Dear Michael: Approximately five year ago I put my house on the market and could not sell it. I am thinking of re-listing it. Is this the right time to sell?
Answer: The market has improved. Timing a market to achieve the highest price point is an almost impossible task. If you’re a seller with equity in your home it may be worth considering selling as the “right time” can be defined as: today, tomorrow or yesterday! In other words, the decision is yours to make. Consider all your options and reasons for moving; if it’s to cash out, relocate to be near your children or for employment purposes, divorce, retirement, heath issues or any other reasons that would be referred to as a legitimate matter to you. The decision is only yours to make. No matter what you decide, the price of you home is dictated by the current market and comparable homes sold in your area. If you are not sure what the price of your home is, consult with a real estate agent whom is active in your area, he/she will give you an accurate sale price on your home. If you do not like the price he/she gives you, then waiting to sell your home maybe the better option for you.
Dear Michael: We are buying a 4-unit apartment building and would like to know at what rate of inflation should we calculate our investment return?
Answer: When buying an investment property in today’s market the safest and most accurate way to calculate your equity appreciation is to use 4 to 5% rate of inflation. This means that if you purchased an investment property for $1 million today, in 10 years it would be worth $1,500,000. This number is not specific but historically has been in line with equity appreciation. Keep in mind that your rental income from each unit is and should also be a source of income. Make sure you complete a spread-sheet which will show you exactly what your monthly overhead is. When buying an income property, it is best to plan for the long-term investment.
Dear Michael: I want to rent out my home as we are relocating to the Bay area. How do I know how much I can get for it? We rather not hire a real estate agent and do this ourselves.
Answer: Check the comparables for prices and rental incomes of similar properties within your immediate area. Take note of the size and features of your home prior to researching comps. You will then need to scan newspapers and Internet sites for rental advertisements. Offer to rent your home for a price that matches local comps to attract demand. Keep in mind that every month lost while you are not living in your homes is money right out of your pocket. Be diligent but also cautious to whom you rent. There is nothing worst then a “deadbeat” tenant. No perfect strategy exists for setting rents. Rates vary per location and economic trends. For example, landlords will drop prices amid a recession when renters are looking to save money. However, lowering rents beyond may create a financial burden for you. The current rental market trend allows for landlords to be selective as there is high demand and few properties for rent.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at homes@agentmichael.com