This Week’s Short Stories

Zillow Buys Trulia for $3.5 Billion
The real estate agent community is coming unglued with this announcement. They view it as another threat to their existence and the local MLS system. It really isn’t, as neither of these sites have direct access to MLS data, so the real estate community will still have the most accurate and up-to-date listing data out there.

S & P Case-Shiller Home Price Index Shows Slow Improvement
The S & P Case-Shiller Home Price Index is the most widely-watched indicator of home price movement. The index posted a 9.3 percent increase in the May monthly data year-over-year. This was down from a 10.8 percent increase in April.

Altos Says Ignore the Naysayers – Housing to Boom in 2015

Income Tax Changes Heads-up

There is a group of significant tax law changes taking effect or already in place from recent rulings. They aren’t all related to investments, but we all have more things going on than real estate investment. This is a quick overview, so check with your accountant if you see something that could apply to your financial situation.
1. No more bankruptcy exemption for inherited IRAs – The Supreme Court unanimously held that inherited IRAs do not qualify for a bankruptcy exemption. Creditors can now go after those funds because the court rules that the exemption is specifically for “retirement” funds, and that status disappears with death and inheritance.

Reporting the Convoluted Recovery, the giant real estate online portal, just released their second quarter Real Estate Market Report. It covers home values, rents, foreclosures, inventory levels, and hazards an outlook for the near future. Let’s take a look at an overview of this report.
In general, national home values rose 6.3% year-over-year from June 2013 to $174,200. The article doesn’t mention it, but this is likely the median, not average price. The last time prices were at this level was back in March of 2005. Rents were up 2.5 percent year-over-year. The largest segment of the report addresses home values.
Home Values

This Week’s Short Stories

Fannie Says More Recovery
Fannie Mae’s Economic & Strategic Research Group predicts that the economy and the housing market will continue to strengthen modestly in 2014. This is balanced by the statement that improvement will not be as good in 2014 as it was in 2013 however.

6.5 Million Homes at Risk for Flooding
An analysis of storm surges found that 6.5 million homes along the costs of the Gulf of Mexico and the Atlantic Ocean are at risk from flooding this year’s hurricane season. This represents approximately $1.5 trillion in reconstruction costs.

Renters Trading Size for Amenities

Maximize Rental Revenue While Minimizing Vacancy

We could just use the approach that charging really high rent will maximize profits. Of course, that only works if we have a half dozen tenants for every available unit. That doesn’t happen often; in fact rarely. Tenants have this annoying habit of moving on when they think they’re paying too much in rent. Sometimes they also drag their feet on meeting payment deadlines when the rent is a burden. Those pesky ‘vacancy and credit loss’ calculations are where we see the impact.
The quest for the highest ROI involves a lot of market research and some commons sense marketing strategy.

Use Realtors – With Some Cautions

Successful real estate investors don’t work in a bubble. Some have whole teams of professionals involved in their businesses. Real estate agents are on these teams, as we use them to help us to locate deals and to present our offers on listed properties. Working with real estate professionals is part of our job, but we shouldn’t count on them understanding our unique property and financial requirements.
We don’t always have a choice of Realtors, as sometimes we’re making offers through listing agents or an agent we don’t know brings a deal to our attention. When we do have a choice, there are some things we need to keep in mind that all real estate agents aren’t created equal, and they’re working under strict rules and restrictions.

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