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Why Rent When You Can Own a Home

by Susan Johnson and Associates

RENTING VS BUYING A HOME

Should you Rent a home or should you buy a home? This is an age old debate. Some people think it’s better to buy a home while others are of the view that renting a home is much better. Everyone has an opinion.

What is the Answer? Well the truth be told, there isn't one answer that is cut and dried that makes the decision easier. Let me walk you through the pro's and con's and let you decide

PROs of buying a home:

    “Home owner”, has a nice ring to it. Especially in America, owning a home is the America Dream. Of course, there are many other benefits too and here are some

  • Buying a home gives you peace of mind
  • It helps you put down roots.
  • Provides financial security
  • Financial stability
  • Tax deductions
  • A vehicle for retirement savings
  • With each mortgage payment, you get closer to fully owning the home
  • Growing asset
  • The equity you build over the years can be leveraged to buy another home and keep the investment property or can be utilized to buy up or reduce your existing mortgage should you wish
  • Sense of achievement

​​This could be the first step in building your wealth

CONs of Buying a Home:

Home ownership comes with risks

  • Buying means you are tying up your savings into an asset that requires maintenance
  • Its not easy to move quickly should you need to - lets face it, homes can take time to sell
  • Life happens - you can be transferred, you could lose your job and that may have a serious impact on your financial well being
  • There are costs of maintaining a home
  • You have a responsibility to pay HOA Levies
  • Your day off work can sometimes be the day for doing home maintenance

PROs of renting:    

  • In some States, the cost of owning far exceeds renting
  • There are little or no maintenance costs
  • If life happens and you need to move, its far easier to do so
  • If you do not like your neighbors or even the neighborhood, you can move!

CONs of renting:

  • The property is never your own
  • You are paying someone else's mortgage
  • The property can never be personalized to suit your needs - its someone else's investment 

Home ownership cannot be taken lightly and if you are a free spirit and like to move fairly often, then owning a home may not be for you. Take time to make the right decision for your personal set of circumstances. Do keep in mind that owning a home could cost you less than renting a home. Perhaps it would be a good idea to explore your options

If you would like some assistance by looking at the facts, then let my team of specialists and I help you with that important decision

Contact me - Susan Johnson - 704-439-5350 or email Susan@HomeCarolinas.com

 

Investing In Real Estate

by Susan Johnson and Associates

Investing in Real Estate 101

In recent months many of our clients have approached us asking is now the time to invest in real estate?  Well, the answer isn’t really a yes or no answer.  There are many factors to consider and each person’s individual long and short term goals as well as their risk tolerance differ.  As real estate consultants, it’s our job to go over all the factors with each person to determine if it’s right for them.  Then, if they are ready, we will help them make the best decision.

Here are some of the things we initially discuss when venturing into real estate investment.  Keep in mind, some of our clients are seasoned investors and some have never bought a home before, so we go from the very basic to the complex when analyzing each situation.

First you have to evaluate your buying power.  How much cash do you have to put down?  Typically in today’s market, lenders want to see at least 20% down for a non-owner occupied property.  Have you spoken to a lender to get pre-approved and for how much?  Do you own a home now?  One strategy to consider if you don’t own yet, is to buy something very affordable, live in it two years and then turn it into a rental and buy something else.  Keep doing that and grow your portfolio that way.

Then we discuss your risk tolerance.  Is your down payment all the money you have to your name or is this money you can live without being liquid long term?  How close are you to retirement?  How does investing fit into your personal budget?  

Many new investors get excited thinking that they must buy while the market is low.  While it is wise in theory, if you aren’t ready financially, meaning you will be stretching yourself thin, using your retirement money, or just putting yourself in an uncomfortable situation where you are stressing out every month if the renter will pay their rent or you can’t pay the mortgage; then you probably shouldn’t buy an investment property.

However, if you are really ready for the long term commitment, there are opportunities out there.  Not every home listed will be a good investment and not every foreclosure, short sale or FSBO is a deal.  It takes some skill and market knowledge as well as patience to find the right investment.

Cash flow is the biggest consideration.  If the numbers don’t work, meaning you don’t break even, or better yet, have positive cash flow after all expenses, then it’s probably not the right property.  Of course there are other factors, like appreciation, but too many people got burned banking on appreciation, so the safe strategy, in my opinion, is to follow the cash flow model.  Here is a link to a site that has a basic tool you can use to plug in some numbers for practice.  Cash Flow Tool.

Before jumping into a purchase, there is a lot of homework on your part to master.  Don’t rely on random information to make a big financial decision.  You need to take the time to know and understand the market.  Give us a call and let us setup a Market Snapshot in the areas you are interested in so you can keep abreast of the property information in your chosen area.

You should also watch the rental market carefully in the areas you are interested in.  You can look on Craigslist, the MLS and property management websites.  Create a spreadsheet or just make notes so you can remember which neighborhoods, size homes, features, etc are most desirable to renters and what the rates are in comparison.  

If you are considering flipping, rather than buying and holding for investment, then that is a completely different ball game that takes even greater skill and knowledge as well as a higher tolerance for risk and more capital outlay.  If you are handy and plan on rehabbing the property yourself, you may have an advantage, but the reality is it always takes twice the length of time and two times more money than you thought it would when you first venture into flipping. You really have to know your numbers and understand the market.  Flipping is not for amateurs.

This is just a basic overview about considering a real estate investment.  If you would like to meet and discuss your situation and goals, please contact us anytime.  We here to help.

What You Need To Know About Property Disclosures

by Susan Johnson and Associates

Understanding Property Disclosures

Property disclosures are key details in the selling and buying of real estate and so it is important that we understand these before we enter the market.

Seller’s Disclosure

If a seller of a property knows of any defect to the condition of their property, they are required to disclose this information to a buyer. This is a formal document called the “Seller’s Disclosure”. A seller of a residence needs to make sure that every known defect to their property is included in this disclosure. A buyer has the right to make the seller take back a property if any defect is not disclosed to the buyer. Therefore a seller needs to take this document seriously.

Once a Seller’s Disclosure has been drawn up by realtor together with the seller, the buyer will have time to read through and query any information. The buyer will then initial each page as proof that they have acknowledged these defects. As a seller of a property, it is therefore also wise to make sure that you have a copy of this disclosure with the initials of the buyer prior to the purchase of your property.

A Seller’s Disclosure is a formal way of both the seller and the buyer having agreed to the condition of the residence before agreement to purchase.

Square Foot Disclosures

The area of a house or the “square footage” of a house is a very important detail to consider when selling or buying a property. The square footage of a house must be disclosed by the seller on an MLS. However, the measurement and presentation of square footage is not an exact science.  The space for the Square Foot Disclosure on an MLS might have an annotation next to it to indicate whether the square footage was determined by the “owner” or by the “appraisal district”.

Unfortunately, neither of these sources can be 100% trustworthy. The owner might simply be repeating what they were presented when buying the property and the appraisal district might have pulled the figure from various older sources. Therefore, a disclosure of the square footage of a house is not always accurate and a buyer should think about this detail when considering a property. As a buyer, if you are not happy with the square foot disclosure, you may ask the seller to make an appointment to measure the floor space yourself. It is not inappropriate to do this. However, a knowledgeable realtor should have a good idea whether the Square Foot Disclosure seems accurate or not and this might not be necessary.

In summary, do not take the Square Foot Disclosure of a property lightly. Have the discussion about the accuracy of this figure with your agent prior to purchasing a property.

Year Built Disclosure

Like the Square Foot Disclosure, the Year Built Disclosure is not always accurate. It can be surprisingly difficult to determine exactly in which year a home was built. There are also no requirements that a seller provide a buyer with a documented disclosure about the exact year the residence was built. The year of construction can usually be found on the MLS but this might be another detail a buyer would want to check.

You could determine the year of construction by checking local government records. You could also chat to neighbors or talk to local housing or zoning officials about the year of construction. A Year Built Disclosure is therefore not a formal requirement by a seller. It is definitely information that a buyer would want to consider before purchasing a property and it may be worthwhile looking into this detail.

Lead Paint Disclosures

For the safety of occupants, the government requires the disclosure of lead based paint and potential lead paint hazards for sales and leases of older residences. If you are considering purchasing an older property, it is very important that the seller discloses information about lead paint or lead paint hazards to you.

A seller is required to give an EPA approved pamphlet with information that discloses the identification and control of lead based paint hazard. The seller must also provide a separate attachment with a warning statement that states that the seller has complied with government requirements. The attachment also discloses information about the condition of paint surfaces and includes records or reports of lead based paint. This document must be signed by the seller, buyer and realtors.

If you are considering buying an older home, it is very imperative that you and your realtor carefully consider the Lead Paint Disclosure. Set aside time to work through this as it is important to your wellbeing and the future investment you are about to make.

School Disclaimer

The quality of schools in an area could undoubtedly impact the value of your home. Therefore, school disclaimers on a property are key details to consider. As a buyer, you need to know to which potential schools your home is zoned to. There are no requirements that a seller need disclose this information to you, but it may be well worth the time to do this research. Initially you could check what the MLS document discloses. Often this is only a school district and not school names. The best information about school names comes from the school district itself and simply enough their websites should have all the information you need. You can download a current district map or see the future rezoning plans. Even if you do not have children, a home is an investment and the resale value of your home can be impacted by the quality of schools. If the seller discloses information to you about specific schools to which the house is zoned, rather do your own homework to confirm this information. Disclosing information about school zones is not the seller’s responsibility but could be an important factor for a potential buyer.

Deed Restrictions

A buyer may not be the only party with legal rights to a property. Deed Restrictions are important property disclosures that a buyer must consider. Deed Restrictions are using imposed by developers of an area which limit specific design elements to a home or certain activities in an area. These could range from the limited color of walls to the specification of trees that may be planted. Normally these restrictions are beneficial in the way that they ensure the high standard of quality in an area. This information must be disclosed in the Seller’s Disclosure and must be carefully considered when buying a home.

Zoning Restriction

Zoning restrictions are limitations put in place by government to protect consumers. These restrictions may include what land may be used for, what activities may or may not be performed in specific areas, or how land may be developed. For example, industrial development may be prohibited in a suburban neighborhood.

Sellers are not required to disclose this information to buyers. Buyers need to check with zoning officials about current restrictions and future restriction plans for the buyer’s target area. There might even be no restrictions in certain areas which could be problematic for an investment in a home.

Now that you understand more about property disclosures, you can enter the buying and selling of real estate more knowledgeably and confidently.

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Mortgage Options Explained

by Susan Johnson and Associates

If you are needing assistance with a Mortgage our team can offer you some assistance.

Read more about the various options and programs here and then please give us a call and let us assist you to find the right people to help you find the perfect mortgage.

 

Fixed-Rate Loans

The fixed-rate mortgage is the most popular mortgage program in use today. Fixed-rate loans offer the borrow a fixed interest rate for the life of the loan, typically 15 to 30 years. Borrowers have peace of mind knowing that their monthly payment will not change over time. Conventional fixed-rate mortgages have underwriting requirements established by Freddie Mac and Fannie Mae, and require certain down-payment and debt-to-equity ratios to qualify. Fixed-rate loans are especially attractive to buyers who plan to stay in their home for more than a few years.

Adjustable Rate Loans

With an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and payments go up or down accordingly. Rates are tied to an index that reflects the cost of money at any given point in time. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Adjustable rate loans are attractive for buyers who expect to be in the home for a short period of time.

FHA and VA Loans

The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have lower down payments, and have relatively easier requirements than conventional fixed-rate mortgages. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program!

In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!

Local Homebuying Program

There are often many state and local programs available. These programs offer down-payment assistance and programs for local home ownership. Learn more about these local programs, recommended lenders, and other finance options by contacting us today!

Call Molly LaPorta Direct 312-804-1010 or on the office number 704-439-5350

Email Molly click here

Whats it Like Living In Charlotte | Lake Norman?

by Susan Johnson Team

Charlotte Lake Norman Lifestyle
Charlotte NC

We often get asked, What's it like living in Charlotte area?

It is very easy to live in Charlotte North Carolina. The City itself is very pretty and has lots of green areas for walking, cycling, picnicking or playing ball. It appeals to all people through all walks of life. The short winters and the long warm summers that are fairly humid, with sometimes extremely hot temperatures and humidity in July and August, are something the people from Charlotte embrace. We can bear living indoors or doing things early in the day in July and August and we will reappear in the evening in time to go outdoors and watch a concert or a movie in the park, or even to go out for a walk. Lake Norman and Lake Wylie are wonderful sources or recreation and almost everyone has some form of boat, paddle ski, kayak, stand-up paddle board or jetski. We love the summer and we find any excuse to get out there and play on the lakes.

The downtown or uptown as it's sometimes referred to is a maze of modern and old architecture and at street level you will find lovely outdoor seating areas, incredible art and culture exhibits and always interesting people. There is a whole array of wonderful restaurants with cuisine to suit every taste. Visit the 7th street market where there are several food vendors surrounding a dining hall creating an electric atmosphere.The nightlife is spectacular with superb theaters, tapas bars, nightclubs and so much more. There are also a number of kiddies entertainment venues and places to visit, museums and so much more. The City of Charlotte NC offers a wealth of cultural and sports events and the locals are die hard fans of the Panthers and the Hornets and we welcome the competition anytime.

Charlotte has a favorable business environment, with the financial industry amongst the top employers in the Carolinas. There are many job opportunities and every where you look there are "Hiring Now" signs in storefronts, online and more. The lower cost of living, a buoyant well rounded real estate market together with a fantastic lifestyle, make Charlotte a worthy choice to call home. Charlotte Douglas International Airport is one of the biggest airline hubs in the USA with more than 700 flights a day and that makes it easy for business travel too.

The lovely thing about the Carolina's is that people are so friendly. Many people that live in Charlotte do come from other states and because of that people are more accommodating and more likely to talk to you. Public transport to and from the city is improving all the time and with the light rail extensions and the wonderful bus service, if you live within the parameters of these services, it's relatively easy and inexpensive to get around. Car travel from the Lake Norman area is at its worst right now with a huge road improvement project underway, but the good thing is that will improve in years to come.

The City is relatively safe, however, like any big city, there is petty criminal activity. The idea is to be cautious as you would in any big city, but you certainly don't have to peer over your shoulder or fear for your life.

Charlotte NC is situated almost equidistant from the beaches , the mountains and Yadkin Valley Vineyards. We love the beach and we spend at least one week each summer getting our toes wet and enjoying the sun and the sand. Those non beach people will head to the coolness of the mountains and hide away in mountain cabins and enjoying clear mountain streams. The Carolinas are an oasis for everyone.

So when are you moving to the Carolinas then? Susan Johnson and her team are standing by to help you make your move. "We love our life here Charlotte and we welcome you to come and join us."

Should I Buy a Home Now?

by Amini & Associates

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall down the road, while others are convinced that home prices will go up.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have fluctuated, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, a one point rise in interest rates could cost tens of thousands of dollars over the life of your mortgage!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates while they are still available.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 1-6 of 6

Contact Information

Photo of Susan Johnson & Associates Real Estate
Susan Johnson & Associates
Keller Williams Realty Lake Norman
19721 Bethel Church Road
Cornelius NC 28031
Susan Johnson 704-439-5350
704-439-5350
Fax: 704-439-2602

Each Office Is Independently Owned and Operated.