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Today’s top stories…
Discover the 7 deadly sins that can tank your home's value
Gen Z is crushing the homeownership game
Politics are turning these states and cities into an investor's nightmare
💰 Deal of the Day!: 5 bd | 6 ba | Broken Bow, OK
Today’s mortgage rate (30 Yr. Fixed): 7.51%
7 Surefire Ways to Tank Your Home's Value
I've seen it all when it comes to homeowners sabotaging their property value. Neglecting maintenance is a common pitfall - small issues can quickly snowball into costly nightmares, so it's crucial to fix those leaks pronto. Over-personalizing your home is another mistake; while you might love those hot pink bathroom tiles, they may not appeal to potential buyers. Stick to broadly appealing aesthetics to maximize your home's value.
Ignoring curb appeal is a major buyer turnoff. Unkempt landscaping and deteriorating exteriors can make a poor first impression, so it's essential to spruce up your home's exterior. DIY disasters are another common issue. Unless you're a pro, it's best to leave complex renovations to the experts, as shoddy workmanship can cost you big time.
In today's eco-conscious market, skimping on energy efficiency can hurt your home's value. Outdated systems and poor insulation are a hard sell, so investing in green upgrades can pay off. Unpermitted additions are a legal and financial minefield, so always ensure you have proper permits for any structural changes.
Finally, unrealistic pricing can lead to stale listings and lowered perceived value. Be realistic about your home's worth to avoid languishing on the market.
Want to boost your home's value instead? Prioritize regular upkeep, consider buyer preferences, and make smart renovation choices. Consulting with a real estate professional can provide personalized guidance on maximizing your property's potential.
⏰ Quick Tips
You asked. I answered.
What are the tax benefits of investing in real estate?
Real estate investing offers several tax benefits, including deductions for mortgage interest, property taxes, insurance, and depreciation. Investors can also take advantage of 1031 exchanges, which allow for deferring capital gains taxes on the sale of an investment property when the proceeds are reinvested in a similar property. Additionally, owning rental properties can provide a steady stream of passive income, which is taxed at a lower rate than active income. Consult with a tax professional to understand how these benefits apply to your specific investment strategy and tax situation.
Gen Z Outpaces Parents in Homeownership, Defying Market Challenges
In a surprising twist, Gen Z adults are outshining their parents when it comes to homeownership. Redfin data reveals that 27.8% of 24-year-old Gen Zers own a home, compared to just 23.5% of Gen Xers and 24.5% of millennials at the same age. This feat is particularly impressive given the current housing market challenges, with high interest rates and stubbornly elevated prices.
Gen Z's success can be attributed to several factors. Many took advantage of record-low interest rates during the pandemic to secure their first homes. Additionally, this generation tends to be financially savvy, conducting thorough research before making significant purchases. Living with parents rent-free has also allowed some to save more for down payments.
Interestingly, Gen Z homebuyers are opting for smaller homes in different locations compared to older generations. In 2022, their typical residence cost $235,000, significantly lower than the $355,000 and $405,000 price tags for 25-to-34-year-olds and 45-to-54-year-olds, respectively. Smaller metro areas like Virginia Beach, Cincinnati, and Detroit have become popular choices, thanks to the flexibility of remote work.
Despite these achievements, Gen Z still lags behind baby boomers, 35.6% of whom owned a home by age 26. Factors like delayed marriage and parenthood, as well as overall housing unaffordability, contribute to this generational gap.
As the youngest Gen Zers enter the workforce, their earnings potential and financial acumen suggest a promising future for homeownership. Real estate investors should take note of this emerging generation of homebuyers, adapting marketing strategies to appeal to their digital-native sensibilities and unique preferences.
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Politics Are Making These States and Cities a Risky Bet for Investors
Population shifts are a key indicator for real estate investors, as population drives demand. Recent Census Bureau data reveals a trend of Americans leaving higher-tax states in favor of lower-tax ones. Texas and Florida, for example, are among the fastest-growing states, offering a compelling mix of no state income tax and warmer climates.
Comparing population change to state tax burdens, as ranked by WalletHub, reveals a clear correlation. States that lost population last year, such as California, New York, and Illinois, tend to have higher tax burdens. While correlation doesn't necessarily equal causation, it's hard to ignore the role taxes play in people's decisions about where to live, especially for wealthier individuals and companies relocating their headquarters.
Anti-landlord regulations pose another significant risk for investors. Cities and states with heavily tenant-friendly laws can make it difficult and costly to remove nonpaying tenants, as demonstrated by pandemic-era eviction moratoriums. These regulations add risk and expense to investments, particularly in multifamily properties.
As an investor, I don't completely shun these cities and states, but I am more cautious when investing there. I focus on managing risk by considering alternative property types, such as short-term rentals, industrial, retail, storage, or mobile home parks with tenant-owned homes, which may be less affected by anti-landlord regulations.
Ultimately, when evaluating a deal in a high-tax, anti-landlord jurisdiction, I expect it to compensate for the added risk with lower risk elsewhere. While everyone invests differently, ignoring these factors can put your money at risk.
(source)
💰 Deal of the Day!
Price: $1,175,000
Address: 292 Xpress Ln, Broken Bow, OK 74728
Marshmallow Bliss makes an excellent vacation rental due to its secluded location, spacious layout with four en-suite master bedrooms and a separate game room, proximity to local attractions, and inviting outdoor area featuring a covered patio, fireplace, Smart TV, and outdoor kitchen, providing ample space and amenities for families and groups to gather and create unforgettable memories.
Airdna data:
Estimated monthly payment: $7,566/month (if financed)
Estimated monthly revenue: $7,130/month
Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.
Thanks and see you tomorrow!
✍️ Brett