The Rent To Value Ratio – Another Way to Evaluate Rental Homes

August 17, 2017

The Rent To Value ratio is a simple calculation. It is the value of a home divided by 12 months of rent. EXAMPLE: $ 175,000
Dean Graziosi

Lease Expiration Decisions – Can You Raise the Rent and Keep the Tenant?

July 19, 2017

When should you be thinking about your strategy for expiring leases with good tenants? It certainly shouldn’t be the month
Dean Graziosi

Rent vs Buy – Lifestyle May Trump Cost

April 13, 2017

Consumers these days are bombarded with information through the Internet. They can read reviews of any product they may be considering to buy. There are consumer reporting and review sites with the stated objective of advising consumers about what is a good deal and what is not. There are consumer product safety sites with loads of product safety information.
Dean Graziosi

Rent vs Buy Isn’t Just About Cost

March 30, 2017

There is no shortage of coverage in the media and on the Internet about the decision to either rent a home or buy one. Most of this coverage is centered on the relative costs of owning versus renting.
Dean Graziosi

Marketing a Home for Sale or Rent – Photos are Key

February 17, 2017

Dean Graziosi

Rent vs Buy – Lifestyle May Trump Cost

December 20, 2016

Consumers these days are bombarded with information through the Internet. They can read reviews of any product they may be considering to buy. There are consumer reporting and review sites with the stated objective of advising consumers about what is a good deal and what is not. There are consumer product safety sites with loads of product safety information.
Dean Graziosi

Rent vs Buy Isn’t Just About Cost

December 6, 2016

There is no shortage of coverage in the media and on the Internet about the decision to either rent a home or buy one. Most of this coverage is centered on the relative costs of owning versus renting.
Dean Graziosi

Marketing a Home for Sale or Rent – Photos are Key

October 26, 2016

Dean Graziosi

Marketing a Home for Sale or Rent – Photos are Key

January 24, 2016
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What comes to mind when you see this image? No, not a glass of wine. When I see this image, I notice what isn’t there. There isn’t a bright white blown-out set of windows. Instead, there is a pleasing outdoor view exposed properly. There are not a lot of dark areas inside, much darker that the mellow shadows on the floor and walls. Instead, the shadows and highlights are more as my eyes would see them. There just isn’t a stark contrast because of the bright outdoors merging with the interior.

The fact is that real estate photography requires a lot of interior shooting. Surveys every year conducted by real estate associations and others tell us that people are using the Internet to shop for homes to buy or rent. They, at least 90%+ of them, tell surveyors that photos are the first thing they check out and they’re very important to them. If they like the pictures, they’ll check out the descriptive text and property information. If they don’t, they move on to another property.

Many real estate agents unfortunately would rather close the curtains and turn on interior lighting than have those blown-out bright windows like big white boxes. Others have embraced HDR, High Dynamic Range, photography. Real estate investment is about numbers, and the number here is 3. HDR photography uses three to five, usually three, photos at different exposure settings to merge and create a single image with all of the bright and dark areas adjusted for a result like the one in the photo above.

I can’t show you what this photo would look like if it was done as a single shot, but it definitely would have had the bright outdoors mostly very whitish to get the interior right. To get the outdoors right, the interior would be very dark, with harsh contrast between light and dark areas.

Most of today’s digital cameras have a feature called “exposure bracketing.” You set the camera to take your three photos with one underexposed, one properly exposed, and one overexposed. You should use a tripod, as you’re going to push the shutter button once and all three exposures will be created in rapid order. There will be:

• The underexposed photo with the outdoors looking OK, but the indoors dark.
• The properly exposed photo will be something in between, too bright out and too dark in most likely.
• The overexposed photo with the interior looking good but the windows blown out.

Now you just need software to do the HDR process for you. There is free software out there, such as Picturenaut. There are many good software packages under $ 50 too. The software merges the three photos to create the perfect blend of exposures that are more like what your eyes do for you. Some of the newer digital cameras even have in-camera HDR, and the processing is done for you automatically.

If you are going to market homes for sale or rental, you should look into HDR to get the attention of your Internet property viewers.
Dean Graziosi

Rent vs Buy Isn’t Just About Cost

July 9, 2015
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There is no shortage of coverage in the media and on the Internet about the decision to either rent a home or buy one. Most of this coverage is centered on the relative costs of owning versus renting.

With rental demand rising, supply-demand factors take over and rents rise as well. As it becomes more expensive to rent, number-crunchers find plenty of validation for a decision to buy instead. With interest rates still historically low, a mortgage can often be a smaller monthly payment than rent, even with taxes and insurance included.

Zillow.com gathers a lot of home purchase and rent data, and there are some good articles there for research into the rent or buy decision. Recently, a rent-vs-buy article appeared there with these four steps under a sub-title “By the Numbers.”

1. Calculate the monthly cost of homeownership.
2. Calculate the tax benefits of homeownership.
3. Subtract the tax benefits from the cost of ownership to get the “after tax cost.”
4. Compare the after tax cost to market rent for a comparable property.

The article goes on to explain the break-even horizon for buying versus renting. This calculation determines how far in the future it becomes more affordable to own than rent when all costs of ownership are included. You know, maintenance, repairs, utilities owners may pay that renters do not, etc. In the first quarter of 2015, the national number for the break-even horizon was 1.9 years. This means that 1.9 years after buying, it becomes more affordable to own than to rent.

All of this is great information and of value to anyone trying to decide between owning or renting. However, our lives have become more complicated and the American economy and workplaces have evolved over the past couple of decades. There are valid considerations other than money in this decision matrix.

Do you want to be responsible for maintenance and repairs?

You need to take care of your investment in a home, and this requires everything from yardwork to minor and major repairs. Of course you can defer maintenance, but then you’re negating some of the value of owning, as the home will likely sell at a lower price after the home inspection turns up problems.

Are you concerned about being forced to move?

This points to the fact that your rights are only guaranteed through your lease expiration. If the landlord decides to sell the home, you’re inconvenienced with potential buyers walking around, and you may be forced to move when your lease is over. Maybe you won’t have to move, but you may see a substantial increase in rent with the new owner.

How secure are you in your job, or do you want better?

What about your employment? Are you pretty secure in keeping your job or getting another one locally that will support a mortgage for a five year or longer ownership period? If you’re actively seeking a better career opportunity, it may present itself far away, even across the country. Can you sell a home and get most or all of your money out of it if you have to do so sooner than planned?

Is family growth possible in the shorter term?

If there may be children coming, you either must overbuy to plan ahead, or you could be stuck with too small of a home until you can sell and get your money out. It isn’t just children however. There is a growing trend of older generations moving in with their children for late life care.

The decision of buying versus renting a home is not too complicated. But, you want to take every facet into consideration, not just money.
Dean Graziosi

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