The 6 Steps to Purchasing the Perfect Florida Keys Vacation Home

It’s very common for northerners who fall in love with the Florida Keys to buy a second home here where they eventually plan to retire. Many put their homes on the market as vacation rentals; others keep them exclusively for their own vacation use. Regardless of your plan there are some basic things that you should know as you go through the process of purchasing your vacation home.

Price Range

Goes without saying that the first step is know what you can afford. If you budget is $500,000 then you can narrow down your search to areas or communities that are in your price range. Since this is not the first house you have ever purchased then you realize that you only want to invest your time looking at locations that are in your budget. It is important to let your Real Estate agent know this so they can present homes that are best suited for you.

 

Go on Vacation and Come Back with a Second Home?

When you visit a someplace like the Florida Keys and fall in love with a destination, it’s easy to be start thinking about buying a property for retirement or as a vacation home. Of course, you don’t want to be impulsive and buy without doing more research, but your vacation is a great time to start the process of looking at homes and getting familiar with the real estate market.

You will want to decide whether you will keep the home for your own vacations, for example, or whether you want to rent the home to other vacationers when you’re not using it. If you decide you want to rent your home out before retirement or when you’re not on vacation yourself, that will influence the home you purchase, since you will want to make sure you maximize the rental potential of your purchase.

Consulting with a real estate firm that also rents and manages properties can give you some inside information you might not get from a agency that only sells property.   A rental management company can tell you how many beds/bedrooms you need, for example, says Lisa Joseph of Key Colony Beach Rentals. Your ideal retirement home may sleep only 4, but the most popular rentals sleep 6-8, on average.

Location may also play a major factor. In the Florida Keys, for example, rentals that have Ocean access for deep sea fishing are more popular than those with only Gulf access.

 

Don’t Get Engaged on the First Date

This goes along with buying on impulse, but there is a little more to this. You visit a location for a week or two, maybe even multiple years in a row, so you are ready to buy, right? Not necessarily, many locations have a completely different feel off-season. It would be a good idea to visit off season, get to know some locals and really get to know the local culture of the area not just the tourist view of the area. A couple conversations with some of the locals and you can get a good feel for the area.

 

Find a Local Real Estate Agent

Although your friend Bob back home in Massachusetts just picked up his Florida license to sell Real Estate to all of his buddies that are buying retirement homes, you may want to pass on having Bob help you. Although Bob has been your friend forever and he even sold you the home you have lived in for the last 30 years, but Bob doesn’t know the local Real Estate market like an agent that works and lives in the location you want to buy. Find a local agent in the Keys here http://www.keysproperties.com/

 

Financing

The best advice is shop around, check local banks in the area where you are buying, large mortgage companies and maybe even an online lender. Weigh the options with your financial advisor as to the best options for your personal financial situation. Depending on your portfolio it may make more sense to use your investments to purchase the home than to finance.

 

Tax Benefits and Consequences

According to TurboTax there are several important tax implications involved with purchasing a second home.

• Tax breaks to encourage buying a second home
• Mortgage interest deduction on a second home
• Deductible property taxes on a second home
• Tax free income for renting your second home out for less than 15 days a year
• Possible tax free profits, by changing your principal residence

Learn more about these benefits and possible tax consequences at TurboTax.Intuit.com

Sell Your Home Fast: Nail the Price and Get Sufficient Exposure

The nuts and bolts of selling a home are actually quite simple. You may be stressed to the limit at the thought of putting your home on the market but success is just around the corner if you focus on two straightforward steps.

1. Set the Right Price
2. Get your home shown to Qualified Buyers

The correct price and adequate exposure. That’s it. That’s all you need to sell a house.

Let’s put it this way: if your Realtor is getting qualified buyers through the door, but you aren’t getting any offers, there is something wrong with your price. It’s that simple, says luxury real estate broker Scott Forman of Royal Palms Realty in Key West, Florida.

Finding the Sweet Spot: What’s my perfect price?

Balancing your wish to attract an offer as soon as possible while maximizing overall profit is a whole lot easier than you might think.

Professional appraisers and realtors aren’t rocket scientists; they simply apply a time-tested methodology for determining market value: “comparables.”

A “comparable” is any other home in the general area of your property that is similar in age, size, condition and amenities. No two homes are exactly alike, of course, but comparables are meant to provide a ball park figure and not the end all be all final price.

Your Realtor will advise you on a course of action but it’s always best to ask for a personal copy of the listings used for their analysis.

You will want to look over “Sold Listings” to find out what homes like yours have sold for recently in your area and to see how long on average properties sit on the market prior to closing.

“Active Listings” illuminate a picture of your current competition. It’s worth your time to take a drive and visit some of the houses on the market at this time to see how your property stacks up mano a mano.

“Expired Listings” are homes that didn’t sell. Period. Use these numbers as a guide for avoiding the dreaded overpricing of your property.

Remember that your final price will also include an “instinctual” element. Ask your realtor about current trends in your neighborhood to determine whether a bump up or a dip down in price is warranted.

Beware: Overpriced Homes Sell for Less

Sellers who fall into the web of an ambitious new agent often wind up listing their property well above the going rate.

How does this happen?

It’s simple. In an effort to win your business a realtor will quote you a very favorable price they’re sure to fetch for your property.

But it never works out – and here’s why:

Buyers and buyer agents are inclined to ignore hot new listings that are clearly reaching with their listing price. This means that overpriced home tend to sit on the market until their listing goes stale.

A stale listing begins to pick up negative energy as buyers start to wonder “What’s wrong with the house that just won’t sell?”

By the time the price is adjusted back down to reality it’s too late. Often home sellers must pull the property off the market to list again in the future or they are forced to actually sell the house for less than they would have brought in had they listed a reasonable price from the get go.

Getting Proper Exposure is as Easy as Hiring the Right Agent

There are a million and one resources out there for maximizing the exposure of your listing. The reality, though, is that even with internet sites, social media and all sorts of other FSBO outlets you’re almost always better off hiring a realtor to sell your home.

A qualified agent with professional contacts and experience marketing your type of property in your specific location is worth his or her weight in gold.

Interview any prospective realtor to find out what their marketing approach would be should they list your home. Does it entail both online and offline strategies? Can they provide evidence of previous listings having sold with similar techniques?

The bottom line is this. Selling your home is as simple as setting the right price and getting qualified buyers to visit your property. More on this topic: http://royalpalmsrealty.com/price-and-exposure-the-two-most-important-factors-in-real-estate-sales/

Real Estate Landscape is Slowly Shifting Due to Baby Boomers, According to The Counselors of Real Estate.

Demographic shifts are under way as baby boomers downsize to smaller homes, senior communities and assisted living facilities, according to The Counselors of Real Estate which is a group of 1,000 handpicked individuals, who are considered experts in Real Estate.

Low interest rates are playing a part in this shift, as seniors view this as a great time to downsize, taking advantage of low rates. These lower interest rates are helping the baby boomers sell as well as finance the home they are downsizing to.

Investors, such as “We Buy Homes Philadelphia” are preparing for interest rates to rise, when rate increases occur, “it will devalue future cash flows, thereby devaluing assets,” according The Counselors of Real Estate.

Sources:
http://articles.philly.com/
http://homecashguys.com/
http://money.usnews.com/money/blogs/on-retirement/2015/04/06/7-baby-boomer-housing-trends-to-watch

Commercial Real Estate Sales and Prices Are Surging, Prompting Concerns About Possible Bubble, According to The WSJ

The Green Street Commercial Property Price Index hit 118 in July, this leading indicator of commercial real estate prices, has been on a steady increase since its low in 2009.

“The value of U.S. commercial real-estate transactions in the first half of 2015 jumped 36% from a year earlier to $225.1 billion, ahead of the pace set in 2006, according to Real Capital.” As published in the Wall Street Journal.

Private equity real estate fundraising has already exceeded $73 billion and is on pace to surpass the highs in 2008.  Many are comparing this to the boom of the mid-2000s, which ended in a bust that affected developers around the world.

 

Sources:
http://www.wsj.com/articles/surge-in-commercial-real-estate-prices-stirs-bubble-worries-1439415930
http://www.retailsolutionsadvisors.com/services/
http://www.loopnet.com/

USA Home Sellers Are in Line for Big Profits This Spring

Home prices in the USA went up by 7 percent in March of 2018, according to the CNBC.com website. This price increase represents the largest monthly gain since May of 2014. People are fighting for available homes, and this is driving up prices. According to a Trulia report, the February supply of existing properties was 3.4 months. This is the lowest level of supply ever for February. The median average cost of a home in February 2018 is over five percent more than last February’s median average price of $241,700.

Home Buyers Need to Spend More

Of course, what’s great for home sellers isn’t such good news for home buyers. Those looking to purchase in the USA are battling one another for properties and many end up paying a lot more than they wished to in order to get on the real estate ladder, upgrade to larger homes or downsize after retirement. Those who want to purchase their first homes are behind the eight ball in spring 2018, as interest rates are rising as home prices also escalate.

Will Interest Rates Continue Rising?

According to the CNN Money website, at the start of this year, a 30-year mortgage of the fixed rate type came with an interest rate of 3.95%. When April commenced, the interest rate for the same form of mortgage was 4.44 percent. This equates to a monthly payment increase of 57 American dollars, for a home valued at a quarter of a million dollars, which was purchased with a 20 percent down payment.

Will Home Prices in the USA Keep Rising?

Yes, they probably will. Most forecasts point in the direction of increasing real estate prices over the long term. According to a Reuters.com report, American home prices are predicted to go up by a cumulative ten percent during 2018 and 2019. This is because new homes will be scarce and demand for new homes is anticipated to increase steadily.

Don’t Forget to Buy Home Insurance

When you consider all of the costs associated with home ownership, which include the mortgage, maintenance costs and power costs, it’s easy to see why increasing interest rates are putting a strain on American home buyers. Home insurance is also important and home buyers shouldn’t skip purchasing it in order to save money. If your home is damaged and you can’t stay there while it’s being repaired, this form of insurance will cover temporary increases in living costs. The team at CNN Money recommend “deep coverage” which covers the cost of replacing your home 100 %.

Knowing the facts is the key to making smart decisions about when to buy properties and when to sell. Commercial real estate prices are also rising, so these real estate price increases are happening across the board in the USA. Home sellers in America are likely to reap big rewards from their real estate investments this year, when they do make the decision to list their properties.