure You Don’t Get Fleeced

Thinking About Buying an Investment Property? 6 Tips to Ensure You Don't Get FleecedPurchasing an investment property is one of the most important decisions that you’ll ever be a part of. As such, it’s a necessity to make your decisions with only the most careful of consideration.

Here are the six tips that you need to heed in order to ensure that you don’t get fleeced.

Find The Right Property At The Right Price

Yes, this is a whole lot easier said than done. However, it’s not impossible. All it takes is some patience and research.

You have to determine what everything in your area is selling for in order to be able to spot a bargain! Further, you need to know that various property classes will outperform each other. For example, land and home units will appreciate differently.

Figure Out The Cash Flow

It’s always a good idea that you know how to maintain your mortgage repayment obligations over the long term. It’s recommended that you analyze the cost of servicing any loan only on an after-tax basis. By taking this approach, you have the power to calculate and put the cost into actual terms that make sense for you.

Look For A Good Property Manager

Finding a good property manager who is a professional in his or her field is vital. Your property manager’s job will be to make certain that everything is in order between you and any of your tenants. A good property manager can extract the best possible value for you from your property and help to keep your tenants in line as well.

Choose The Appropriate Type Of Mortgage

There are many options available for financing the investment property that you choose, so it’s best to get sound advice. Options such as a variable rate loan and a fixed rate loan are both popular choices, but your specific circumstances will dictate what’s most suitable for you. Consider that variable rates often end up being cheaper over time, yet fixed rates at the right time are ideal.

Take Equity From Another Property

Leverage the equity from your residence or another investment property. Doing this is actually an ideal way to purchase your investment property. Equity can be calculated by way of calculating any difference between what you owe on your mortgage and the overall value of your property.

Comprehend Both The Market And Dynamics When Buying

It’s best to analyze what other properties are available in the area when you’re looking at an investment property. It’s very advisable to actually talk to both local people and real estate agents in the neighborhood. They can give you hints on small, yet vital, things like which side of a street is considered more desirable.

These are the six tips to help make sure that you don’t ever get fleeced when buying an investment property. They can make the difference between purchasing a great property that has a high return on investment and purchasing a lemon.

Call your trusted mortgage professional today for some answers and more information.