Real Estate Blogs Of The Carolina's

Leverage is an investment term that describes the use of borrowed funds to control an asset; sometimes referred to as using other people's money.  Borrowed funds can affect the investment in your home positively. For instance, if you had a $100,000 rental property, collected the rents and paid the expenses and had $10,000 left, you would earn a 10% return (divide the $10,000 by the $100,000.)  With no loan on the property, there is no leverage. If you decided to get an 80% mortgage at 8%, you would owe an additional $6,400 in expenses leaving you only $3,600 net.  However, your return would grow to 18% because your investment is now $20,000 in cash (divide the $3,600 by $20,000.) Leverage, the use of borrowed funds, causes the return to increase in this example.  While, most people associate leverage with rental properties, it also applies to a home.  The larger the mortgage, the more leverage you have.  A FHA mortgage with a 3.5% down payment ha...

Checking for Water Leaks Aside from standing water in your yard or water running out from under a sink, the first indication that you might have a water leak comes from a larger than normal water bill.  Before calling a leak specialist or a plumber, there is a simple diagnostic you can perform. Go through your home and make certain that all the faucets are turned off and that the toilets have indeed stopped filling the reserve.  Then, go to the water meter and make a mark on the lens where the dial is currently.  If there is water in the meter box, the meter itself could be leaking. If the meter is still turning, the leak is between the meter and the house. By inspecting the area between the meter and the house, you can look for soft, muddy areas or grass that is greener than the rest of the yard. One of the hardest places to isolate a leak is in a swimming pool.  If you have an automatic filler, like in a toilet, you'll need to turn it ...

Building Equity Owning a home is the first step to building equity.  Tenants build equity but not for themselves; they build it for the owners. Equity is the difference in the value of the home and what is owed on the home.  There are two dynamics that cause this to grow: appreciation and principal reduction. As the home increases in value, it is said to appreciate.  Various authorities will annualize an appreciation rate based on average sales prices from one year to the next.  Since appreciation is based on supply and demand as well as economic conditions, it will not be the same year after year. If you looked at a ten to twelve-year period, some would be higher than others and there may even be some individual years that it is flat or even declined.  For the most part, values tend to appreciate over time. Most mortgages are amortized which means that a portion of the payment each month is applied to the principal in order to p...

Show Them You're Serious June and July are the busiest home sale months of the year. When inventory is in short supply and you may be competing with other offers, it is important to show the seller you're serious. Make your offer look as good as possible because you may not get the chance to make or accept a counter-offer. Put yourself in the seller's shoes.  Your home has just gone on the market.  There is lots of activity and suddenly, there is more than one offer to purchase.  The seller's first consideration may be to accept the highest offer but there are many other things to consider like closing dates, closing costs, possible repairs, contingencies and of course, the ability of the borrower to get a loan. Offer a fair price for the property in your initial purchase agreement.  It shows sincerity and good faith that you're actually trying to purchase the home and not trying to take advantage of the seller.  The old adage...

Don't Leave Home Without... You been planning this trip for some time and almost every detail has been considered...or has it?   Have you thought about how to protect your home while you're out of town?   What's going to make sure that everything you left is still there in you return? Nothing could ruin a trip more than coming back to find out your home has been burglarized or worse.   It makes sense to spend a little time before you leave on making sure your home is as safe and sound as it can be. There are a host of devices to use across the Internet including camera door bells, video cameras, door locks, garage door openers, light and thermostat controls.   You can monitor your home whenever you have an Internet connection.   The question is whether you want the distraction from your trip. Consider these low-tech suggestions along with your other normal efforts: Tell your neighbors you'll be out of town and to be aware of any unusual act...

Temporarily Renting a Home IRS has provisions for homeowners regarding the sale of a principal residence that allows for temporarily renting the home without losing the ability to exclude the gain if the home is sold under the correct conditions. The rules for the exclusion of gain on the sale of a principal residence are: Up to $250,000 of gain may be excluded for single taxpayers and up to $500,000 for married taxpayers filing jointly. Ownership and Use must have been a principal residence for two of the five years preceding the date of sale (closing date).  This allows for a temporary rental for up to three years maximum. Either spouse may meet the ownership test. Both spouses must meet the use test. No exclusion has been used in the previous 24-month period. Let's pretend that a person had owned a home from more than two years.  This person married and moved into their new spouse's home two years, six months ago.  That person decided to sel...

Get Rid of Things You Don't Need Periodically, you need to rid yourself of things that are taking up you time and space to make room for more of what you like and want. There's a frequently quoted suggestion that if you haven't used something for two years, maybe it isn't essential in your life.  If you have books you'll never read again, give them to someone who will.  If you have a deviled egg plate that hasn't been used since the year your Aunt Phoebe gave it to you, it's out of there.  Periodically, go through every closet, drawer, cabinet, room and storage area to get rid of the things that are just taking up space in your home and your life. Every item receives the decision to keep or get rid of.  Consider these questions as you judge each item: When was the last time you used it? Do you believe you'll use it again? Is there a sentimental reason to keep it? You have four options for the things that you're not going to keep. ...