It seems you can’t find a headline with the term “housing affordability” without the word “crisis” attached to it. That’s because some only consider the fact that residential real estate prices have continued to appreciate. However, we must realize it’s not just the price of a home that matters, but the price relative to a purchaser’s buying power.

Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by 3.5% over the last year.

Let’s look at three different reports issued recently that reveal how homes are very affordable in comparison to historic numbers, and how they have become even more affordable over the past several months.

1. National Association of Realtors’ (NAR) Housing Affordability Index:

Here is a graph showing the index going all the way back to 1990. The higher the column, the more affordable homes are:

We can see that homes are less affordable today (the green bar) than they were during the housing crash (the red bars). This was when distressed properties like foreclosures and short sales saturated the market and sold for massive discounts. However, homes are more affordable today than at any time from 1990 to 2008.

NAR’s report on the index also shows that the percentage of a family’s income needed for a mortgage payment (16.5%) is dramatically lower than last year and is well below the historic norm of 21.2%.

2. Black Knight’s Mortgage Monitor:

This report reveals that as a result of falling interest rates and slowing home price appreciation, affordability is the best it has been in 18 months. Black Knight Data & Analytics President Ben Graboske explains:

“For much of the past year and a half, affordability pressures have put a damper on home price appreciation. Indeed, the rate of annual home price growth has declined for 15 consecutive months. More recently, declining 30-year fixed interest rates have helped to ease some of those pressures, improving the affordability outlook considerably…And despite the average home price rising by more than $12K since November, today’s lower fixed interest rates have worked out to a $108 lower monthly payment…Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15%.”

3. First American’s Real House Price Index:

While affordability has increased recently, Mark Fleming, First American’s Chief Economist explains:

“If the 30-year, fixed-rate mortgage declines just a fraction more, consumer house-buying power would reach its highest level in almost 20 years.”

Fleming goes on to say that the gains in affordability are about mortgage rates and the increase in family incomes:

“Average nominal household incomes are nearly 57 percent higher today than in January 2000. Record income levels combined with mortgage rates near historic lows mean consumer house-buying power is more than 150 percent greater today than it was in January 2000.”

Bottom Line

If you’ve put off the purchase of a first home or a move-up home because of affordability concerns, you should take another look at your ability to purchase in today’s market. You may be pleasantly surprised!

There is a lot of uncertainty regarding the real estate market heading into 2019. That uncertainty has raised concerns that we may be headed toward another housing crash like the one we experienced a decade ago.

Here are four reasons why today’s market is much different

1. There are fewer foreclosures now than there were in 2006

A major challenge in 2006 was the number of foreclosures. There will always be foreclosures, but they spiked by over 100% prior to the crash. Foreclosures sold at a discount and, in many cases, lowered the values of adjacent homes. We are ending 2018 with foreclosures at historic pre-crash numbers – much fewer foreclosures than we ended 2006 with.

2. Most homeowners have tremendous equity in their homes

Ten years ago, many homeowners irrationally converted much, if not all, of their equity into cash with a cash-out refinance. When foreclosures rose and prices fell, they found themselves in a negative equity situation where their homes were worth less than their mortgage amounts. Many just walked away from their houses which led to even more foreclosures entering the market. Today is different. Over forty-eight percent of homeowners have at least 50% equity in their homes and they are not extracting their equity at the same rates they did in 2006.

3. Lending standards are much tougher

One of the causes of the crash ten years ago was that lending standards were almost non-existent. NINJA loans (no income, no job, and no assets) no longer exist. ARMs (adjustable rate mortgages) still exist but only as a fraction of the number from a decade ago. Though mortgage standards have loosened somewhat during the last few years, we are nowhere near the standards that helped create the housing crisis ten years ago.

4. Affordability is better now than in 2006

Though it is difficult to afford a home for many Americans, data shows that it is more affordable to purchase a home now than it was from 1985 to 2000. And, it requires much less of a percentage of your income today than it did in 2006.

Bottom Line

Today’s conditions are fundamentally different compared to a decade ago, the graphs above show that the market is much healthier than it was prior to the crash ten years ago. Though no one can know the future, the likelihood of a nationwide home price collapse is near nil for the foreseeable future.

Millennials.

They’re the generation of people born between the 1980s to early 2000s, or also called the Generation Y. Many stereotypes have influenced how they have been viewed by the public, including the typical assumptions that they jump from one job to another, that they couldn’t even save for a down payment, or that they overspend.

But the recent 2018 Better Money Habits Millennial Report by Bank of America says otherwise. “Millennials deserve more credit — both from themselves and from others — for their mindfulness when it comes to money and their lives, ” says Andrew Plepler, Global Head of Environmental, Social and Governance. This key takeaway is related to how millennials are saving and managing their money. And when it comes to saving, at least 33 percent of millennials prioritize saving towards buying their first home.

In the NAR Home Buyer and Seller Generational Trends Report 2017, it is expected that 66 percent of millennials will buy homes in the next five years. And while each generation is different, there’s no doubt that millennials have their own set of unique attitudes and preferences towards home buying.

“Millennials are shaping the market more than anyone realized,” says Jeremy Wacksman, Chief Marketing Officer at Zillow Group. According to the 2016 Zillow Group Report on Consumer Housing Trends, 50 percent of today’s US home buyers are under 36 or those who are called Millennials, which means they are shaping the future of real estate. They are having an impact on the industry through their growing influence on the market.

Here’s how the millennial generation is changing the real estate market:

1. They are tech-savvy researchers

More than any other generation, millennials prefer to approach the home buying process in a more digital fashion. The Zillow report further stated that the process of finding or selling a home is a much more collaborative process for them. They bring all available tools to the process, such as their smartphones, social media and online networks.

In the NAR Real Estate in a Digital Age 2017 Report, a whopping 99 percent of Millennials searched on online websites while looking for a home, compared to the 89 percent of Older Boomers and only 77 percent of the Silent Generation. At least 58 percent of millennials also found the home they decided to purchase on their mobile devices. They also rely on online customer reviews more than any other generations.

As they technically live in a world that is ruled by technology, real estate investors, firms, and even real estate agents need to boost their online presence in order to attract more millennial buyers and sellers.

2. They are very comfortable trusting a realtor when purchasing their home

Despite being the most tech-savvy home buyers, millennials were the number one buying group to purchase their home from a realtor. They might have done their research first before stepping into homeownership, but they are still very comfortable in trusting the experts. At least 92 percent of millennials purchased their home through a realtor, and 74 percent said they wanted help in understanding the purchase process. They value the personal experience and insights that only a top real estate agent can provide. Millennials expect real estate agents to become trusted advisers and strategic partners. Likewise, it might also be related to the fact that their age group had more difficulty handling paperwork and understanding the process than any other generation.

3. They want specific must-have features in a home

As the real estate sector becomes more focused on millennials as home buyers, the market is also focusing on what millennials specifically want in their homes.

Millennials mostly want to buy newly-constructed homes, rather than fix-uppers, to avoid dealing with renovations and other plumbing and electricity problems. Likewise, they also have specific features that they want in a home they purchase. Some of the features they prefer include a spacious kitchen and an open floor plan, a dedicated workspace for those who are working from home, energy efficient appliances, updated kitchen and bath, and new technology and smart home systems.

A unique study was also conducted by Northshore Fireplace in 2016 to know what millennial buyers are looking for in a home. The results have revealed millennials value these features most: new appliances, a large master bedroom, a 2-car garage, solar panels/energy storage, and a luxury kitchen.

Millennials are also most likely to choose a home that is located closer to their work, so they can save time and gas. At least 65 percent say convenient location to their job is the most important factor when choosing a neighborhood.

4. They are least likely to view homeownership as permanent

Only 11 percent of millennials said they view homeownership as permanent, compared to 37 percent of seniors and 29 percent of baby boomers. It was also revealed in the Bank of America 2017 Homebuyers Insights Report that 68 percent of millennial homeowners say their current home is only a stepping stone towards their dream home. They see the value in buying early but realize it may mean putting their dream home on hold for now. It also reflects the average of six years that millennials are keeping their home before selling, compared to 10 years for the rest of homebuyers. This trend can influence would-be buyers to purchase sooner.

5. They highly associate homeownership with the American Dream

This is probably one of the main reasons why they currently dominate the housing market. At least 65 percent of people aged 18-34 associated home ownership with the American Dream, more than any other age group. It is despite the fact that they wait longer to buy their first home compared to their older generations. Most of today’s home buyers are also redefining the so-called “starter homes,” which is now as large as the median homes for “move-up buyers.”

With all of the volatility in the stock market and uncertainty about the Coronavirus (COVID-19), some are concerned we may be headed for another housing crash like the one we experienced from 2006-2008. The feeling is understandable. Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:

“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”

There are many reasons, however, indicating this real estate market is nothing like 2008. Here are five visuals to show the dramatic differences.

1. Mortgage standards are nothing like they were back then.

During the housing bubble, it was difficult NOT to get a mortgage. Today, it is tough to qualify. The Mortgage Bankers’ Association releases a Mortgage Credit Availability Index which is “a summary measure which indicates the availability of mortgage credit at a point in time.” The higher the index, the easier it is to get a mortgage. As shown below, during the housing bubble, the index skyrocketed. Currently, the index shows how getting a mortgage is even more difficult than it was before the bubble.

2. Prices are not soaring out of control.

Below is a graph showing annual house appreciation over the past six years, compared to the six years leading up to the height of the housing bubble. Though price appreciation has been quite strong recently, it is nowhere near the rise in prices that preceded the crash.There’s a stark difference between these two periods of time. Normal appreciation is 3.6%, so while current appreciation is higher than the historic norm, it’s certainly not accelerating beyond control as it did in the early 2000s.

3. We don’t have a surplus of homes on the market. We have a shortage.

The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory which is causing an acceleration in home values.

4. Houses became too expensive to buy.

The affordability formula has three components: the price of the home, the wages earned by the purchaser, and the mortgage rate available at the time. Fourteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased and the mortgage rate is about 3.5%. That means the average family pays less of their monthly income toward their mortgage payment than they did back then. Here’s a graph showing that difference:

5. People are equity rich, not tapped out.

In the run-up to the housing bubble, homeowners were using their homes as a personal ATM machine. Many immediately withdrew their equity once it built up, and they learned their lesson in the process. Prices have risen nicely over the last few years, leading to over fifty percent of homes in the country having greater than 50% equity. But owners have not been tapping into it like the last time. Here is a table comparing the equity withdrawal over the last three years compared to 2005, 2006, and 2007. Homeowners have cashed out over $500 billion dollars less than before:

During the crash, home values began to fall, and sellers found themselves in a negative equity situation (where the amount of the mortgage they owned was greater than the value of their home). Some decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area. That can’t happen today.

Bottom Line

If you’re concerned we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears.

Last March, many involved in the residential housing industry feared the market would be crushed under the pressure of a once-in-a-lifetime pandemic. Instead, real estate had one of its best years ever. Home sales and prices were both up substantially over the year before. 2020 was so strong that many now fear the market’s exuberance mirrors that of the last housing boom and, as a result, we’re now headed for another crash.

However, there are many reasons this real estate market is nothing like 2008. Here are six visuals to show the dramatic differences.

1. Mortgage standards are nothing like they were back then.

During the housing bubble, it was difficult not to get a mortgage. Today, it’s tough to qualify. Recently, the Urban Institute released their latest Housing Credit Availability Index (HCAI) which “measures the percentage of owner-occupied home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

The index shows that lenders were comfortable taking on high levels of risk during the housing boom of 2004-2006. It also reveals that today, the HCAI is under 5 percent, which is the lowest it’s been since the introduction of the index. The report explains:

“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market.”

This is nothing like the last time.

2. Prices aren’t soaring out of control.

Below is a graph showing annual home price appreciation over the past four years compared to the four years leading up to the height of the housing bubble. Though price appreciation was quite strong last year, it’s nowhere near the rise in prices that preceded the crash.There’s a stark difference between these two periods of time. Normal appreciation is 3.8%. So, while current appreciation is higher than the historic norm, it’s certainly not accelerating out of control as it did in the early 2000s.

This is nothing like the last time.

3. We don’t have a surplus of homes on the market. We have a shortage.

The months’ supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued appreciation. As the next graph shows, there were too many homes for sale in 2007, and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing an acceleration in home values.

This is nothing like the last time.

4. New construction isn’t making up the difference in inventory needed.

Some may think new construction is filling the void. However, if we compare today to right before the housing crash, we can see that an overabundance of newly built homes was a major challenge then, but isn’t now.

This is nothing like the last time.

5. Houses aren’t becoming too expensive to buy.

The affordability formula has three components: the price of the home, the wages earned by the purchaser, and the mortgage rate available at the time. Fifteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased, and the mortgage rate is about 3%. That means the average homeowner pays less of their monthly income toward their mortgage payment than they did back then. Here’s a chart showing that difference:As Mark Fleming, Chief Economist for First American, explains:

“Lower mortgage interest rates and rising incomes correspond with higher house prices as home buyers can afford to borrow and buy more. If housing is appropriately valued, house-buying power should equal or outpace the median sale price of a home. Looking back at the bubble years, house prices exceeded house-buying power in 2006, but today house-buying power is nearly twice as high as the median sale price nationally.”

This is nothing like the last time.

6. People are equity rich, not tapped out.

In the run-up to the housing bubble, homeowners were using their homes as personal ATM machines. Many immediately withdrew their equity once it built up, and they learned their lesson in the process. Prices have risen nicely over the last few years, leading to over 50% of homes in the country having greater than 50% equity – and owners have not been tapping into it like the last time. Here’s a table comparing the equity withdrawal over the last three years compared to 2005, 2006, and 2007. Homeowners have cashed out almost $500 billion dollars less than before:During the crash, home values began to fall, and sellers found themselves in a negative equity situation (where the amount of the mortgage they owed was greater than the value of their home). Some decided to walk away from their homes, and that led to a wave of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area. With the average home equity now standing at over $190,000, this won’t happen today.

This is nothing like the last time.

Bottom Line

If you’re concerned that we’re making the same mistakes that led to the housing crash, take a look at the charts and graphs above to help alleviate your fears.

Hello, World!

Get Ready To Buy a Home in 2025

If buying a home is on your goal sheet this year, there are things you need to do now to make it happen. But above all else, connect with a trusted agent and lender so you have expert advice every step of the way.

#homebuying #homebuyingtips #keepingcurrentmatters

Data Sources

• https://downpaymentresource.com/

• https://themortgagereports.com/68062/8-things-to-do-now-to-prepare-to-buy-a-house

While there’s certainly a huge debate on renting vs buying a home, no one could argue that it’s a major decision for many people. Some say renting is like throwing money down the drain and you’re just paying off someone else’s mortgage. Others insist that there’s no way they could give up their flexibility and be tied up in one place. 

If you’re finally thinking about taking the plunge into homeownership this year, how do you know that it’s time for you to take that leap? The decision on whether to rent or buy is a huge and costly endeavor, but you can always justify it based on logic and emotion. To help with your case, we’ve laid out seven signs you’re ready to make the switch from renter to homeowner.

 

1. Your rent payments keep going up.

Rents keep on escalating in many parts of the country, and this is one of the biggest reasons why any renter would want to buy a home. In some neighborhoods and real estate markets, the cost of renting is even higher than the average monthly mortgage of a single-family home. If you already feel trapped with the uncertainty of your rent payments, you might be better off purchasing a home where your mortgage is consistent, and you’ll be gradually putting equity into your biggest asset.

 

2. You have steady employment. 

Employment plays a huge role in the mortgage application process since lenders and mortgage companies take into account your employment history before approving you for a loan. Typically, they would want to see that you spent at least two years working for the same company or in a similar field, and that you’ll likely continue having the funds to pay your debt. If you’re a freelancer or a gig economy worker, you need to prove that you have a steady source of income for a couple of years through your W-2s, tax returns, and other documents. Just remember that for lenders, a stable job means a stable income, which lowers your risk as a borrower.

 

3. You’ve saved up for a down payment, closing costs, and other costs associated with owning a home.

 For many home buyers, the most difficult step in the home buying process is saving for a down payment, according to the 2019 NAR Profile of Home Buyers and Sellers. Setting aside money for a down payment towards their dream home is made even harder because of student loans and credit card debts. So if you have a stable job for a while now and your income has improved, there’s a better chance for you to save up enough extra money to cover up the added expenses of homeownership.

And remember that the 20 percent down payment requirement for you to qualify for a mortgage is already a myth. In fact, mortgage insured by the Federal Housing Administration, also known as FHA loans, require only 3.5 percent of the home’s purchase price. Meanwhile, government loans guaranteed by the U.S. Department of Veterans Affairs (VA Loans) and the U.S. Department of Agriculture (USDA Loans) require no down payment at all, so there’s no need to scrape all your money just to cover the 20 percent down payment if it means leaving zero balance in your savings. 

You know you’re ready to get the keys to your new home instead of renewing your lease if you have also saved up for closing costs and other homeownership expenses, such as property taxes, maintenance funds, and homeowner’s insurance.

 

4. You’re managing your debts.

It isn’t necessary for you to be totally debt-free when you apply for a mortgage. Loan companies simply need to make sure that you aren’t carrying too much debt compared to what you make, and that you’ll be able to afford to take on additional responsibility, such as your potential monthly mortgage payment. They do this by determining your debt-to-income (DTI) ratio, which measures how much of your monthly income goes toward paying off your debts. 

Lenders ideally prefer a ratio lower than 36 percent, but borrowers with no more than 43 percent DTI ratio can still get qualified for a home loan. Getting your debt down to a more manageable level will help put you in a stronger position to get pre-approved. Assess your spending habits even while still renting, and change them as much as possible to improve your chances of finally owning your first place.

 

5. Your credit score is in good shape.

One of the biggest reasons why renters can’t make the leap to owning a home is because of their low credit score. Having good credit matters because it will determine how much money you can borrow and how much you’ll pay in interest. A good FICO score is usually about 690 and higher, although borrowers with a credit score as low as 500 can already qualify for a mortgage depending on the loan program. 

When was the last time you’ve checked your credit report? If your credit is looking healthier because you’re making timely payments and settling your debts, you can have access to more conventional loan programs with lower down payments. Once you have addressed this important issue, you can rest assured that homeownership is now within your reach.

 

6. You’re ready to settle in a neighborhood you love.

This one’s quite subjective, but your preferred location and your capability to settle in one place are also huge considerations when buying your first home. If you anticipate moving in a few years, you know that you’ll only live in a particular area for a year or two, or you just can’t imagine yourself being tied down in one place, renting is likely your best option since you can leave whenever you want. Renting is also your smarter bet if you want to test out the waters in different areas where you’re thinking of buying a place. 

But once you’re ready to settle down in a neighborhood you love, you’re secured in your job, and that you can see yourself putting down roots in the next five years, purchasing a home is your next sensible step.

 

7. You’re ready to finally become a homeowner.

In the 2019 Home Buyers and Sellers Generational Trends Report by the National Association of RealtorsⓇ, 29 percent of all buyers cited their main reason for purchasing was the desire to own a home. Your readiness to become a homeowner matters above everything else. When you own a property, you’ll be in charge of all the repairs, maintenance, and upkeep costs. If you’re not comfortable with these tasks and you’d rather leave the problem to a landlord, you may be better off renting for longer. Many people simply prefer to rent instead of taking advantage of lower interest rates because of this reason.

If the idea of home maintenance no longer intimidates you, you actually enjoy fixing things up in your place, and you’re ready to stay for the weekends just to mow the lawn and do other yard work, these are signs that you’re finally ready to call a place your home. You know you’re ready for the huge responsibility that is homeownership and you’re ready to be your own landlord.

Even in a market where interest rates and material costs are soaring, it still pays to position your home to sell for top dollar. At the very least, upgrading your property means a more comfy and convenient living situation.

Figuring out which improvements are worth the money can be tricky, especially with all the uncertainties rocking real estate. Still, you can try to enhance your home’s value with these high-ROI projects.

1. Improve Curb Appeal 

Investing in landscaping upgrades such as well-maintained gardens and outdoor spaces significantly enhances your property’s attractiveness and perceived value. Similarly, upgrading your exterior with fresh paint, updated doors and clean siding creates a positive first impression for potential buyers. According to a university study, these improvements can boost your home’s value by 7% –14%, depending on market conditions.

2. Renovate Your Kitchen

For years, kitchen renovations have been the quintessential project for boosting property value. 2024 is no different.

The best part is you don’t even have to do a complete makeover to get decent returns. For instance, replacing aging, worn-out cabinets can add 3.63% to your home’s financial worth, while installing high-end appliances tacks on another 2.35%.

3. Touch Up Your Bathroom 

Luxury bathrooms are another safe bet when increasing property value. With more people opting to spend quality time at home, spa-style bathrooms with mobility upgrades remain in high demand.

As with kitchen renovations, you don’t need to revamp the entire enclosure — updating faucets, showerheads and lighting can adequately modernize the space. However, avoid using wood paneling and accents, as these elements can exacerbate moisture damage and cap your bathroom’s life span at 15 years.

4. Implement Clean Energy Upgrades

Embracing energy-efficient upgrades benefits the environment and enhances your home’s market valuation. For example, solar panels are increasingly popular thanks to increasing demand for passive, net-zero and sustainable architecture.

The rule of thumb is your home’s value grows by $20 for every $1 saved on energy bills. That means a solar setup saving $500 yearly on electricity could increase the property’s worth by $10,000, on average.

5. Modernize Interior Doors

Interior door replacements transform your property’s aesthetics, adding a touch of sophistication to each room worth a few percentage points to the overall market value. Moreover, modern glass doors improve natural lighting and make nonverbal communication much easier, minimizing noise and brightening a space. These are all features today’s homeowners and potential buyers greatly appreciate, especially those living in noisy neighborhoods and wanting to cut down on energy bills.

6. Update Your Home’s HVAC

Installing an Energy Star-rated HVAC system can significantly enhance property value by 5%-7% with an estimated 30% ROI. Newer systems use substantially less power than older models, which can lower utility bills and attract eco-conscious buyers. Additionally, a well-maintained HVAC system reduces the likelihood of costly repairs, making the property more appealing.

7. Install Smart Home Features

Smart home automation increases convenience, security and efficiency, translating to a 3%-5% higher home value. The key is to be strategic with your selections to maximize ROI and marketability. For example, smart thermostats and video doorbell systems will likely be more attractive to prospective buyers than lighting fixtures.

8. Add Living Space

Are there unfinished rooms in your home? Convert them into usable living spaces. Extra bedrooms, entertainment areas or home offices are a surefire way to increase your property’s worth.

These projects increase square footage, enhancing overall functionality and design. For instance, finishing your basement can yield an impressive 70% ROI — a highly profitable project to undertake.

Funding Your Home Improvements

There are multiple ways to finance your home upgrades without dipping into your savings. Take advantage of the following methods.

1. Home Equity Loans or Lines of Credit (HELOC)

HELOCs let you borrow against your home’s equity. Research shows the average American homeowner has about $200,000 in real property value, which they can use to finance renovations.

2. Cash-Out Refinancing

This can be beneficial when interest rates are low because you’ll refinance your current mortgage for more than what’s left and get the difference in cash. According to Freddie Mac, you can access up to 80% of your home’s value through cash-out refinancing, allowing you to fund substantial improvements.

3. Personal Loans

Taking out a personal loan can be a viable option for smaller, short-term projects. Keep in mind, though, that these loans typically have higher interest rates than home equity products. You want to be careful about borrowing too much capital, especially if the renovation doesn’t have a commensurate return.

4. Credit Cards

While not ideal for large sums due to high interest rates, credit cards can be used for minor renovations or quick fixes. Consider promotional offers with 0% APR for introductory periods to finance small projects without immediate interest.

5. Government Grants and Programs

Various federal and local programs offer grants or rebates for specific improvements, especially sustainability upgrades. For example, you could qualify for a $3,200 tax credit for energy-efficient home improvements, including heat pump installations and window replacements.

Maximize the Value Of Your Home

Increasing your property’s market worth involves a combination of strategic upgrades, modernization and maintenance. Whether you’re looking to sell in the future or simply want to enhance your living experience, making the most of your investment can yield rewarding returns. Focus on curb appeal, energy efficiency and key interior spaces to make your home more appealing to potential buyers or renters.

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First impressions matter. Your home’s curb appeal — or lack thereof — is the first thing that people see when they pass by your house. It says a lot about you as a homeowner and an individual. Here are some of the greatest benefits you can expect from giving your home the curb appeal it deserves.

 

1. Boosts Your Home’s Resale Value

The best benefit of excellent curb appeal is the additional value it brings to your home. A house’s exterior attractiveness can increase its value by 7% if you renovate it in the right places. The landscaping, driveway, roofing, windows and front door spread all play essential roles in boosting your home’s curb appeal.

Even if you’re not planning to sell your Florida home right now, you should still try to maximize its value. A job opportunity or family situation might arise in the future that requires you to relocate. Keep the exterior in good condition so it’s ready for the market if your plans change.

 

2. Keeps the Neighborhood Friendly

Maintaining your home’s curb appeal helps you avoid petty disputes with neighbors and keeps everyone friendly with each other. It will also keep the local homeowner’s association out of your hair if you belong to one. Besides, you owe it to your community to keep your home clean and organized. Nobody wants to live near a messy neighbor.

 

3. Shows You’re a Responsible Homeowner

Curb appeal also demonstrates you’re a responsible homeowner to anyone who passes by. People notice little details like your lawn’s grass length or the decorations around your front door. A well-maintained exterior shows your commitment to home ownership and providing your family with a beautiful living environment.

On the flip side, poor curb appeal shows you don’t care about keeping your home in good condition. It also suggests you aren’t home often, which might make your house a target for trespassers and thieves. Maintaining your home’s curb appeal helps you avoid these types of negative attention.

 

4. Improves Your Home’s Functionality

Curb appeal is a practical thing too. Along with establishing a unique style, it also improves your home’s functionality in many ways. Most notably, it can enhance your home’s energy efficiency with features like draft-proof windows and doors. This factor is crucial for Florida residents who often have to use air conditioning year-round to keep their homes cool.

Other simple and affordable improvements — such as replacing the doorknobs, putting up a fence and installing additional lighting — will also make your home more functional. Curb appeal keeps things organized and lets you get the most out of your house.

 

5. Gives You a Sense of Pride

Lastly, giving your home the curb appeal it deserves will fill you with pride. Keeping a house in good shape isn’t easy — it takes non-stop work and attention to detail, especially in a hot and humid climate like Florida, where working outside is more taxing than usual. You could stay inside and enjoy the A/C, but you decided to stay out and improve your home’s exterior. That’s an admirable thing and you should be proud that you made the right decision.

 

Take Your Home’s Curb Appeal Seriously

Maximizing curb appeal is more important than most homeowners realize. It can boost the home’s resale value, improve your reputation, make your house more functional and give you a newfound sense of pride and accomplishment. If you want to reap these benefits, start taking your curb appeal seriously and get to work!

A vacation rental with a white table and a chair in one corner and a sofa bed with a large painting above it in another as an example of how to prepare it for summer

Summer months are just around the corner, and if you own a vacation rental in Florida, it’s time to prepare it for an upcoming busy season. After all, you want to give your guests the best rental experience ever. If you do that, you’ll make sure to attract many new guests and help your rental gain popularity. The best part it isn’t hard to prepare your vacation rental for summer, and it won’t take much of your time. It’s so easy that it might inspire you to look for a second Florida property to turn into an attractive rental.

How to prepare your vacation rental for summer?

With the busiest rental season coming in just a couple of months, it’s time to start preparing your Florida vacation rental. Even though you may have a perfect Boynton beach home, if you don’t take the time and make the necessary preparation, you’re risking a slow season and negative guest reviews.

To help you make your vacation home look its best, we’ve prepared seven carefully selected tips. Stick to them, and we guarantee you’ll have a lot of happy guests coming back each year.

#1 Repair what’s needed

One of the first things to do when preparing your rental for summer is to have a walk-through and check for damage. Fix or replace anything necessary. Double-check if everything is in good working order and safe for your guests to use.

If you want your rental to feel fresh and new, consider painting the walls. It’s one of the cheapest ways to make your place look new. Plus, you can use colors to emphasize different features or even hide flaws. For example, if you’re dealing with a small space, consider painting it in bright colors to make it appear bigger.

In case you need to invest in new furniture pieces, make sure to choose multi-functional options. If you’re buying large items, the team from Big Man’s Moving Company suggests hiring furniture movers to help you as you’ll avoid potential injuries and damage to the new pieces.

#2 Clean and declutter your furniture

It goes without saying that before you invite guests into your vacation rental, you need to make sure that it’s spotlessly clean. To get the best results, consider hiring professional cleaners. You can even schedule them to clean each time new renters are about to come in.

Also, if you have a small place and it feels cramped, perhaps it’s time to declutter and remove some unnecessary furniture pieces. Of course, if they are in good shape, don’t toss them as you might need them in the future. Instead, put them in storage, but be mindful and use quality materials when preparing furniture for storage. High-quality packing supplies are critical for keeping them in the same condition.

#3 Make sure your rental is safe

Ensuring your rental is safe is another step in preparing your rental for summer. It’s a good idea to have a first-aid kit on hand. On the kitchen counter, make sure to leave a list of emergency numbers, a printed document of what to do in the event of a storm, and a working fire extinguisher. It’s also good to have a working flashlight in a kitchen drawer.

#4 It’s all in the details

Think about your last holiday and remember what you liked the most about your accommodation. You’ll likely remember a friendly staff member or a cute note on the bed before anything else. Therefore, add small touches to your rental to make it stand out.

For example, make an effort to have maps, driving instructions, house regulations (including check-in and check-out times and key delivery information), and emergency numbers translated to their language. They will surely appreciate your effort. Or, you can consider leaving your guest a box of local treats with a welcome note.

#5 Provide entertainment options

Even though your vacation rental guests will spend most of their time at the beach or sightseeing, there will probably be periods of downtime. If they want to spend it relaxing in the house, you need to make sure your guests have something to entertain themselves. For example, you can bring several books or leave some board games in the living room.

As we live in the internet age, easy and constant access is a must. So make sure to choose a great internet provider as this is something most people look for in accommodation nowadays. You should also consider investing in cable or Netflix. 

#6 Listen to your customers’ feedback

Reviews are critical for gathering input from your guests. 80-90% of consumers read internet reviews, and 80-88% of consumers believe online reviews as much as personal recommendations.

Reviews are, without a doubt, golden eggs; one positive review might mean a boost in not only popularity but also cash. Encourage guests to leave a review when they return home, and if there is anything unpleasant, attempt to remedy it for the next guests. It’s a good idea to go over the previous year’s client feedback and make sure that any problems or complaints were addressed.

The bottom line

If you make an effort to prepare your vacation rental for summer, you’ll ensure your guests have a positive experience that will encourage them to come back many more times. Always remember that it’s crucial to maintain the same level of service. So before each summer, make sure to get your rental in great shape. If you’re still looking for that fantastic Florida property to transform into a rental, reach out to experienced real estate professionals. They will give you all the help you need to turn your real estate dream into reality.

 

If you’re a holiday homeowner, it’s time to prepare your vacation rental for summer – the busiest season. We’ll let you know how in this post.

 

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