Homeowners and investors can consider lease options as tool

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Homeowners and investors can consider lease options as tool
 

As the owner of real estate assets that have been used and abused by the current market, I have had the opportunity to evaluate my long term goals.  I have always used the business mindset with the belief that my rentals can pave the path to retirement down the road.
 
Have you evaluated your own real estate holdings?  Are you the owner of a house you would rather see “sold?” Are you a landlord by default?  Here is a thought – try renting the assets with a concurrent lease option.  Who is it best for? This fits an existing investor looking for income, and anyone with a “due on sale” clause that has considered selling on contract.
 
There are many benefits to concurrent lease options, but they are not for the faint hearted.  If you have a business mindset about owning a rental, this option could be for you.  Contact me for a full article on this topic.

 

For more information and a private consultation on how to use your own real estate assets to your benefit, please contact me.  We can discuss value, reasonable rents, concessions, capital improvements, and the prospect of increased cash flow with a lease option.  The best business person does their due diligence and makes wise decisions based on facts.  Now is the time to evaluate your real estate holdings with a long view.

October 24, 2009 by ·

September Market News

Filed Under For Buyers, For Sellers, Home Owners, Investors, Landlords, Uncategorized · Tagged: , , , , , , , , , , ,  

September Market News

The number of homes for sale at the end of September left us with 7.6 months of “inventory.”  This means it would take 7.6 months to sell all homes on the market.
 
There is word of a “shadow market,” (houses that banks have foreclosed on and will be throwing on to the market) as we move through winter.  If this happens, expect home sales to slow (more glut) when mixed with the typical holiday slow down.
 
The 1st time home buyer tax credit had a favorable impact on market activity, and crunch time is on for buyers to cash in.  Lenders have their buyer’s in process now and the home has to be pending in order to meet that November 30th deadline.  Many working to beat the date may not make it.
 
Pending sales jumped 34.1% and closed sales rose 9.8% when compared to September 2008.  New listings fell 14.3%.  Comparing the third quarter of this year with the same period in 2008, pending sales were up 17.5% and closed sales rose 6.5%.  New listings dropped 18.7%.
 
The average sale price for September 2009 was down 8% when compared to September 2008, while the median price declined 9.6%.
 
Economics continue to impact home sales.  The state unemployment rate is now at 11.7%, not adjusting for those who have left the job search, or who have taken part time work.   We continue to be one of the worst states for unemployment.  Until this trend declines, which is expected in 2nd or 3rd quarter 2010, the market will remain soft and we will see continued decline or leveling of home values. 
 
There are three theories being discussed by economists both locally and nationally.  The question at hand is: what sort of recovery will we have?  Will it be U shaped, V shaped, or W shaped, with the influx of stimulus money creating a false bottom, from which we shall drop to another bounce off the bottom before beginning a solid recovery.
 
My vote is that we are experiencing a W rebound, in which more financial trouble is yet to come.  My planning does not include appreciation or definite leveling of market conditions for the next 12 months, to be safe. 
 
This is a phenomenal time to buy given historic interest rate lows, depressed pricing, and great loan opportunities.  Add to this our plethora of housing choices and you have a win for buyers. 
 
Statistics thanks to RMLS.  For more on real estate trends or economic data, email me at kathryn@kjkproperties.com or call 503-997-9035. 

October 23, 2009 by ·

Having the long view in real estate investing

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Having the long view.

 

My name is Kathryn King and I am an investor as well as a Realtor and company owner.  I work with owners of homes and small investment properties, mainly built of houses and duplexes and other small buildings.

 

Thinking over what sort of message I have, I started thinking about a financial book I have been reading.  It was written near the year 2000.  In the final chapter the author talks about taking a long view with regard to investments in the stock market.  Reading this at the end of this financial book was a breath of fresh air.  I need the long view in real estate for career, clients, and my own investments.

 

I don’t know about your experience of the past 18 or so months, but my experience as a person employed in the field of real estate and as that of an investor has been trial and tribulation.  I have experienced many things that I could view as failures and I think the opportunity lies in the ability to see them as hiccups on the ride.  To remain detached and keep stride I like the concept of taking the long view.

 

I did not have a short view or a “flip” mentality wit h regards to my real estate holdings.  However I did not anticipate the increased turnover, the decrease in rents, the sharp increase in concessions, and the literal demise of commercial real estate in the midst of an attempted reverse exchange.  With these experiences and the news repeatedly reminding me of the state of our nation, I somehow became a short view investor, losing sight of the end goal!  I can say the same is true for home owners and investors I know. 

 

Change has hit my segment of the market on a huge personal scale.

1. Clients and friends are being foreclosed on.  For many this is their financial vehicle going away.

2. Buyers have lost their jobs in the midst of home shopping this year.

3. Sellers are not understanding CAP rates—they never had to think about that in this decade.

4. Increased vacancy rate has had a very personal impact.

5. Default rental owners struggle with the concept of supply and demand, and rent as a pricing function.

6. The climate has required an ability to understand change as it is directly under foot.

7. My clients do not readily understand that economic factors are relatable to their investments in a very real and large sense. 

 

The end result of my experience is to plan for today’s economic climate as the future, and not to plan for increase revenue or rents in my planning.

 

There has been a powerful lesson in this period in time.  For one I had to remember that I purchased real estate investments as part of a long term retirement plan.  I had ideas about retiring early and the change of economy has helped me to take seriously the exit planning if I intend to take the plunge some day.  Another thing that I learned is to value that which we cannot place a dollar figure on.  In this time I have found opportunity to appreciate health, family, my new husband, my dogs, great weather, and the companionship of friends.

 

October 21, 2009 by ·