Should You Rent Your Home?
Assuming you’re current on your mortgage and have the credit scores to buy another home, now may be the time to turn your present home into a rental. If rent will cover your mortgage costs, you’re off to a good start.
To see if you can afford to carry a rental plus another home mortgage, your lender must see a signed rental contract, but counts only 80% of the rental income. Why? Many homes don’t rent as soon as they hit the market. You have to show enough resources to pay both mortgages, just in case.
There are other expenses to consider. Your home is no longer a homestead, but is now an income-producing asset which will change the tax rates on your home and on your income. You should consider contacting your income tax professional to learn how renting your home will impact your income taxes and deductions, so you can budget and escrow the appropriate estimated amount you’ll need at tax time.
The advantages are that someone else is building equity for you. The longer you own your rental, the more amortization rates work in your favor. You can deduct maintenance and improvement expenses and “depreciation” from your income taxes, benefits that are not available to homesteaders.
Berkshire Hathaway HomeServices Hodnett Cooper Real Estate can provide you with market comparables and advice about the pros and cons of becoming a landlord. We will also be able to share real-life property management situations and costs that may help you to decide.
Real Estate Market Update
Condominium Market Autumn 2017 Joe Wills BHHS Hodnett Cooper Real Estate
On the chart below you can see (in red) that average annual sales prices peaked in 2007 at $399,297 then fell 37% before bottoming at $250,855 in 2012. Sales units (in blue) peaked in 2003 with 324 condos sold and then began what would be a 78% decline over the next five years before crashing with only 70 condos sold in 2008. Today we are at 2003-04 average sales prices of $289,972.Sales of 316 units over the past year is 2½% below the historic peak of 2003.
There are 154 condos on the market today ranging in price from $137,500 to $2.495M; with a Median List Price of $329,990. Year over Year Sales Volume is up 6%, Average sales prices are up 2%. Demand exceeds Current Supply by 105%.
Single Family Home Market Autumn 2017 Joe Wills BHHS Hodnett Cooper Real Estate
On the chart below you can see that Average Sales Prices (in red) rose until 2006 at an average rate of 5% per year, peaking at $600,042 then falling 37% through 2012. Annual Sales (in blue) rose through 2004 then falling 75% over the next five years. We are at 2005 levels today for both Average Sales Price and Units Sales volume.
There are 268 houses on the market today ranging from $139,500 to $17.25M with a Median List Price of $675,000. Year over Year Sales Volume is up 9%, Average sales prices are up 14%. Demand exceeds Current Supply by 159%.
Market Update courtesy of Joe Wills, REALTOR at Berkshire Hathaway HomeServices Hodnett Cooper Real Estate
The Joy of Older Homes
- The fairy-tale Tudor revival. The English Tudor revives late medieval architecture popularized during the House of Tudor reign, a period of unequaled enlightenment known for political reformation and the Renaissance. Late Gothic and ecclesiastical influences include charming leaded and stained glass windows, steep-pitch cathedral ceilings, arched doorways and exposed wood beams.
- The solid and home-y Craftsman bungalow. Popular as the middle-class retort to the fussy, formal Victorian style, the Craftsman ushered in minimalism, thanks to Frank Lloyd Wright and others. Craftsman homes celebrate wood, stone, iron, ceramic and glass artistry, with wood floors and wainscoting, large windows, built-in cabinets and hand-made Art Nouveau tiles.
- The automobile-loving Ranch. The mid-century ranch helped post-World War II families move to the sprawling suburbs while they commuted back to the city for work. Built with speed, ranch-style homes typically have no load-bearing walls in the interior of the home, making them easy and inexpensive to remodel. Get your atomic décor on with low-slung furniture, sputnik light fixtures and abstract art.
No matter which older home you choose, knowing a little history should bring you added enjoyment.