Month: May 2013

Birmingham, AL Home Sales Are Up

Matthew Whitaker - Wednesday, May 29, 2013

If you are looking for investment opportunities in Birmingham, AL then it is important that you remain up-to-date on the status of the local real estate market. Birmingham, like many other cities throughout the United States, is making progress significant strides toward real estate market recovery – putting the last few years of turbulence in the rear-view mirror.

According to the Alabama Center for Real Estate (ACRE), the median sales price for Blount, Jefferson, Shelby, and St. Clair counties increased 17.4% from April 2012 to April 2013. In addition to rising home prices, home sales are also increasing. Specifically, there was a 9.4% increase in home sales from April 2012 to April 2013 for the greater Birmingham area.

This news shows that home prices and home sales throughout the Birmingham area are increasing, which is indicative of real estate market growth. More than likely, home prices and homes sales will continue the slow but steady increase throughout the near future. Therefore, if you have been waiting for an opportunity to invest in Birmingham real estate while prices are still low, then now is a great time to invest.

Birmingham Investment Property Options

When it comes to investment property, investors typically either utilize the property for house flipping purposes for (hopefully) a quick profit, or they turn the property into rentals. Over the last few years, many people have been purchasing discounted properties and putting them back on the market as rentals until the market makes a full recovery – at which time many will then sell the property for a nice profit.

However, not everyone wants to be a landlord—understandably so. That is where Birmingham, AL property managers come into play. There are many reasons to hire a property manager for your Alabama investment property. If you are looking to purchase investment properties in Alabama then allow a property manager to perform the duties you do not want to do so that you can focus your efforts on finding more investment opportunities.

In conclusion, the Birmingham real estate market is making progress—slowly but surely. If you want to take advantage of still low home prices and mortgage rates, then start looking for investment properties today.

Planning to Sell in 2013? Look into a Starker Exchange

Matthew Whitaker - Thursday, May 23, 2013

If you are a real estate investor, then you more than likely plan to do some buying or selling of investment properties this year. However, with the current capital gains tax rate, those who are looking to sell a house may wish to consider a Starker exchange instead.

What is a Starker Exchange?

A Starker exchange essentially allows you to defer your tax obligations by exchanging properties with another. The specific and complex rules are outlined in Section 1031 of the Internal Revenue Code. For investors, this option allows you to take your investment property that you are looking to sell, and exchange it for another investment property while deferring taxes.

Currently, the capital gains taxes are a hefty 18.8% —not including a recapture tax on depreciation.

What Qualifies as a Starker Exchange?

The rules are rather complex, but a basic synthesis of the rules is explained below. Please note that you should thoroughly review these rules yourself and make sure you follow them to deter taxes.

Properties must be exchanged

The replacement property (the one you receive) has to be “held for productive use in trade, in business, or for investment.”

Property cannot be your principal residence

There are detailed rules that outlines how soon a replacement property must be identified after transferring your property to its new owner as well as the number of properties that can be exchanged and their aggregate fair market value.

It is essential to note that the property or properties you obtain are to be used for investment property purposes (at least for a while) and therefore are to be rented out to tenants. If you do not wish to be a landlord, you can always hire a property manager to do everything from tenant screening to collecting and depositing rent checks for you—allowing you to continue focusing on finding new investment properties.

In short, if you are looking to sell an investment property this year but wish to avoid the 18.8% capital gains tax, then you should look into a Starker exchange and determine if this option is a good fit for your investing goals. Make sure you speak with a financial advisor to ensure that a Starker exchange is a good idea for your specific circumstance.

Tenant Selection Matters: Finding Ideal Tenants

Matthew Whitaker - Monday, May 20, 2013

If you are a property owner, then you more than likely have an abundance of stories of bad tenants. You know what I am talking about—tenants who fail to pay their rent on time, intentionally damage your property, are always complaining, etc.

Your tenants can make property ownership a rewarding or frustrating experience. Therefore, when looking for tenants you should take the selection process very seriously. When it comes to property ownership, actively screening your tenants is absolutely essential.

Tips for Finding Ideal Tenants

When screening for tenants, it is pertinent that you conduct a background check and that you actually call previous property owners (not just the most recent one) to learn more about that property owner’s experiences with the potential tenants.

Along with calling previous property owners, it is also recommended that you have a face-to-face interview with each tenant that you are considering. These interviews can provide valuable information about whether or not these tenants are a good fit for you and your property—going well beyond what you can get from a paper application.

Plus, make sure you review the credit history and confirm current employment to increase the chances of finding a tenant that will make rent payments on time every month.

Hire a Property Manager in Birmingham, AL to Screen Tenants for You

If you simply do not have the time or desire to manage your properties, then you can always hire a Birmingham property manager to do everything from screening possible tenants to collecting rent and scheduling maintenance.

Property managers can make your property ownership a lot easier on you, while freeing up some of your time to allow you to continue looking for investment properties.

At the end of the day, who you choose as your tenants is incredibly important. Therefore, make sure you take the screening process seriously—if you do not have time or desire to conduct a thorough screening process yourself, then hire a property manager in Birmingham to help you ensure that you are finding quality tenants.

Now is the Perfect Time for Investing in Rentals

Matthew Whitaker - Sunday, May 19, 2013

If you are an investor who has been waiting for the perfect opportunity to invest in Birmingham rental properties, then your time has come!

The Birmingham real estate market, like many other places throughout the United States, has been showing significant signs of progress toward recovery – but has not yet reached recovery. Specifically, today’s real estate market is still filled with discount properties (foreclosures, short sales, etc.) in addition to still-low home prices and mortgage rates.

The combination of low prices and interest rates with a positive real estate market outlook for the near future means now is your chance to invest in rental properties in Birmingham, AL.

Three Tips for Investing in Birmingham Rental Properties

When investing in any type of real estate, it is essential that you follow tips and guidelines to help increase your chances of making a smart real estate investment.

Tip #1: Know Your Purpose

When purchasing rental properties, it is essential that you understand your purchase for investing. As you know, not all home are built alike. Some homes can quickly and relatively easily be converted into a duplex, while others cannot. Furthermore, many lenders are selling distressed properties (i.e. foreclosures) in bulk; however, these homes often require significant improvements before being in a good condition for renting it out to tenants. Therefore, the first step is to determine your purpose and therefore the type of property that will best meet your needs.

Tip #2: Know the Location

In addition to knowing your purpose, it is pertinent that you understand the local real estate market in which you are looking to invest. How much are people paying for rentals in the area? What are some local attractions that you can market to potential tenants?

Birmingham in particular is quite diverse; the urban core itself has several different residential areas while being surrounded by a ring of suburbs, each with its own unique environment. When it comes to real estate, location is key—the same is true when investing in rental properties.

Tip #3: Know your Clientele

After you have purchased the property, you will then have to market it to potential tenants; therefore, it is pertinent that you know your potential customers so that you can tailor your marketing strategies to best meet their needs. One of the best ways to do this is to actually find and hire property managers in Birmingham, AL who do all of this for you (screening tenants, collecting payments, scheduling maintenance, etc.) so that you can focus your time and efforts on finding more investment opportunities.

If you are looking for a property manager in Birmingham you can trust, then learn more about what Golden Key has to offer to investors and homeowners.

Should You Buy or Rent a House in Birmingham AL?

Matthew Whitaker - Thursday, May 16, 2013

If you are like most people in the current real estate market, you are more than likely trying to choose if it is best for you to buy or rent a house in Birmingham. Rest assured, you are definitely not alone. Over the last few years, the real estate market in Birmingham, AL and beyond has been turbulent at best, and even though recovery is underway, the Alabama real estate market as a whole is still lagging behind national trends.

Let’s take a look at buying vs. renting a home.

Making the Decision

Before you can decide whether it is best for you to rent or buy a home, you must first determine your plans. Consider the following questions when making the decision that is best for you and your situation:

How long do you plan to stay in the home?

What does the real estate market look like in the specific area in which you are looking to buy or rent?

How much are you looking to spend on rent/mortgage payments each month?

After you have the answers to these questions nailed down, it is easier to determine whether to rent or buy a home. You can also utilize a rent vs. buy calculator that can help you determine the finances behind the decision.

Renting a Home

If you are not planning to stay in the area in which you are considering purchasing a property for many years, then you are more than likely better off renting as opposed to buying. Although the real estate market is making progress toward recovery, the future of the Alabama real estate market is still a bit unstable. Due to the uncertainty, if you purchase a property today in hopes of selling it for a profit (or even to get your money back after closing costs) in a couple of years, there is definitely no guarantee that you will be able to sell the home without losing money.

There are several benefits to renting as opposed to buying, including flexibility, less up-front costs, and a built-in, landlord-sponsored maintenance program. On the other hand, you may end up paying more monthly when renting a property in comparison to mortgage payments for a home you choose to purchase.

Buying a Home

If you have a stable lifestyle (family status, job situation, etc.) and you are planning to stay in the area for a very long time, then buying may be a better option for you. The benefits for buying include a potential for a return on your investment (building equity), an ability to obtain lower monthly payments in comparison to renting the same home, and the ability to do what you please with your property (decorations, remodeling, etc.). On the other hand, when buying a home you are fully responsible for all maintenance (which can be costly), you often have to have money saved for a down payment, and when you decide to leave the property you have to sell the home to satisfy the home loan.

At the end of the day, when choosing to buy or rent a house in Birmingham, AL it comes down to understanding your current situation and determining which option is best for you and your needs.

Renting a Home: Tips for Tenants

Matthew Whitaker - Sunday, May 12, 2013

If you are looking to rent a house in Birmingham, AL (or anywhere else for that matter), there are some essential tips that you should consider to help you throughout renting the process.

Tip #1: Be Prepared

One of the most important parts of being competitive with others who may be interested in the same property that you desire to rent is to come to the meeting prepared. Make sure you complete your application ahead of time—including references and a completed credit report. (Note, you can get three free credit reports each year.)

Tip #2: Closely Review the Lease

Along with coming to the table prepared, it is essential that you take time to closely review the lease before signing. Make sure that you even read the small print to ensure that you understand the terms and conditions of the lease completely. If you are unsure about a certain part of the lease, make sure you ask questions before signing the document.

Tip #3: Keep Records of Payments

Once you have committed to a property and signed the lease, make sure you keep up with your payment records in case you need them in the future.

Tip #4: Request Repairs

Sometimes a tenant may be reluctant to ask for a repair. Remember, as a tenant you are able to request repairs from your landlord instead of paying out of pocket; therefore, take advantage of this opportunity and make sure to call upon the landlord when you need repairs made to the property.

Tip #5: Respect the Property

Although you are merely renting the property, remember to take care of the home as if it were your own house. Being proactive and taking care of the property can go a long way in helping you to get more of your deposit money back (typically minus cleaning fees).

At the end of the day, it is important for you to come to the table prepared, review the lease closely, keep records of payment, request repairs, and respect the property. Following these tips can help you to have a successful renting experience.

Use Golden Key to help you find the perfect home to rent in Birmingham, AL—contact us today!

Positive Outlook for Alabama’s Real Estate Market

Matthew Whitaker - Monday, May 6, 2013

Over the last few years, the Alabama real estate market has essentially been in the same boat as other real estate markets across the country. After the housing market crash, Alabama started to see a high number of foreclosures and other distressed properties.

As homebuyer and investor confidence declined, home prices started to fall as a result of having to compete with the low prices of foreclosures and short sales and due to a lack of demand. This same trend has been present throughout much of the United States over the last few years—until recently.

Fortunately, the real estate market locally as well as nationally is starting to improve as investors and potential homebuyers are regaining confidence and have a renewed interest in real estate.

Alabama’s Economic Outlook for 2013

Those at the Center for Business and Economic Research (CBER) are predicting that the overall economic situation throughout the state will continue to improve throughout the remainder of the year. In fact, these economists are calling for job growth in everything from real estate to healthcare services.

Birmingham Real Estate: 5.7% Rise in Home Sales

One gauge of local real estate market progress involves looking at the number of home sales. For the Birmingham Metro Area, home sales were up 5.7% in March 2013 in comparison to March 2012, according to the Alabama Center for Real Estate. Furthermore, the median sales price was $149,000 in March 2013 in comparison to $140,000 in 2012.

Renewed Investor Interest in Birmingham Real Estate

With investors taking a renewed interest in the Birmingham real estate market, many of these investors are purchasing foreclosures, short sales, and other discounted properties and are turning them into rental properties—this initiative is great for those looking to rent a house in Birmingham, Al.

Why, exactly, are investors purchasing homes and turning them into rentals instead of flipping them for a profit?

Home prices are still low, but are steadily rising. With experts predicting that home prices will continue to rise throughout the future, many investors are purchasing discounted properties and are utilizing property managers in Birmingham, Al to manage the property until the market picks back up—at which point these investors will more than likely sell the home for a bigger profit.

In conclusion, the Birmingham real estate market is making progress and the overall economic outlook of Alabama is positive throughout the remainder of 2013 and in the foreseeable future.