By Tom Branch, on July 10th, 2011 
Even with housing prices rising in the Dallas Fort Worth Metroplex, many homeowners are still unable to sell their houses. Many of those impacted have refinanced or did 100 percent financing, others are simply in pockets of homes that have seen a correction over the past few years.
Either way, they are unable to sell at a price high enough to cover the mortgage and the closing costs. That leaves the homeowner with a couple of choices. Take to house off the market and wait a couple of years for some more appreciation or consider leasing the house.
Leasing and property management is not right for all homeowners.
If you are considering leasing your home, the first step is to do the research. You really have to know the numbers to make sure that leasing makes good financial sense. You need to know the following:
How much rent you can reasonably charge? A local real estate professional should be able to give you details on comparable leases in the area. I usually advise clients to work on an 85 percent occupancy rate meaning the property is only leased and generating rent 85 percent of the year. On a monthly basis, simply use 85 percent of the projected rent as your base rental income.
How much are your monthly costs (including the mortgage, maintenance, taxes, insurance, HOA dues)? It is critical that you accurately project these costs. Not only are there expected monthly costs, but you have to factor in maintenance and repairs as well. I usually recommend a Residential Service Contract for houses I manage.
How much will it cost to lease? You can advertise and lease it on your own or you can hire a real estate professional to market the property for you. Real estate professionals usually include tenant screening and lease preparation in addition to marketing the property. If you decide to go it alone, you need to figure in the costs of advertising, tenant screening, and document preparation. Proper and legal leases become critial if you have to evict or take other legal action against a tenant.
How much is ongoing property management if you decide not to manage it yourself? Like everything else, the cost to have professional property management varies. Cost is not the primary factor in my opinion. What you’re looking for is a company that will find good tenants and take care of your property.
Once you know the potential income and expenses, you can do the math. Most of our owners are generating positive cash flow from renting their houses while they wait for housing prices to climb some more. Others are losing money each month, but they have decided that losing a few hundred dollars each month is better than selling at a loss or facing foreclosure.
As mortgage approval criteria tightened, the demand for lease and rental homes have risen along with it. Not only is demand up, but rental and occupancy rates are climbing as well. If you’re having problems selling your house, you might want to look into leasing it.
By Tom Branch, on June 26th, 2011 
I had lunch with the sales staff of a local builder I represent yesterday. A couple of tasty pizzas combined with an interesting conversation led to this post.
Many of the potential buyers are walking in concerned about everything they are reading, hearing, and seeing in the national media. “It’s a bad time to buy”, seems to be the news of the day.
As we sat there and ate, we jumped onto Google and looked at the rents of an apartment complex within sight of the subdivision. The rent for a 1608 square foot apartment is $1639 a month. We compared that to a brand-new 1620 square-foot townhome. The townhome is priced at $195k. An FHA mortgage with a 3.5 percent down payment results in a mortgage payment of about $1626 including principle, interest, taxes, insurance, mortgage insurance, and HOA dues.
For the same money being paid for rent, one could own a townhome. These figures do not take the tax advantages or long-term appreciation in account.
Home and interest rates are both low. It will not stay that way. Home prices in North Texas are up 3.5 percent over last year and Collin County is up 5.4 percent. Interest rates will remain where they are as long as the government continues to purchase most of the mortgage loans. They cannot continue to do so forever.
I suspect we will look back at this period in 20 years as the golden opportunity of a lifetime.
Search the North Texas MLS.
By Tom Branch, on June 25th, 2011 
I was interviewed by Danny Gallagher with the McKinney Courier Gazette as part of his story on the dramatic drop in foreclosures in June 2011.
According to the Foreclosure Listing Service (FLS), July 2011 foreclosure filings are down 28 percent across the Metroplex, the fifth straight month of decreased filings.
The real question is “What’s driving this change?” I agree with the FLS that while our numbers continue to decline, it’s hard to pinpoint the reasons.
As I dug into the MLS statistics, I note that North Texas continues to buck all the trends. Housing prices are up 3.5 percent year over year and Collin County prices are up 5.4 percent. Higher housing prices allow people to sell, if needed.
Additionally new listings are down 17 percent and home sales are down 14 percent. What these two numbers tell me is that the number of available homes is getting smaller since there are more sales than new listings. This has a positive impact on housing prices because the supply is actually getting smaller.
Other good news is that the North Texas economy is doing well. People who are working are far less likely to default on their mortgages.
Are we out of the woods yet? Perhaps–but there is still too much economic uncertainty at the national level. While some areas of the country are experiencing the “double-dip”, our housing market appears to be relatively stable.
If you are a homeowner having problems paying the mortgage, help is avaialable. Contract your lender or local real estate professional.
By Tom Branch, on June 18th, 2011 
I received an email from a past client asking me why the soil is pulling away from his foundation. The short answer is, “The soil is drying out and shrinking. You need to water.”
For those of you interested in a more detailed explanation, read on.
North Texas is known for its clay soil. Clay soil expands and contracts substantially based upon the moisture in the soil. If the soil dries out, it contracts. If it gets wet, it expands. While this seems simple enough, that shrinkage and expansion can have a dramatic impact on a slab foundation.
A slab foundation sits directly on the soil. Since clay soil expands and contracts, the slab is actually “floating” on the soil. Keeping the moisture level in the soil around the foundation stable is critical to the long-term stability of the foundation. While the in-ground sprinkler system often provides enough water, many times soaker hoses are installed to help regulate the moisture level.
The bottom line is if the soil is pulling away from the slab the moisture content is dropping and steps should be taken to add water. Doing so early can save thousands in foundation repairs later.
If you think you may have an issue, contact a DFW professional engineer or a foundation company.
By Tom Branch, on June 17th, 2011
While the temperatures have been at or above the 100-degree mark, I’m not talking about the heat wave in North Texas. I’m talking about the lease-home market.
If you’re searching for a lease home in the area and find something you like, you need to be ready to submit lease applications because the good, clean, and well-priced leases are going faster than new listings are coming on the market. You need to have completed applications and funds ready for the application fee.
Search for Lease and Rental Homes in North Texas
If you’re an investor looking for solid income-producing properties, the North Texas market is a great place to be. Capitalization rates are on the rise, the local economy is stable, and with more people moving into the area, the demand for rentals is climbing rapidly.
Search the North Texas MLS
Have questions or need more information? Contact us!
By Tom Branch, on June 4th, 2011 
I was out working in one of my new home developments today.
As I chatted with the sales staff about how things were going, a common theme became apparent. Potential buyers are sitting on the fence waiting on home prices and interest rates to drop further!
This has been fueled by the reports of nationwide home price drops by many of the national media outlets. The old adage,”location, location, location” comes to mind. All real estate is local!
I did an interview locally last week when this news was released discussing the local numbers. Dallas Fort Worth is actually bucking the national trend with average sales prices up 3.2 percent in North Texas and 5.4 percent in Collin County. Prices are not going down here.
I looked deeper into the numbers and found that new listings are down 17 percent while sales volume is down only 14 percent. What these numbers indicate is that the market is absorbing inventory at a rate greater than new inventory is coming on the market. The supply of available homes is getting smaller. This helps keep prices stable or rising.
To be fair, values may continue to drop in other places depending on a number of factors. Contact a local real estate professional to find out what’s going on in your area.
Mortgage interest rates are at 50 year lows. They may fluctuate slightly but I don’t see them trending much lower. The only reason they remain so low today is because the government is buying most of the mortgage paper and holding the rates low. Eventually the government is going to want to push this back into the private sector but the private sector is not going to get back into mortgage backed securities until rates climb.
What does all this mean for Dallas Fort Worth home buyers? Now may be one of the best times to purchase a home. Prices are stable in most areas and we’re seeing an upward trend over the past year. Mortgage interest rates are at 50-year lows.
It’s time for home buyers in DFW to get off the fence.
Search the North Texas MLS
By Tom Branch, on June 1st, 2011 
I did an interview with Mitch Carr on KRLD News on May 31st. With all the news of rapidly decreasing property values across the nation, he wanted to know what the Dallas Fort Worth market was doing.
“Texas likes to buck the trends” I told him. Property values in North Texas are up 3.5 percent and Collin County home values are up 5.4 percent.
Mitch asked the logical follow-up question, “Why?”
There are many reasons. First, Dallas has a stable economy. Second, Dallas never saw the run-up in prices so there was no bubble to burst. We do have our share of distressed properties, but the market is absorbing them at a reasonable rate.
I looked deeper into the local statistics and noted that listings are down 17 percent and home sales are down 14 percent over 2010. That’s also a good sign for housing prices. Fewer listings helps keep inventory down and prices stable.
Know the value of your DFW home.
Search the MLS for North Texas Homes for Sale.
|
|
Comments are closed 
You must be logged in to post a comment.