The Growing Opportunity of Midterm Rentals

Posted on November 8, 2024 by Will Sing

Midterm rentals are properties rented for more than 30 days but less than a year. They are gaining attention as a smart investment strategy for homeowners and investors. These rentals have become more popular in recent years because they can bring in good money, even in today’s challenging housing market.

What Are Midterm Rentals?

Midterm rentals fall between short-term rentals (like Airbnb) and long-term rentals (leases for a year or more). These properties are rented for months at a time, often to people who need a temporary place to stay but not for just a few days. Midterm rentals became even more popular during the pandemic when many cities put rules on short-term rentals.

Who Stays in Midterm Rentals?

Midterm rentals work well for:

Traveling Medical Staff: Nurses and healthcare workers often need a place to stay for a few months while working in different cities.
Workers on Temporary Projects: Construction workers, consultants, and other professionals who travel for work prefer staying in midterm rentals over hotels.
Families Trying Out a New City: People who want to move but aren’t ready to buy a home might rent a place for a few months to see if they like the area.

Why Invest in Midterm Rentals?

Midterm rentals can make more money than long-term rentals. This is because people staying for a few months often pay more than those who sign a year-long lease. Plus, midterm renters are usually professionals or families, so they tend to take better care of the home.

Unlike short-term rentals, midterm rentals don’t come with as many rules and regulations. This makes them easier to manage. Since people are staying longer, there are also fewer cleanings and turnovers, which saves time and money.

What Types of Homes Are Best?

Homes with 1-2 bedrooms are often the best fit for midterm rentals. This is because most midterm renters are single travelers, couples, or small families. A two-bedroom home where one room can be used as an office is also popular. Midterm renters look for places that are comfortable and well-kept, but the home doesn’t need to be fancy.

Where Should You Invest?

The best places for midterm rentals are cities or towns with:

Hospitals and Medical Centers: Traveling nurses and healthcare staff often need nearby housing.
Big Companies and Construction Projects: Workers coming in for temporary projects look for midterm rentals instead of hotels.
Areas with Few Hotels: If there aren’t many hotels or the hotels are too expensive, people will prefer midterm rentals.

Examples of Good Markets: Cities like Seattle and Nashville are popular, but smaller towns and rural areas with business hubs can be great options too. Check if there’s demand by looking at how many hotels or other rental options are in the area.

Is Now a Good Time to Start?

Yes! The midterm rental market is still growing and not as crowded as short-term rentals like Airbnb. Experts say it’s like how short-term rentals were in 2012, which was a great time to get started. By investing in midterm rentals now, you can build experience and get ahead as more people find out about this type of rental.

Tips for Starting:

Research Your Market: Know who will be renting and why. This could be medical workers, business travelers, or families.
Start Locally: If you live in or near a city with a big hospital or major companies, consider starting there. You already know the area, which helps with setting prices and marketing.

Ready to Explore Midterm Rental Options in Portland?

If you’re interested in exploring midterm rental opportunities in Portland, I’d love to help! Whether you’re looking to invest or simply learn more, I can guide you through the process. Schedule a time to chat with me using my link, and let’s discuss your goals and options.

What You Need to Know About HOAs: A Homebuyer’s Guide

Posted on November 1, 2024October 29, 2024 by Will Sing

What is an HOA?

An HOA, or Homeowners Association, is an organization in a subdivision, planned community, or condominium building that makes and enforces rules for the properties and residents. When you purchase a property within an HOA’s jurisdiction, you automatically become a member and are required to pay dues, commonly known as HOA fees. These fees contribute to the upkeep and maintenance of common areas and sometimes cover utilities like water, sewer, and trash.

The Benefits and Drawbacks of HOAs

Benefits:

Reduced Risk Profile: By joining a larger group of homeowners, you’re contributing to the maintenance and exterior updates, which can reduce your individual risk.
Community Standards: HOAs help maintain property values by enforcing community standards and ensuring properties are well-maintained.

Drawbacks:

Cost: HOA fees can range from as low as $60 to over $500+ per month, depending on the age of the property, size of unit, and the reserve funds available for repairs and maintenance.
Control: You may have less control over certain aspects of your property, as the HOA will have rules and regulations that you must follow.

What Do HOAs Cover?

HOAs typically cover the maintenance of common areas, which can include landscaping, pools, and recreational centers. They may also cover certain utilities, though this can vary. For example, in the Mountain Park area, there are separate HOAs for specific building complexes and an overarching HOA for the entire area, providing amenities like a pool and a rec center.

Special Assessments

Special assessments are additional fees that can arise when the HOA’s reserve funds are insufficient to cover major repairs or improvements. These assessments are usually paid on top of your regular HOA fees and can significantly impact your budget. It’s crucial to be aware of potential special assessments, especially if the property is older and may require more extensive maintenance.

HOA Transfer Fees

When purchasing a property with an HOA, be prepared for an HOA transfer fee, typically ranging from $200 to $1,000. This fee can vary widely depending on the specific HOA.

Reviewing HOA Documents

In Oregon, there isn’t a large governing body overseeing HOAs, so it’s essential to thoroughly review all HOA documents. Here are the five key documents you need to examine:

Reserve Study: This document details the HOA’s reserve funds and planned improvements.
Financial Reports: Ensure the HOA is financially stable and can cover future expenses without needing special assessments.
Meeting Minutes: Understand ongoing and upcoming issues, potential rule changes, and financial health.
Governing Documents: These include the rules and regulations, such as pet policies and property use restrictions.
Insurance Certificate: Verify that the HOA has adequate insurance coverage.

Getting Expert Help

While reviewing these documents, consider hiring a company like CID Analytics. They offer a service similar to a home inspection but for HOAs, providing a detailed report on the HOA’s health and potential issues. This service costs around $600 and takes about five business days to complete.

Conclusion

Understanding the role and impact of an HOA is crucial when buying a home. By reviewing the necessary documents and considering both the benefits and drawbacks, you can make an informed decision that suits your needs and lifestyle.

For personalized advice, you can schedule a free strategy session here. Also, check out my Free Buyer’s Guide to help you navigate the home buying process.

Watch the full video on Understanding HOAs: What Every Homebuyer Needs to Know.

Connect with me on YouTube, Instagram, or Facebook!

Real Estate Investment 101: Differentiating CapEx from Maintenance

Posted on October 25, 2024October 23, 2024 by Will Sing

Are you diving into the world of real estate investment? If so, understanding the crucial difference between capital expenditures (CapEx) and maintenance is key to your success. In this comprehensive guide, we’ll break down these terms, show you how to calculate them, and teach you how to forecast them when analyzing potential deals. Let’s get started!

What Are Capital Expenditures and Maintenance?

Capital Expenditures (CapEx)

CapEx refers to significant, long-term investments made to improve or increase the value of a rental property. These are typically big-ticket items such as:

Roof replacement
HVAC system upgrades
Major plumbing or electrical renovations

Maintenance

Maintenance involves routine tasks that keep the property in optimal condition. These are usually more frequent and less costly expenses, including:

Regular lawn care and landscaping
Exterior cleaning and power washing
Appliance repairs (e.g., fixing a leaky dishwasher)

How to Factor CapEx and Maintenance into Your Deal Analysis

When evaluating potential real estate investments, it’s crucial to distinguish between CapEx and maintenance. Here’s a step-by-step approach:

Analyzing Capital Expenditures

Assess Major Systems: Thoroughly inspect the roof, water heater, HVAC system, plumbing, and electrical components. Evaluate their current condition and estimated remaining lifespan.
Calculate Costs: As a rule of thumb, CapEx should account for 2-7% of the property’s value. For properties requiring significant updates, lean towards the higher end of this range.
Forecast Future Needs: For properties in excellent condition or those recently renovated, you can reasonably budget a lower CapEx percentage.

Estimating Maintenance Costs

Evaluate Property Condition: Look for signs of wear and tear, older appliances, and the overall state of the property.
Estimate Monthly Expenses: Maintenance costs typically range from 2-5% of the gross rent. Larger properties with extensive landscaping or amenities might incur higher maintenance costs.

Building Your Reserve Funds: How Much Should You Set Aside?

The amount you allocate to reserve funds depends on your risk tolerance:

Conservative Investors: Aim for 6-12 months of reserve funds to cover potential expenses.
More Aggressive Investors: A 3-month reserve fund may suffice if you have additional income streams or savings to cover unexpected costs.

Mastering CapEx Calculations

For a detailed understanding of CapEx, create a spreadsheet using this formula:

Monthly Cost = Replacement Cost / Lifespan (in years) x 12

This formula helps you determine the monthly amount to set aside for each major expense. For more accurate estimates, consult with a general contractor or your real estate agent.

Pro Tips for Savvy Real Estate Investors

Patience Pays Off: It typically takes 3-5 years for a rental property to stabilize, allowing you to understand its true maintenance costs.
Avoid Analysis Paralysis: While it’s important to dive into details, remember to step back and view the big picture. Ensure your investments align with your long-term financial goals.
Organize Your Finances: Initially, you can combine CapEx and maintenance funds into one account. As your portfolio grows, consider consulting a CPA for a more sophisticated accounting system.

Wrapping Up: The Key to Successful Real Estate Investing

Understanding the nuances between CapEx and maintenance is crucial for effective property management and investment planning. By accurately forecasting these expenses, you’ll make more informed decisions and build a robust real estate portfolio that stands the test of time.

If you have any questions about buying a home or need more personalized advice, feel free to reach out to me. Connect with me on YouTube, Instagram, or Facebook.

For a more detailed consultation or to get started on your home buying journey, schedule a free strategy session here. You can also access my Free Buyer’s Guide to help you through every step of the process here.

The 85% Rule: Your Key to Overcoming Analysis Paralysis in Home Buying

Posted on October 18, 2024October 14, 2024 by Will Sing

Hey future homeowners!

Ever find yourself stuck in a loop, analyzing every little detail while hunting for your dream home? Well, I’ve got a golden rule to share with you that might just be your game-changer: The 85% Rule. Let’s dive into it!

What is the 85% Rule?

In the home-buying journey, it’s easy to get caught up in the whirlpool of options and details, leading to what we call ‘analysis paralysis’. This is where the 85% rule comes into play. It’s a simple yet fantastic rule to guide you in making decisive actions.

How Does it Work?

The rule is pretty straightforward. When you’re looking at potential homes, aim for one that meets about 85% of your criteria. Yes, it doesn’t have to tick every single box on your list.

Why 85% and Not 100%?

Here’s the thing, finding a home that has 100% of what you’re looking for is like finding a unicorn – it’s a beautiful thought but nearly impossible. Even those who have had their homes custom-built find themselves wishing for changes five or ten years down the line.

Embrace the Imperfections

Remember, it’s absolutely okay for a home not to be perfect. What matters is that it’s perfect for you at this moment in your life. The small imperfections? They are opportunities for you to add your personal touch down the line.

Conclusion

So, the next time you find yourself stuck in the home-buying process, remember the 85% rule. It’s not about settling for less; it’s about embracing a home that meets most of your needs and holds the potential for you to make it truly yours over time.

Reach out to talk further now!

📞 Call Me – (503) 303-0822
✉️ Email Me – hello@agentlivinginpdx.com

What Does Contingent Mean in Real Estate? A Complete Breakdown for Buyers and Sellers

Posted on October 10, 2024October 9, 2024 by Will Sing

In the world of real estate, the term “contingent” can sometimes leave buyers and sellers scratching their heads. Whether you’re navigating the buying process or preparing to list your home, understanding contingent offers is crucial. In this post, we’ll break down what it means to be “contingent” in real estate, how it affects you as a buyer or seller, and what potential scenarios you could face.

What Is a Contingent Offer?

A contingent offer on a house means the buyer has included a protective clause in their contract. This contingency gives the buyer an option to back out of the purchase if certain conditions are not met. Typically, a contingent offer involves the buyer needing to sell their current home before they can finalize the purchase of a new one. Think of it as a step in between “active” and “pending”—the property is not quite under contract yet, and there’s still an opportunity for other buyers to step in.

If you’ve heard the term “bumpable buyer,” it means that the current buyer’s offer is contingent on selling their home, and another buyer could potentially “bump” them out of the contract. Essentially, it’s a state of uncertainty, and another buyer might have a chance to swoop in.

What Does Being Contingent Mean for Buyers?

For buyers, there are two key scenarios involving contingent offers:

You Are the Contingent Buyer: You want to buy a home, but you need to sell your current property first. This makes your offer contingent on that sale, which can sometimes be a hurdle. If another buyer who is not contingent decides to make an offer, you will usually have 48 to 72 hours to either remove your contingency or lose the property.
You Are a Competing Buyer: You want to buy a property that already has a contingent offer. In this case, you can put in an offer, which then triggers the “bump clause.” The original buyer (who is contingent) will have a set amount of time to remove their contingency—if they can, they go from “contingent” to “pending,” solidifying their contract. If they cannot, the seller is free to accept your offer, and the contingent buyer is out.

What Does Being Contingent Mean for Sellers?

If you’re selling your home and receive a contingent offer, it’s important to understand the potential risks. If the buyer needs to sell their current home, this could delay your closing timeline. For instance, if their home takes longer to sell than expected, you might need to extend the closing date, which can be problematic depending on your plans.

It’s also essential to assess the buyer’s preparedness to sell their current property. Are they already on the market? Are they prepped and ready, or are they just starting? The more ready they are, the less risk you’ll face. Given the additional uncertainty, contingent buyers often need to make a stronger offer to compensate for the risk you are taking.

Key Takeaways

Contingent Offers: Buyers need to meet specific conditions, often involving selling their current home.
Bump Clauses: If you are the contingent buyer, be prepared to act quickly if a competing offer comes in.
For Sellers: Contingent offers can mean more risk and longer timelines, but they might come with a higher price to compensate for that risk.

Watch the Full Video: The REAL Difference Between Contingent and Pending

If you have any questions about buying a home or need more personalized advice, feel free to reach out to me. Connect with me on YouTube, Instagram, or Facebook.

Navigating Your Home Purchase: Who’s Who in a Real Estate Deal

Posted on September 13, 2024September 10, 2024 by Will Sing

Understanding the Key Players in Your Home Buying Journey

Buying a home involves several key players, each with a unique role. In this blog post, I’ll walk you through the major roles in a real estate transaction, what they do, and how they help ensure a smooth process. Whether you’re a first-time buyer or an experienced investor, understanding these roles will give you the confidence to navigate your home buying journey.

The Real Estate Agent: Your Project Manager

First and foremost is your real estate agent. Think of your agent as the project manager of your home buying process. Their job is to guide you from start to finish. Here’s what you can expect from your real estate agent:

Scheduling Tours: Arranging viewings for properties you’re interested in.
Determining Comps and Offer Strategy: Helping you understand the market value and craft a competitive offer.
Negotiating Deals: Working to get you the best terms possible.
Scheduling Inspections: Coordinating necessary inspections to ensure the property is in good condition.
Connecting with Contractors: Providing referrals for any needed repairs or renovations.
Resource Direction: Guiding you to tax or legal professionals as needed.

The Lender: Securing Your Mortgage

Next is the lender, who plays a crucial role in securing the financing for your home. They will:

Pre-Approval Process: Help determine how much you can borrow and identify suitable loan programs.
Document Collection: Request necessary documents to process your loan application.
Loan Processing: Guide you through the steps to secure your mortgage, providing clarity on your financial obligations.

It’s essential to work with a lender who communicates effectively and who you can trust. Poor communication can jeopardize your transaction.

The Escrow Officer or Title Company: Ensuring Neutrality

The escrow officer or title company acts as a neutral third party in the transaction. Their responsibilities include:

Holding Earnest Money: Managing the deposit you make when your offer is accepted.
Facilitating the Closing: Ensuring all paperwork is completed and funds are distributed correctly.
Providing Title Insurance: Protecting you against any title disputes.

Home Inspectors: Assessing Property Condition

Home inspectors are like the primary care doctors for your new home. They meticulously examine the property to identify any potential issues. Key tasks include:

Detailed Inspections: Checking structural integrity, plumbing, electrical systems, and more.
Referrals to Specialists: Suggesting further inspections if they find potential problems.

The Appraiser: Determining Home Value

Appraisers assess the value of the home to ensure the lender is not over-lending. They are a neutral third party and you won’t have much direct contact with them. Their role is crucial for:

Valuation: Ensuring the home’s value justifies the loan amount.
Risk Mitigation: Protecting the lender from overextending credit.

The Insurance Agent: Securing Home Insurance

Home insurance is mandatory when buying a home. An insurance agent will:

Policy Selection: Help you choose the right insurance policy for your home.
Bundling Options: Provide options to bundle home insurance with other policies for discounts.

Other Key Players

Additional roles that may come into play include:

Transaction Coordinators: Assist with paperwork and ensure everything runs smoothly.
Home Warranty Providers: Offer warranties to cover potential mechanical issues.
Contractors: Provide estimates and complete any necessary repairs or upgrades.

Conclusion

Understanding the roles of these key players in a real estate transaction can help you navigate the process with confidence. If you have any questions about buying a home or need more personalized advice, feel free to reach out to me. Connect with me on YouTube, Instagram, or Facebook.

The Art & Science of Pricing A Home

Posted on June 30, 2024June 30, 2024 by Kat Gilpatrick

Coming up with the right price to list your home is daunting.

It’s not a fixed number, or what we might expect to get for it – it’s not the number we need to make to break even on renovations or to what you need to buy our next home.
It’s not what a neighbor got for hers last week or last year, it’s not what one of the property listing sites estimates you could fetch.
It’s not the appraisal value of your home, either, which is a doozy to digest – and why wouldn’t it be?

If our homes are so unique — and we’ve put so much great care, time and investment into improvements, etc. why can’t we ask for the number that represents that?

I mean, you CAN — you can end up pricing your home however you like, at the end of the day. It is the homeowner’s choice — but, if the end goal is to sell your home, with the expectation that someone will pay X amount for it, and in a reasonable amount of time — this often falls into the strategy philosophy camp I like to refer to art and science.

The science is data – what’s for sale right now that compares to your property? What similar homes have sold in the last 3, 6, 12 months in your area? What is that average price per square foot? And then comes the delicate science — and math of finessing the numbers to reflect the more unique or bespoke characteristics of the home. Sauna? Tennis court? Flag lot? Oh, the considerations and calculations!

The art bit is understanding people – the buyer — where the market is at, and what is the tolerance for price range where you are, at this exact moment? Where are the interest rates? What are people buying? Is it a condo? How many days on the market in that zip code have similar properties taken to sell? Is your style of home super popular right now? That neighborhood is so hot homes sell in less than a week? That’s data, too, of course, but it’s truly understanding that mindset, that appetite that is the real finish work when it comes to determining the price at which to sell your home. The additional artistry is understanding your priorities when selling? Have to have it sold quickly? Don’t care how long it takes you want the right buyer who’s willing to pay your price?

Of course all of these things factor in. It’s touches on the emotional, the financial, the very core of our fears and that which is most important to us. That’s why it’s so incredibly nerve-racking thinking you’ve either left money on the table or you’ve aimed too high and over-reached, possibly having to consider a price adjustment or pulling it from the market until a different time or after having done some value-add improvements.

It’s a tough conversation at times. Often, I’ve found, through the art & science method, you can determine a range: factoring all of these elements in, that provides something that everyone can tolerate — and possibly, very possibly, find very satisfying on closing day.

HGTV, A Cup of Coffee, and a House Flipping Venture

Posted on October 22, 2022October 28, 2022 by Bobby Curtis

In 2016, Ian Curtis, asked if I’d meet him for a cup of coffee. While we share the same last name, it turns out the only relation we have is through real estate and our interest in restoring 100 year old houses. We met at Case Study on Alberta St in NE Portland to talk about house flipping. Ian had just gotten his real estate license. He shared with me he wanted to buy and restore houses. I had been house flipping in Portland for about five years by then, so I certainly had some experience to share. And tips.

I’ve always been open to talking with people about my real estate ventures. But also what has had them go well and the pitfalls along the way. By the time I met Ian, I had had many cups of coffee with many people who had even a twinkle in their eye when watching their favorite house flipping show on HGTV. And I love that, actually. That’s usually where dreams begin in this line of work. Whether or not people go on to actually do the work and restore houses, doesn’t really matter. It’s exciting imagining, and then taking a few steps to see if its right for you.

I don’t remember everything Ian and I talked about that day, but I remember him asking thoughtful questions. I saw him as a serious, very professional, and talented, young guy. And I think I recognized an old soul, which really made me like him from the beginning. Also not bad qualities to have in this line of work.

From then, Ian and his business partner, Matt Clark, went on to flip a house. I remember that first one well. It was an old farm house in North Portland on N Cecelia St. It was such a thoughtful renovation, a ton of work, and people loved the traditional farmhouse remodel style they created. When we listed it for sale, it sold within the first three days.

Now, several years later, Ian and Matt have a dynamic real estate development business, Milk & Honey Restoration. They take on complex home renovations, new construction and rentals. While I wish I could take some credit for it, they’ve really gone beyond what I’ve done. Though I do appreciate they still ask my opinion from time to time. 😀 They have their own ideas, style, and team. And I’ve been inspired not just of the work they’ve done, but the integrity they have in their work.

Their most recent remodel is at 2606 SE 16th Ave, Portland, an old Foursquare home with large garage they converted to a second living space. I asked Ian some questions about the house, and here’s what he shared

What was the inspiration for the remodel and design you chose?

Sometimes a renovation project feels like a blank slate where the original design and style is ambiguous or has been convoluted over time. Other times, such as this one, a house has such marvelous original style that staying true to that design feels like the best thing you can do for the home. Working with Pip Stevens, our local interior designer, we restored the many original archways, replicated original trimwork, and made design decisions that stayed true to the original architectural style of the home while bringing in fresh ideas and modern upgrades.

What was the most unexpected thing that popped up if anything?

One of the unexpectedly pleasant things that happened was, after opening up the walls, discovering how well built and well kept-up the home was. Some of the best “bones” we have seen in a home of this age. Probably the most unpleasant (though maybe not so unexpected) thing that happened was the delay in manufacturing times. The pandemic supply chain issues are still affecting all sorts of products and it is hard to keep track of what products will have delays. For the last project, garage doors were extremely delayed. For this project, our windows took at least two months longer than usual to get back from the manufacturer, causing a pretty big delay in the project.

Did this turn out how you expected, or did you make any big changes along the way?

When we started the project we hadn’t decided how to finish the garage. The extra large garage with a kitchen sink and upstairs loft was once apparently used by one of the early owners, an Italian vegetable farmer or merchant, to wash his vegetables before selling them at a market. After some due diligence and deliberation we decided the best use of the space was to create a 1 bedroom / 1 bathroom legal ADU while retaining a single car garage space. The ADU can be used as a short or long term rental. The close-in, desirable location surely lends itself to, or however the next owner sees fit.

Ian and Matt provide an exceptional level of detail in their work. When you walk through this house, you want to sit down and stay for a while. But it doesn’t just look pretty. When you discover the new guts of the house: energy efficient casement windows, roof, extensive electrical, plumbing and efficient heating and cooling updates, you want to move right in.

I had the opportunity to share this house and and before and after photos of the house on KATU’s Afternoon Live. To see the short interview and photos, check it out here

Bobby Curtis on Afternoon Live with Kara Mack, House Flipping & Portland Real Estate

For those with that twinkle in their eye after watching their favorite HGTV show, check out my house flipping tips. Now let’s get some coffee.

Just Sold! Radiant Rose City Retreat

Posted on April 15, 2021April 16, 2021 by Living Room Realty

Own It Portland’s very own Operations Manager, Heidi Effmann, and her family just sold their longtime home in NE Portland. It’s a beautiful 1925 bungalow in the Rose City Park neighborhood. After ten years, four remodels, four kids, two dogs, one cat, six chickens and lots of life on NE 55th, Heidi and her family are on the lookout for a new Portland home that will better suit longer visits with extended family and growing kids, more chickens and maybe even a pool…? One can dream. Congrats to Heidi and family!

Just Listed- Sweet & Serene Scenes in SE

Posted on April 9, 2021April 26, 2021 by Living Room Realty

Kick back and relax in this wonderfully open home in Brentwood/Darlington. Once inside, you’re greeted with a warm and charming feel right away. Enjoy high vaulted ceilings and beautiful oak floors in the bedrooms and Brazilian cherry in the main areas. Lovely large living room adjacent to quaint kitchen and dining area. Grand master-suite plus 2 spacious bedrooms, 2 baths round out the 1,849 sq ft floor plan. The private fenced backyard has a gorgeous patio and plenty of room to roam with greenspace and designated garden area. Last year, the current owner grew gallons of fresh fruit right from home. The neighborhood is quiet and residential, perfect for a sunny stroll on a warm spring day. Don’t miss this beautiful SE gem!