Month: January 2014

Birmingham Real Estate in the News: City in Top 10 Hottest Housing Markets


Matthew Whitaker - Thursday, January 30, 2014

We’ve seen an upsurge in Birmingham real estate over the past few years, particularly in 2013, marked by more interest in single-family homes for purchase and for rental. It’s no coincidence; more people are seeking out real estate in the Birmingham metro because it represents a bright spot when it comes to Southern real estate – and CNNMoney agrees. This week, CNNMoney listed the top 10 hottest housing markets in the U.S. as determined by the projected increase in home value through 2014. The Magic City itself came in at number eight, alongside hot markets like New Orleans, Richmond, VA, and Tampa and ahead of Memphis and the Big Apple itself, New York City.

Here’s what the article had to say about Birmingham:

“Median home price : $174,000

Forecast gain through Sept. 2014: 7.8%

After years of investing in revitalization efforts — turning old warehouses into offices, opening new parks, building a minor league baseball stadium — Birmingham is finally seeing the big payoff.

People are no longer fleeing from the inner city, new businesses are moving in and home prices are actually on the rise.

In the 12 months ended September, home prices climbed 6%, bringing the median home price in the metro area to $174,000. And CoreLogic expects above-average returns again this year, forecasting a 7.8% increase in the 12 months ending in September.”

We have to agree – particularly with the notion that Birmingham is seeing a resurgence in popularity and demand. People have wanted to live in the suburbs and Over the Mountain communities for a while now, but now the suburbs and the city itself are all benefiting from increased demand that has led to higher prices for all.

Check out our prognostication about Birmingham real estate and property rental in 2014 and see how it matches up with what the folks at CNNMoney project.

How to Protect Your Deposit – Advice from Professional Alabama Rental Managers


Matthew Whitaker - Monday, January 27, 2014

We’ve all been there before. Upon leaving our rental home, we are shocked to find that our rental deposit is a lot smaller than it was before – if there’s anything left.

alabama rental managers Rental deposits are things we give up freely at the beginning of our lease and really don’t expect to get back ever. Believe it or not, though, you can protect your rental deposit and make sure you get as much back as possible. It all goes back to knowing what the security deposit, ultimately, is used for. Professional Alabama rental managers like gkhouses.com use the deposit to basically restore the rental home to the condition it was in before you began your lease, minus normal wear and tear.

Here’s how to protect that deposit and get the most back at the end of your lease.

Take Pictures at the Beginning of Your Lease

Make sure you document the appearance of the rental home as soon as you move in.

This is so you can have a reference for what the home looked like and what it should reasonably look like once again at the end of your lease – minus normal wear and tear.

Speaking of…

Learn What ‘Normal Wear and Tear’ Means

This phrase might be in your contract. If so, consult with your professional Alabama rental managers to figure out what that means and what their expectations are.

There is no industry-standard definition. Typically, very minor blemishes and marks of being lived in – like a few small nail holes for hanging pictures, or a scuff mark here and there – are okay. Things like carpet stains, pet scratches, and anything broken typically aren’t.

Give Your Home a Good Cleaning

Finally, before you move out, give your home a good cleaning from top to bottom.

Ideally, you’ve kept on top of small repairs during your lease. You’ve hopefully also promptly reported any repair request to your landlord.

If so, you should be good to go just by making sure your home is in great shape. To do this:

Thoroughly clean all carpet, walls, windows, and furniture (if furnished)

Clear away any trash and don’t leave anything behind

Return all keys to your landlord

Remove all of your belongings

Replace all non-working light bulbs with bulbs that work

Clean all counters, mirrors, ovens, tile surfaces, and bathroom surfaces (Make sure to disinfect them too)

The goal is to make your rental home as clean and spotless as possible. You can also repaint the home’s interior if you chipped, scuffed, or otherwise removed paint; it may be cheaper to do it yourself than to let the landlord hire someone to do it later – and pay out of your deposit.

Be proactive and keep your home in tip-top shape. You’ll have a much better chance of getting your security deposit back in one piece.

Could New Mortgage Rules Ultimately Hurt Homeownership?


Matthew Whitaker - Thursday, January 23, 2014

On January 10, new mortgage rules proposed by the Consumer Financial Protection Bureau (CFPB) went into effect.

These new rules – the “qualified mortgage” and “ability-to-repay” rules – ostensibly were designed to eliminate the possibility of unaffordable mortgages like the ones that ultimately caused the housing market crash in 2007.

Some, though, say that the new mortgage rules will actually hurt the ability of many Americans to purchase a home.

Take Rep. Spencer Bachus, for example. Rep. Bachus, in a speech delivered in a subcommittee hearing on Capitol Hill, said that new mortgage rules are overreaching and going to negatively affect the ability of many to buy a home.

This isn’t the first time people have expressed concern. Banking experts in the Birmingham area said they feared the impact of the rules on homeowners looking to take out loans, citing a statistic that 20% of all mortgages in 2013 wouldn’t have qualified under the new rules.

The new rules are attempting to create a uniform regulation for what qualifies for a loan. Lenders, for starters, will be legally liable for the loans they issue – meaning they will have to ensure that borrowers are able to repay their loans.

There are also other regulations to create what the CFB terms “qualified mortgages”. These mortgages will be tougher to obtain for some prospective homebuyers.

Impact on the Rental Market

As things stand now, we project that these new mortgage rules will ultimately have at least some negative impact on homebuying – and will, conversely, have a positive impact for the rental market.

As professional Alabama rental managers, we expect that the homebuyers who will not qualify now for home loans that they may have been able to obtain previously will have no choice but to rent. While we don’t anticipate that those who own homes now will become renters at some point as a result of this law, it is possible that the rental market will benefit from keeping those who otherwise would have moved on to homeownership.

There is a chance that Congress could reform the new mortgage rules at some point in the future, but for now, they are here to stay.

Reviewing the Latest Birmingham Real Estate Stats for Property Management


Matthew Whitaker - Monday, January 20, 2014

The new year is upon us, and although we are still recovering in real estate, things are looking up.

In fact, even though we are currently missing the monthly stats for December, it is clear that the end of 2013 closed out a strong year for Birmingham real estate and property management in the area. Here is a look at the stats released for November 2013 and how they fit into overall trends we foresee for 2014. Birmingham Turns In a Solid Year of Price Growth

While December stats have not been released yet, all indications are that they will sum up the main trend: that housing prices rebounded significantly during 2013.

Case in point: the November 2013 stats show that the median selling price for the Birmingham metro market grew by 4.43% from November 2012. Even more tellingly, the year-to-date figure for 2013 as of November grew by 9.91% from 2012.

Birmingham actually had the largest increase in median selling price across all metro markets in Alabama, far above the 4.39% average. Only one midsize market – Lee County – reported a larger increase.

The takeaway is that Birmingham property is increasing in value, which should catch the eye of investors looking for growing markets with upside potential.

Birmingham’s Supply Moves Closer to Normal

In a “normal” real estate market, six to seven months of supply is considered the sign of a balanced market.

In Birmingham, the inventory-to-sales ratio stood at 9.5 months of supply for November 2013, which was up slightly (0.26%) from 2012 but down 1.29% from October 2013.

The trend is that Birmingham’s market, while supply-heavy, is moving toward equilibrium. Investors who make moves now and partner with professional property management are more likely to succeed in Birmingham in the near future as the market matures and transitions from recovery to growth.

Contact gkhouses.com for more information on taking advantage of the Birmingham real estate market in 2014 and positioning yourself for success.

How Renters Can Save Money When the Weather Turns Cold


Matthew Whitaker - Friday, January 17, 2014

Birmingham renters just endured a few days last week of bitter cold that is normally reserved for our cousins up north. As temperatures plummeted into the single digits during the night, we all faced the ordeal of not only dealing with the weather, but with the bills that result from it.

What can you do to buffer yourself from the chill and the cash drain? How you can help cut down on your utilities during the cold months?

As professional Alabama rental managers, we have a few suggestions that can help.

Zone Heating Is Your Friend

The automatic response to falling temperatures is rising thermostats. This only increases your bills, though, and honestly may not be necessary.

This is where zone heating comes in. Instead of raising the thermostat, try using space heaters and other portable heating devices to assist with heating only the rooms you’re in at the moment.

(Just be careful when you’re using space heaters; keep all combustible material away from the heaters and be sure to unplug them/turn them off when not in use.)

Find Leaks in Your Home

Even in properly-maintained homes, leaks happen. They’re inevitable. Finding them and working with your professional Alabama rental managers to fix them up can work wonders.

Some of the prime spots for leaks include window and door frames, all air ducts, electrical outlets, recessed lighting, flashing and seals around the chimney, and any kind of surface that can present a gap between the interior and the exterior.

Holding a lit stick of incense or a candle to these places can help you find drafts that cost money.

Turn Down Your Water

You can also turn down your water to 120 degrees Fahrenheit – or even 115 degrees – if it is set to a higher setting and save money.

You more than likely won’t notice the difference, and you’ll save money, since a chunk of our heating bill each month comes from heating water.

Want more tips to save? Check our post from earlier for more information.

What Will Real Estate and Property Management Look Like in 2014?


Matthew Whitaker - Friday, January 10, 2014

2013 has come and gone, and we are now into 2014, just seven years removed from the worst housing crash in American history.

Since then, we’ve come a long way. Prices are up, foreclosures are down, and more people are able to buy and sell than in the past few years.

Will this recovery continue? Will real estate improve in 2014 – or take a slide backwards? And what does this all mean for property management?

We already predicted that the rental market will remain strong. Here is our best stab at gazing in a crystal ball for real estate as a whole next year.

One metric that everyone keeps an eye on is the median housing price.

Over the past couple of years, housing prices have trended up. For 2014, that trend should continue, albeit at a slower pace than we saw in 2013 (10.9% growth).

This isn’t out of the ordinary; the average median home price growth per year is somewhere around 4-6%. While we probably won’t see 10.9% next year, we also won’t see -18% growth like we did from 2008 to 2009. It’s all about perspective.

Inventory Should Remain Tight

In many parts of the country, inventory has become constrained because more buyers are interested in virtually the same number of properties that are for sale.

New home construction has also taken a hit over the past seven years, meaning the pool of potential properties has shrunk. Throw in underwater mortgages that still persist (in the millions) and you can see why it may be difficult to find a wealth of properties in some cities.

One positive takeaway: smaller investors who take the time to understand communities at the neighborhood level will find better opportunities than larger investors. Really understanding the market could be a tremendous boon for investors looking for great property management opportunities that will probably slip by the big boys.

Household Income Should Rise in 2014

Another development that may not seem immediately connected to real estate is household income.

For 2014, the U.S. government predicts that real disposable income will increase by 3.1% in 2014, up significantly from the 0.7% increase in 2013. What this means for real estate is clear: people will have more money to spend on housing, among other things, which means they’ll be tempted to upgrade their current rental or buy a home outright.

Property investors who work with property management companies to oversee their assets could be well-positioned to take advantage of a real estate market that, in many ways, will be better in 2014 than since over seven years ago.

3 More Tips for Those Looking to Rent a House in Birmingham, AL


Matthew Whitaker - Tuesday, January 7, 2014

This past summer, we published a blog titled “3 Tips for Those Looking to Rent.” In this piece, we gave you three great pieces of advice to put your best foot forward when searching for a place to rent.

These tips – such as knowing your options, learning more about the property manager or owner, and being thorough in your inspection and inventory – are very useful, but we’ve just scratched the surface.

To better help you rent a house in Birmingham AL, here are three more tips you can use to improve your experience.

Know Your Deal-Breakers

Have you ever seen the TV show “Baggage”? “Baggage” features a person looking to choose between three contestants for a date. The catch? He or she bases the decision on three embarrassing facts from the contestants’ – and then decides which fact is the “deal-breaker”, or something that just is too much to handle.

Know what your home must have or cannot have in order for you to pick it. This will save you a lot of time and effort as you search for properties by weeding out the ones that simply will not work with you under any circumstances.

Understand Your Budget

Budget is huge when it comes to renting, especially if you are renting because you think owning a home is too expensive.

The first step is to do a little math. Take your annual income – your take-home pay, not what your gross salary – and divide it by 40. That number will give you a suggested amount for monthly rent that is affordable. What that number is based off of is the old rule of thumb that you should try to only spend around 30% of your net income on rent and other costs (such as utilities and renter’s insurance.)

Of course, some things are worth spending a bit more, but keep this rule of thumb in mind.

Watch for Red Flags

Finally, watch for red flags during the process. These include:

A manager who won’t go over the contract with you or who is reluctant to do so;

Not being able to tour a property;

No references available;

Unkept yards;

Rent significantly above the typical market rate for a similar property (without any apparent reason as to why);

Difficulty communicating with the manager or owner;

Owners who don’t actually own the home they’re trying to rent

Anything that seems “too good to be true”

Consult with the professional managers of gkhouses.com today – let us answer your questions about pursuing your rental.

Investment Trends from Ireland: Single-Family Homes


Matthew Whitaker - Wednesday, January 1, 2014

Investing in single-family homes has seen an increase in recent years. This trend has been observed in consumers from Ireland, as more and more Irish investors opt to bet their retirement on steady options in the property market.

This view is also shared by business magnate and investor Warren Buffett. In an interview with CNBC’s Squawk Box, he revealed that investing on a single-family home is something he would really consider. “If houses are bought at low rates and held for a sufficiently long period of time, single family homes perform even better than stocks,” he iterates.

From a research finding on Irish investor attitudes, Michael Gordon, Head of Customer Management, Insurance and Investments at Aviva Ireland, reveals that “regular saving and investing is the best approach to accumulate funds for retirement.” Having said that, investing in single-family homes may pose some questions to those who are in it the first time; here are some tips to get you started:

Assess the location. If you intend to buy a house and flip it, knowing the crime rates and establishments of the area before buying would allow you to sell it easier. If you plan on renting out the property, the condition of the house compared to its surrounding is something you must take into consideration.

Think about insurance. Of course, having your property insured translates to having your money insured as well. If you intend to invest on a single-family property, the type of property definitely impacts insurance premiums. More importantly, insuring your property protects you against damages that are brought by natural causes, like fire or hurricanes.

Know your tenants. The neighborhood from which you buy a property for investments speaks so much of the kind of people you target to sell or rent out to. A decent-sized single-home property has a tenancy of 3 to 5 years. Keeping your tenants staying longer on your property saves you the time and money to repeatedly advertise your property.

So whether you’d like to buy in properties in Birmingham, or someplace here in the South, this consumer trend from Ireland may be the profitable investment you’ve been waiting for.