Archive for October, 2011

Thinking of Renting out your Condo Instead of Selling?

Friday, October 14th, 2011

“If I can’t get the price I want for my condo…… I’ll just rent it.”

We can’t tell you how often we have heard this statement over the past few years. With the housing market in Boston in a bit of a holding pattern, many condominium owners feel that the best thing to do right now is rent and wait it out.

There are many advantages to this strategy: the potential of market increase, tax deductions, and many other positive aspects to becoming a landlord. But, experience tells us, it may not be as simple as you think.

As Realtors, it is our job to inform condominium owners of all aspects of all their options. With that in mind, we ask people to consider these Seven Considerations Before You Rent Your Home:

1. Tenant occupied properties tend to sell for less

If you decide to rent your property with the intention of selling next spring or the year after, you need to consider that marketing a property with tenants in place can put you at a disadvantage. Tenanted properties tend to not show as well and create challenges for showing availability.

2. Renting your unit could pose a disadvantage to your condo association

One of the largest obstacles we face in the current mortgage market is owner occupancy. A building with more than 30% of the units rented could lower the value of all condominiums in the association.

3. Damage to the property

Keep in mind that if you have recently renovated or improved your property, having a tenant may place wear and tear on these “new” items. Additionally, despite proper screening and best intentions, a tenant almost never takes as good of care of a home as the owner does.

4. What if you get the Tenant From Hell

Even with a complete, professional screening, there is always a chance your tenant could “go bad”. A landlord needs to think through if they can afford the monthly expense if the tenant does not pay rent, especially in a down economy without the readiness of available new jobs, should your tenant lose theirs. Are the financial advantages worth the potential cost of renovating after a tenant destroys your property or the cost of an eviction?

5. Monthly Nut

The most important first step in deciding to rent your property is to determine the cost of ownership verses the potential rent. Even if the rent can cover your mortgage, taxes and condo fees, you need to consider maintenance, vacancies, building assessments and other potential expenses of ownership.

6. What if the market goes down instead of up?

As Realtors, we are currently very optimistic about the future of our current real estate market. However, we do not have a crystal ball and there is always the chance that over the next year, two years or beyond, the market in Boston will decrease rather than grow. If you rent with the intention of selling for more “next year”, you could end up being a landlord much longer than you planned for.

7. Tenant Issues and Maintenance Problems

Unlike a stock certificate that sits quietly, tenants need things! Are you prepared to get a locksmith at 2am? Do you know good plumbers, electricians? Are you ready to liaise with your condo association if the tenant violates the Rules and Regulations of your association? These are questions any potential landlord needs to ask themselves.

As Real Estate Professionals with a combined 30 years of experience in The Boston Market, we are here to answer your questions, help you weigh your options, and always give you honest advice. Please feel free to contact us anytime for a free real estate consultation or to answer your questions. The knowledge is free! We are here to help and serve.

By, Betsy Herald

QR Codes in Real Estate

Tuesday, October 11th, 2011

I think that at this point, it is safe to say that we have all seen the little scan-able bar codes on advertisements and for sale signs. Have you ever scanned one? Do you even own a smart phone that can? Do you even know what they are? For those of you who answered “no” to that last question, they are QR codes, which is short for “Quick Response codes.” The idea is basically, if you have a QR code scanner on your smart phone (which is a free app), where ever you see a QR code, all you have to do is snap it with your phone and you’ll be sent to a webpage with details on whatever it is that the code was printed on. In the case of real estate, this means that just by scanning a QR code on a for sale sign outside of a property, you could be sent to the price, square footage, condo fees, and all other useful information about the property instantly to your phone.  When you think about it that way– it is really no wonder why QR codes are considered among the gold standards for mobile marketing.

However, how many people are actually utilizing them to their full potential?  And who are these people? “Thirty-five percent of adults own a smart phone, according to the Pew Internet Project, making the QR technology available to them.” (Source) but that that mean they use it? Although some people definietly remain skeptical or in the dark about QR codes, there has certainly been a boom of them in the last year or so. Now, “Scanbuy Inc., a New York company that develops and manages QR codes, processes 1.2 scans a second, every second of the day, or more than 100,000 scans per day globally. (When the smart phone app scans the code, it acts like a hyperlink, taking the user to a webpage.)” (Source).

And, who is doing all this scanning? “Men are bigger scanners than women (60.8 percent), and people with household incomes of $100,000 or more scan more than lower earners, according to comScore. Scanning is also a young person’s game. Those 25 to 34 scan more than people between 35 and 44, who scan more than those in the 45-to-54 group, and so on. Only 2.9 percent of scanners are 65 or older.” (Source) So, does this make the codes a logical addition to sales listing signs? Possibly.

Have you ever scanned one? After reading this– will you? And from a marketing perspective it is important to think about the fact that a QR code takes up a little amount of space on an ad, but the potential punch it can deliver is large.

Cash Deals in Massachusetts

Tuesday, October 4th, 2011

So far this year one third of the homes purchased in Massachusetts were bought in cash– mortgage free. In an economy that is known for its down market- why are we seeing this? Possibly because the only people who have enough assets to buy in this economy are the ones who would buy in cash anyway? Or maybe it’s a reaction to the new, firm, and constricting guidelines surrounding mortgages. Or perhaps it’s the volatile stock market that has investors searching for more tangible and stable ways to invest their money. “Brian Bethune, an economist at Amherst College, said wealthy buyers may want to take advantage of deep discounts in the high-end market rather than watch their money flounder in stocks and bonds.” (Source).

Whatever the reason, the trend is not isolated to Boston. “Across the nation, about 31 percent of all August home sales were in cash, the second highest percentage since February, when it reached nearly 34 percent, according to a survey by the Maryland-based trade publication, Inside Mortgage Finance.” (Source).

Many people are buying in cash: investors picking up run-down properties to either flip or fix up and rent, foreign buyers, empty-nesters that are down-sizing and moving into the city who can buy a condo with the profit from the sale of their suburban home, or wealthy parents buying their kids a condo to live in while they go to school in the area.

Regardless of the reasons, this is atypical and remarkable percentage of cash purchases, and an impressive increase after 22% in 2010 and 20% in 2009.

The story was published on the front page of the Boston Globe and can be found here: Source.