How Much House Should You Buy Based On Your Income

It’s always a question asked by first time home buyers (and some second time too): how much home can I afford? A huge part of the answer to that question is your income.

A better question might be, “How much house you SHOULD buy should be based on your income?” Not only because you need to make payments, but also because you need to save a down payment. Zero down payment mortgages are few and far between.

Experts recommend 20%

How Much House Should You Buy Based On Your Income... It's always a question asked by first time home buyers (and some second time too): how much home can I afford?Most experts recommend that home buyers put down no less than 20%.

This will give you the best chance to get the contract, get the mortgage and avoid mortgage insurance. This is problematic for many home buyers under the age of 35. They average about 8%, according to the National Association of Realtors.

Keep in mind that if you put a 10% down payment you’ll need a higher income level. This is because you’ll have to pay mortgage insurance with your mortgage payment. Higher income means no mortgage insurance, and it also means better means to save. But what if you don’t have a higher income?

It may mean moving to an area where you can afford it.

Denver area median salary may do it

If you crunch the numbers for the Denver area, your median salary may just be enough. If you’re wondering what median income means, it’s the middle of a set of numbers.

So, if a job has a salary range of $50,000 to $75,000, the median salary is $62,500. Back to the Denver numbers. Here’s how it works out. The median salary in Denver is $69,754. The median home price is $318,164. That means if you have the 20% down payment your income should be $44,071, and if you have only a 10% down payment you’ll need an income of $52,766.

Those numbers were found on Huffington Post

(https://www.huffingtonpost.com/entry/how-much-you-need-to-afford-a-home_us_591c84d1e4b094cdba507c94?utm_hp_ref=real-estate)

and it has other cities listed as well. Do your homework!

The Benefits of Buying A Home In A New Build Subdivision

So the other side of the buyer’s coin is new construction. If the idea of buying an older home with all of it’s possible issues doesn’t appeal to you, buying into a new subdivision or having a custom home built may. Doing either has plenty of benefits. Here are a few.

Input

The Benefits of Buying A Home In A New Build SubdivisionWith a custom home you get to have tons of input as to the floorplan. Even if you look at a new subdivision that has preset types of homes will still give you input as to what you are looking for.

For example, if you had problems finding an existing home that has an open floor plan and larger rooms, a pre-built new construction will have what you need.

Along with that, you can personalize either a custom build or a home in a subdivision to be built to your liking. Choosing things like flooring color and options, wall colors, countertops and cabinetry and appliances. It may add some cost if you upgrade from builders grade, but it is what you want.

Energy efficient

New homes are also more energy efficient and probably greener, smarter and healthier. New appliances and HVAC systems are more efficient with energy than older systems. They are healthier because of low or zero VOC paint and building materials. Smart homes, integrating technology into the home, are easily found in a new home.

Maintenance

Remember that maintenance cost in an existing home? Not going to find it in a new home. With everything being brand new, maintenance or replacement cost is next to nil. Plus there are also warranties on everything should something go wrong.

Amenities

And let’s not forget the amenities offered in planned communities. Many include pools, park spaces, community centers, health clubs and so on. All of those are there for you, the homeowner, and mean that you don’t have to pay to have your own pool installed or an extra space in the home for work out equipment.

There are so many benefits to a new build, so why consider anything else?

If you are considering buying a new build home, you might be surprised to know that you CAN use a Realtor who will be there to protect your interests! New builders are generally happy to work with agents and you can be assured that you will get the best deal possible AND great representation!

Thinking about buying a new build? Give Tena D. a call today to find out what is available… 303-452-5853

The Benefits of Buying an Older Home in an Established Neighborhood

Every home buyer goes through the decision process: do I The Benefits of Buying an Older Home in an Established Neighborhoodbuy a newly built home or an older home in an established neighborhood. Here are some reasons why buying an older home is a better idea.

Construction

Depending on the age of the home, its construction could be sturdier than new construction. If a home is decades or even hundreds of years old, it has withstood storms or worse. Many have cabinetry or woodwork that were hand made by craftsmen whose attention to detail was second to none. That charm and construction can be hard to find today. Old hardwood floors, higher ceilings and beautiful built ins.

Older home, larger lot

Want some yard between you and those neighbors? Buy an established home instead of a new one. Most older homes were built on larger lots because land was cheaper then. For instance a recent new home built in a new subdivision has larger homes, but are built on quarter acre lots. In comparison, another home less than a mile away in an older subdivision was built in 1972 and is smaller, but sits on a half acre lot. More yard. More trees and big ones too. That’s another plus, established and mature trees that provide shade and character.

Neighbors

Those neighbors? They may just have been around for generations. Or at least a generation. Homes are owned for 15, 20 years or more. Neighbors know each other and when a young couple or family move in, they can be another set of eyes for parents. Trusted neighbors trade keys to help a child locked out of the house after school, or a contact for school if the parents aren’t able to get there.

Established neighborhoods

Remember too that older, established neighborhoods are less likely to have changes in zoning which means that businesses can’t move in next door. You’re also more likely to find better schools, better cell reception, established internet lines and other things like natural gas connections and other perks.

What Questions Should You Ask Your Property Management Company?

Congratulations! You are now an investment property owner. Now you need a property management company to help you with your property.

What Questions Should You Ask Your Property Management Company?When you are interviewing prospective companies, do you know what questions you should ask? Here are some good ones.

Questions To Ask Your Property Management Company

About The Property Manager

  1. How long have you been a property manager? The longer they have been in business, the better their track record can be proven to you.
  2. What kinds of properties do you manage and how many are you currently managing?Ask this because you want to have a property management company that is familiar with the ins and outs of leasing out your property. If they mostly manage apartment complexes and you have a single family home, that could be an issue. You also want to be sure that they aren’t over extended meaning response times will be slow.
  3. What associations do you belong to? This could include local chambers of commerce, Better Business Bureau, etc. They can be a font of information about their business practices.

Vacancy Questions

  1. How many vacancies do you currently have and how long does it take you to fill each? Obviously, a higher vacancy rate will mean something is amiss. Also, it will tell you how long your property may remain unrented.
  2. Can I see your current lease or have my attorney review it? If they aren’t willing to let you see or have their form lease look elsewhere. Violating local and federal laws with tenancy can be a huge problem.

Inspections & Repairs

  1. How often do you inspect properties? Keeping a regular inspection schedule will mean your property will be maintained properly.
  2. What process do you follow for repairs to the property?
  3. Do you set the limit for repair costs before consulting me or do I?
  4. Do you get competitive rates from your contractors?
  5. What is the bid process for large repairs?

Payment Questions

  1. What are your policies surrounding collecting rents?
  2. How late do you allow people to pay?
  3. Do you allow them to pay electronically?
  4. When will I receive payments?
  5. What are your eviction procedures and how often do you have to evict?

Property Management Fee questions:

  1. What are your management fees?
  2. What other fees do you charge (i.e. for eviction, renewal, marketing, contract cancellation and/or account set up)?
  3. Do you charge to find a new tenant? Is there a fee when the unit is vacant?

Selling Questions

  1. If I sell the property, do you handle notices to the tenants?
  2. Do I have to list it for sale with you (if it’s a real estate company that is managing it)?
  3. What is your screening process for tenants?

This is a really good list to get you started picking a property manager! If you are looking for a Denver area property manager, give Tena D a call today! 303-452-5853

Should You Use Your Rental Properties As An Airbnb

You’ve seen the commercials for things like Airbnb or HomeAway and others. It makes it seem to be a good decision to offer your second home or rental property using their service. Maybe, maybe not. Should you offer your property on sites like those?

How does it work?

Basically, the sites allow owners to offer properties that are Should You Use Your Rental Properties As An Airbnbavailable for rent. Owners set up a profile and list their property. They decide whether to accept or decline a guest, often based on the guest profile.

Sites often offer protection for up to varied amounts in case a guest damages the property. Owners and guests can leave reviews of each other. Payment is made through the sites. Sounds great, and when it works it can be.

When it doesn’t…

Well, you as the owner need to make sure you are insured beyond homeowners insurance. Beyond damages to the property, you as the owner may be responsible for the liability of injuries that may occur.

Laws

Then there are local and state laws about short term rentals can trip you up as well. That extra money you make may just be dwarfed by the fines levied for operating a business in a residential area. This is especially true if your neighbors complain about people coming and going or being noisy, etc.

Another local or state law issue: landlord tenant law. Be careful how long you offer rental terms. In many cases if you rent your property out for a month, you need to go through the eviction process to get a renter out of your property. In the meantime, they are living in your property, rent free, and possibly damaging it.

Do your homework

If you do your homework and make sure you aren’t stepping into a mess and look closely at the profiles of prospective renters, offering your property on sites like Airbnb can be a great way to make some extra money and keep your property rented.