Archive for April, 2019

Should You Sell Your Home First?

Tuesday, April 30th, 2019
Sell your home

Should you sell your home first or wait until it sells to buy a new one?

If you’re moving soon, you might be questioning whether or not you should sell your home before buying a new one. There are a lot of factors involved in answering this question and making a decision. But hashed out below are the pros and cons of each. Now you can decide whether or not you should sell your home first before buying a one. And you can decide with confidence.

 

Yes, Sell Your Home First If You …

Want to get the most money for your home

If you’re not in any hurry, you won’t be tempted to take a low offer. It’s hard for you as a seller to hold firm on a price when you’re carrying two mortgages. And if you’re not in any hurry, you’ll also have negotiating power.

Can include a contingency clause in your contract of sale

You certainly don’t want to lose a buyer just to be able to stay in your home longer. But you can add a contingency clause to your contract that allows you to remain in your house for a short time after closing. A contingency of 30 to 60 days will give you enough time to close on a new property. It may be difficult to get the buyer to agree to this. But if they do, you’ll have plenty of time to find the perfect new house.

Can handle moving twice

If you sell your home first, you can always live in a short-term rental until you find a new place. This means moving twice, yes. But if you can handle it and are okay with that, it gives you an option.

Don’t want to be stressed about selling

No doubt about it. Selling a home is stressful, no matter how organized, prepared, or easy-going you may be. And carrying a second mortgage is stressful enough to elevate your blood pressure.

 

Yes, Buy a New Home First If …

It’s the Brooklyn home you’ve always wanted

 If you’re absolutely sure you’ve found your dream house, you should buy it now, even if your current house hasn’t sold. You might be full of regret later if you let your dream house pass you by.  Just make sure the house is truly worth it.

You’ve found a deal that’s too good to pass up

If you’ve researched the comps and you know the home you’ve found is too good a deal to pass up,  buy it. Waiting to sell your home might cost you more in the long run if you lose out on a good bargain.

The real estate market is a seller’s market

If it’s seller’s market, there are more buyers than there are houses selling, you won’t have any difficulty selling your Brooklyn property.

You have the money

Talk with Charles D’Alessandro, your Brooklyn Real Estate Agent. Find out how long homes that are comparable to yours are taking to sell these days. Then, do the math. Determine whether or not you have enough in savings to make the down payment and both monthly mortgage payments while you’re waiting to sell.

Do you need to sell your home? Should you buy a new home now or wait until the home you’re selling sells? Call Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate and ask him. Call (718) 253-9600 ext.206 email [email protected] With 30-plus years of real estate experience in Brooklyn, he’s got the answers.

 


 

Brooklyn Real Estate Agent

 Charles D’Alessandro
Your Brooklyn Real Estate Agent
718-253-9600 ext. 206
[email protected]

When You Need to Sell Your House Now But It Isn’t Selling

Monday, April 15th, 2019
Sell your house
Renting your home is a great option when you’ve been relocated and can’t sell your house.

Are you relocating? If you took a new job in a new place, and you just can’t get your house sold, you’re probably feeling like you’re in a bit of a pickle. Whenever a home sells, it’s always our hope to close the sale within a certain amount of time. This is especially true when you’re relocating or need to sell your house before buying another one. But sometimes it takes a lot longer than planned. Don’t fret. You can rent your home.

When You Need to Sell Your House but It Isn’t Selling, Rent It

The people who first came to mind when I started this blog post are those in military service.

Some friends of mine who serve in the Air Force relocated from South Dakota to Wyoming. Since they couldn’t live on base in the military housing provided to Air Force Officers, they bought a home. Then, two years later, the Air Force gave them orders to serve in Wyoming. But they couldn’t sell their house in South Dakota.

So what could they do?

Renting Until You Sell Your House

Renting your home is one way to generate cash flow while you wait for your home to sell. The monthly rent pays all or part of your mortgage costs and therefore, helps you avoid foreclosure. And if the market is slow like it was in 2008, renting allows you to:

  • Sell your home for a profit when the market recovers
  • Keep the mortgage paid until you find a qualified buyer

But you’ve got to weigh your pros and cons with renting.

What to Know Before Renting Your Home

There are important things to consider about renting before you’re a landlord.

  • Costs
  • Rates
  • Tenants
  • Benefits

 

Costs

The costs of becoming a landlord involve Homeowner’s Insurance, Property Management, and Capital Gains.

  1. Your Homeowner’s Insurance needs to change to a policy that covers landlords and rental properties specifically. And landlord policies cost more than a standard homeowners policy since landlords need more protection than the typical homeowner.
  1. Property management could cost you a lot of the monthly rent payment your tenants pay you, especially if you are a remote landlord. Unless you live near the rental, and you are skilled to take care of clogged drains, routine maintenance, or even deadbeat tenants, you will have to hire a property manager. And the cost to pay a property manager is generally around 10 percent of the monthly rent.
  1. Simply, you must live in your home for two of the five years prior to the sale of your home in order to avoid paying Capital Gains Taxes on:
  • up to $250,000 of profit if you are single
  • $500,000 of profit if you are married

However, if you rent your home for longer than three years after you relocate and then sell your house for a profit, taxes on that profit gained are due to the federal government.

Rates

What will you charge your renters to rent your home? What’s appropriate? This alone can be difficult to determine due to all the factors that need to be considered.

  • In general, it is suggested that you charge at least one percent of the mortgage. This should generate enough positive cash flow.
  • Charging one percent of the mortgage must also be reasonable for your neighborhood. Find out what the rental properties near your home are renting for to help you determine what is reasonable. To learn about rates, talk to property management agencies, search for similar rentals online, and check Craigslist, Rentometer, and Rent.com.
  • To get an idea about how much money you can expect to receive from a year of renting, you have to factor in your vacancy rates. It is suggested that investment property owners plan for only ten and a half months of occupancy per year.

What if you find that the rent you should charge, minus the costs and vacancy rate, won’t actually be enough to cover your monthly mortgage? It may still make sense to rent out your home until you sell your house instead of attempting to carry the mortgage all by yourself.

Tenants

After researching the costs involved as a landlord and the rates you should charge to rent your home, you still have to find reliable tenants. How?

  • Advertise – Advertise online, on rental sites like Rent.com and Craigslist, and on social media. And advertise on local relocation firms, HR departments, and local universities, too. Always advertise the good old-fashioned way, too. Put a sign in your yard.
  • Ask questions – Put every applicant through a screening process. Boilerplate applications and lease agreements can be found online, but you must ask your potential tenants about their: income, employment history, rental history.
  • Call all of their references.

Note: You can request Social Security numbers for background and credit checks through a website like E-Renter. Background and credit checks cost around $25, but that’s nothing compared to the number of headaches you could be spared.

Benefits

The benefits of renting your home until you sell your house shouldn’t be overlooked.

  • Capital Loss. Renting your home and then selling it at a loss allows you to claim the capital loss against your income. That can be a huge tax break!
  • Tax Breaks. There are other tax breaks available to you as a homeowner who rents your home. Landlords can deduct almost any expense related to the maintenance and marketing of their rental property. Insurance premiums, repairs, advertising costs, landscaping services, property management services, mortgage interest, and travel expenses related to the rental can be deducted.

 

More Notes Worth Considering Before You Rent Your Home

Renting your home until you sell your home is a great way to generate cash flow, cover your mortgage costs, and avoid foreclosure. But if you choose to rent your home:

  • Plan to rent it for at least one year.
  • Draw up a lease. Most renters prefer the security of a lease. But include a clause in the lease about the home being for sale. And see a real estate attorney for help with making your lease agreement clear, making sure it protects you.
  • Know the rental laws in New York.
  • Save money for repairs. You will have to make repairs before your renters move in and again after they move out. You are responsible for repairing anything major that breaks, such as the air conditioner or refrigerator.

Do you need to sell your home? Call Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate at (718) 253-9600 ext.206. Or email him at [email protected] Charles can help you sell your home or protect your home as a rental property.


Brooklyn Real Estate Agent

 Charles D’Alessandro

Your Brooklyn Real Estate Agent

718-253-9600 ext. 206

[email protected]teSales.com