Investment Property Search, Part III

This afternoon my husband and I went to view the condos competing for our investment dollars. Really, there was not much difference that warranted a list price that is 25% higher. The more expensive condos have an enclosed garage versus a carport garage. The difference was the the carport garage had no door, the structure was built the same. And the more expensive condos had slightly larger bathrooms. But that was it. No magical kitchens. The baths weren’t even updated, just a few more square feet of space. Does that really warrant a 25% higher list price? I think not. From a rental standpoint, you wouldn’t be able to justify a higher rent for any of the spaces. They are all comparable. One of the condos would probably be easier to rent because it was very neutral (cream wallpaper, cream paint, blonde hardwood floors), but it still wouldn’t command a higher rent. So, it looks like we will be pursuing the lower priced condo. The only thing standing in our way is the owner-to-renter ratio and our ability to get a mortgage. We could pay cash, but then the financials don’t work because we wouldn’t have any interest to deduct for tax purposes.

Stay tuned for the exciting conclusion…

Investment Property Search, Part II

I mentioned recently that my spouse and I are looking into buying an investment property. Specifically, a condo. Well, this week 2 other condos with the same square footage and layout, only 2 doors down from the one we’re considering, came on the market. The asking price on each of these condos is 25% more. Hmmm. The descriptions don’t make either sound like they have a fabulous gourmet kitchen or spa bath. So what gives. They are in the same types of buildings, monthly Association fees are the same, location is the same, parking situation is the same. We’re looking at both of them tomorrow, so I’ll know conclusively then what specifically is different. But something just seems fishy. Did the new sellers get bad advice from their agents on pricing? Are the new sellers just too optimistic about their property market values? The condo we looked at has been sitting for 6 months and actually shows very nicely. And still hasn’t sold, even with a significantly lower listing price. Now I’m ticked that these two other condos may make it difficult for me to negotiate a better price on the one that has been sitting.

Stay tuned for more info tomorrow.

Fluffy and Benji Live Here Too…

Did you know that in 2006, 73% of all US households owned a dog or cat? We sure do love our four legged companions.

But how do you minimize the impact of your beloved fluffball when you’re trying to sell your home?

First, you want to make sure that you either remove your pets from the home for all showings, or have them crated with a “Do Not Disturb” sign. You never know how your pet will react with strangers in the home, and I’ve seen more than one agent running after an indoor cat that escaped during a showing. Always try to minimize your pet’s presence so the buyer can focus on the home and not your cute Labrador.

Next, get rid of the smelly stuff. This means constantly cleaning litter boxes, removing stains from carpets, and using natural cleansers to remove odors. Nothing is worse than walking into a potpurri-filled home that’s trying to mask pet odor. It immediately raises a concern with the buyer and they wonder what else you’re trying to cover up.

Finally, get rid of the toys. No one wants to look at slimy tennis balls, cat towers, and half-chewed fake mice. Gather up the sources of amusement and put them in a covered basket. You’ll still have easy access to them, but buyers won’t have to look at your pet’s dirty laundry, so to speak.

If you follow these simple steps, you’ll minimize the impact your pets may have on your home sale and keep them in a secure state of mind during this time of transition. Woof!

Hartford Area Heat Map

It’s getting hot in here…well, for some pockets in town. If you’ve never used Trulia’s heat map functionality, check it out. You can search for Average Listing Price (by week) by state, town, or county. Additionally, it provides historical Average and Median Sales Price data and average Price per Square Foot. It’s a great snapshot tool to understand how your neighborhood is trending.

Metro Hartford Growth Projections

Major news outlets periodically publish housing data for US metro areas. This week’s version was reported by CNNMoney and is originally from Fiserv Lending Solutions. It’s a forecast of growth from April 2007 to April 2008 and a couple snapshot statistics. Although I’m not familiar with Fiserv, the forecasts are in line with others that I have seen since the beginning of the year.

There are two interesting points about our area in this report – homes in Greater Hartford are more affordable than in many other areas around the country and local home prices are expected to increase this year.

Some may be surprised to hear that housing in and around Hartford is actually affordable. The Fiserv data shows that median mortgages as a percentage of income are comparable to Springfield, MA and lower here than anywhere else in New England. Most of the places young professionals find desirable and exciting are considerably less affordable based on this statistic. Anecdotal data from friends and former business school classmates confirm the study’s conclusions. Our friends in the NYC, Boston, and Washington DC areas have considerably less buying power.

The other interesting result of the report is that home prices in the Hartford area are expected to appreciate 2.8% over the next year. Although the usual headline is that US housing is in big trouble, the reality is that real estate is a local industry so conditions are different around the country. Some markets are definitely losing value – typically they are the same ones that experienced such strong growth over the past few years. Most of New England is projected to either hold firm or decline slightly. The Cambridge, MA area is the only other region in NE expected to rise in value, though it’s growth forecast is less than half of Hartford’s.

So the Fiserv study shows that housing in Hartford is not only affordable compared to other metro areas, but that prices are going to be rising over the next year. It seems like the market is still in good shape and we should feel comfortable buying and selling.