Posts Tagged ‘boston rental market’

If Boston Competed in Real Estate Olympics

Monday, February 3rd, 2014

February 7, 2014 marks the beginning of the Winter Olympics in Sochi, where 88 nations will compete in the foremost sports competition. To get in the Olympic spirit this blog is a hypothetical look if were an Olympics where all American cities competed in real estate related events. Boston’s placing are as followed:

City Where to Invest: (15th Place) According to Forbes, Boston places 15th among cities to invest in. This is a strong placing considering how many cities are below Boston. Medaling in this event was, Fort Worth, Dallas, and Charlotte.

Area Where Renters Should Buy: (Gold) Considered the best city to make the investment move from renting to buying, Boston received a gold in this category.

Housing Market Index: (6th Place) Although Boston did not medal in this category, they still received a positive Housing Market Index of 7.43.

Education: (Gold) With top notch universities and a strong school system, Boston is above all in education.

Foreclosures: (Did Not Place) A category that cities do not want to place in, Boston is at the bottom when it comes to foreclosures.

Coziness: (Gold) Boston was recently announced the coziest city in American, allowing them to take home the gold in this category.

Be sure to let us know what you think by commenting on our Facebook! For more information on Boston, feel free to message our Rental Agents directly at our rentals Facebook page, Newbury Rentals.

Sources:

Zillow

MSN Real Estate

Huffington Post

Forbes

WBUR

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

Thinking of Renting your Home?

Wednesday, August 3rd, 2011

We all know the current state of the real estate market. If you have been following this blog, or if you have been following Boston Real Estate anywhere, then you are aware that the Boston rental market is through the roof, and people just aren’t buying (and therefore people aren’t selling). The sales are tricky right now.

People who are thinking of up-sizing their home due to a growing family are hanging on to their property with hopes of it commanding a higher price in a year or two. Also, so that enough money is made on the property so that they can comfortably invest in something larger. Because these people aren’t selling, they’re not buying. The other group of people not buying, who previously did, is newly weds (and other young, potential first time home buyers). With job insecurity, huge student loans left to pay, and the high expense of things such as gas and food, this category is more and more opting to rent.

[I will insert here, that we do have real, serious buyers in all the categories, and I don't mean to generalize in a way that is inappropriate. I am just describing a trend that I have seen, and it is my opinion]

With the realization that sometimes selling at a price you’re comfortable with is out of reach, some sellers today are turning into landlords. The rental market is healthy, and sometimes deciding to rent your old home is a viable option. In order for it to be so, however, here are some things to consider: (source)

1. Crunch the numbers. There are a lot of financial ups and downs to being a landlord. The general rule of thumb is that if you cannot get 125% of your mortgage payment in rent, then it isn’t worth your time. Bare in mind that rental units come with a lot of unexpected expenses as well. Also, when you’re thinking about renting, remember that if you’re using a rental agent there is a fee of one month’s rent. Sometimes this fee is payed by the tenant, but it is always good to be aware that it exists. Additionally, budget the cost of about one month’s rent for clean up at the end of your tenants stay. Not that they did anything wrong, but general wear and tear means that at the end of their lease you will probably need to repaint and freshen up a bit before being able to attract a new tenant.

2. Speaking of money, it is vitally important to price your unit right and competitively. Just like if you were to sell it, look at similiar places in your area and see what they are bringing in in rent. From there, if you’re not working with an agent, you can decide what price sounds reasonable. Remember to think rationally and not emotionally about pricing.

3. Finding the right tenant is crucial to a successful experience as a landlord.  A rental agent can help you a lot with this task. If you are choosing to work alone, remember to check the tenants credit score, their references, their job, past rental experiences, etc. Be sure to get all confirmations in writing. Treat the situation like a business deal. Even if they make a good impression, or you really like talking to them, be sure to diligently check their background. People can be deceiving. (However, it is totally a plus if you do get along with them)!

4. Be aware that being a landlord means significant changes in your taxes in addition to your insurance. “While you probably know that rental income is taxable (Rent for 15 days or more, and you must report this income on Schedule E), and that there are numerous deductions on expenses and depreciation, here’s something you might not know: If you rent your place out for three years or more and then sell, you forfeit a valuable tax break ($500,000 in capital gains tax-free to married couples filing jointly; $250,000 in tax-free gains for singles). Rent your house for a year or two and you’ll still be eligible for this exemption, providing  you’ve lived there — in your primary residence — for at least two of the past five years.” (source) Remember also that you will need landlord insurance. This will cover the home and the potential loss of rental income if there is damage to the home. Additionally, it covers you if the tenent gets hurt. Due to all the coverage, landlord insurance usually costs about 25% more than normal homeowner’s insurance.

5. The last major point is that being a landlord comes with a lot of responsibility and accountability for a lot of unexpected expenses. You need to have the proper temperament to deal with crisises in a timely fashion. There is a lot of room for error here, but remember you can always hire a management company.

Hopefully, this answers some of your questions about how well you would do as a landlord. There is definitely a way to make money and thrive at it, but you also put yourself in the line of fire for headaches, large expenses, repairs, and lawsuits.

Navagating Boston’s Rental Market

Wednesday, July 27th, 2011

The vacancy rate in rental units is down lower than it has been in the Boston area since the end of 2002.

“Boston-area rents are hitting new heights – with the median price recently reaching $1,665 a month” (source). Perspective-tenants are scrambling to find affordable places for September 1st. We hear stories of some landlords taking advantage of the desperation and hiking up rents, and of others requiring extreme items from possible renters in order to consider them.

Here are some tips to navigating this tough rental market:

1. Work with a rental agent.

While it means sometimes paying a fee (typically one month’s rent), working with one agent who can scour MLS and exclusive rental listings that are not on Craigslist will very  be helpful to you. Plus good rental agents have relationships with landlords, and if you have them to back you up as a good fit for the unit, then you stand a much better chance of getting it! A good rental agent can also help you understand your lease, etc. and walk you through the complicated process of renting an apartment in Boston.

2. If you do want to do it on your own…

Search the listings by owner on Craigslist. If you can get a floor in a single family, you could save a lot of money, and a lot of headaches if your landlord shares a wall with you. If Craigslist comes up short, go to the area you’re wanting to live in and look for “for rent” signs in the windows. Just because it’s not online, doesn’t necessarily mean it doesn’t exist.

It’s hard out there, but perseverance and sacrifices are necessary if you want to find the perfect rental unit for September! Good Luck!