The thing is this… there are no crystal balls in real estate, but I want to get a few thoughts down that will be of value to you whether we’re heading for a readjustment or not. And believe me, I hope we’re not! Anything you read below is coming from a home owner/investor if several homes in the Wichita area. In fact, NOBODY wants home prices to drop off or foreclosures to increase. Okay, maybe investors have enjoyed the bounty of cheap foreclosures over the past few years but they are only a percentage lately compared to what we had right after the ’08 crash. But it’s not good on the macro scale and certainly all home owners in Wichita have been enjoying selling their homes for more than the would have a few years ago! But what if we ARE due for a hitch? They happen. It’s a fact. Even in good economies housing goes up and goes down and (usually) goes back up higher. How do you time it?
Well, the first thing is that if you’re thinking about selling, move now. Prices are up, inventory is low, and we’re getting asking price or more on most homes we sell. If you’re not looking to make a move now but want to make sure you don’t get in a negative situation, or if you’re researching how to get the most bang for the buck when you do buy – this is for you.
Look for the “Value-Add”
When Kacey and I are going through homes that we think might be good investment properties we run into everything nasty you can think of. You probably don’t want to look for your work to be cut out quite the same if you’re going to be living some place, but you can look for other things to drive the price down. Find a house in your criteria with pink paint, or worn out carpet, even ….ick… POPCORN CEILINGS. This stuff is easy to fix up at little cost and you’ll be dollars a head when you do by bringing up the market value. It’s also MUCH quicker than waiting on a down market to heal.
Unfinished basements are also a great way to bring in some quick equity. A little drywall, paint, and carpet won’t cost nearly what the price difference to your home will be if you’re doubling square footage!
Shorten your loan term
I wrote a blog post on this a few months ago, but I keep jumping around and yelling it. 15 years (or less) at a fixed rate FORCES you into making quality financial moves. You’ll wind up with 5x the equity after 5 years compared to a 30 year mortgage. Pretty sweet for only a few hundred a month difference.
Have an emergency fund
This is less real estate advice and more grandma-style advice. But seriously, have some backup cash for if things don’t work out quite right or you need to move at an inopportune time. Pulling it out of a 401(k) does not count. You need CASH in the bank. In a very literal sense that stuff changes how life feels when you have a little war chest ready to go.
Most people want to have a “Feel good” prediction or a “Doom and Gloom” forecast at the end of this type of post but the reality is this: If you do smart things with your money (including non-liquid assets like a house) you’ll be miles ahead of those didn’t prepare at all. If you’re ready to pay off your own mortgage instead of your landlords call one of our specialized agents today!