Dear Michael: Three year
ago I put my house on
the market and could not sell
it. I am thinking of re-listing
it. Is this the right time to
sell? I am hearing from some
people that it is slowing
down again.
Answer: Timing a market
to achieve the highest price
point is almost impossible.
There has been a slight slowdown
in the past couple of
months. This is mainly due
to current higher interest
rates and a 28 percent price
increase in the past year. If
you’re a seller with equity in
your home it may be worth
considering selling at the
“right time” can be defined
as: today, tomorrow or yesterday!
In other words, the
decision is yours to make.
Consider all your options
and reasons for moving; to
cash out, relocate to be near
your children or for employment
purposes, divorce,
retirement, heath issues or
any other reasons that would
be referred to as a legitimate
matter to you. The decision
is only yours to make. Understand
that no matter what
you decide, the price of your
home is dictated by the current
market and comparable
homes sold in your area. If
you are not sure what the
price of your home is, consult
a real estate agent who is
active in your area and they
will give you an accurate sale
price on your home. If you
do not agree with the price
he or she gives you, then
waiting to sell your home
maybe the better option for
you.
Dear Michael: We are
buying a four-unit apartment
building and would like to
know at what rate of inflation
should we calculate our
investment return?
Answer: When buying
an investment property in
today’s market the safest and
most accurate way to calculate
your equity appreciation
is to use 4 to 5 percent
rate of inflation. This means
that if you purchased an
investment property for $1
million today, in 10 years it
would be worth $1.5 million.
This number is not specific
but historically has been in
line with the equity appreciation.
Keep in mind that
your rental income from
each unit is and should also
be a source of income. Make
sure you complete a spread
sheet which will allow you to
calculate exactly what your
monthly overhead will be.
When buying an investment
property it is best to always
think long term.
Dear Michael: I want to
rent out my home as we are
relocating to the Bay Area.
How do I know how much I
can get for it? We rather not
hire a real estate agent and
do this ourselves.
Answer: Check the comparables
for prices and rental
incomes of similar properties
within your immediate area.
Take note of the size and features
of your home prior to
researching comps. You will
then need to scan newspapers
and Internet sites for
rental advertisements. Offer
to rent your home for a price
that matches local comps to
attract demand. Keep in mind
that every month lost while
you are not living in your
homes is money right out of
your pocket. Be diligent but
also cautious to whom you
rent. There is nothing worst
then a “deadbeat” tenant. No
perfect strategy exists for setting
rents. Rates vary according
to economic trends.
For example, landlords will
drop prices amid a recession
when renters are looking to
save money. However, lowering
rents beyond mortgage
and upkeep costs may create
a financial burden for you.
The current rental market
trend allows for landlords to
be selective as there are few
properties for rent.
Michael Kayem is a Realtor
with Re/max Estate Properties
serving Culver City
and the Westside since 2001.
You can contact him with
your questions at (310) 390-
3337 or email them to him at:
homes@agentmichael.com
