Ten Real Estate Calculations Every Investor Should Know

What are the 10 calculations every real estate investor ought to know?  Today’s infographic from FortuneBuilders gives investors a comprehensive guide to the most commonly used investment property calculations in order to discover the best type of real estate calculator for your business – everything from After Repair Value (ARV)  to Gross Yield!  Indeed…….Happy Friday!!!

“Investing in a property can be exciting, but taking the time to properly analyze your deal is paramount. In some cases, what may seem like a good deal at first glance may actually cause financial pitfalls long-term.”

Hat tip to FortuneBuilders.

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Houston Ranks as No. 1 U.S. Destination City for Movers

According to the latest U-Haul Migration Trends Report, Houston, TX, tops the list for as the number one destination for the 9th consecutive year.  In fact, Houston saw a 5% increase since last year in one-way truck rentals.  The top-10 cities in their 50-city list are Houston, Chicago, Orlando, Brooklyn, San Antonio, Las Vegas, Austin, Philadelphia;, Charlotte and Columbus.  U-Haul bases its rankings on rankings on the total number of arriving one-way U-Haul trucks into a city during the past calendar year.   Be sure to check out their entire list of the top-50 cities to see where people are moving.

“We are an international city with a strong housing market,” stated Matt Merrill, U-Haul Company of West Houston president. “The cost of living remains relatively inexpensive. The average paycheck goes further in Houston. Many companies are relocating here and bringing jobs to our communities…”

Click here to read the full report at UHaul.com.

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Mortgage Delinquency Rate at 11-Year Low

According to the latest CoreLogic Loan Performance Insights Report, 4.3% of mortgages were in some stage of delinquency in March, 2018.  This figure is not only down one percentage point from a year ago, it is also at the lowest level since March, 2007.  March’s foreclosure inventory rate (the share of mortgages in some stage of the foreclosure process) came in at 0.6%, down from 0.8% one year ago.  CoreLogic points out that the foreclosure rate is back to the pre-crisis level of 0.6%.

Click here to read the full story.

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Recent California Law Allows Homeowners to Help Solve Housing Crisis

BY  ON JUNE 13, 2018

It kind of sounds oxymoronic, but a law passed in California back in 2016 to ease the housing crisis just might be showing some fruit.  According to a recent story on Bloomberg, California’s legislature passed a law two years ago that allows owners of single-family properties to build guest apartments, which are referred to as accessory dwelling units (ADUs).  Basically, they’re granny flats, guest houses or apartments over the garage.  They have to be in residential areas and meet setback and height requirements. Interestingly, cities cannot outlaw them nor can they force homeowners to go through the local planning commission.  However Bloomberg does ponder whether “cities will resist the temptation to excessively control how homeowners use the space.”  It is California after all.

“…House flippers are starting to see adding accessory units as a way to increase value enough to make investing in larger houses in particular pay off…”

Click here to read the full story on Bloomberg.com.

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Four Renovations for Max ROI

You don’t need to watch Tarek & Christina to know that it’s what you put into that flip that maximizes your ROI (return on investment).  Along those lines, the folks over at Keeping Current Matters looked at data from HGTV to come up with the top 4 renovations to maximize your flip’s ROI.  Number 1?  Give that bathroom an upgrade and laugh all the way to the bank!  Happy Friday!!

Hat tip to Keeping Current Matters.

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Top 10 Cities with Highest Share of Vacation, Investment & 2nd Homes

A recent study by lendingtree ranked the top 10 cities in America with the most non-owner-occupied loan originations.  They suggest that the lack of inventory in market is being exacerbated by a “lock-in” effect where current owners are dissuaded from selling and moving as their new home would be at a higher interest rate.  In addition, they say non-occupant buyers are crowding-out homebuyers by making a market more competitive and forcing prices higher.  Indeed…

“Our study looks at the share of mortgages made for non-owner occupied properties to gauge their impact on inventory. Non-owner occupied properties are either vacation homes, investment properties or second homes. Many such properties are often bought for cash, however, which means our mortgage focused-study likely understates the effect on the market.”

Click here to read the full report on LendingTree.com.

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Home Buyer & Seller Generation Trends for 2018

For over 5 years the National Association of Realtors has issued their annual Home Buyers and Sellers Generational Trends Report.  This report provides insights into differences and similarities across generations of home buyers and sellers. It’s good data…these are your customers!  Happy Friday!!!

“One consistent finding for the last several years of reports has been that buyers 37 years and younger (Millennials/Gen Yers) is the largest share of home buyers at 36 percent. Sixty-five percent of these buyers were also first-time home buyers. The largest cohort in America is growing up and becoming more traditional in their buying habits.”

Hat tip to the NAR and by all means, click here to read their full report.

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Regulations Consume 30% of a Multifamily Development’s Costs

The NAHB reports that industry experts have become concerned about the affordability of rental housing in America, and how difficult it has become to address the problem through new construction.  To that end, the National Association of Home Builders (NAHB) and the National Multifamily Housing Council (NMHC) conducted joint research to find out how much government regulation (red tape) adds to the cost of building new multifamily housing. The results show that over 90% of multifamily developers typically incur hard costs of paying fees to local jurisdictions – such as applying for zoning approval and when local governments authorize construction.  However;

“…government regulation can impose costs in other ways as well. Over 90 percent of multifamily developers also incur costs of delays caused by sometimes lengthy approval processes, development standards that go beyond what would ordinarily be done, changes to building codes over the past decade, and OSHA requirements…The bottom line is that regulation imposed by all levels of government (whether local, state or federal) accounts for 32.1 percent of the cost of an average multifamily development.”

Click here to read the full report on the NAHB’s website.

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Cities With the Most Student Debt

By now, almost Americans are aware of the growing amount of student debt many folks are carrying.  In fact, according to a report from LendingTree, the total U.S. student loan debt reached $1.5 trillion earlier this year, up around $600 billion 10 years ago.  They also cite data from the Pew Research Center revealing that 37% of adults under 30 have at least some student debt.  No doubt about it, all this debt has a big impact on whether someone is able to buy a home or chooses to rent.

“Incurring student debt isn’t necessarily a bad thing, and the return on investment — for those who leave school with degrees that are valued in the marketplace — is generally well worth it. The biggest problems tend to arise when people take on debt to attend programs they don’t complete or aren’t properly accredited or are generally unethical.”

Click here to read the full story on LendingTree.com.

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The Worst Cities in America?

Detroit’s abandoned train station

A new study from 24/7 Wall Street identified what they say are the 50 worst cities in America to live in.  To come up with their list they looked at data on 551 U.S. cities with a population greater than 65k.  Then, they looked at a whole range of quality of life variables that included schools,  local economy, job market, public safety and even its climate.  They said that cities that perform well on these measures are more likely to attract new residents while those that don’t tend to drive residents away. Oh, and their number one worst city;  Detroit.  That’s brilliant…you be the judge.

“Quality of life in an American city often depends on the neighborhood one lives in, as abject poverty and crime can be found just blocks away from prosperity. Still, as much as a city can be judged on the whole, some cities face widespread problems that detract from their residents’ overall quality of life.”

Click here to read the full story on USAToday.com.

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