8 Reasons Why Real Estate is the Best Investment

Real estate has long been considered a solid investment for many reasons. It is a relatively safe and easy way for people to build wealth beginning with a small amount of money. If you are interested in investing in real estate, I’d be happy to help you find the right properties.

Here are some of the ways investing in property can help you build an investment portfolio.

1. Real estate investments can provide you with a reliable and steady cash flow. Investing in rental properties is relatively easy as expenses are predictable and if your properties remain occupied you know what to expect in terms of profit margin.

2. Real estate appreciates in value. Real estate consistently appreciates, even during economic downturns, making it one of the more reliable investments. On average, real estate appreciates between 3-5% annually.

3. Real estate investments help you retire. If you have been paying on your mortgage throughout your working years, you will experience greater cash flow as you near the end of your mortgage term and the principal is paid off.

4. Real estate sales are taxed at a lower rate than other income. When you sell your property, you are taxed short- or long-term capital gains which are usually lower than income tax brackets.

5. Real estate equity can be leveraged. One of the most attractive reasons for investing in real estate is the ability to leverage your money. When you take out a mortgage to purchase property you reduce the amount of capital required. As you build up equity in the property, you borrow against the equity or refinance the original loan, freeing up cash to buy another property.

6. You have control to improve upon your asset. Unlike an investment in stock, where you have no control over how it performs, you can improve upon your real estate investment. Updating or upgrading systems, finishes, appliances, and landscaping helps build value in your investment.

7. Real estate gains taxes can be deferred. In certain cases, you can invest the gains from the sale in one property to the purchase of another property without paying taxes on the gains.

8. Real estate investments are depreciable. This is confusing, but you can legally claim a depreciation expense on an investment property even though the value of your investment property is actually appreciating. The depreciation deduction allows investors to generate a higher cash flow while reporting a lower income for tax purposes.

What to Check on Your Final Walk-Through  

The final walk-through on your new home is an exciting event. It means you have successfully maneuvered through negotiations, inspections, and financing approval, and are on the verge of signing your closing papers. Most buyers attend the final walk-through with thoughts of furniture placement and paint colors in their heads. But the walk-through is about more than just making sure your favorite chair will fit by the fireplace. Be sure to do your due diligence to make sure there are no issues that should be resolved before you reach the closing table.   The purpose of the final walk-through is to ascertain that the home is being conveyed to you in the same condition it was when you agreed to purchase it. Here are a few of the things you should check:  

1) Make sure no damage has occurred to the home that the sellers are responsible for repairing. Weather conditions or careless movers can cause accidental damage, and old and forgotten damage may be uncovered when the sellers’ belongings are removed.  

2) Check that appliances are still in working order and no new plumbing or electrical issues have popped up. While you aren’t doing a complete home inspection, you can visually check for obvious problems that should be repaired before you move in.  

3) Confirm that items contractually conveying are present. If the sellers agreed to leave particular furniture, décor, or equipment, see that it has not been removed.  

4) Make certain the sellers have removed all their belongings. You don’t want to arrive with the moving truck only to find out that the sellers left behind an assortment of unwanted furniture or trash. The sellers should be held responsible for removing everything that doesn’t convey with the sale.

Ready to buy your first home in 2022? Hodgins Home Team specializes in helping first-time home buyers like you find their dream property in Windsor/Essex County.

Before you start searching for homes online, it's important to take the first step to house shopping: Getting pre-approved for a mortgage.

Your pre-approval will tell you what you can afford and what your monthly payment will be, so it's important to determine this before you start searching for your new home.

Pre-approval is good for about 30-90 days, so once you're ready, take these first 3 steps to get it done.

1.  Contact me and I’ll send over a list of lenders I know and trust.
2.  Look over the list, check out online reviews, and ask friends and family for referrals.
3.  Email 2-3 lenders you like or let me introduce you over email.

Once you've got your pre-approval letter in hand, it's time to start the search!

Before we hop into the home search, I like to advise my clients to create a "Needs" list and a "Wants" list. This will help us to really focus on the things that are most important in your future home.

Needs are the non-negotiable features; the features you simply must have in your next home. Wants are the ones you’d like to have, but you can add or change down the road. Remember, you can’t change the lot or the location so make sure you love both.

Once you've established what you're looking for, I will set you up on a search so you can receive an email the second a home that fits your criteria goes live. If you have any questions about a property, send me the information and I will find out for you. Send me listings you like and I can get more information and set up showings on your behalf.

Have more questions about buying a home or what happens after making an offer? Reach out to Hodgins Home Team today!

Luxury homes are generally described as those in the top 10% of their market. Luxury homes are usually located in the most optimal areas in a market, are large in size, and built with high-end materials. Luxury homes often have unique design elements and amenities not found in most homes. Want an indoor shooting range, a rock-climbing wall, a ballroom, or a bowling alley? A luxury home might have one of these– or all of them!

If you have not purchased in the luxury market before, you should be aware that the process can be very different from buying a standard single-family home. Here are some tips to help you navigate your way through the luxury home market.

1. Be patient. Shopping for a luxury home may take longer than average. For one, there are not as many of them, which, of course, is what makes them special. Since many luxury homes have décor or features that are distinctive, quirky or eccentric, finding one that fits your style may take a little while. The closing process may also take longer as there is more to inspect, more to negotiate on, and often special circumstances to be worked out. Make sure you are getting what you want. When you are investing millions of dollars in a home, you want to make sure you don’t settle.

2. Know where to look. Luxury homeowners, particularly if they are high-profile people in their area, often don’t want their home pictured on MLS. You may need to network with people in your desired area to find out what homes are being offered. Look online for luxury home sales websites such as mansionglobal.com or luxuryportfolio.com.

3. Check for possible planned development.  Don’t assume that the lovely pond or wooded park behind the property will always be there. Make sure you know of any development plans that may affect your view, the amenities around the property, and the future resale value. You don’t want to buy a home for its beautiful ocean or mountain views only to find out another property will be built in the way.

4. Consult with your financial advisors. Make sure you qualify for the purchase amount you are thinking about. Luxury home sellers will often want to see proof that you qualify to purchase their home before they even allow a showing. If you do get a showing, you will certainly need to have your financial preparations done before you contemplate an offer. Everything is scrutinized more closely in the luxury price range. You should also make yourself aware of all the financing options available to you.

5. Work with an experienced luxury home agent. The right agent knows all of these tips and more. We are knowledgeable in the high-end neighborhoods in our market area and understand the intricacies of negotiating and closing on luxury homes. Are you ready to purchase a luxury home? I’m available and ready to help you in your search!

I love working with first-time home buyers. Helping you find your first home, learn the home buying process, and guiding you from house-hunting to move-in day gives me the warm fuzzies. Here are three things you should know before you start looking.

1. Work with one real estate agent. It’s best to have one agent who is helping you with your search. Your agent will be dedicated to finding you the right property, and then negotiating on all the terms of your transaction on your behalf. You want that person to get to know you and your family’s needs and preferences, rather than starting over with someone new each time you go look at a house. Keep in mind that the agent who shows you a home is, ethically, the one who should continue the transaction. Also, when you call an agent from a yard sign or advertisement, you are dealing with the seller’s agent. While most real estate professionals are adept at handling both sides of a transaction professionally, it makes more sense to deal with someone you have already taken time to get to know and who has your best interests at heart as the buyer. You aren’t paying your agent; unless otherwise stated, he or she is paid by the seller upon closing. Still, you are hiring someone to work for you, so feel free to interview multiple agents and pick the one that you feel fits you best.

2. You need to be pre-approved for financing. Unless you are paying cash for your home, you do need to talk to a lender before you start looking at houses. One reason is that it helps you set an accurate price range for house hunting. Looking at homes that you can’t afford to make an offer on just leads to frustration. A mortgage lender will not only tell you what amount you can borrow, but also your projected monthly payment, your closing costs, and what you should or shouldn’t do with your finances to maintain your eligibility throughout the lending process. Another reason for having an up-to-date pre-approval in hand is so you don’t lose out to another buyer. If you find the perfect house, you will want to get an offer in before someone else gets it, and that pre-approval letter must accompany your offer. I would be happy to provide you with names of mortgage lenders in our area who have provided excellent service to my clients.

3. There are some up-front costs. When you find the right house, and you and the seller have agreed on the price and terms and have signed the contract, you will first need to make your escrow, or “good faith” deposit. This is money you are risking if you back out of the deal for reasons not protected in the contract. Usually it is between 1% and 5% of the sales price but can be more or less depending on what you and the seller agree to in the contract. Your agent will help you with this during negotiations. The escrow deposit counts towards the sales price.

4. Next, you should have an inspection of the property done by a certified home inspector. This cost varies depending on the size, condition, age, and features of the home, but is usually a few hundred dollars. You will need to pay this at the time of service. You may elect to pay for other inspections based on the results of the initial inspection. For example, if the inspector notes an issue with the HVAC system, you may need to pay a service fee for an HVAC contractor to look at the system. You want to get as much information during your inspection period as you need to confidently move forward with the purchase.

5. An appraisal and a survey of the property will be ordered, but these are usually added to your closing costs and not expected to be paid in advance. However, you may be asked to provide a credit card number to be charged in the event that the closing does not take place.

I will guide you through all of these steps throughout your home buying journey. Ready to get started? Give me a call!