real estate

First-time homeowners are faced with the quandary of whether they should buy a new structure or an older home. Listed below are several pros and cons to both. 

The Existing Home 

Pros 

The pre-existing home on the market is already settled and has weathered many storms. It’s also offered, on average, at a much lower price. For many first-time home buyers, this can be very appealing. In many cases, first-time homeowners use all of their available funds to cover a down payment. Even if you consider just a $50,000.00 price difference, this can add up to substantial savings over the course of a typical 30-year mortgage. Another advantage of buying an older home is its uniqueness. Most new constructions, especially in developments, have only a few different floor plans, so they have the same layout. On the other hand, an older home generally has charming features like dormers in front of the windows, slanted ceilings, and unique window and room shapes. You can also negotiate over things like the price, repairs and the closing date. 

Cons 

Depending on the age and the condition of the existing home, that $50,000 in savings is just temporary. Having to replace or update major parts of the home such as the heating/cooling system and plumbing can run into a bundle of money. If the home was built prior to the 1990s chances are good that it has very little insulation and that the home has older windows and doors. This translates into higher utility bills and a loss of comfort. 

New Construction 

Pros 

One of the main reasons people purchase a brand-new home is to be the first one living there. There’s something about the smell of new carpeting or hardwood floors and freshly applied paint. Another advantage of buying new is that you can pick out the type of flooring, cabinets, countertops, and the quality of your appliances with the help of remodeling contractors. Additionally, you’ll have brand-new everything, so the roof, plumbing, and heating will last for years before they need replacing. They will also be energy-efficient thanks to insulation and new windows and doors. Your homeowner’s insurance will also cost less. 

Cons 

One of the biggest downsides to purchasing a new home is the price. When you encounter an older home that may have a listing price of a certain amount, you can often haggle to reduce the price. On the other hand, a new construction development has a limited number of homes for sale. In a soaring economy, these homes sell quickly and for the full purchase price. 

Another con to buying new construction is the cookie-cutter style. If you’ve seen one home in the neighborhood, other than a few minor variations, you pretty much had the tour of every other home in that sub-division. Any changes that you make will have a tremendous markup and, as such, cost you dearly. Additionally, since the house is already up to date, you will likely lose money if you decide to sell within a few years. Buying a home is a decision that you should make very carefully. You should weigh the pros and cons as to the type of home, whether new or pre-existing, and your budget to make sure that whichever one you decide on, you’ll be able to afford comfortably. Remember, along with the mortgage, you will have many other household expenses to cover.

If you’re interested in real estate investing, you will quickly discover that buying properties you can rent out will improve your monthly cash flow.

Here are 3 important things to know about property management

1. Every real estate region is different. 

How you manage your property depends on where it’s located. Besides differences in state and municipal regulations, cultural influences will also affect your advertising for tenants and your business relationship with them. If you are buying a property in an area that you’re not familiar with, then it’s best to work with real estate professionals who live and work there. If, for example, your property is in Southwest Florida, a property management, Fort Myers business could professionally manage your rental real estate. 

2. It’s stressful being a landlord. 

Before you become a landlord, you probably have a lot of naive optimism. You probably imagine the role is as simple as putting a few ads in the local paper, showing people around the property, doing a background check to screen tenants, and then signing a rental agreement. 

After that, your main job is to collect checks every month and charge late fees for those who cannot pay during the first few days of the month. You probably also imagine that maintenance work is simply hiring a few handymen and sending them out to fix things.

This idyllic scenario is far from accurate. Being a landlord is even more demanding than having a full-time job. By hiring specialists to look after your property, you won’t have to deal with late-night tenant emergencies, spend your time chasing down unpaid rent and confronting tenants to make them take responsibility for damages.

You also won’t have to find contractors to supervise maintenance workers or spend hours of the day dealing with all sorts of time-consuming, tedious paperwork. 

 3. Hiring a professional property management company is your best option

Because each area is different and because being a landlord is such a stressful occupation, it’s worth the cost of hiring a property management company.

A professional property management company will do all the heavy lifting for you. Here are some things to expect when hiring the right people to manage your rental properties: 

• A professional property management company will prepare your properties when you are ready to rent because they know exactly how to stage a property so that you can maximize your occupancy rate. 
• A professional property management company will accurately determine a fair rent, one that will appeal to buyers yet still allow you to maximize your profits. If the rent is too high, you will find few people are interested in renting from you. If the rent is too low, you will not have any trouble finding tenants, but you will lose money each month. Industry professionals base pricing on understanding the local real estate economy, what other rentals are charging, and the use of the right rental rate software. 
• Professional property management companies will know through years of experience how to write ads that get results and in which local newspapers and rental sites to place them to find people looking to rent. They may also be able to negotiate better rates with newspapers because the advertising managers will recognize them as good customers. 
• A professional property management company will know how to close sales both on the phone and in person. When people call to inquire about the rental property and come to look, experienced salespeople will know how to win them over. 

In conclusion, your interest in property investment is something you should move forward with some caution. Avoid the trap of actively taking care of your property as a landlord. Instead, find a property management company to do all the work for you.