Rent is Increasing! Why You Should Look Into Homeownership.

Recently, WFAA released an newcast stating that the rent rates in DFW are increasing month-to-month.  All across DFW, you will see development happening. The developments are for new businesses, new apartments, and/or new homes. There isn’t too many places where you don’t see that in DFW. Currently, Dallas is the land of opportunity.

The newly published April 2017 Dallas Rent Report shows prices across the city remain above the national media. On average, one-bedroom apartments were leasing for $1,260. Two-bedroom units were renting at $1,760.

There are thousands of people relocating here monthly (so yes, people are coming here and they need a place to live). As a Realtor, I have people coming from everywhere. It isn’t a specific place that people aren’t migrating from. They come from the East and West Coasts, other Southern states, and the Midwest.

My biggest motto from a financial standpoint is that if you are paying $1000+, you should consider purchasing a home. Why? The benefits of being a homeowner outweighs being a renter. Let’s take this example.

Let’s say your monthly rent is $1200/month. For a whole year, you’ve paid $14,400 in rent. However, if you had a home that was $1200/month for your mortgage, you could have tax benefits from property taxes, mortgage insurance, mortgage interest. The $14,400 you spent with a mortgage with a tax benefit of $3,600 means that you technically have paid $10,800 for a whole year. That’s basically $900/month. What’s even better? You are build equity while buying and equity = wealth. With an apartment, you are making the developer/builder wealthy.

Homeownership is an investment. Yes, you can invest in stocks and bonds but homeownership provides you a tangible asset. Homeowners in DFW have seen an increase in their asset of 8.5%. That’s extra money that you have made and all you did was live in a home. Can you say the same about your apartment? I live with the financial sense of wanting to make money while I sleep. That is EXACTLY what a home does. Check out the graph below on the status of DFW homes from 2014 to now.

The market has went from homes having a median sales price of $162,000 to $255,000 in June 2017. That’s a $93,000 increase in 3 years. Listen to me, that’s $93,000 increase in THREE years. Imagine what you could do with $93,000 if you had a home to sell. That’s 20% down for a move-up home and some left over to decorate and pay Navient (Sallie Mae’s wicked sister) a nice chunk of change.

Bottom Line: You could look into purchasing a home instead of renewing your lease. Homeownership can be a condo, townhome, or a house. The first two really depends on a person’s lifestyle and what they prefer. All three can be considered a home that you’ve purchased. I think condos/townhomes are great for turning into easy rental properties whether short term (Heard of Airbnb or Homeaway?) or in the long-term. You have to weigh your options and what works best for you. The easiest way to get to the McMansion is to purchase your first home and build yourself and your wealth from there.

For more detailed information for your personal situation, contact me at 972-813-9788 or atfowler@NewAvenueRealty.com.

 

 

New Communities in Dallas Suburbs

 

As a Realtor, I love finding new communities in Dallas suburbs before information is released publicly. It helps my clients beat the rush and get in on pre-sale prices. Now some communities may have an advertisement or two but not all model homes have been built in the community. Recently, I had a relocation buyer looking to build a home in the suburbs. She saw a community but wasn’t quite sure of it. We both went to visit it and discovered the three builders in the community.

From there, I went on to find more information and which builder fit her price range. We not only found one that did her price range but one that had their upgrades as standard options for her. We had pre-sale prices and even after she built the home out the way she wanted, we still didn’t reach her max budget. Can we say SCORE?!

If you follow me on Instagram, you will see that I absolutely love new construction. It is my thing for my clients. I like resale as well but I understand that some clients like the thrill of new. I understand. It is like the difference between new car sales and used car sales. The used car sales are great for your budget and timing. The new car sales come with a sticker price. It is somewhat equivalent to it. I love to help clients build their “perfect” home for now. I placed “perfect” in quotations because there is no such thing as a perfect home.

Below are a few communities that I have found while out on the search as well as some from my builder relationships. If you are interested in any of these communities, contact me. Seriously, I always get the question of whether you need an agent purchasing new construction. YES! The sales representative represents the builder. Who is representing you? It’s free representation for you so why not have someone represent you. Agents can help you negotiate the deal, understand what will help you in the resale process (if you are building), and explore your options. You don’t want to get caught up in the beauty of the model homes. Yes, they are staged well and you will be ready to hand over your whole checking account but an agent can help you weigh the pros and cons. So if you are interested in buying a built home in a community or building one, contact me to walk you through it.

Lakewood Hills – “New Carrollton” as they as describing it but it’s basically the Lewisville area outside of Castle Hills on Josey Lane and 121 Toll. As of now, I know Pulte Homes and Beazer Homes will be in this community.

Willow Wood – Located in McKinney. Builders in this community consist of First Texas Homes, Chesmar Homes, and Bloomfield Homes.

Winn Ridge – Dirt hasn’t even been built up yet for this community but it is coming soon. The only builder I can find so far is Centex Homes. Pre-sales start in summer 2017!

Windhaven Crossing – Townhome communty by DR Horton and Megatel Homes Pricing has yet to be revealed.

Melton Ridge – Located in the Stonebridge Ranch community in McKinney. New homes are being built by American Legend and Shaddock Homes.

Hollyhock Frisco

Merion at Midtown – Dallas

There will be more updates as I receive them about new communities in North Texas. To sign up to receive more information, head to my website at NewAvenueRealty.com.

Find out where I head on Wednesday with my #WOWWednesday posts.

 

Millionaire to Millenials: Buy a Home

Last week, CNBC ran an article quoting self-made millionaire David Bach explaining that not purchasing a home is “the single biggest mistake millennials are making”because buying real estate is “an escalator to wealth.”

Bach went on to explain:

“If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

“As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Timesbestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show appearing more than 100 times, has been a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS, and has been profiled in many major publications, including The New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, The Washington Post, The Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

As a fellow millenial, I have the same sentiments. It’s another staple to your portfolio that happens to be the place you spend a lot of time at. Buying a home doesn’t mean a single-family in the suburbs. It can be a condo or a townhome as well.

How Does Housing Help Build Family Wealth?

20160531-Share-KCM

 

What’s the best thing about owning a home? Making money while you sleep and who wouldn’t love that? June is National Homeownership and we will celebrate the good things about homeownership.

As the economy continues to improve, more and more Americans are seeing their personal financial situations also improving. Instead of just getting by, many are now beginning to save and find other ways to build their net worth. One way to dramatically increase their family wealth is through the acquisition of real estate.

For example, let’s assume a young couple purchased and closed on a $250,000 home in January. What will that home be worth five years down the road? 

Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists every quarter. They ask them to project how residential prices will appreciate over the next five years. According to their latest survey, here is how much value that $250,000 house will gain in the coming years.

How Does Housing Help Build Family Wealth? | Keeping Current Matters

Over a five-year period, that homeowner can build their home equity to over $40,000. And, in many cases, home equity is large portion of a family’s overall net worth.

Bottom Line

If you are looking to better your family’s long-term financial situation, buying your dream home might be a great option.

Do’s and Don’ts…..Do YOU know?

do and dont

Today I am combining my blog post with my Tuesday tip because these tips needed to be in one place. The topic for today is the “do’s and don’ts” of home buying.

Every one has heard that you can do this and you can do that but before you do something in particular, talk to the lender. There are so many interesting stories that I can tell you about when it comes to real estate and why things happen. Here are a few do’s:

DO pay your bills on time. You are asking a lender to loan you thousands of dollars guaranteeing that you will pay them back. They only thing that is attesting to your payment history is your credit report. 

DO know where you stand financially. Do you know you budget and how much you can really afford? Yes your total income may be $100K but when you include all debts, is it financially reasonably to purchase the home with a $2500 mortgage. Better yet, does your credit help those claims? Home buying is there for you to struggle to make the payment just to have an asset. Lenders look at the overall credit picture and you must look at your whole financial picture too. Do you have bills that you pay that doesn’t show on the credit report like cell phone bill, daycare costs, tithes, charitable contributions, etc? 

Now on to the don’ts.

DON’T QUIT YOUR JOB. I know you really dislike Susie and the rest of the staff. Which one do you want more? The house or a new job? Just put a time limit on how long you can deal with Susie and the rest of the staff until you make your home purchase. 

DON’T DEPOSIT YOUR MATTRESS MONEY. Yes, Grandma Jane still hides her savings under the mattress so you developed that habit. Now you have maybe $1,000 or 2 under the mattress. You need it for your down payment or closing costs. When purchasing a home, you need a paper trail. You won’t be able to be use these funds because there is no paper trail on where it came from. I’ve actually had a client do this. Thankfully we were able to get the seller to pay the closing costs he needed. But that’s an FYI. Start “seasoning” your money into an account months before purchasing your home. Plus, it may be safe to have it in an account instead of your home. That’s just my opinion though. 

One of my trusted lender partners do a great job discussing the do’s and don’ts of buying a home. Check out the video below from Mortgage Express.

 

Now that you know what to do to get started, you can contact the lender to get started and be crowned a homeowner in your new home!

 

 

Your new avenue awaits you….let’s find it here. #CrowningHomeowners

Brand New Home. Marriage Proposal. Birthday Celebration

Crowned Homeowners - Johnson

 

This weekend has been an adventurous one. It started with a closing for my client at 2pm. Now when I met Billy last year, at our consultation he mentioned that when he purchased this house he would propose to his girlfriend. I was like “Oh my gosh. That would be amazing!”. Then the woman in me came out and was like, “are you strictly choosing the house or will she be with us?” He informed me she’d be along the journey. Woman we are very particular and our happily ever after home has to be perfect for us. Yes, the notion of gifting a house as part of the proposal is sweet but it can’t be any house.

So I was determined to help find the happily ever after home. Mind you Chelsie did not know about this part. She just knew they were going to buy a house and she wanted a yard big enough for a pool. I was able to say let’s do a master-planned community that has a pool to keep costs low for you guys.

It was then that we found a community outside of Lancaster, Texas that fit their needs. Building a new home takes so time so I completely forgot about Billy’s gesture. It wasn’t until Friday came and he was like today is my birthday. What a sweet birthday present as you close on your new home! He looks at me again and was like today is the big day. Suddenly I remembered and was equally excited.

He had the place and time down to the science. The place: their new home. The time: Around 6:30 to 7 when all their family members would be present to come view the home. 

I rushed back down to be apart of this experience because it feels good when your clients welcome you into their world outside of buying their home. I always say real estate is so much more than opening doors and collecting a check. There is a bond that is built and my clients really become my extended family after the transaction.

Here are some snippets from that day which included a brand new home, marriage proposal, and a birthday celebration! What a Happy Day!!!

Billy and Chelsie

That’s 1 down and 35 to crown in 2016. Congratulation Billy and Chelsie! Wishing you guys the best to come with your future marriage, family, and now home. 

9 Ways to Fund Your Down Payment

9 Ways to Fund

 

You’ve come to the realization that you are done renting. You hate driving through the broken gate into your apartment complex and you aren’t feeling the property management anymore? Okay that may have been my own personal struggle but I know plenty of people thinking the same.

Example: You pay $1000 a month in rent. That is yearly amount of $12,000 (yes in reality that is what you are paying). Guess what? When it is tax time, you cannot write any of that off and that is just $12,000 out of your pocket for a place that you don’t own and have to ask permission to paint the wall. How fun is that?

Now you’re at the point of “I want to own my home and live my life on the edge.” The scenario may not play out like that but you’re at the point where you want to own your own home. You want the granite countertops, stones on the outside of the home, inviting entry-way, and my beloved favorite: media room.

You know you can get approved for a mortgage. You know you have excellent credit and a stable job. The fear is the down payment. How do I purchase my home without having the funds to do so? Don’t I need 20%? Well I am here to break down what you need and how to gain those down payment funds.

How much will the downpayment be?

This answer really depends on what type of mortgage loan works best for you. For a FHA loan, you will be required to put down 3.5% of the sales price. For a conventional loan, that amount would be 5%. 

Example: If a home is $250,000, for a FHA loan you will need a downpayment of $8,750. On that same home with a conventional loan, that the downpayment would be $12,500.

Does that make you feel a little better?

I don’t have that amount saved. What do I do now? 

Did you know that there are numerous resources to help with the downpayment. Here are 8 ways to fund your downpayment.

  1. Check Your Savings Account
    • Now you may have checked here first and realized that was the obvious first option for the downpayment but that is mostly the first start and lenders are going to want to see some savings in your account.
  2. Tap your IRA
    • If you’re looking to buy your first home, let the Internal Revenue Service help. Tax laws allow you to use up to $10,000 in IRA funds as a down payment if you’ve never owned a house. If you’re married and you both are first-time buyers, you each can pull from your retirement accounts, meaning a potential $20,000 down payment. Even better is the IRS definition of first-time home buyer. Technically, you don’t have to be purchasing your very first abode. You qualify under the tax rules as long as you (or your spouse) did not own a principal residence at any time during the two years prior to the purchase of the new home. In these instances, Uncle Sam waives the penalty for early withdrawal, but you may owe tax on the money depending on the type of IRA. Many cash-strapped home buyers, however, find the long-term return of investing in residential real estate is worth the short-term tax bill. (Bankrate)
  3. Borrow from your 401K
    • Do you have more retirement money in a company savings plan? Consider borrowing against your 401(k) for the down payment. There are downsides to this strategy: Unlike an IRA home-related withdrawal, you’ll have to pay back any money you take out of your company plan. The repayment will cost you a bit more since the account contributions were made with pretax money, but your payback will be made with after-tax dollars. At least the interest payments on this loan will be going back into your 401(k). (Bankrate)
  4. CDs, Stocks, Bonds
    • Do you have money stashed in CDs, stocks, and bonds? These assets would help would it comes to your down payment.
  5. Down Payment Assistance Programs
    • Majority of the major cities in the metroplex have down payment programs. The state of Texas does as well. These programs are based on your household size and income. The amount of money from these programs range from 5% of the loan price to $20,000. The city programs are based for low to moderate income families. The chart below is widely used in the Dallas, Collin, and Denton County areas. FYI – The income cannot exceed the number based on your household size. These are local income limits. The state limits are higher.
    • Income Limits
  6. Ask a Relative
    • Do you have a rich uncle or parents? Aunt Sue and Uncle James love you right? Butter up that loving to ask relatives for a gift fund. Your down-payment can be funded by relatives who are willing to give you funds to purchase your home with no strings attached. It has to feel good to come from such a loving family right? Go ahead and give Uncle James a call right now.
  7. USDA/VA Loan
    • If you have served our country, you are due to a special treat when it comes to homebuying. You will be able to qualify for a 100% financing loan. This means no down payment and low interest rates.
    • You may not be a veteran but you don’t mind living in a rural area to have 100% financing. Then you may be eligible for a USDA loan. This loan has income restrictions too. USDA loans are restricted to rural areas BUT areas such as Little Elm, Aubrey, Cross Roads, Oak Point, Prosper, and Celina are eligible for 100% financing. These areas are quickly growing in the metroplex.
    • Below is the income limit for USDA Loans in the metroplex. The limits are based on household size in each column. Column one is for a one person household and so on until an 8 person household size.
    • USDA Limits
  8. Get A Second Job
    1. You can also get a part time job to help secure your down payment. We could all use some extra income to satisfy our needs so why not apply for a job to help secure those extra funds Uncle James couldn’t give?
  9. Sell Your Assets
    • With new sites and apps, you’re able to sell things quickly and shortly to secure some cash. Sites like OfferUp, Ebay, and Craiglist are all valuable to sell things that you could give up to secure a few more dollars.

These are just the steps to fund your down payment to becoming a homeowner. As always, I’m #CrowningHomeowners and this is my Tuesday Tip.

I Want A Home…..Maybe a Townhome?

Could you first home be a townhome? Most people want the 3 bedroom, 2 bathroom, and 2 car garage home with a spacious backyard. Realtor.com highlighted this boom in the housing market for townhomes by stating the following: ““Despite the drop in market share during the Great Recession, the share for townhouse construction is expected to increase in coming years – with occasional ups and downs,” according to NAHB’s Eye on Housing blog.”

townhomes

Realtor.com even suggested the long-run prospects for townhouse construction are positive given large numbers of homebuyers looking for medium density residential neighborhoods. In the Denton County area that I work in, townhomes are becoming a big movement. Townhomes are being designed like the normal single-family structure and you definitely wouldn’t know it was a townhome in the inside. I had the pleasure of showing Beauty Vlogger Missy Lynn a few townhomes in Lewisville at The Manors at Vista Ridge. Check out the video below and see what it means to have a townhome as your first home.

 

 

June is National Homeownership Month!

Today Kicks Off National Homeownership Month! | Keeping Current Matters
National Homeownership Month actually started as a week-long celebration of homeownership during the Clinton administration in 1995. In 2002, President George W. Bush proclaimed June as the National Homeownership Month. Here is an excerpt from his proclamation:
“Homeownership is an important part of the American Dream…A home provides shelter and a safe place where families can prosper and children can thrive. For many Americans, their home is an important financial investment, and it can be a source of great personal pride and an important part of community stability.”
“Homeownership encourages personal responsibility and the values necessary for strong families. Where homeownership flourishes, neighborhoods are more stable, residents are more civic-minded, schools are better, and crime rates decline.”
“During National Homeownership Month, I encourage all Americans to learn more about financial management and to explore homeownership opportunities in their communities. By taking this important step, individuals and families help safeguard their financial futures and contribute to the strength of our Nation.”
If you are one of the many renters out there who would like to make the transition from renter to homeowner, contact me so that we can evaluate your ability to do so.