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How to Buy your First Investment Property

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How to Buy your First Investment Property

Want to invest in real estate in Columbus, Ohio? If you’re not sure where to begin or what you should be considering, read these tips to start your successful real estate investment portfolio.

The Columbus Team’s Top 10 Tips for buying your first investment property:

  1. Ensure your financial house is in order
    Eliminate all debt if possible. School loans, credit cards, medical bills, and any other areas you may owe money. Not having all these bills allows you to save down payments for your investments faster. It also removes the financial pressure to help you make better, less emotional decisions throughout the process of the purchase.
  2. Save the down payment
    Save a minimum of 20% down. If this is an investment property, a minimum of 20% is required down before you can get a mortgage. If you can pay the entire cost in cash, you have a better chance of winning the contract in tight markets with limited inventory. Sellers will often take an all-cash deal that is less than one that requires lenders be involved. The more you save and pay upfront, the better your cash flow will be while you own it.  
  3. Start small.
    Consider investing in an affordable single-family home or duplex first. Keep your investment small so you can net returns faster from the rental income or sale, then take those profits and invest in your next property. Operating expenses and repairs are the most reasonable in this type of real estate. Purchasing multi-family units, commercial real estate, or apartment buildings require a more substantial investment and monthly operating expenditures.
  4. Establish your parameters.
    Know exactly the type of property you’re looking for. Choose the neighborhood, school district, and price point of the property you are targeting.
  5. Amass your professionals.
    To keep your profits in your pocket, it’s best if you have some repair skills yourself. You can save a lot of money by being able to replace a leaky faucet or repair drywall and paint. If you don’t possess these skills, you’ll have to source some affordable local laborers who can do the work for you. Keep in mind this will impact your operating budget. Drywallers, plumbers, electricians.  Forging relationships with these people and knowing what the charges are ahead of time will make your investment life easier. Add an excellent REALTOR who will be looking for potential investment properties that meet your criteria. S/he can also connect you with reputable service professionals when needed.
  6. Secure a loan, if required.
    Take advantage of any period of low-interest rates to use a mortgage when purchasing. A lower interest mortgage will keep your operating costs at a minimum and your profits at a maximum. Interest rates are slightly higher on loans for investment properties, so be sure to account for that in your budgeting.
  7. Plan for Expenses and Profits.
    Determine your financial break-even point and how much income needs to be produced to cover your expenses and turn a profit for further real estate investments in Columbus. Also, consider whether the property will need renovations before you can rent or re-sell it. With your first investment, you may not yet have the professionals you can count on in your contact list. You may best purchase a home that does not need immediate repairs or even consider a turn-key home with reliable renters already living there.  In a turn-key scenario, you will not immediately need to interview and vet new renters.
  8. Consider a partner.
    An investment partner may be an idea for cost-sharing and profit-sharing and may allow you to start investing earlier. Keep in mind that, like a marriage, a partnership’s success or failure depends on the commitment and shared goals of the people involved. Who you choose may simplify or complicate the process and outcome.
  9. Keep your emotions in check.
    From finding the right property to dealing with adversity in an income-producing home, you must learn to keep your emotions in check. From the purchase to negotiating with tenants and partners can be sidelined by emotions. You’ll need a cool head and a laser-like focus on your plan to keep your new business profitable.
  10. Evaluate Risk & Reward.
    Any investment has risk and potential for reward. If you follow your plan and don’t make decisions based on emotion, you will reduce your risk and increase your chances for financial reward.

Follow these tips, and before you know it, you’ll have purchased your first investment property and be looking for your second!

Packing and Moving With Heart

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Packing and Moving With Heart

Packing and moving into a smaller space can be exciting and overwhelming at the same time. We’re grateful for organizations in our community like Downsize With a Heart who help with the entire process of packing and moving. They motivate us to be Realtors With a Heart! 

When we were introduced to Downsize With a Heart, a social enterprise of the Furniture Bank of Central Ohio, we knew that home buyers and sellers could use their services. They not only help you with the planning, packing, moving, and unpacking, they also help you donate items and help others. Really, it’s a win-win service. 

Don’t let packing take a toll on your life. If you want to learn more about how Downsize With a Heart can help you, contact us. Our team is proud to sponsor their mission. 

Pelotonia 2019 Wrap-Up by Patrick Florence

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CC-Love Out Loud ready for Pelotonia

I would like to thank all of you have supported Pelotonia this year.  It is such a great cause and a fantastic event.   

This year our team (CC-Love Out Loud, see below)  rode 45 miles from downtown Columbus to New Albany.  It is so incredible to see the level of support from riders, corporate sponsors, volunteers, communities with people lining the streets with posters and signs of loved ones that have been affected by cancer.   

Being my 3rd year riding, each year some there is something memorable that gets to me on the ride.  This year it was riding through Old Pickerington.  As we approached the small downtown are there were motorcycles that were parked all lined up.  As we rode through their owners reeved them up to a thundering roar over and over again in support of Pelotonia.  It brought chills over me as we passed by, it was soooo cool!!!  It was a perfect day for riding and reflecting on all the support our communities have and also reflecting on the ONE GOAL of Pelotonia-End Cancer.  Below is a little about our Group CC-Love Out Loud & Shut Up and Ride.  Thank you for your support!!

Greatest Team Ever - Pelotonia

CC – Love Out Loud is small team of riders that are riding in honor of a friend, educator, musician and an all around amazing person, Chris Collaros.  Chris for years has support our Pelotonia fundraising by playing music at our party.  He was always there, always willing, and always had a smile for a brother or sister.

Chris was diagnosed with stage 4 cancer last September and passed in April. He has impacted hundreds if not thousands of people from his students, colleagues and friends.  He is greatly missed.

He got involved with Pelotonia when we had our first party.  We started Pelotonia when Stacey’s friend Belinda was diagnosed with stage 4 breast cancer.  While fighting cancer she was training for the 1st Pelotonia.  She would tell Stacey to “Shut Up and Ride” when Stacey was whining.  She passed after the first Pelotonia.

So we were originally “Shut Up and Ride”, but we are honoring Chris this year and changed our name.  We hope that we will not have to come up with a new name because that will mean we lost another friend.

But that is why we ride!

ONE GOAL, Shut Up and Ride, Love Out Loud

Tips for Moving With Kids and Pets

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Moving day. It brings a mix of emotions and details to organize. And moving with kids or pets adds another layer of planning. 

We want to put you at ease and decrease the stress of your move. There are ways to ensure the move to your new home will run smoothly. Preparation is key. 

Follow these tips to prepare for your move with a family and pets…

Moving with Kids

  • If your kids will be changing schools find ways to help soothe the emotional impact it may have. Get a photo of their new teacher/s and school so your children can start to visualize the new environment. And if you’re moving during the school year, be sure to take extra steps to ease the transition.
  • Involve your kids in the move. Ask your kids to help write lists to prepare for the move, allow them to choose a theme for their room decor, and give them opportunities to make some other decisions about the move as well.
  • Give your kids an essentials box. This is a box that they can pack with their favorite things and it will be the first box to be opened once you arrive at the new house. An added touch like this will help your children have the comfort of familiar things with them from the start.
  • Consider purchasing your kids a move gift. This can be anything from new white board for their room or a baseball to new bedding or clothing. It doesn’t have to be something expensive, but an item they will enjoy and find comfort in.
  • Lower your expectations for the kids behavior on the day of your move. Be prepared to be patient and flexible. While you have a lot to do, some boxes can wait to be unpacked in order to attend to your kids needs during the transition.

Moving with Pets

  • Order a new tag for your pet or update your pet’s microchip with your new address.
  • Have at least a week’s worth of food and any necessary medication for your pet during the move.
  • Carry a large bottle of water from home for your pet’s drinking water, in case none is available for any period of time.
  • Establish a relationship with a vet close to your new home.
  • If traveling by air, consult your airline about rules and requirements for pet travel.
  • If you’re moving internationally, check on quarantine and health laws around importing a domestic animal.
  • Pack your pet’s bedding, favorite toys, and comfort objects with you, so they are available immediately upon arrival to the new home.
  • Upon arrival to your new home, double-check that fences, pet doors, and pet features are clean, free of hazards, and work smoothly with no possibility of escape.
  • Offer quiet, calm opportunities for your pet to explore additional indoor space and become acclimated with the new surroundings.
  • Even if your pet is normally safe off-leash, use the leash until your pet has settled in.

If you have additional tried-and-true tips for moving with kids and pets, leave a comment below!

2019 Central Ohio Real Estate Market Forecast for Fall

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2019 Central Ohio Real Estate Market Forecast for Fall

As we head into fall this year, we cannot assume a typical real estate market since atypical has become the norm the past couple of years.  

We are still looking at a surplus of buyers and a shortage of homes available for them to purchase.  Interest rates remain favorable, especially for first-time buyers trying to break into the real estate market.  But as housing prices are being pushed up due to the lack of inventory, the cost may shut new buyers out.  

Housing shortages are due to a variety of reasons, but the top 3 are:

  1. boomers choosing to age in place rather than move,  
  2. lack of consumer confidence which dropped 9.8 points in June, 
  3. the construction market has faltered with affordable housing new builds due to labor issues and the cost of materials.

Nationally, 35% of home sales in June were savvy first-time homebuyers who are taking advantage and locking in those lower interest rates.

The National Association of Realtors chief economist, Lawrence Yun said, “Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country,” and attributed the slow sales to the ongoing lack of inventory.

Here in central Ohio, our days on the market are lower than the national average in June of 27 days.  Central Ohio’s average was 23 days for the same time with the more affordable properties selling even faster at 18 days.

Home values are rising and a 5.6% increase by May 2020 is estimated by the Home Price Index Forecast.

The last four months of 2019 could pick up or slow down!  If hesitant homeowners finally decide to sell, this could open the floodgates to buyers unless consumer confidence & rising prices keep buyers from purchasing in traditional pre-recession numbers.  

What we don’t see slowing down anytime soon is affordable turn-key housing! Millennials are the group to watch since they are the largest group on the cusp of purchasing.  We’ll be watching Senate Bill 139, Ohio’s First-Time Homebuyer Savings Act!  Too late for 2019, but once this bill passes, it will assist all future first-time purchasers with a tax-free savings account to save for their first home.

If you’re contemplating a sale and are wondering what the current market value of your home is, we can help! Call The Columbus Team at (614) 888-6100 to set up an appointment for a comprehensive analysis. There is no obligation to list!