With interest rates near record lows, lease prices at record highs, and hot buys that regularly surface in the current real estate market, now is a fantastic time to purchase a piece of investment property for those who are able!
In Houston, the real estate market hasn™t been nearly as affected as in other major cities around the country within the last couple years. On average, home prices have remained fairly constant here in Houston for two to three years during the country™s economic slowdown. If anything, our city has simply not experienced the increase in property values we were used to experiencing prior to 2008. One of the major reasons Houston was negatively impacted at all over the last couple years was due to the squeeze in lending that spread across the country™s financial markets. Even now, borrowing is a luxury left only to the strongest individuals and companies.
What type of investment property should you buy?
Now is a great time to purchase and hold real estate while leasing to both cover the note and make some additional monthly income. Since mortgages are only available to the strongest Buyers, there are more deals available to those qualified, and those not qualified have often been forced to lease resulting in a VERY healthy lease market¦and an upswing in lease prices! Don™t get in a hurry though! The best thing you can do is prepare your finances, and wait for the right deal to surface. If you will be obtaining a mortgage to purchase, get prequalified up front so you know exactly what type of down-payment and monthly payment to expect based on the sales price you are considering.
Once the money is in order, wait for the right deal to surface. When purchasing, look for properties that are in good condition or completely remodeled. Unless you are an experienced investor, steer clear of properties that need a lot of repairs. Pay special attention to properties that have frequent price reductions since there are often Seller™s who are in a position where they must sell quickly, and this presents an opportunity for those who are prepared. Look for properties that will lease for a price that is near 1% of the list price. With interest rates near record lows, you can often clear hundreds in profits if your property leases for 1% of what you paid for it. Do NOT move forward with a purchase until you know exactly what similar homes have leased and sold for in the same area within the last year or so, how long it takes on average for homes in the area to lease, and what your total monthly expense will be including taxes and insurance.
Since it doesn™t cost you anything (Buyer™s do not pay real estate commissions in Texas), leverage a professional to help you locate a good investment property. Ideally, find a Realtor who is experienced in your market area, and who has owned investment property before. Make sure they are informed of your price-range and preferences so they can help you keep watch for œhot deals. Since your Realtor will also help you draw up your offer and run the numbers on each property you are interested in, inform them up front that you are looking for a solid investment and may make a few offers without making a purchase. This will ensure you are both on the same page. Also, be prepared to œpull the trigger when the right deal does surface!
If you are considering a real estate purchase for investment either now or in the future, feel free to give me a call to discuss your situation. I have purchased many investment properties over the years, from lease properties to flip homes, to lots and raw land. I™ve done extremely well in some cases, and have learned lessons in others, and I would be glad to expose you to the many benefits and liabilities of owning investment property. As long as you have a plan, prepare for bumps in the road, and stick to the plan, you can have a very positive and lucrative experience purchasing real estate for investment!
In the last few years we’ve all seen some pretty large storms hit the gulf coast and the weather community is already predicting an active 2010 hurricane season due to the unusually warm temperatures of the waters. June 1st was the start of this year’s Hurricane Season so I thought I’d take a few minutes to talk about the importance of being prepared for it, how to go about doing that, and some things going on around town to help you prepare. Don’t get caught without needed supplies if a Hurricane does decide to target our great city this year.
So what exactly is a hurricane? According to FEMA it is defined as “a type of tropical cyclone-an organized rotating weather system that develops in the tropics. Hurricanes rotate counterclockwise in the Northern Hemisphere.” A cyclone can then take the form of a tropical depression (winds up to 38 mph), tropical storm (winds of 39 to 73 mph), or hurricane (winds 74 mph or higher) based on maximum sustained wind speed. There are several aspects of hurricanes that can affect you and your family’s safety:
- Flooding – flooding is a major concern when hurricanes hit Houston. If the rain comes too fast and too hard it can quickly overwhelm the city draining system and cause major flooding and damage.
- High Winds – hurricane force winds 74mph or higher have major damage potential to houses, buildings and any other dwellings in Houston and surrounding areas. They can also be very dangerous to you and your family by flying debris easily picked up by the high speed winds.
- Tornados – although not all that common here in Houston, hurricanes do have the potential to spawn tornados.
2010 Family Hurricane Preparedness Event at the George R. Brown Convention Center takes place on June 19th from 10 am to 3 pm and is FREE to the public. The event will feature:
- An interactive format suitable for the entire family
- The Kids Zone Activity Center
- Guest appearances by the Energizer Bunny and Louie the Lightning Bug
- FREE giveaways
- Hurricane experts from the National Weather Service
- “Hurricane tracker” scavenger hunt
- Electric safety demonstration presented by CenterPoint Energy
If you don’t already have one, you need to prepare a Hurricane Survival Kit BEFORE one hits Houston again. Here is what you should consider including in your survival kit (I keep mine in a large plastic storage container marked with “Survival Kit” for easy identification and retrieval):
- Water – at least 1 gallon daily per person for 3 to 7 days; Also fill bathtub and other containers; Gator Aid is also good to fend off dehydration
- Food – at least enough for 3 to 7 days
-non-perishable packaged or canned food / juices
-foods for infants or the elderly
-non-electric can opener
-cooking tools / fuel
-paper plates / plastic utensils
- Bedding – Blankets / Pillows, etc.
- Clothing – seasonal / rain gear/ sturdy shoes
- First Aid Kit / Medicines / Prescription Drugs
- Special Items – for babies and the elderly
- Toiletries / Hygiene items / Moisture wipes
- Flashlight / Batteries / Lantern Radio – Battery operated and NOAA weather radio
- Telephones – Fully charged cell phone with extra battery and a traditional (not cordless) telephone set
- Cash (with some small bills) and Credit Cards – Banks and ATMs may not be available for extended periods
- Important documents – in a waterproof container or watertight resealable plastic bag (insurance, medical records, bank account numbers, Social Security card, etc.)
- Tools – keep a set with you during the storm
- Gas - Vehicle fuel tanks filled several days before landfall is expected
- Pet care items - proper identification / immunization records / medications;ample supply of food and water;a carrier or cage;muzzle and leash
- Bleach (without lemon or any other additives)
- Fire extinguisher
- Mosquito repellent
- Toys, Books and Games
- Duct tape
Remember, you don’t wait till the last minute to try to gather your supplies when a hurricane has been predicted to hit Houston. If you do you’ll quickly find that what you’re looking for has already been scooped up by the crowds rushing to prepare. You might also consider keeping some nails and plyboard on hand in case you might need to board up your windows. A generator might be helpful as well but make sure if you use one you follow the directions carefully and don’t put your family in danger from exposure to carbon monoxide poisoning. You might also think about getting a small window a/c unit as well. I used one along with a generator after Hurricane Ike and it really made those days without power a lot easier to handle. Again, don’t wait till the last minute if you are planning on purchasing a generator or window a/c unit because prices can spike quickly if everyone is making a mad dash to their local hardware store to grab one.
Preparation of a family disaster plan will ensure that when disaster strikes, everyone knows where to go and what to do. According to FEMA, here are the three steps to take to prepare your disaster plan:
- Gather information about hazards – contact your local Contact your local National Weather Service office, emergency management office, and American Red Cross chapter. Find out what type of disasters could occur and how you should respond. Learn your community’s warning signals and evacuation plans. Assess your risks and identify ways to make your home and property more secure.
- Meet with your family to create a disaster plan - discuss your plan with your family. Pick two places to meet: a spot outside your home for an emergency, such as fire, and a place away from your neighborhood in case you can’t return home. Choose an out-of-state friend as your “family check-in contact” for everyone to call if the family gets separated. Discuss what you would do if advised to evacuate.
- Implement your plan -
- Post emergency telephone numbers by the phone; install safety features in your house, such as smoke detectors and fire extinguishers.
- Inspect your home for potential hazards (items that can move, fall, break or catch fire) and correct them. Have your family learn basic safety measures, such as CPR and first aid, how to use a fire extinguisher, and how and when to turn off water, gas and electricity in your home.
- Teach children how and when to call 911 or your local Emergency Medical Services number.
- Keep enough supplies in your home for at least 3 days. Assemble a disaster supplies kit. Store these supplies in sturdy, easy-to-carry containers, such as backpacks or duffle bags. Keep important documents in a waterproof container. Keep a smaller disaster supplies kit in the trunk of your car.
Visit Channel 11′s hurricane preparation site for more information.
Well, it™s that time again¦tax time. And I™m not referring to income taxes, I™m referring to property taxes. It™s time for home owners to decide whether or not to protest their home™s tax value assessed by the county for 2010. If the county has your home appraised for too much, you will pay too much in property taxes this year. With little effort, you can make sure you don™t overpay. If you do nothing, it can cost you hundreds of dollars¦even thousands. One thing is for sure, no one will watch your pocket book if you don™t!
If you are in Harris County and own a home, you have likely received a notice in the mail this month from HCAD (Harris County Appraisal District) letting you know what the appraised amount of your home is for 2010. If you have not yet received the notice, it™s possible it hasn™t been mailed to you yet¦but you should have it by the end of April when HCAD finishes with the mailings. It is also possible HCAD has the wrong address for you, and they are sending the notice to an incorrect address.
In minutes, you can visit HCAD™s website and verify both the 2010 appraised value and the mailing address they have on record for you. Go to www.HCAD.org and click on œRecord Search. Search for your property either by address or name. Once you have your property on the screen, check the address on the top left under your name. This is the address they are mailing the valuation notice to. Scroll down the page to see the appraised Value for 2010.
The appraised value for 2010 is the figure you will be paying taxes on at the end of the year. If this figure is too high, you will overpay for this year. If you suspect your value is too high, a quick look at the recent comparable sales to your home in the same neighborhood will identify approximately what the value of your home is. You will need to know what the comparable homes sold for, and a Realtor has access to the sale prices. Contact your Realtor and ask them to provide you with a printout of recent comparable sales in your area. This printout is the evidence you will use to attempt to have HCAD lower your appraised value. If you don™t have access to or don™t want to impose on your Realtor, send me an email, and I will assist you. Make sure to include the address of your property in the email.