Scottsdale Real Estate

In most parts of the United States, real estate is – over time – a good investment. And while we all know that to be true, often this nagging question remains unanswered: “How do I get started buying Scottsdale investment real estate?” For some millennials and others the answer is, “Just do it.” Let’s look at how you can make a start in building your Scottsdale Investment real estate portfolio.

Financial Considerations

Though it seems somewhat ironic to use millennials as a segment of the population perhaps best suited to start a modest Scottsdale investment real estate portfolio, let’s look at a few salient points. Millennials comprise roughly 50% of all current homebuyers in the marketplace, according to the Zillow Group Consumer Housing Trends Report. And given that most millennials buy their first homes or starter homes with the intention of living there fewer than seven years, potential real estate investing could be in their future. Why? Millennials or other first-time homebuyers are in a unique position to buy their second home and maintain their first as a rental property. This can most often be accomplished by leaving the owner-occupied original mortgage intact without selling the property. Hopefully, the mortgage was acquired with a modest down payment and is accompanied by a low interest rate.

For a Scottsdale investment real estate portfolio to be successful two factors need to be considered... 

Obviously, if a borrower is able, it’s much better to keep the first property and rent it rather than trying to purchase a non-owner-occupied rental property. Financing for rental property usually requires a higher down payment – 20%-25% – and will likely have a higher interest rate, as much as .50%-.75% or more. In summary, it will almost surely cost less to arrange for your current house to become a rental property and purchase a second home to use as a primary residence than to buy a second property for use as a rental home.

Quite naturally, in order for this growing Scottsdale investment real estate portfolio to be successful two factors need to be considered:

1 ) You must be able to find a tenant for your first home. This is important not only for the additional rental income to pay for the mortgage, but many millennials or first time homebuyers may find it difficult to qualify for a mortgage on the second home unless they have a tenant under lease.

2) You must be able to come up with the necessary down payment for the second home. With low down payment financing available for as little down as 3% in some cases, this is possible. Most first time homebuyers rely on the equity from the sale of their first home to be able to afford the down payment on their new one.

Tax Advantages

There are certain tax advantages to be enjoyed by renting one of your properties. We recommend discussing them with an accountant in order to make sure you’re up on the latest tax rules regarding Scottsdale investment real estate. As a normal rule, the best tax advantages come in the form of depreciation of the rental property along with being able to deduct both the mortgage interest and the maintenance expenses of the rental property.

Choosing the Best Rental Property

If you’re contemplating turning your first home into a rental property, it’s probably best to consult with a Scottsdale investment real estate professional first to better understand the market and establish a strategy of what you want to accomplish. In addition, there are considerations to discuss regarding whether there is a viable rental market for your home. Experts say homes with one to three bedrooms are likely to rent more easily and more often than larger homes. Lastly, and the real estate rental professionals can better help with this, it’s important to understand who the typical tenants are in your market as well as the type properties they usually rent. That will give you insight as to where to advertise, what rents to charge, what terms to ask for and other decision-making factors.

Assessing Rental Rates

As is the case with rental properties across the country, Scottsdale investment real estate rental rates have been on the rise in the last year or so. In addition, rental rates vary widely in the single-family home and condominium rental market. Most real estate professionals agree that one of the most challenging aspects of renting a home is being able to establish a rental rate low enough to be competitive in the market yet high enough to pay the mortgage and related expenses while making a small profit each month. Again, consult your local Scottsdale investment real estate rental professional for the most current information on what the market will bear and what you can expect to rent your home for.

Final Thoughts

Aside from the financial considerations, one of the most important things to remember about renting out your first home is becoming a landlord. You’ll need to budget both your time and money in order to be able to take care of your tenant’s needs as they arise. Of course, you can hire a property management company to handle the typical chores of a landlord, but there are expenses involved with such an arrangement. Still, it may be worth looking into to see if the rental market will enable you to cover a portion of the rental management fee by raising the rent.

Most experts say when it comes to starting a Scottsdale investment real estate portfolio comprised of rental property, “buy and hold” is usually a good philosophy. However, there are precautions you should take if you’re thinking about making the leap. If you find yourself in a sellers market, just realize that it may be more difficult to buy the second home without getting the needed equity out of the first. However, there are other options such as refinancing.

See more articles pertaining to real estate in the section of articles on Scottsdale Real Estate just below Scottsdale Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

Most real estate on the market is comprised of homes listed by real estate professionals. In addition, some properties may be available for sale directly by the owner. FSBO is the industry acronym for “For Sale By Owner.” One of the common misconceptions with Scottsdale FSBO properties – or FSBOs – is the myth that because the sale doesn’t involve a real estate agent it will somehow be simpler. This is rarely the case. Let’s examine a few key points to keep in mind if you’re in the market for Scottsdale  real estate and come across a home that is advertised as a Scottsdale FSBO.

Most Scottsdale FSBO sellers will still work with your agent.

Typically, savvy home sellers are aware that most buyers they encounter have a close relationship with a buyer’s agent. As such, they will usually make arrangements to ensure the buyer’s agent will be paid for their efforts. Dayton area real estate buyer’s agents are important participants in the home buying process. If you’re interested in taking a closer look at a Scottsdale FSBO, consider calling us to make the initial contact with the seller on your behalf.

A home is a home, regardless of whether it’s a FSBO or not.

Just because a Scottsdale FSBO is not listed with an agent doesn't mean that seller won't work with an agent.

Just because a home is listed for sale by the owner doesn’t mean it should be treated any differently than a home listed by a professional real estate firm. The biggest difference between the two is the greater likelihood that you’ll be meeting, talking and negotiating directly with the seller. So be prepared. Because a home sale is often an emotionally challenging experience for some sellers to go through, be ready for some hurdles – and try your best to take them in stride.

If you’re truly interested in a Scottsdale FSBO home, you’ll find a way to work around the drama. Remember, lean on your agent for assistance and expertise. In addition, if you find it necessary to view the home without the owner being there, just ask. While it’s always a little uncomfortable for owners to have prospective buyers “snoop around” by themselves or with their agent, if you’re selling your home as a FSBO it goes with the territory. Try to put yourself in their shoes and understand how you might feel if the roles were reversed. Then, use that to your advantage by assuring the seller that you simply want to take some extra time alone to envision your furniture and your belongings in what may end up being your home. Once the seller understands your insistence and reasoning, they will likely be more open to letting you have all the time you need – especially if it means the difference in making the sale.

The law is the law – and it applies to all homes equally.

Regardless of whether a home is being sold as a FSBO or not, real estate sales laws still apply. Sellers have an obligation to disclose existing issues about the home to the buyers. In addition, the seller could also be bound to have the home inspected and perform certain repairs. Unfortunately, many Scottsdale FSBO sellers are rookies when it comes to selling homes, and they simply aren’t aware of the laws or common industry practices. Again, rely on your agent – and your own instincts – to determine if a seller is shirking his responsibility or making it more difficult to inspect the home than it should be. It could be a tell-tale sign that the seller knows something about his home that he doesn’t want you or your agent to find out about. If that’s even remotely the situation, keep looking. Life is too short to deal with difficult people, and money is too valuable to take a risk on a home that may be trouble in the future.

Anticipate inflated asking prices.

If there’s one factor that tends to remain consistent when owners try to sell their homes directly, it’s overpricing. Not having a knowledgeable professional real estate agent to consult often means sellers price their homes unrealistically. They tend to dismiss the market comparables and any other recent sales data and erroneously assume their home is worth more than the others in the same neighborhood. You'll often hear rationalizations or justifications expressed by owners that go something like this:  "Our home is the nicest one in the neighborhood." While it's normal for any homeowner to have pride in their home and want to get top dollar when they sell, the cold hard truth is more like, "Your home is pretty much like all the others in the neighborhood – some are more attractive, some less."  It’s not necessarily greed that motivates them to inflate their asking price, it’s more a case of just not knowing the market – and the Scottsdale home selling process. Again, they’re rookies, and just like in the big leagues, rookies make mistakes.

If you really like the home, once again rely on your own agent to assist. By providing comparable sales information of similar homes in the neighborhood maybe your agent can convince the seller to see his price is too high. In addition, if the home has been appraised already – or if you can perhaps negotiate having an appraisal done – you can use that as a closer representation of the home’s value. If either of those ideas fail, keep looking. A stubborn owner isn’t worth the headache, and there are likely other homes on the market that are priced where they should be.

Just keep this in mind: A Scottsdale FSBO home is just a home, it just happens to be listed for sale by the homeowner. Discuss the home with your agent and get his or her thoughts and input. While the negotiation process may be a little different since the sellers are going solo, remember there are still certain obligations incumbent upon the sellers. Don’t be intimidated by the fact that the seller is listing the home directly – as mentioned above, that doesn’t necessarily mean he knows more about Scottsdale real estate than you – and he certainly doesn’t know the process as well as your professional agent.

See more articles pertaining to real estate in the section of articles on Scottsdale Real Estate just below Scottsdale Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

The Scottsdale real estate market has probably changed quite a bit since the last time you were part of a home sale closing, if ever. Not only has the housing market changed dramatically in recent years, but so have mortgage lending requirements. In addition, as a homeowner your needs and desires for your next home have probably changed, too. So, if you’re looking to move up or move out of your present home you’re likely in the middle of a well-known dilemma: Should you sell your current home first or buy your new one? Let’s take a closer look at that situation and consider a few ideas.

Scottsdale Real Estate – Making the Right Move

How to know the right move when it comes to Scottsdale real estate.

A logical place to start to analyze the problem of whether to sell first or buy first is to examine just how much risk you’re willing to take. If you fancy yourself a veritable Las Vegas gambler that goes “all-in” every chance he gets, you may decide to assume a greater risk than some people. So, if you elected to buy your new home before you sold your existing home, the possibility of having two house payments at the same time may be less stressful for you than for others. Conversely, if you felt that situation would lead to sleepless nights you’d probably be more comfortable – and well rested – by taking a more conservative approach. That will entail selling your current home first before you started your new home search.

In addition to your risk tolerance, there are some other factors that could potentially sway your decision. Because Scottsdale real estate prices have risen while housing inventory from which to choose continues to be thin, it’s possible you could sell your existing home but not be lucky enough to find a new home immediately. What could make matters worse is, if the added stress and pressure to rush to find a new house led you to settle for something less desirable than you wanted.

Scottsdale real estate experts suggest you ask yourself these important questions to more fully understand the timing of your current home’s sale and your next purchase.

Can you afford two mortgage loans at the same time?

Carefully examine your income and obligations to determine, are you able to comfortably afford two mortgage payments at the same time? If the honest answer is “no,” then do yourself a favor and sell your current home first. A mortgage lender will ask the same question and perform the same financial analysis. Remember, just because you can afford it, doesn’t mean you should.

Some lending institutions offer bridge loans – short-term loans designed to allow flexibility between selling one home and buying another. The normal term is six months to a year.

Another consideration is where your down payment will come from. Do you have enough money in a savings or investment account you plan to liquidate? If not, are you planning to use the equity in your existing home? While some lenders may be willing to provide you with a 100% conventional loan – enabling you to buy the new home without first selling your current one – some lenders may not.

How soon do you want or need to move?

Often the biggest deciding factor of what to do first in the selling-then-buying versus the buying-then-selling conundrum is how quickly they want or need to make the move. If you’ve taken a new job that requires you to relocate out of state, it may be best to put your home on the market first. That way, as you make plans to move and begin your new home search if your home sells it will make your relocation easier and less stressful.  However, if you're simply shopping for a larger home or want to move into a nicer neighborhood it could be better to not sell your home immediately. Wait until you find a new one that best fits your needs. This is where the advice of an experienced Scottsdale real estate agent can be invaluable.

Are you aware of the newest regulations?

If it’s been awhile since you’ve bought a new home with a mortgage, you’ll need to be aware of some new federal regulations that took affect late last year. The TILA-RESPA Integrated Disclosure rules now require mortgage lenders to give new borrowers two forms – one at the beginning of the loan application process, and one upon loan approval. The importance of these forms is this:  The Closing Disclosure form must be given to the borrower no less than three days before the loan closing. You can no longer expect to close on the sale of your existing home one day and close on the new home purchase the next.

The Closing Disclosure requires the lender to have all the integral parts of the mortgage loan finalized and approved prior to the three-day period. The result often means selling one home and buying the next can be a little “iffy.” Closing delays are a likely possibility. Know what to expect and rely on the advice of your mortgage lender and Scottsdale real estate agent. It can help make the process flow smoother, without snags or delays.

Do you need a negotiating advantage?

Some experts say that purchasing your next home before selling your existing one has distinct benefits. Make an offer to purchase a home without the often-used contingency on the sale of your current home. It will likely be considered more favorably by most sellers. So, if you can swing both loan payments or can get a bridge loan or other financing, go for it!

Do you have somewhere to move while you wait to buy a new house?

As we’ve discussed, a tight housing market with low inventory gives you little from which to choose. As a result, you could find yourself without a home if you sell prior to buying something else. Before making a move requiring you to find a new home quickly or renting a place, think it through. Don’t panic or rush into buying a home you don’t really want. Take your time and make a plan. Remember, too, that it’s okay to rent while you’re looking to buy something new. Be aware that most rentals require at least a six-month lease – and many require a year.

You can find more articles pertaining to Scottsdale real estate in several categories below Scottsdale Real Estate Categories in the column to your right.

We also post tips daily on Facebook and Twitter and would love for you to follow us there, too.

Buying Scottsdale real estate is an emotional process. Many buyers see a house they fall in love with and decide in their heart and mind that's the home they want to buy. If you find what appears to be the perfect home for you and your family, it’s a good idea to take a more detailed, in-depth look at the home’s exterior. The old adage, “Don’t judge a book by its cover” doesn’t apply in this case. For homes in the Scottsdale real estate market, it’s important to give the outside of the home a thorough inspection. By doing so, the “cover” may, indeed, give you a better idea of the entire “book.” Let’s take a look at some of the exterior considerations to keep in mind when looking for a home to buy.

Scottsdale Real Estate – Check the Outside

Trees and Foliage

Scottsdale real estate always needs a close up inspection of the exterior of the home

Take a closer look at the trees surrounding or near the home. Pay particular attention to how close the trees are to the home’s foundation. As those trees continue to grow, the roots can expand and cause problems to the foundation. In addition, other areas like concrete or paved walkways and driveways can be affected. Furthermore, if an older tree is removed it could create a void when the roots decay, resulting in a drop in the foundation.

To ensure you can avoid potential problems it may be a good idea to seek the opinion of a foundation expert during the inspection process. Enlist the aid of an experienced tree expert of arborist to evaluate the health of trees that may affect your home.

In addition, those beautiful mature trees may have limbs that extend over the home’s roof. Have the home inspected for any signs of damage to the roof shingles or eaves. Squirrels, possums, and rodents often use tree branches to get into accessible areas of your home. When that happens, they can enter your attic through the smallest of openings in the fascia or soffit. If the home you’re looking to buy has foliage extending over its roof, consider asking the seller to prune the tree limbs. It’s also advisable to inspect the shrubbery that may be in direct contact with the house to make sure it doesn’t contain evidence of termites or carpenter ants that may have gained easy access. Naturally, to be completely sure, it’s always good to have a professional termite or wood-destroying insect inspection and treatment.

The Home’s Foundation

Check the foundation of the home for cracks. Some cracks are to be expected and most will be minor in nature. However, cracks allow moisture in the foundation and can cause deterioration – especially in climates subject to freezing temperatures in the winter.

Experts suggest that if you encounter foundation cracks you should have a contractor inspect them to determine the degree of severity. If you decide to move forward with the home purchase, the cost of the repairs – if necessary – could be a factor in the price negotiation.

Lastly, in areas prone to foundation problems, a potential purchaser should take note of the grade or slope of the soil around and against the house. The foundation should be exposed by a minimum of two inches and it should be sloped away from the house. This ensures that rainwater runs away from the foundation and doesn’t collect or pool against the home.

A Swimming Pool  

If the home in the Scottsdale real estate market you’re interested in has a swimming pool, there are several questions you should ask:

How old is the pool lining?

Has the pool liner been resurfaced?

How old is the pool equipment?

For a more in-depth inspection, contact a professional pool company. While a swimming pool can seem like a wonderful amenity for a home, it can also become an expensive and problematic feature for prospective home owners.

What if You Find a Problem?

If you find an issue or two with the home’s exterior, it doesn’t necessarily mean you shouldn’t buy the house. Compile an analysis of the home’s plusses and minuses. Consider the problems objectively, taking into consideration the cost to remedy them. Then, armed with that information you can either request that the seller make the necessary repairs or use that in the negotiating process. In many cases, the seller may discount the sales price based on the estimated cost of substantiated repairs a buyer may have to make. In addition, some lenders may require certain repairs be made before they provide final approval of the financing.

What if Everything’s Good?

If everything regarding your exterior inspection checks out, you should still keep in mind the future maintenance of the home.

•  Continue to keep foliage and tree branches pruned

•  Determine what type of grass your yard has and care for it accordingly

•  If you have a lawn sprinkler system, check it regularly

•  Inspect you landscape lighting

Remember, Curb Appeal is More Than Just the Obvious

Curb appeal is important in evaluating Scottsdale real estate, but curb appeal is more than just an attractive mailbox or driveway. There are many other components that should be considered and inspected to make sure your prospective home is all you want it to be. Be cautious, inquisitive and have an expert inspect the home. A little knowledge beforehand can save a ton of frustration and expense after the fact.

You can find more articles pertaining to Scottsdale real estate in the real estate section of our site below Scottsdale Real Estate Categories in the column to your right.

We also post tips daily on Facebook and Twitter and would love for you to follow us there as well.

Scottsdale home selling should be a happy occasion. Often, however, the next step – moving out of one home and into the next – can be stressful at best and sometimes downright traumatic. Taking a few necessary precautions can make it less worrisome, maybe almost enjoyable.

Scottsdale Home Selling – A Moving Experience

Most people dread moving because of the unforeseen problems that seem to occur at every turn. A torrential rain comes as soon as the movers are loading the truck. Your car loaded with items you wanted to personally transport has an untimely flat tire. You know the drill… these things never happen at a good time, but why do they happen on an already-stressful moving day?

Following the Scottsdale home selling experience, most of the common moving nightmares fall into one of these three categories. Let’s take a look at what usually happens and how we can best avoid them.

Scottsdale home selling should be a happy occasion, but it doesn't always turn out that way.

Incompetent Movers
You'd think in this day and age, a reputable moving company wouldn’t have incompetent or untrained people serving its customers. However, as with any other business, it happens. It’s not uncommon for many moving horror stories to revolve around unscrupulous, inexperienced or downright bad movers.

Scottsdale home selling – and especially moving – is a time-sensitive process. As such, when movers are late or – worse yet – don’t show up the resulting domino-effect can be frustrating and borderline disastrous. If you’re an understanding customer, you may give them a certain window of time before you call the moving company and complain. More times than not, you’re met with excuses about why your movers are running late or haven’t shown up yet. These excuses range from traffic jams to mechanical breakdowns to delays on a previous move. No matter the reason, you’re ready to move and they aren’t there.

Movers who are inexperienced, untrained or careless add to the stress, worry and anger levels. More frustrating for homeowners having just completed the Scottsdale home selling process is that the end may not be in sight. Just when you think the hard part is over, the moving process often ends up being the worst experience.

A moving crew shows up with an undersized truck – despite your best description of what was needed to be moved, how many rooms of furniture, packed boxes, etc. Didn’t they listen when they booked your move? How can they be so incompetent and stay in business?

You watch in horror as the movers scratch your brand new mahogany dining room table and break your grandmother’s antique mirror. And those are just the damages you can see – there’s no telling what other horrors await when they move your belongings into your new home.

There is good news, however. There are relatively easy ways to avoid the moving pitfalls. Spend some time researching your movers prior to hiring them. Make sure they are licensed and insured. Ask for references and contact them to get their feedback. Check with the local Better Business Bureau or Chamber of Commerce to find out more about their business reputation and professionalism. It’s probably a good idea to purchase additional insurance for your possessions, depending on the moving company’s liability limits. Consult your insurance agent for more information.

Traffic Problems
Things that occur on the road to and from your move can often cause or contribute to added stress.

Traffic jams can delay the moving truck, sometimes to the point there may not be enough time to handle the move on a particular day. Again, the domino-effect means since you can’t move out on time, the floor refinishers can’t get in the house to do what they need to do for the new buyers, and the new buyers can’t move until the floors are completed. Often, a few hours delay may result in several days of additional delays – and possibly additional expenses.

Traffic accidents, of course, mean the moving truck will have to wait until the damaged vehicles are moved and traffic is returned to normal.  Depending on the time, location and severity of the accident this could take an hour or longer. Worse still is if the accident actually involves the moving truck carrying your possessions. Then, not only do you have the delay to contend with, but any damages that may have occurred.

Mechanical failures or breakdowns are fairly common in older moving trucks due in part to the number of miles they are driven and the wear and tear they endure. In the event of a breakdown, you’ll have to wait for the moving company to send a second truck to transfer your furniture and other possessions. That creates additional delays and increases the chances damage may occur during the transfer.

Parking problems, surprisingly, account for added stress levels during a move. Especially in the case of a move to a downtown apartment complex where parking is limited or restricted, the moving truck may have to wait for an appropriate parking space. An alternative – though not a good one – is for the truck to park farther away than expected, thereby slowing down the moving process and potentially causing you to have to pay extra for the delay or long-carry charges.

While there’s virtually nothing you can do to prevent traffic accidents or breakdowns, it may be possible to reserve a parking space accessible to your new location. In addition, you can choose a moving company with experienced drivers and whose vehicles are in good operating condition.

Poor Organization
One way to potentially avoid most moving problems following your Scottsdale home selling is to plan as carefully as possible. A plan including each step of the relocation process complete with attention to detail and an allowance for delays may give you additional peace of mind. Although it’s impossible to predict and plan for every potential problem, expecting the unexpected is usually a good preparation and planning tool. When possible, have a back-up plan just in case.

Additional examples of poor organization include packing problems or not being prepared when the movers arrive. The list can range from forgetting the piano won’t fit through the front door to not having the various boxes labeled properly.

In addition, paperwork problems can often lead to additional delays. If you forget to transfer the utilities, when the movers arrive at your new home you may not have electricity or water.

Lastly, safety issues should be of utmost concern during the moving process. Remember, there will be many items that will be out of place. That could mean potential trip, slip and fall hazards. Plus, many homeowners find themselves distracted when negotiating steps, stairs or when driving in unfamiliar surroundings.

Hopefully some of these tips will help you have a smoothe moving day. Remember to also Find us on Facebook and Follow us on Twitter. We post tips there each day as well.