The Powell River real estate market is heating up! If you are on the hunt for a home in a seller’s market you might feel overwhelmed. You can prepare for the challenges an active market presents however, and find yourself a solid investment in a great home! Read on to find out how to navigate Buying a Home in a Hot Market.
A strong real estate market has some distinct differences from a slower, buyers market. Here is what you can expect:
–Low inventory. One of the driving forces causing price increases is a lack of homes for sale. This creates an opportunity for sellers to ask a little more for their homes because a purchaser that needs a place to live will pay more when there are few other options. This also means it’s hard to find a “good deal”. With homes selling fast (and plenty of buyers ready to pay full price) getting a discount on a home is harder than ever.
–Buyer competition. With fewer homes on the market and more buyers on the home search, it is likely that you will have some competition when you find a home that works for you. Bidding wars are frequent and it can be disappointing to make an offer on a home only to be outbid by another party.
–Pressure. A hot market means there is a rush to get in. Buyers have to rush to view new listings, act quickly to make an offer, and rush to get a home inspection done or deal with any other subject conditions on the offer. This pace can be stressful.
You can reduce the stress of buying in a hot market by preparing in advance and proceeding with confidence!
–How to Prepare. Get a firm financing pre-approval! Don’t just casually talk to you bank or broker about what you can afford. Sit down with them, get them all the documents they require and get a definite assurance about what you can borrow. This prevents nasty surprises after you make an offer and gives you confidence when shopping.
–Shop Before You Are Ready to Buy. Start attending open houses, driving by new listings, and even viewing some homes with your real estate salesperson to get a feel for the market and understand the price points. Choose your favorite neighbourhoods, figure out the style of home you prefer and watch what the homes sell for. Also look at all your options, perhaps buying a lot and building will work? Maybe a condo is the right choice for you? Don’t hastily conclude that a single family home is the only way to go. This education will prove invaluable to make you a smart, savvy, purchaser when the time comes to get serious about buying.
With your new understanding of a hot market and your preparations complete you can proceed with confidence! Here’s how to step up and get the home you love:
–Be confident. This is a fast market but know that you are going to get a good home and don’t worry excessively about moving forward.
–Go to a home ready to bid. Now that you are prepared, when you view a home be ready to make an offer immediately if the home is right for you.
–Offer what you are willing to pay first. Don’t act on the impulse to make a low offer. This will only delay you getting a home and add to the stress.
–Don’t quibble about the home inspection. Every home will have concerns that show up on a home inspection … every home. Don’t worry excessively if there are some repairs or maintenance that you will have to do after you move in.
A hot market has challenges but there are many advantages as well. The purchase investment you make starts growing immediately and has strong increases in an active market. Also, financing is often easier to secure when sales are strong. And a hot market means there is a lot of positive energy and excellent resale opportunities should you find yourself wanting to sell.
There is never a time when buying a new home is stress free, each market has challenges, but when you understand what you are up against, when you are fully prepared and when you go for it with confidence you can realize the Canadian dream of owning your own home and rest assured that your real estate profits are right around the corner!
Owning a rental property can be a profitable investment —
but it’s not everyone. Here are some tips and insights
you can use to make your investment as soundand profitable as possible. By Brandy Peterson
Owning rental and investment properties has lead to financial success for hundreds of years. It is a proven way to build wealth, and it is something that anyone can do regardless of background or education. It is not a risk free opportunity, however, and there are many things to take into consideration before you begin your search for the perfect rental property. Here are some tips and insights you can use to make the investment as sound and profitable as possible!
Location. There really shouldn’t be a real estate article written that does not place a huge emphasis on the location of the property. This is so important when you are looking for a rental home. A good location will not only mean consistent growth on the value of the investment over the years, it will also affect the amount of rent you can charge and the quality of the tenants you will attract. Look for a neighborhood within easy distance to amenities and reputable schools, an area that has strong growth and resale value and one that is not too far from where you live so you can maintain and manage the property easily. When considering if the location is right or not, ask yourself, would I live here? If you wouldn’t, many tenants (especially good ones) wouldn’t either.
Income. The whole idea in a nutshell is to purchase a property that has the potential to bring in rents that cover all the costs of the mortgage, taxes, insurance and maintenance the home will require. If you find a property you love but the costs will not be covered, keep looking. Taking on an investment property that will cost you money each month, drastically increases your financial risk. It will also make the job of managing the property a thankless one since you don’t have profit for the time and work you are putting into the home. To be sure the home will cover the expenses, look for a property with multiple suites, one in good up-to-date condition, and one that has features tenants will need. Extra parking and storage space, for example, are often lacking in rentals and will increase the value of your investment if you can offer them.
Maintenance. A common mistake among landlords is not putting enough time and energy into maintaining the investment property. Neglecting regular maintenance will depreciate the home’s value, lower the amount of possible rent you can earn, and reduce the lifespan of the key components of the home. A perfect example is paint. Keeping the paint fresh on the exterior of the home not only keeps the curb appeal attractive, it protects the exterior siding and reduces the likelihood of rot, something that can be a lot more expensive to repair. When buying a rental property ensure you will have the funds and the time necessary to maintain the home as needed.
Reserve Fund. All investments carry some risk and this is true of rental properties as well. Some of the risks a landlord may face are vacancies, property damage and depreciating land values during slow markets. All of these risks can be successfully navigated with the presence of a reserve fund. When investing in a rental home, first be sure to have enough money set aside to cover three to six months of the home expenses. This means you have funds for three to six months of mortgage payments, insurance costs, utility fees, property taxes, and maintenance in an account. It goes without saying that if you have a six month reserve fund, your risks will be less than if you have a three month reserve.
Follow these guidelines, and you will be on your way to a profitable real estate investment! View it as a second job, after all, your tenants are paying you hundreds of dollars each month, and for that income, be willing to maintain and improve the property over time. You will find owning a rental home is rewarding, as well as lucrative!
Brandy Peterson is a real estate professional living in Powell River, BC. You can reach her by e-mail at firstname.lastname@example.org , on Twitter (@branpeterson).