Lifestyle

Category: Law, taxation & tips

  • How Can Foreigners Invest in Miami – a Guide for Florida Investment

    How Can Foreigners Invest in Miami – a Guide for Florida Investment

    Florida real estate has always been attractive to foreign buyers. Luckily, the state has always held opportunities for investing in properties, especially to invest in Miami luxury real estate.

    Come to think of it, real estate in this state was attractive even before the housing crash that depressed prices for both residential and commercial properties. This made foreign investment in Florida a bargain for many buyers.

    This is why our luxury real estate agents are awaiting your call!

    According to the National Association of Realtors, Florida has the largest number of foreign investors in the field in the country, with 41% purchasing vacation homes, 25% making a dual use purchase and 23% are investing in rentals.

    Although, investing in Miami real estate is popular and widely known, there are still a few things investors should keep in mind. For starters, foreign nationals are able to purchase real estate in the country for personal use, on their own or in the name of a corporation or LLC, without any governmental agency’s involvement.

    Foreign investors are also entitled to defer capital gains taxes in the country by purchasing another investment property under Section 1031 of the IRS Code. However, the actual tax treatment may depend on tax treaties between the United States and the investors home countries, if such treaties exist. This can be a rather complicated area, which is why it is advisable for investors to consult with Florida professional real estate agents on the subject before making a purchase or opt for an investment.

    Investment in Private Property

    If you opt to invest in property, foreign nationals who purchase large tracts of real estate in the U.S. must report that purchase to the U. S. Department of Commerce under the International Investment and Trade in Services Survey Act. The reported information must include the names and addresses of buyers, sellers and owners of more than a 50% interest, and financing information like income or expenses and similar info about the property itself. More reporting details are needed for property over 200 acres or property with a purchase price of more than 1 million dollars.  

    Investment in Rental Property

    When it comes to rental property, foreign nationals purchasing Florida real estate for leasing purposes are subject to taxation on rental income. However, foreign landlords have two choices on how to be taxed. The first option is to pay 30 percent of gross rental receipts, or they can pay regular U. S. income tax rates on net income from the property by filing a Form 4224 with the IRS.

    Other Requirements Concerning The Subject

    The state of Florida has certain filing requirements for foreign nationals and legal entities purchasing real estate. Any property which is owned by a foreign business entity or U. S. corporation whose ownership by foreign nationals exceeds 10% must have a registered office in the state and an agent on file with the Florida Department of State.

    If the sales tax on rents is collected, a foreign national must register as a sales tax dealer with the Florida Department of Revenue.

    As you can see, investing in Miami might be a bit confusing, but nothing out of the ordinary procedures from similar matters. If you have any more questions, contact us!

  • Capitalizing on the shifting real estate markets: Look for opportunities — and always network

    Capitalizing on the shifting real estate markets: Look for opportunities — and always network

    In recent months, there has been a lot of discussion about the oversupply of luxury condos in Miami-Dade County, triggering developers to put some projects on hold. The strong dollar and struggling economies abroad, particularly in Latin America, have caused foreign buyers and investors to tighten their purse strings.

    As a general contractor who started SPACiO Design Build during the last recession, I have learned to look ahead — past current trends — and adapt my business model to not only mitigate the impact of a market correction but also to take advantage of Miami’s fast-changing real estate market. This is a challenge that most businesses in the real estate industry — and in many other sectors — have to wrestle with.

    We started our business at the time when unsold condos in the Brickell area in the last cycle were being converted to rental units, as buyers had exited the market. When many people were seeing doom and gloom, we looked for opportunities amid a paralyzed real estate market. While we were able to grow the company with that business model, we knew we had to keep our eyes open looking for the next trends as the housing market was rapidly recovering. We began to see starchitects, high-end fashion designers, and exclusive brands — unlike in past cycles — descend upon Miami to stand behind some of the region’s most ultra-luxury condo developments.

    Starchitects like Bjarke Ingles, Herzog & de Meuron and luxury brands such as Armani, Fendi, and Porsche have entered the South Florida market to design and develop grandiose projects, attracting some of the world’s wealthiest people to buy a home in Miami. So, we decided to develop a niche in the marketplace, building out complex projects that required a high level of craftsmanship to match the new level of sophistication that the Miami architecture was beginning to experience.

    In this cycle, building and unit designs became more elaborate and complex, transforming the way space is built out. The introduction of imported design-driven materials required SPACiO to invest in artisans that could turn the visions of these renowned designers and architects into reality. So, when the residential market was active, we focused on building out highly sophisticated projects like the Residences at Armani Casa sales center in Sunny Isles Beach and decorator-ready condos in newly built towers such as the Grove at Grand Bay, Oceana Bal Harbor and SLS Brickell.

    But what the recession taught us the most was not to put all our eggs in one basket. We learned to diversify our operations to include high-end commercial spaces, from hotels to restaurants and luxury retail stores.

    Part of the process was transferring skills we had developed in the residential market but, part of it required teaching our staff new skills. The goal was to prepare our company to stay busy when the condo construction market slowed down. A significant part of our jobs comes from individual condo buyers who buy decorator-ready condos in recently completed luxury high-rises. As we started diversifying our portfolio to include commercial properties, we’ve turned our attention to building out hotels and restaurants, such as Nobu Restaurant, Nobu Hotel, Marriott Stanton South Beach and others.

    Business owners who focus on cyclical industries, like the condo market, have to find the time to boost their networking efforts at the first signs of a market slowdown.It is important not only to develop new relationships but more importantly, to leverage the past and current connections. As times get harder, most likely, it will be your connections that will help you with referrals and new business. A majority of our clients have become my friends, and it was them who helped me launch my businesses at the height of the last recession. Investing time to grow your relationships now will pay dividends when the market loses steam. Staying top-of-mind with your clients starts now, not in six months or a year, when the market has turned.

    People always say that change is the one thing that you can count on.

    That statement couldn’t be, and that statement couldn’t be more true to describe Miami’s real estate market and many other cyclical sectors such as tourism and hospitality. It’s up to the small business owner to seek out and capitalize on the opportunities that arise in each stage of the cycle.

     

    SOURCE

  • Miami’s Lowest Property Tax Rates Reviewed for Income Properties

    Miami’s Lowest Property Tax Rates Reviewed for Income Properties

    Greetings Real Estate Investors,

    The Miami Herald recently published an article detailing the different property tax rates in Miami-Dade county for various municipalities.  Since it is tax season and that horrible three letter word is on all of our minds we decided to look a little more closely the list.  Specifically we are going to detail the 10 municipalities with the lowest 10 rates and give our opinion in terms of whether or not these areas offer other strengths or weaknesses for purchasing your next real estate investment.

    Here is the image from the Miami Herald’s article, they had more but we are looking at the lowest 10.

    Miami-real-estate
    We will start at the top of the list and work our way down…

    Sunny Isles Beach
    This is a no brainier and an no-go on investment, this luxury enclave of million dollar condos is where you want to live not where you want to invest, the high cost to purchase and the astronomical Condo fees mean that it doesn’t matter how low the property taxes are your bottom line will get massacred!

    Cutler Bay
    The little town that was formerly known as Cutler Ridge has come a long way since it was just a few homes on the way to Homestead.  There are several condo communities that were built within that last decade that provide a lot of bank for your buck.  We would definitely advise taking a look down the road at this community, the low tax rates combine with a low cost of entry to make this a very attractive place to invest.  There is one thing you have to be very aware of, there is a part of the community that is close enough to the giant Miami-Dade County trash mountain that there is a noticeable stench on some days.  This has kept property values low, so you can get a great deal but you also may have trouble finding good tenants who will stay for long.

    Miami Lakes
    You definitely would not want to invest in a single-family home here but there are several condo communities that are very good deals.  The community itself is very much tailored to working families so in general it tends to attract very good stable tenants.  The prices are definitely higher than Cutler Bay but you are getting what you pay for in terms of a very nice and community that also draws commuters because of its proximity to the Palmetto Expressway.

    Palmetto Bay
    Same as Cutler Bay but 10 minutes further north.

    Pinecrest
    Not much to say it’s too expensive to invest.

    Unincorporated County
    This is probably our number one pick on the list because it comprises so many options that are so much more central the work centers and Downtown than Cutler Bay, Palmetto Bay and Miami Lakes.  The only one that comes close is Doral, but as you will see when we discuss it next the cost of entry is much higher.  The unincorporated county comprises areas such as Shenandoah, Westchester, and basically everything West of US1 starting at 57th Avenue.  You can find some great Single-Family homes in these areas that have sturdy construction and access to some of the best spots in the rest of the city.

    Doral
    This is our number two pick, but if you prefer that your portfolio be filled with newer construction then this might be the first place that you want to look for your next investment property.  Most of the properties are townhomes and most were built within the last two decades.  What you need to watch out for the the HOA fees because some communities are much higher than others.  But the low tax rate combines with some exceptional properties and excellent location to make Doral a place you should definitely look into.

    Aventura
    We used to be higher on this city but recently there has been so much development that it feels like the traffic makes it impossible to get around after 9am.  Still there is a definite draw for quality tenants who want to live in a semi-luxury community.  Cost of entry is high but the low tax rate can somewhat offset that, although Condo fees still remain high, so only look here if you really like the mall!

    Bal Harbour
    Pretty much the same story as the Key but there are some condo buildings that are a bit older that can provide a more manageable amount of cash out of pocket.  The area is growing as well with revitalization happening in the famed Bal Harbour shops and the surrounding areas.  Again you should vacation here but probably not invest.

    Key Biscayne
    It is surprising that such an expensive community would have the lowest tax rate in the county but we might guess a reason…good lawyers?  But there isn’t much else to say, while this may be a great place to buy your next vacation property, the high cost of entry means you should probably avoid investing here unless you have very deep pockets!

    We hope that gives you some insight into where you make your next purchase…start in Unincorporated Miami-Dade county if you are looking for Single-Family and start in Doral if you are looking for new construction townhomes.  If you want to have low cost of entry look down the road in Cutler Bay and Palmetto Bay.

    SOURCE

  • Should You Invest In South Florida Real Estate?

    Should You Invest In South Florida Real Estate?

    Quick Hits: If you’re planning to buy a home, do it now, because prices are going up for the next few years. Investments in single-family rental properties have good potential in Broward County. Apartment developments have the best potential in Miami-Dade. Mortgages have higher risk even though prices are rising. Best bets for investments in retail or restaurants are in Palm Beach County, which also needs medical office space.

    With a large number of second homes and condos, South Florida is prone to boom and bust cycles that stem more from investment hopes than housing needs. Add an expanding Latino population and waves of baby-boomers – two million retiring every year – and you get both risks and opportunities. Demand for Florida housing is always growing, but is it growing slower or faster than the supply?

    The percentage of second homes increases as you head north from Miami, to 20 percent in Palm Beach County. This large pool of empty properties is the swing vote in home prices. It can swamp supply during a downturn but also represents the desire of future retirees – and South American investors – to buy while they can.

    The economy of Miami itself is diversified – with an important finance sector – but as you go up the coast more jobs are in retail and services. Healthcare is the largest creator of jobs in all three counties, and growing rapidly.

    Home prices were strong in the last three years – up 40 percent – and I expect they’ll keep rising 10 percent a year. But… How much of that 40 percent was from speculation in foreclosed condos? How much from ‘real’ demand? There are strong reasons to believe that from here on we are looking at prices going higher than they ‘should’ – especially in Broward County – in other words a mini-boom that will fizzle after a few years. If you’re looking to buy for the long-term, do it now. If you’re looking for a short-term investment, be very, very careful.

    Because rents held up better than home prices during the recession, buying a property to rent out is an attractive option despite the recent rise in prices, less so in Palm Beach County, more so in Miami-Dade and Broward. Almost half of households in Miami are renters. With most the new healthcare and retail jobs paying low wages, the renting population will increase. In urban areas it makes sense to buy a single-family house and split it into rental units. Apartment buildings are a good option in Miami – at the right price.

    Mortgages are a difficult investment right now. Because home prices will keep rising the next few years, the equity cushion for new mortgages will grow quickly; on the other hand, prices are almost too high in Broward and Miami-Dade already, which means these mortgages will have a rising risk of default. Just because the last bust is over doesn’t mean a new one isn’t around the corner. Lenders should back away from high loan-to-value mortgages during this period. The same is true for construction loans; new projects should be financed in very careful stages.

    Population is growing at an uneven pace, slower in Miami, faster as you move up the coast. Over the next three years I expect a 10 percent increase in housing needs in Palm Beach County – 30,000 owner properties and 23,000 apartments. I expect 25,000 of each in Broward, and in Miami 30,000 houses and 36,000 apartments.

    The climate for investments in retail businesses and restaurants is best in Palm Beach County, where demand has grown quickly the last two years and average income is the highest. All three counties, but especially Palm Beach will need office space for the growing number of healthcare workers.

     

    SOURCE

  • The cost of buying vs. renting a home in all 50 states

    The cost of buying vs. renting a home in all 50 states

    Housing is the biggest expense for many Americans, accounting for more than 30 percent of a household’s yearly expenditures, according to the Bureau of Labor Statistics.  But housing costs can vary greatly, depending on where you live — and whether you’re a renter or owner.

    To find out where your housing dollar will go the furthest, GOBankingRates surveyed the cost of renting versus owning a home in all 50 states and the District of Columbia. The study found it’s more expensive to own a home in only eight states and the District of Columbia, with renting the more expensive option in 42 states.

    With rents so high, though, it can be difficult to save up for a down payment and make the jump to homeownership, she said. If you’re considering becoming a homeowner, scroll down to find out if you should own or rent a home in your state.

    Wyoming

    Renting vs. buying a home in Wyoming:

    Monthly rent in Wyoming: $1,100
    Monthly mortgage in Wyoming: $1,199

    How much do you need to live comfortably in Wyoming? If you want to rent or buy a home, make sure you get a job that pays enough to cover a monthly rent or mortgage of around $1,000. But the good news: Wyoming might start experiencing declining home prices, according to an Arch Mortgage Insurance Company report released in April.

    Vermont

    Renting vs. buying a home in Vermont:

    Monthly rent in Vermont: $1,500
    Monthly mortgage in Vermont: $1,226

    One of the best states for first-time homebuyers, Vermont’s homes have become more affordable over the past year. The median sale price has dropped about 4 percent, according to the Vermont Realtors May 2016 report.

    Only 13 percent of Vermont homeowners spend more than 50 percent of their income on housing, according to the Vermont Housing Finance Agency. However, 28 percent of renters spend half of their income or more on housing.

    District of Columbia

    Renting vs. buying a home in DC:

    Monthly rent in the District of Columbia: $2,575
    Monthly mortgage in the District of Columbia: $2,719

    Even though it’s cheaper to rent instead of buy in the nation’s capital, the National Association of Realtors identified Washington, D.C., as one of the top markets for aspiring millennials who want to buy a house. That’s because millennials’ higher income levels are making it easier to afford a home.

    Alaska

    Renting vs. buying a home Alaska:

    Monthly rent in Alaska: $1,690
    Monthly mortgage in Alaska: $1,356

    Rent in Alaska is higher than the U.S. median rent of $1,407, according to Zillow. Although home values have been rising, too, it’s still cheaper to own a house than rent one. Home prices have stayed steady even though the state’s economy — which depends heavily on the oil industry — is in a recession due to the low energy prices, according to the Arch Mortgage Insurance Company report.

    North Dakota

    Renting vs. buying a home in North Dakota:

    Monthly rent in North Dakota: $1,250
    Monthly mortgage in North Dakota: $1,144

    Owning a home in North Dakota is less expensive than renting — and it might become even more so. The state’s home prices are overvalued by an estimated 22 percent because the state’s oil fracking boom drove up prices, according to the Arch Mortgage Insurance Company report.

    South Dakota

    Renting vs. buying a home in South Dakota:

    Monthly rent in South Dakota: $1,100
    Monthly mortgage in South Dakota: $1,033

    Although home prices have risen by about 6 percent in South Dakota over the past year, according to Zillow data, it’s still cheaper to own a home than rent. However, even renting is more affordable in South Dakota than in many parts of the nation — considering the median rent in the U.S. is $1,407, according to Zillow.

    Delaware

    Renting vs. buying a home in Delaware:

    Monthly rent in Delaware: $1,300
    Monthly mortgage in Delaware: $1,375

    Delaware’s housing market is rebounding as retirees move to the state and families move from rentals to homes, the state’s The News Journal newspaper reported in January. The median home list price has risen about 3.8 percent over the past year, according to Zillow data. As a result, it’s more expensive to buy a home than to rent a home in this state.

    Montana

    Renting vs. buying a home in Montana:

    Monthly rent in Montana: $1,100
    Monthly mortgage in Montana: $1,348

    Rising home prices in Montana have made the cost of owning a home more expensive. The median home list price in Montana has increased just 1.7 percent over the past year, but it’s climbed 7.5 percent from May 2014 to May 2016, according to Zillow data.

    Rhode Island

    Renting vs. buying a home in Rhode Island:

    Monthly rent in Rhode Island: $1,750
    Monthly mortgage in Rhode Island: $1,416

    Consumers are taking advantage of low interest rates to buy homes in Rhode Island. Single-family home sales increased 19 percent from May 2015 to May 2016, according to the Rhode Island Association of Realtors. The median sale price also has risen 5 percent. Despite the strong real estate market, it’s still less expensive to buy a home in Rhode Island than to rent a home.

    Maine

    Renting vs. buying a home in Maine:

    Monthly rent in Maine: $1,500
    Monthly mortgage in Maine: $1,104

    Single-family existing home sales in Maine have risen a whopping 25 percent in May over the past year, but prices have risen just 2.84 percent, according to a June report from the Maine Association of Realtors.

    New Hampshire

    Renting vs. buying a home in New Hampshire:

    Monthly rent in New Hampshire: $1,475
    Monthly mortgage in New Hampshire: $1,240

    The New Hampshire market has been tight for renters, with rents rising as vacancy rates have been dropping, according to a February report by RealtyTrac. Renters who want to find affordable options in a tight market will likely have to make concessions, Gudell said.

    Hawaii

    Renting vs. buying a home in Hawaii:

    Monthly rent in Hawaii: $2,347
    Monthly mortgage in Hawaii: $2,862

    The supply of houses hasn’t been able to keep pace with population growth in Hawaii, pushing prices up, according to the Hawaii Department of Business, Economic Development and Tourism. In fact, Hawaii has the highest median home list price — $577,499.50 — in the nation.

    Although rent prices fell slightly from April to May, according to Zillow, the market still is less friendly to buyers than renters. And, Honolulu has the second-highest home price-to-rent ratio in the U.S., which means it is cheaper to rent than buy, according to SmartAsset.com.

    Idaho

    Renting vs. buying a home in Idaho:

    Monthly rent in Idaho: $995
    Monthly mortgage in Idaho: $1,199

    Home prices have soared more than 23 percent over the past two years in Idaho, according to Zillow data. The average list price jumped from around $190,000 in May 2014 to $234,900 in May 2016.

    West Virginia

    Renting vs. buying a home in West Virginia:

    Monthly rent in West Virginia: $1,098
    Monthly mortgage in West Virginia: $832

    Although the median home list price has risen 6 percent since the beginning of the year, according to Zillow data, it’s still cheaper to own than rent in West Virginia. However, home prices in West Virginia are expected to fall, according to the Arch Mortgage Insurance Company report.

    Nebraska

    Renting vs. buying a home in Nebraska:

    Monthly rent in Nebraska: $1,200
    Monthly mortgage in Nebraska: $884

    It’s still less expensive to own than rent in Nebraska, although the median rent price in Nebraska has hardly budged over the past year while the median home price has climbed 5.8 percent, based on Zillow data.

    New Mexico

    Renting vs. buying a home in New Mexico:

    Monthly rent in New Mexico: $1,125
    Monthly mortgage in New Mexico: $1,043

    The median home list price of $215,000 in New Mexico has held steady for nearly a year, according to Zillow data. Although the median rent price also hasn’t risen over the past year, either, it’s still slightly more expensive to rent than own in this state.

    Nevada

    Renting vs. buying a home in Nevada:

    Monthly rent in Nevada: $1,275
    Monthly mortgage in Nevada: $1,196

    The median rent in Nevada has risen 6.25 percent from $1,200 in May 2015 to $1,275 in May 2016, according to Zillow data. In fact, Reno is among the top 10 U.S. cities with the fastest-growing rents, up 6.5 percent since June 2015, according to the July 2016 National Apartment List Rent Report. Rising rents in the state make renting a more expensive option than buying a home.

    Kansas

    Renting vs. buying a home in Kansas:

    Monthly rent in Kansas: $1,150
    Monthly mortgage in Kansas: $836

    The monthly mortgage on a home with a median list price of $159,900 is $314 less than the median monthly rent in Kansas, making home buying a better prospect than renting in this Midwestern state.

    However, home sales have been slower in Kansas compared to the rest of the country. Sales in Kansas rose by 1.3 percent in May 2016 compared with the same period last year, but home sales on a national level rose 4.5 percent, according to the Kansas Association of Realtors.

    Arkansas

    Renting vs. buying a home in Arkansas:

    Monthly rent in Arkansas: $1,050
    Monthly mortgage in Arkansas: $769

    The monthly mortgage on a home with a median list price of $155,000 is $281 less than the median monthly rent in Arkansas. The median list price in this state has increased just 1.9 percent from May 2015 to May 2016, according to Zillow data.

    Mississippi

    Renting vs. buying a home in Mississippi:

    Monthly rent in Mississippi: $1,100
    Monthly mortgage in Mississippi: $791

    The median monthly rent is $309 higher than the monthly mortgage on a home with a median list price of $160,000 in this Southern state. Although it’s more expensive to rent than own in Mississippi, the median rent here is still below the national median of $1,407.

    Utah

    Renting vs. buying a home in Utah:

    Monthly rent in Utah: $1,275
    Monthly mortgage in Utah: $1,517

    Zillow named two Utah cities — Salt Lake City and nearby Ogden — in its top 10 hottest housing markets for 2016 list. Statewide, the median home list price has risen about 20 percent over the past two years, from $249,000 in May 2014 to $299,000 in May 2016, according to Zillow data.

    Iowa

    Renting vs. buying a home in Iowa:

    Monthly rent in Iowa: $1,095
    Monthly mortgage in Iowa: $836

    Home buying has been on the rise in this state where owning is less expensive than renting. The number of homes sold rose 5.3 percent in April 2016 from the same period a year ago, according to the Iowa Association of Realtors.

    Connecticut

    Renting vs. buying a home in Connecticut:

    Monthly rent in Connecticut: $1,700
    Monthly mortgage in Connecticut: $1,486

    Although home sales have been booming in Connecticut, home prices have not. Sales of single-family homes rose 17.28 percent year over year, according to Berkshire Hathaway HomeServices New England Properties’ Second Quarter 2016 Connecticut Market Report. Yet, the average price dropped 5.7 percent, which is good news for prospective buyers.

    Oklahoma

    Renting vs. buying a home in Oklahoma:

    Monthly rent in Oklahoma: $1,050
    Monthly mortgage in Oklahoma: $867

    Low home prices make owning less expensive than renting in Oklahoma — and prices might get even lower, according to the Arch Mortgage Insurance Company report.

    Oregon

    Renting vs. buying a home in Oregon:

    Monthly rent in Oregon: $1,550
    Monthly mortgage in Oregon: $1,562

    Buying a home is becoming more expensive in Oregon, as increased demand from people moving to the state drives up home prices, CNBC reported in January. Portland was named one of the top 10 hottest housing markets for 2016, according to Zillow. And over the past year, home values have increased 14.8 percent — the biggest increase among the 50 largest metro areas, said Gudell.

    In a hot housing market such as Oregon, Gudell recommends avoiding shopping for a home during the height of the home sale season to lower the chance of getting into bidding wars with other buyers.

    Kentucky

    Renting vs. buying a home in Kentucky:

    Monthly rent in Kentucky: $1,000
    Monthly mortgage in Kentucky: $849

    Statewide, the median rent in Kentucky is $151 higher than the monthly mortgage on a home with a median list price of $161,900. Kentucky’s housing market has been strong, with a record number of homes sold in 2015, according to the Kentucky Association of Realtors.

    Louisiana

    Renting vs. buying a home in Louisiana:

    Monthly rent in Louisiana: $1,250
    Monthly mortgage in Louisiana: $1,022

    Buying a home in Louisiana is slightly less expensive than renting and could become even more affordable. Home prices are at risk of dropping, according to the Arch Mortgage Insurance Company report.

    Alabama

    Renting vs. buying a home in Alabama:

    Monthly rent in Alabama: $950
    Monthly mortgage in Alabama: $859

    Although Alabama has the lowest median monthly rent on our list — along with Missouri — mortgage costs are even lower. Home sale prices have risen only slightly, even though supply has dropped but demand has increased, as evidenced by an 11 percent increase in home sales in May 2016 over May 2015, according to the Alabama Center for Real Estate.

    South Carolina

    Renting vs. buying a home in South Carolina:

    Monthly rent in South Carolina: $1,250
    Monthly mortgage in South Carolina: $1,121

    The median rent in South Carolina is still higher than the median monthly mortgage cost, despite a stronger housing market. The state’s real estate market had its best year in 2015 since the end of the Great Recession in 2009, according to the South Carolina Realtors’ annual report.

    Charleston is listed as one of the National Association of Realtors’ best home purchase markets for millennials. The household income and homeownership rates among millennials who’ve moved to this city recently are higher than the national average.

    Colorado

    Renting vs. buying a home in Colorado:

    Monthly rent in Colorado: $1,700
    Monthly mortgage in Colorado: $1,837

    Owning a home in Colorado is more expensive than renting. Zillow named Denver the top housing market for 2016, but home prices haven’t been rising just in the state’s capital. Prices are up statewide because supply hasn’t kept up with demand. In fact, the supply of homes for sale in Colorado reached historic lows in May 2016, according to the Colorado Association of Realtors.

    Minnesota

    Renting vs. buying a home in Minnesota:

    Monthly rent in Minnesota: $1,400
    Monthly mortgage in Minnesota: $1,085

    In a state where buying a home is less expensive than renting, home sales have been climbing. Sales increased 4.6 percent in May 2016 over the same period a year ago, according to the Minnesota Association of Realtors. However, the median sale price increased — up 7.9 percent — while the number of new listings dropped over the past year.

    Wisconsin

    Renting vs. buying a home in Wisconsin:

    Monthly rent in Wisconsin: $1,200
    Monthly mortgage in Wisconsin: $921

    Madison is one of the top 25 most expensive rental markets in the U.S., according to the Zumper National Rent Report. And statewide, the median rent of $1,200 is $279 higher than the monthly mortgage on a home with the median list price of $177,000.

    Buyers have been snapping up the state’s affordable houses, with existing home sales up 2.9 percent in May 2016 over May 2015, according to the Wisconsin Realtors Association.

    Maryland

    Renting vs. buying a home in Maryland:

    Monthly rent in Maryland: $1,700
    Monthly mortgage in Maryland: $1,446

    One of the top 25 highest-priced rental markets is Baltimore, according to the Zumper report. However, it’s one of the most affordable markets to buy a home based on percentage of wages needed to purchase a house, according to the RealtyTrac Q2 2016 Home Affordability Index. Statewide, the monthly mortgage on a home with a median list price of $284,900 is $254 less than the median rent.

    Missouri

    Renting vs. buying a home in Missouri:

    Monthly rent in Missouri: $950
    Monthly mortgage in Missouri: $768

    Missouri’s median rent of $950 is the lowest in the nation, along with Alabama. However, the monthly mortgage of $768 is even lower. And it seems buyers are taking advantage of affordable home prices in the state. Home sales rose 11.1 percent in May 2016 over May 2015, according to Missouri Realtors.

    Tennessee

    Renting vs. buying a home in Tennessee:

    Monthly rent in Tennessee: $1,195
    Monthly mortgage in Tennessee: $934

    The median rent in Tennessee has jumped 8.6 percent from $1,100 in May 2015 to $1,195 in May 2016. Nashville is ranked as the 29th most expensive rental market in the U.S., according to the Zumper National Rent Report.

    With the median rent in the state higher than the median monthly mortgage, buyers can get a better deal by owning a house.

    Indiana

    Renting vs. buying a home in Indiana:

    Monthly rent in Indiana: $1,025
    Monthly mortgage in Indiana: $745

    With one of the lowest monthly mortgage costs on the list, buying a home is less expensive than renting in Indiana. Buyers have to act fast if they want to get a good deal, though. The inventory of new homes for sale has been decreasing, according to the Indiana Association of Realtors, and houses sell quickly once they’re on the market.

    Massachusetts

    Renting vs. buying a home in Massachusetts:

    Monthly rent in Massachusetts: $2,500
    Monthly mortgage in Massachusetts: $1,941

    Although the median home list price is $389,000, homebuyers still come out ahead of renters due to high rents in the state. The nation’s fifth-most expensive rental market is in Boston, according to the Zumper National Rent Report. And the median statewide rent is more than $1,000 higher than the national median of $1,407, according to Zillow data

    Arizona

    Renting vs. buying a home in Arizona:

    Monthly rent in Arizona: $1,250
    Monthly mortgage in Arizona: $1,223

    Seven of the top 100 highest-priced rental markets are in Arizona, according to the Zumper National Rent Report. Although the median rent statewide hasn’t risen over the past year, it’s still slightly higher than the median monthly mortgage, according to Zillow data.

    Washington

    Renting vs. buying a home in Washington:

    Monthly rent in Washington: $1,650
    Monthly mortgage in Washington: $1,515

    Seattle is the 10th most expensive rental market in the U.S., according to the Zumper National Rent Report. The city also had the fifth-fastest increase in rent prices in the nation since June 2015, according to the July 2016 National Apartment List Rent Report. And Vancouver had the third-largest increase in rent prices.

    To keep the cost of renting down in markets where prices are rising, Zillow’s Gudell recommends signing a two-year lease to avoid annual hikes.

    Virginia

    Renting vs. buying a home in Virginia:

    Monthly rent in Virginia: $1,650
    Monthly mortgage in Virginia: $1,465

    Four of the nation’s top 75 highest-priced rental markets are in Virginia, according to Zumper. Renters are probably better off buying because the monthly mortgage on a home with a median list price of $289,990 is $185 less than the median rent of $1,650.

    New Jersey

    Renting vs. buying a home in New Jersey:

    Monthly rent in New Jersey: $1,900
    Monthly mortgage in New Jersey: $1,428

    The median monthly rent in New Jersey pales in comparison to rents in its neighbor to the north, New York. But, it still tops the national median rent price of $1,407. And, rent is $472 higher than the monthly $1,428 mortgage on a house with a median list price of $299,900.

    Michigan

    Renting vs. buying a home in Michigan:

    Monthly rent in Michigan: $1,000
    Monthly mortgage in Michigan: $741

    Michigan has the second-lowest monthly mortgage cost on the list, after Ohio. In fact, the Detroit metro area is one of the most affordable housing markets based on the percentage of wages needed to buy a median-priced home, according to RealtyTrac.

    However, in some areas of the state — such as Grand Rapids — buyers have to act quickly to get the house they want. Supply is limited and demand is high, MLive Media Group reported in February.

    North Carolina

    Renting vs. buying a home in North Carolina:

    Monthly rent in North Carolina: $1,175
    Monthly mortgage in North Carolina: $1,089

    Three North Carolina cities — Charlotte, Raleigh and Durham — rank among the 50 most expensive rental markets, according to the Zumper National Rent Report. Homebuyers in the state can get a better deal, though, with the median monthly mortgage cost $86 lower than the median monthly rent in the state. Plus, the National Association of Realtors lists Raleigh as one of the best metropolitan areas for aspiring millennial homebuyers.

    Georgia

    Renting vs. buying a home in Georgia:

    Monthly rent in Georgia: $1,200
    Monthly mortgage in Georgia: $1,029

    Affordable prices make buying a home in Georgia less expensive than renting. However, competition among homebuyers is heating up as multiple offers are being made on houses at or above the asking price, according to the Georgia Association of Realtors.

    Ohio

    Renting vs. buying a home in Ohio:

    Monthly rent in Ohio: $1,075
    Monthly mortgage in Ohio: $700

    Five Ohio cities are among the top 100 most expensive rental markets in the U.S., according to the Zumper National Rent Report. Statewide, the median rent has climbed 5.4 percent over the past year, from $1,019 in May 2015 to $1,075 in May 2016, according to Zillow data.

    On the other hand, Ohio has the lowest monthly mortgage cost on our list. However, the average sale price of existing homes increased slightly — 3.1 percent — in May 2016 over May 2015, according to Ohio Association of Realtors.

    Pennsylvania

    Renting vs. buying a home in Pennsylvania:

    Monthly rent in Pennsylvania: $1,395
    Monthly mortgage in Pennsylvania: $934

    Two Pennsylvania cities — Philadelphia and Pittsburgh — are among the top 30 highest-priced rental markets in the U.S., according to the Zumper National Rent Report. Statewide, though, the median rent hasn’t increased over the past year, according to Zillow data. Nonetheless, the median monthly rent is $461 higher than the monthly mortgage on a home with a median list price of $179,900 in Pennsylvania.

    Illinois

    Renting vs. buying a home in Illinois:

    Monthly rent in Illinois: $1,600
    Monthly mortgage in Illinois: $1,078

    Chicago has one of the highest-priced rental markets, ranking 11th in the nation, according to the Zumper National Rent Report. Statewide, the median rent hasn’t risen over the past year, but it still tops the national median of $1,407, according to Zillow.

    Compared with the state’s high median rent, a monthly mortgage on a home with a median list price of $209,500 is $522 lower.

    New York

    Renting vs. buying a home in New York:

    Monthly rent in New York: $3,295
    Monthly mortgage in New York: $1,660

    With the average monthly rent in New York nearly twice the average monthly mortgage, it’s obvious why it’s cheaper to own a house in the Empire State. In fact, New York City is the second-most expensive rental market in the U.S., after San Francisco, according to the Zumper National Rent Report.

    In a place where rents rise steadily, Zillow’s Gudell recommends getting a two-year lease to avoid rent increases if you’re going to be staying there for a while.

    Florida

    Renting vs. buying a home in Florida:

    Monthly rent in Florida: $1,695
    Monthly mortgage in Florida: $1,297

    Rents have been rising in the Sunshine State — especially in South Florida where the population is growing and demand for rentals has increased, the Sun Sentinel reported in April.

    In fact, Miami is the eighth-most expensive rental market in the U.S., according to the Zumper National Rent Report. More and more adults are living with roommates in Miami to offset high rents, Gudell said.

    Texas

    Renting vs. buying a home in Texas:

    Monthly rent in Texas: $1,425
    Monthly mortgage in Texas: $1,271

    Two Texas cities — Dallas and Arlington — rank among the top 10 cities in the nation with the fastest-growing rents, according to the July 2016 National Apartment List Rent Report. Dallas is also one of the top 50 priciest rental markets, along with Austin, Plano, Houston and more, according to the Zumper National Rent Report.

    On the other hand, Texas is favorable to homebuyers; the monthly mortgage is $154 cheaper than the monthly rent, according to this study’s findings.

    California

    Renting vs. buying a home in California:

    Monthly rent in California: $2,400
    Monthly mortgage in California: $2,221

    Three of the top five most expensive rental markets in the U.S. are in California: San Francisco, Oakland and San Jose, according to the Zumper National Rent Report. And another three cities in the state, including Los Angeles and San Diego, are among the top 25 highest-priced rental markets.

    Living with a roommate in California’s pricey rental markets can be a way to keep costs down — especially in cities like San Francisco and Los Angeles where it’s a growing trend, said Gudell of Zillow. However, to avoid paying high prices for housing, utilities, gas and more, consider moving to one of the best places for saving money.

     

    SOURCE

  • The 5 Miami markets where home prices jumped the most in Q1

    The 5 Miami markets where home prices jumped the most in Q1

    A period of instability in Miami’s housing market is finally easing, as 2017 looks to be a year where doomsday predictions for the market give way to stability and growth, according to Douglas Elliman’s first quarter 2017 report.

    “We’re entering into a new period that I refer to as a reset,” said Jay Parker, CEO of Douglas Elliman Florida. “We are seeing somewhat better results than we did in 2016. The market, in general, is showing signs of stability.”

    Douglas Elliman’s report shows that some luxury markets, after years of skyrocketing prices and inventory, are settling into a period of growth in home prices. In fact, luxury areas lead the way in increases in median home cost, as four of the five markets with the biggest jump in price are in ritzy areas. Though some luxury markets had median home price increases, many also saw the average property’s days on market climb, suggesting that inventory is still a problem in some of these markets.

    Here are the five markets with the biggest spike in median home price in Q1 2017, according to Douglas Elliman.

    1. Bal Harbour:

    Median condo sales price (year-over-year change): $1.5 million (107 percent)

    Number of sales closed: 29 (-3.3 percent)

    Days on market: 179 (88.7 percent)

    2. Fisher Island:

    Median condo sales price (year-over-year change): $7 million (104.4 percent)

    Number of sales closed: 3 (-25 percent)

    Days on market: 234 (397.2 percent)

    3. Miami Beach:

    Median condo sales price (year-over-year change): $3.79 million (56 percent)

    Number of sales closed: 9 (no change)

    Days on market: 289 (252.3 percent)

    4. South Miami:

    Median single-family home sales price (year-over-year change): $528,000 (26.6 percent)

    Number of sales closed: 23 (-8 percent)

    Days on market: 68 (36 percent)

    5. Coconut Grove:

    Median single-family home sales price (year-over-year change): $1.72 million (25.6 percent)

    Number of sales closed: 14 (-26.3 percent)

    Days on market: 108 (18.7 percent)

    SOURCE

  • Mortgage Rates Surprise By Nearing 2017 Low

    Mortgage Rates Surprise By Nearing 2017 Low

    The 30-year fixed rate mortgage dropped lower for the third consecutive week and neared its low for 2017, Freddie Mac reports in its weekly mortgage market survey.

    “The 10-year Treasury yield was relatively unchanged this week, while the 30-year mortgage rate fell 4 basis points to 4.1 percent,” says Sean Becketti, Freddie Mac’s chief economist. “After three straight weeks of declines, the 30-year mortgage rate is now barely above the 2017 low. Next week’s survey rate may be determined by Friday’s employment report and whether or not it can sustain the strength from earlier this year.”

    Freddie Mac reported the following national averages with mortgage rates for the week ending April 6:

    • 30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, falling from last week’s 4.14 percent average. Last year at this time, 30-year rates averaged 3.59 percent.
    • 15-year fixed-rate mortgages: averaged 3.36 percent, with an average 0.5 point, dropping from last week’s 3.39 percent average. A year ago, 15-year rates averaged 2.88 percent.
    • 5-year hybrid adjustable-rate mortgages: averaged 3.19 percent, with an average 0.4 point, rising from last week’s 3.18 percent average. A year ago, 5-year ARMs averaged 2.82 percent.

    SOURCE

  • Average mortgage size reaches record high

    Average mortgage size reaches record high

    The average mortgage size is $318,200, which is the largest it has been in the 27-years of The Mortgage Bankers Association’s weekly purchase loan data survey.

    There are multiple factors leading to higher mortgages in the United States beyond larger and more expensive homes for sale, which include higher leveraging, strong demand and low supply of homes.

    The survey also found that the median mortgage size is five times the median annual income, while it was 3.3 times the median annual income when the survey began in 1990.

    With these larger mortgages, most first-time home buyers are putting down less than 20 percent for their down payment, according to the February 2017 REALTORS® Confidence Index Survey Report. Among all buyers, 62 percent made a down payment less than 20 percent, but 80 percent of first-time homebuyers put down less than 20 percent. The median downpayment for first-time homebuyers is six percent and 10 percent for all homebuyers.

    Many federal government-backed loans, including the Federal Housing Administration, Fannie Mae and Freddie Mac, allow less than three percent downpayment mortgages in order to attract first-time homebuyers. However, the National Association of Realtors’ 2016 Q3 Housing Opportunities and Market Experience (HOME) Survey found that only 13 percent of those 34 years old or younger believe they need a down payment of five percent or less.

    SOURCE

  • Calculator for Buyers: Purchase Now or Save More?

    Calculator for Buyers: Purchase Now or Save More?

    While nearly 40 percent of aspiring homeowners believe they need to put down 20 percent on a home purchase, the truth is the average down payment was just 11 percent in 2016, according to the National Association of REALTORS®. To help your clients understand the strength of their current financial profile when it comes to buying a home, mortgage industry blog MGIC Connects has created a Buy Now vs Wait calculator that can show them whether they’re better off waiting and continuing to save for a bigger down payment or buying now with less money upfront.

    The calculator factors in information such as the current rent your clients are paying, the amount of their monthly savings, and creditworthiness. Users can submit other information such as desired home price, the current amount of savings for a down payment, and an estimated interest rate. MGIC Connects offers the following example of how its calculator works:

    A consumer has saved $10,000 of the $40,000 needed for a 20 percent down payment. She can add about $6,000 a year in savings to that. She wants to purchase a $200,000 home. The calculator allows her to see the cost of the home purchase if she did a 3 percent or 5 percent down payment. The calculator also shows that if homes prices appreciate, say, at 3 percent annually, the amount she’d need a 20 percent down payment would be $48,552, and she would need more than 6 years of savings before she could buy.

    During that time, she will have paid more than $80,000 in rent, while her home equity position would be more than $72,000 had she bought six years ago. None of this is meant to encourage prospective borrowers to buy a home before they are ready. It is in everyone’s best interest for borrowers to succeed, so borrowers need to be comfortable not only with the mortgage payment but also the other responsibilities that come with homeownership.

    SOURCE

  • The Importance of Using a Professional to Sell Your Home

    The Importance of Using a Professional to Sell Your Home

    When a homeowner decides to sell their house, they obviously want the best possible price for it with the least amount of hassles along the way. However, for the vast majority of sellers, the most important result is actually getting their homes sold.

    In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. According to the National Association of Realtors’ 2016 Profile of Home Buyers & Sellers, the percentage of buyers who used the internet in their home search increased to 94%.

    However, the report also revealed that 96% of buyers who used the internet when searching for homes purchased their homes through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their homes directly from a seller whom the buyer didn’t know.

    Buyers search for a home online but then depend on an agent to find the home they will buy (50%), to negotiate the terms of the sale (47%) & price (36%), or to help understand the process (61%).

    The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots.” This is obvious, as the percentage of overall buyers who have used agents to buy their homes has steadily increased from 69% in 2001.

    Bottom Line

    If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

    SOURCE