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Delaware President’s Day Brings Housing Practicality to Mind

Feb 27, 2017

This week, as usual, Delaware celebrates President’s Day on the 3rd Monday in February. Ideally, Delaware’s citizenry observes the holiday by recalling the indispensable contributions of Washington and Lincoln and other Presidential patriots. When you compare today’s typical Delaware house with the one-room log cabin of Lincoln’s birthplace, you get a glimpse of how far we’ve come in little more than a couple of centuries. A lot of Presidents had a hand in getting that accomplished.

In the intervening years, keeping track of what, exactly, comprises the typical American home has been the subject of much measuring and reporting. But last week, as the nation prepared for this year’s President’s Day, the NAR put out a novel kind of civic-minded observation. “In the spirit of President’s Day,” they had a stab at chronicling today’s Chief Executives’ official digs with our own—their fellow citizens’ residences.

How Does the White House Compare to the Average Home?” didn’t deliver a warm and fuzzy “we’re all in this together” kind of takeaway—but the average reader probably didn’t expect that it would. The high points were presented in an infographic with colorful boxes and circles loaded with small print facts about the White House and the “Typical House.”

In fact, the White House has virtually nothing in common with the Typical House, which was represented by a picture of a nicely-painted row house. Most typical Delaware houses aren’t row houses, but if we ignore that for the moment, there were some interesting tidbits Delaware homeowners might find interesting:

  • The Typical House was built in 1991, so it’s newer than the White House which was built in 1792. (Not mentioned: the alterations made by the British when they torched it in the War of 1812).
  • The Typical U.S. detached single-family house as purchased is approximately 1,950 square feet—probably a good deal smaller than the White House, although the square footage isn’t listed (maybe it’s classified?). What is detailed is the White House’s 132 rooms. They include a jogging track, swimming pool, movie theater, billiard room and bowling alley.
  • The Typical House in the U.S. is a lot like a typical newer Delaware house, with a median of 3 bedrooms. The White House has 35.
  • Nationwide, the Typical House’s tenure with the typical owner is 12 years, whereas the White House’s inhabitants will have to call the moving vans after just 4 or 8 years.

  So it turns out that the White House isn’t really a lot like most normal Delaware houses. True, most purchases are also previously-owned, detached single-family homes; but since most of today’s families couldn’t use 35 bedrooms, there the comparison begins to crumble. Besides, few would want to cope with dragging the laundry basket up and down the 6 levels…

Here’s hoping that your own Delaware house is well-suited to the practical needs of your family. If not: I’m a phone call away! Call/Text me Russell Stucki at (302) 228-7871, email me at russellstucki@remax.net, visit more listings at www.beachrealestatemarket.com

Delaware Rental Homes: To Pet or Not To Pet…

Feb 27, 2017

Last week’s 141st Westminster Dog Show TV ratings may not have gone through the woof—but for “Rumor,” the winning German Shepard, it was a wag-tastic finale. It brought to mind one of the foremost issues facing today’s Delaware rental homes landlords: Fido or No; Kitty or not. It can be something of a brow-wrinkler.

 For sure, no matter what the ultimate decision, the owners of Delaware’s rental homes will remain on the upside in the tenant-landlord relationship. As landlords, they are in the happy position of receiving rents from their well-behaved tenants—even as they build equity in their rental properties. But one of the decisions that goes into that picture-perfect arrangement is the one about allowing or restricting pets.

A primary rule for Delaware rental home success is keeping the property rented. Vacancies cause divots in Delaware rental homes’ balance sheets—the antithesis of what rental homes ideally produce. And for each turnover, advertising, cleaning, and reconditioning expenses create new expense items. That’s where the pets/no pets decision weighs in.

The American Pet Products Association told us in 2012 that 39% of U.S. households owned at least one dog and that 33% owned at least one cat (there’s ample evidence that it’s the cats who actually own the households, but that’s another issue). But now comes evidence that those percentages may be severely underestimated.

In their “Animal House 2017” study dealing with remodeling, the National Association of Realtors® found that 81% of respondents say that animal-related considerations play a role when “deciding on their next living situation.”

Eighty-one percent!!! That’s 4 out of 5! If Delaware rental homes even come close to fitting that kind of profile, it means that landlords who choose a “no pets” strategy to protect their properties from all clawing digging, scratching and chewing might be severely limiting their potential renter pool—with bottom line repercussions. Since 89% of respondents with pets say they wouldn’t consider giving up their animals due to housing restrictions, that conclusion could be accurate.

Along those lines, the pro-animal sector is ready, willing and able to produce studies and statistics aimed at publicizing the financial benefits for owners of pets-allowed rental homes. Petfinder is one such site: when it tallies rent surcharges and shortened vacancy periods and subtracts average damage and insurance increases, it calculates a net benefit of more than $2,700 per year as a conservative estimate. I don’t know how conservative that figure truly is (most of the net is due to pet surcharges), but it could well be true that tenants in pet-friendly digs did remain in place more than twice as long (Petfinder’s calculation). Interestingly, it’s also noted that extended tenancy did not occur for tenants who kept pets illegally.

If you are thinking about the advantages of acquiring one of Delaware’s rental homes— whether it will be pet-friendly or not—now is a particularly good time to take a look at today’s available properties. Getting a jump on the spring rush makes sense—so why not give me a call? Call/Text me Russell Stucki at (302) 228-7871, email me at russellstucki@remax.net, visit more listings at www.beachrealestatemarket.com

Liquidity Dimension for an Investment in Delaware Real Estate

Feb 27, 2017

Buying a home as a place to live certainly has important financial implications, but they are only part of an equation that has major lifestyle implications. A given house may be a really terrific deal—but if it turns out that you aren’t comfortable living there, buying it will probably wind up being a mistake.

When the motivation for an investment in Delaware residential real estate is purely financial, it’s a less complicated decision. Taking all factors into account, when a property pencils out as a likely financial winner, it’s a matter of weighing it against the risks and rewards of available alternative investments. In one risk-minimizing longer-term strategy, for instance, the risk that a rental property might go vacant is minimized by setting its monthly rental at little more than the cost of maintenance and mortgage payments. The plan is to patiently await the blissful moment when the mortgage is paid off—at which point a substantial net income begins to flow.

In all cases, any real estate investment in Delaware should be part an overall strategy. It’s likely to represent diversification within a mix of other investment vehicles. Equities and bonds don’t have the “reality” that a deed conveys, but do have the advantage of being less complicated to buy and manage. To the extent that they can be sold more quickly, they are rightly thought of as being more liquid…which brings up the point, here.

Knowing when you can cash out to free equity for other purposes is a positive, for sure—but there are liquidity options for Delaware real estate investments, too:

  • Home Equity Loans. Carrying a fixed or variable interest rate, “seconds” are usually easier to arrange than primary home loans—and are often free of closing costs.
  • HELOCs. These tap home equity to collateralize a line of credit. They are often described as functioning like low-interest credit cards—amounts are borrowed in increments the borrower wishes up to the credit limit; then paid off over time.
  • Cash Out Refinance Loans. These are like home equity loans taken in amounts more than the amount owed. The difference is freed for investment elsewhere (or for any other purpose).

As Investopedia’s Robert Stammers writes, “increasing concerns about the future long-term variability of stock and bond returns” explains why a tactical investment in real estate “is known for its ability to serve as a portfolio diversifier and inflation hedge.”

Knowing how an investment in Delaware real estate would figure into your own long-term plan requires knowing what all the options are—and the easily overlooked liquidity dimension of a real estate investment is one of those. Give me a call if you are interested in sharing an overview of some of the best opportunities now on the market!   Call/Text me Russell Stucki at (302) 228-7871, email me at russellstucki@remax.net, visit more listings at www.beachrealestatemarket.com

Active Buyers Seize the Lowest Delaware Mortgage Rates

Feb 27, 2017

Without knowing it, many people develop something akin to a split personality when it comes to buying a home. In the beginning, as they pursue their ideal Delaware house, they automatically assume an unabashedly active role. Nobody has to tell them that they’re the boss in the process—since they are the customer, they correctly expect to be in total command of the house hunting process. They develop their unique wish list and ultimately decide which property best satisfies it.

But then a split can develop. The active, in-charge commander often does an about-face when it comes to the nuts and bolts of the next step: securing the lowest Delaware mortgage rate. Upon entering the realm of what seems to be a monolithic and largely inscrutable home loan industry, the formerly active, energetic house hunter turns passive, hoping for approval with fingers crossed.

To some degree, that’s not an unreasonable stance, since home loan terms are based on hard numbers already set in stone: income and expense records, payment histories, and credit score numbers. But in truth, the best way to secure the lowest mortgage rate for a new Delaware home loan is to start early and actively to create the scenario you’re hoping for. Here are six ways to make it happen:

  1. First, as soon as possible and well before any house hunting begins, check for errors in your credit report. They can and should be corrected, but since the process can take months, here’s where being proactive early pays off.
  2. Stay on top of those credit accounts. Continue to use credit cards, but keep the balances below 30% of their maximum (better yet: below 20%).
  3. As you approach application time, keep your documents and reports up-to-date. Quick responses to document requests speed the process, and having everything at hand makes your part of the work much easier.
  4. Watch the market. Rates change frequently, and keeping an eye on their movement from week to week will build your confidence in being able to recognize an opportune moment to tap the lowest mortgage rates.
  5. Be wary of loans advertised as “no-cost.” The Brooklyn Bridge is not for sale, either: loans cost something to develop, and those costs will always be paid by the borrower. The bottom line lowest mortgage rates are best represented by the APR percentage, which summarizes the total cost, including fees, in a single number.
  6. Be prepared to shop. Whether you tap a savvy area mortgage broker for help or go it alone, tracking down the lowest mortgage rates in Delaware is doable. The home loan industry really isn’t as monolithic as it might seem.

There shouldn’t be a split between actively seeking your dream house—then merely passively hoping for favorable loan terms to come your way. Starting early is one key—and teaming with an experienced real estate professional is the other. That’s right—you guessed it: call me! Call/Text me Russell Stucki at (302) 228-7871, email me at russellstucki@remax.net, visit more listings at www.beachrealestatemarket.com