Monthly Archives: November 2014

Rent To Own

From the inbox: why don’t people rent to own?

This questions comes up a lot!  The answer to this one is complex and heavily market dependent.  Local agents, please chip in here if you’d like.

**THIS IS NOT LEGAL ADVICE**

The short answer is that in the Colorado Springs market, they generally don’t have to. The demand for housing is high and interests rates are so low that the majority of buyers don’t need this type of financing, either.

The longer answer is that a rent to own is not a simple transaction. A lot of folks think this is an easier option than a traditional purchase but that’s not the case.

Rent to own often requires a substantial down payment. Also, this money is usually forfeit to the seller should you the buyer choose not to execute a sale.

That said, they have their place in a market. If a person would like to buy a home but needs time to work on their credit, it’s an option. However, always consult with a lender, Realtor and attorney prior to signing or drafting a lease purchase option contract,

Looking to buy or sell a home in Colorado Springs or Denver? Call Rob at 719-440-6626!

Home Improvement

Houselogic: carpet or hardwood?

Hardwood reigns supreme as the anecdotal favorite….should we give carpet a chance?

If you’re looking to buy or sell in Colorado Springs or Denver, I’d be honored to earn your business!  Call Rob at 719-440-6626!

MIlitary

Military pay: DoD moves to increase protections for military members…

…and pay.  This is an interesting and nuanced problem the DoD has moved to address.  The core of it is that an allotment doesn’t have the same protections (apparently) that an ACH withdrawal from an account does.  I support moves to increase protections from predatory businesses for our military members.

Consumerist

Mortgages

From the inbox: are you joking about $780 up front to buy a home?

Short answer: I have fun with but rarely joke when it comes to real estate (this is serious business!).  Nope, not joking, you can often get into a home for as little as $780 in Colorado Springs.

Longer answer: there are three costs to a home buyer generally in the purchase process.

1. Earnest money: this is “good faith” money a buyer puts up to compensate the seller if they (the buyer) breaches contract for a non-protected reason.  I’ve had a lot of success w/$500 earnest money in town.  Note: coordinate with your lender but you can often get this money back at closing.

2. Inspection costs: a home inspection costs about $280. This is a sunk cost; even if you choose not to continue with the purchase, this isn’t reimbursable in the normal course of a purchase.

3. Appraisal: there is an appraisal cost that some lenders will charge upfront, others charge as part of the loan costs.

In sum, it is entirely possible to buy a home for an upfront cost of $780-1180, depending on the lender and the earnest money required…and that earnest money can often come back to you.

Questions, please give me a call! If you’re looking to buy or sell in Colorado Springs or Denver, I’d be honored to earn your business.

Facebook.com/robthompsonrealtor

Food for thought

Entrepreneur 101: Capture those ideas!

As a “pre-veteran” myself who’s building a small business, capturing your ideas as they occur is very important.  Often, in the course of taking care of business (both military and real estate), by the time I am home for the night, I’ve forgotten a few things I “meant to write down for future plans.”   Since I’ve started actually using my smartphone to take notes, I feel I’ve gotten ahead of the curve on capturing these ideas.

Looking to buy or sell in Colorado Springs or Denver, I’d be honored to earn your business!  Call Rob with “The Agency” at 719-440-6626.

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Uncategorized

Family handman: you have more storage in your home than you think!

If your home is like ours, there’s never enough storage.  Here are a few ideas to maximize your space!

If you’re looking to buy or sell in Colorado Springs or Denver, give Rob a call at 719-440-6626!

Taxes

Houselogic: homeowners, don’t miss these tax deductions…

…if you own a home or are thinking about, these are some of the deductions you may be able to use.

Looking to buy or sell in Colorado Springs, call Rob at 719-440-6626!

*A good accountant/CPA is well worth the cost of their services.  Always consult one before filing your taxes!

Rentals

From the inbox: why is the rent so high?!

This is one that I’ve been asked a bunch of times!  It’s a good question and one that bears repeated asking.

Short answer: property and mortgage values and cash flow.

Longer answer: it’s a function of the dymanics of the city. As a landlord myself, here’s the analysis/format I use in looking at this. If you want to buy a $150,000 home, as an investment, you need at least 20% down. Let’s assume $1000 a year in insurance and another in taxes.

For investment purposes then, this home is going to cost a $30,000 down payment and at a 4.5% APR, cost a landlord $777 a month to pay principal, interest, taxes and insurance.

A landlord is going to need cash flow, too, to be prepared for emergencies and have a return on their investment. In this case, that $150,000 3 Bed, 2 bath home may rent for $1000-1150.  The landlord is “cash flowing” about $223-373 in this case.  However, that does not account for their costs any time anything breaks.  This isn’t profit for the landlord, necessarily, as there are taxes and maintenance of the home involved, too.

It scales from there…a $175K home requires a 35K down payment (as an investment property) and costs $878 a month to carry in this scenario.

LARGE CAVEAT: This is for a 20% conventional loan, investment property. An owner occupied home will require much less down but have a higher overall mortgage as a result.

Looking to buy or sell a home in Colorado Springs? Please call Rob at 719-440-6626 or email me at robthompsonrealtor@gmail.com.

*This is not legal or financial advise just sharing information and experience.  Always consult a CPA, lender or attorney as needed.