WHEN IS RENTING YOUR LAS VEGAS HOME THE WAY TO GO
You are a Las Vegas homeowner, but now your family has simply outgrown the place. You’re almost ready to start hunting for a new home—but hesitate. The fact is, you’re reluctant to give up your present property. It’s been a terrific home, and you suspect it’s only going to grow in value… If your financial fortunes are on the upswing, you may be wise to consider the viability of renting your Las Vegashome. After all, using it as a profit-making venture even as you expand your Las Vegas real estate holdings might just be doable! Many a successful landlord has begun that way, and find it every bit as rewarding as they’d hoped. Renting your Las Vegas home sounds like a straightforward proposition in the abstract, for sure: recruit a reliable tenant, and then sit back and let any remaining mortgage payments take care of themselves. And it can be a fabulous plan—but like all successful enterprises, is most likely to reward those who prepare. If you are entertaining the prospect of renting your area home, here are three questions you might ask yourself as you make that decision: How’s Your Nest Egg? The transition from residence to rentable home can take a fair amount of cash, even in a well-maintained property. You’ll want to capture top dollar anytime you rent your home, so any hint of potential roof leak or unsafe walkway needs to be eliminated. Realistically, this might be the time to upgrade the kitchen and re-tile the entryway floor. While you pencil in those costs, prudence dictates that you plan for fallow rental periods, too. While it’s possible you might find a suitable tenant as soon as you begin renting your Las Vegas home, you should budget for some months when that doesn’t happen. How’s Your People-Meter? Seasoned landlords all have war stories to tell: the presentable young couple who turned out to be non-stop party hosts for less-than-presentable friends, or the roommates who wound up playing host—or subleasing—to quite a few unauthorized friends. Before you begin renting your home, ask yourself if you’ve looked into exactly how you plan to recruit and screen tenants. You’ll want to highlight the features most likely to draw the best applicants, and advertise in outlets they visit most frequently. And while you’ll want to trust your gut instincts, you’ll need to do a bit of homework to be sure you stay in line with all fair housing laws—even if it all means your house might sit vacant a little longer. How Much Time Can You Spare? Late nights; vacations; rainy days—a rental can require attention on its schedule, which doesn’t always match yours. When you start renting your Las Vegas home, you need to be able to invest a certain amount of your time. You will be adding the upkeep of another household, and as you already know, that does require diligence. If your spare time is already in short supply, the realistic answer will be to hire a Las Vegas professional property management company. If adding their fee means a bottom line that’s close to the break-even point, your decision will become one about whether expanding your Las Vegas real estate holdings (rather than profit-making) will be reward enough. Whatever your decision, I’m here to help you further all aspects of your Las Vegas real estate endeavors!
HELP FOR LAS VEGAS FIRST TIME HOME BUYERS THEYRE OUT THERE
As the end of 2014 approached, the National Association of REALTORS® was able to come up with some general observations on the makeup of the current market—facts that anyone expecting to deal with Las Vegas home buyers in the coming year should find useful. With consumer attitudes showing improvement across the board, you might have expected that all segments of the home buying public would have shown increased activity. Not so. According to the NAR’s annual survey—the big one that they’ve been conducting since 1981—the percentage of first-time home buyers sank to a nearly 30-year low. It dropped 5% in just one year. Throughout the 40+ years of the survey, first-time home buyers have usually made up about four of every ten home sales…but in 2014, that rate fell to 33%. 1987 was the only other year with a comparably weak rate. We don’t tally separate statistics on Las Vegas’s first-time home buyers, but there’s no reason to suspect our buyer profiles wouldn’t reflect the same trend. But there’s some good news, too. Help may be on the way. The reasons, first-timers have had a hard time, was addressed by Dr. Lawrence Yun, NAR’s chief economist. He points to obstacles Las Vegas first-time homebuyers are likely to face—many of them connected with the rising difficulty young people have in saving for a down payment. Rising rents plus student debt and auto loan payments combine with stagnant wage levels to cramp savings growth. Added to that, the cost of mortgage insurance for Federal Housing Authority-insured loans have been rising. In 2010, 56% of first-time home buyers used affordable FHA loans to purchase their home; by 2014, that number had dwindled to 35%. Dr. Yun’s analysis is borne out by a separate RealtyTrac analysis of housing affordability and down payments. This, too, was a wide-ranging survey, examining affordability in 500 counties across all states. It found that for buyers with no additional debt, housing is affordable in 90% of markets —regardless of whether a 3% or a 20% down payment was contemplated. But for buyers with additional debt (like Dr. Yun’s student loans and car payments), housing is affordable in only 48% of real estate markets. Many, who find themselves in that category, are first-time home buyers. No wonder their activity is down. That sounds like daunting news for many aspiring Las Vegas first-time home buyers, but some good news is waiting in the wings. RealtyTrac footnoted a big one. According to data collected by Down Payment Resource, there more 2,300 separate programs are out there to assist buyers with down payments and closing costs. Finding which ones a Las Vegas first-time home buyer might be eligible for is easy: DPR offers online help. Add in recent good news on the economy (job growth in particular) and government efforts to loosen mortgage loan requirements by lowering down payments, and it looks likely that 2015 will find first timers crossing the threshold to their first home. I hope it is the wave of the future—and I am standing by to help make it happen!
FICO THIS FICO THAT LAS VEGAS HOME LOAN BACKGROUND INFO
When anyone is in the early stages of finding a Las Vegas house to buy, unless they are planning to pay for it with cash, a large part of what eventually happens will be determined by the home loan they secure. Both the size of the home loan and its interest rate are negotiable, but in almost all cases, the applicant’s part of the “negotiation” consists of comparing offers from various Las Vegas home loan providers. So unless you are The Donald (or can supply your wheelbarrow full of cash), Las Vegas’s mortgage companies will have a large say about what they think you can afford for your next home. Even though they represent totally different entities, their decisions tend to be awfully similar. The reason for that is that they all work from similar information: your assets, your current ability to generate cash— and your FICO score.If you have ever suspected there is some mysterious secret formula involved in coming up with that last, your suspicion will be valid. But your FICO score isn’t a total mystery—some parts of their formula have been (however grudgingly) made public. Since the system is so pervasive, it’s good to know as much about it as you can. To begin with “FICO” is just a company name. Back in the 50s, Bill Fair and Earl Isaac got together and engineered a credit scoring system, and so Fair Isaac COmpany was in business. Once Fannie Mae and Freddie Mac began to use them, it became a very good business. Now all the major consumer reporting agencies (Experian, Equifax, TransUnion—even PRBC and Innovis) use them. As to how they come up with their all-important scores, FICO has published the exact formula (sort of):• 35%: Payment history: If you have or don’t have derogatory information, like bankruptcies, liens, judgments, settlements, charge offs, repossessions, foreclosures, or late payments. It makes up more than a third of your score. • 30%: Amounts owed: Your current state of indebtedness. • 15% Length of credit history: This one is why borrowing anything early on in your consuming career is a good idea. A long history makes you more trustworthy. • 10% New credit: Have you recently been opening credit accounts all over the place? That’s probably not a nifty idea. • 10%: Types of credit used: A variety of the kind of borrowing you have also done makes you more trustworthy: revolving credit cards, car loans, home loans and lines of credit all broaden your appeal (at least the way FICO sees things). That sounds reassuringly cut-and-dried—but before you relax, remember that ‘’ we began with? As one analyst writes candidly about the Types of credit used category: “It carries the same weight as the New credit category…but in reality, the two categories aren’t quite equal.” If you had been under the impression that 10% = 10%, you now know otherwise. Also, FICO itself states that the percentages it makes public “are for the general population. For particular groups…the relative importance of these categories may be different.” In other words, the percentages are hard and fast, unless you are in a particular group. If you ask what is considered ‘a particular group,’ it gets mind-numbingly confusing. Sort of like the sound of FICO clearing its corporate throat and changing the subject… Nonetheless, knowing just this much about what’s behind a Las Vegas home loan originator’s decision will stand you in good stead when it comes to securing your next home. Another canny move give me a call right from the start!
Categories
Recent Posts
