Jim Valentine on Real Estate
The real estate market continues to sizzle in Northern Nevada bringing a few consequences to be aware of. With values at, or exceeding, our all-time highs in the area, owners are faced with decisions to make.
With so little inventory available to buyers and the demand continuing to be sustained, sellers wonder if this is the time to sell. Real estate is purchased and held for different reasons.
Primary residence real estate is something we address quite often here. Homes are bought for their size, location and features to suit the needs of the buyer at the time of purchase. Circumstances change, however, and with the market at or near historical highs one can be forced to look closely at how the current home is meeting the owner’s wants and needs. It might be time to right size or simply liquidate.
Investment real estate is just that, an investment. The benefits range from cash flow to depreciation for tax purposes, but in the end the potential to realize good appreciation is a common goal for investors. In a sizzling market investors are always looking at their options.
This market segment is currently further stressed in their decision making due to the uncertainty of the rumors coming out of Washington, D.C., about the elimination of the IRS Section 1031 Exchange benefits, and the potential for an extreme increase in the capital gains tax rate. We don’t know what will happen with either of those things, but know for certain that they will affect investment real estate owners if they become a reality.
The volume of investors is high right now as many are looking to move their equities from our neighboring state to the West to save in their taxes and other financial, social and emotional burdens. They are pressing hard to buy, among other things, rental income housing.
Their target market often captures the segment of the market that already has a lot of landlord ownership using them for rental properties. The values have driven up so much that the owners are thinking of selling and the buyers are willing to pay more than normal since the benefits of owning such property far exceeds their continued ownership in their current state of residence.
Tenants should be aware that their landlord may be considering selling in this market where they may have always been told that they would “never sell.”
These are different times with the COVID-19 influence and high pricing. Parents may unexpectedly need to give financial help to their adult children which requires them to sell their long-time rental property. Tenants may have occupied for many, many years, but are now subject to notice to vacate. This can be in order to work on the property getting it ready to sell for a higher price than it would in its current state, or because the buyer is looking to occupy the property themselves. Either way, you might be moving soon even though it seems unlikely. Get ready.
Many renters are able to buy at today’s amazing loan rates with a payment that is less than what they will pay for rent in their new rental at today’s market rental rates… even at today’s high sales prices. Even if you think you have bad credit, or other reasoning for not buying, you might surprise yourself at what you can accomplish and how easily you can accomplish it. Get with a good real estate agent and a good lender and see what you can do in this market. Your time for home ownership may be upon you without your doing so get ready.
The times they have a changed … get with the program. You can act and enjoy the benefits of your action, or wait to see what happens. As you know, there are those that do, those that watch, and those that wonder what happened. Which are you? Which do you want to be? Be it!
Your future is created now. Establish your real estate wants and needs and make a plan on how to realize them. You and your family will enjoy the benefit of your current actions for years to come.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. Email firstname.lastname@example.org.