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Hi Austin Texas, it is time for your housing market update for the week of January 16th, 2023.
Austin, Texas has been ranked as one of the best places to live in the United States, and with good reason. Not only are we a thriving metropolis but we are also home to some of the hottest zip codes in the country.
This week we are checking out the latest trends and strategies for buying and selling in Austin.
Topline tune in for:
The 20% Down Payment Myth
May not necessarily be the best deal! Leveraging your money and understanding the best opportunities when it comes to financing your home purchase is key. It all comes down to knowing what questions to ask AND allowing a trusted mortgage Advisor help you. You’re not a cookie cutter human and the opportunity to purchase a home on terms that best serve YOU are not cookie cutter either!
The value of Airbnb and some things to keep in mind if you’re thinking about investing in short-term rentals in and around Austin Texas and beyond. For now, if you’re considering investing in Airbnb in Austin dive in!
A closer look at the latest news surrounding gas stoves… seriously, is someone is trying to pull a fast one getting people to question gas vs electric? PS I’m all for gas stoves for a number of reasons – 1 of them is definitely based on “is the government trying to control us”?
The Austin Spring Housing Market
Well, no one got the memo that it’s winter in Austin Texas and we’re usually a little quieter on the home selling front until March. However, effective January people are out shopping and buying real estate. You may want to consider this.
Why is now the perfect time to list your home or start looking for a new one?
Whether you’re a seasoned real estate professional or a first-time home Buyer, here’s our take on the Austin real estate market and so much more.
So, are you ready to rock? Let’s dive in!
Mortgage Lending: 20% Down vs Really Leveraging Your Money
One of the most common misconceptions when buying a home is that a 20% down payment is the best option. Affordable monthly payment and structuring your loan in the most cost-effective way are the main considerations when shopping for a mortgage.
There are 2 benefits specifically to putting 20% down payment:
- There’s no mortgage insurance required. We’ll leave it that for today.
- A larger down payment will bring down your monthly mortgage payment as you’re borrowing a smaller amount.
What happens when you put a smaller down payment and use the rest of the money for other expenses or investments?
Do you want a fixed rate mortgage that offers a steady interest rate throughout the life of the loan?
Is an adjustable rate mortgage (ARM) which allows for a lower initial interest rate but could increase over time.
Taking a more holistic approach, how will having your home payment factor into saving for retirement or investing in other assets?
To answer these questions and more, you want to work with an experienced and reputable Mortgage Lender who will help you navigate the pre-approval process, answer your questions and provide guidance on what options will work best for your specific situation. As I like to say “We’re all different humans and we’re not cookie cutter. Mortgages aren’t cookie cutter either.”
Airbnb: The value of Airbnb and some things to keep in mind if you’re thinking about investing in short-term rentals
Airbnb, the investor dream of many, is taking a massive hit across the nation as hoteliers are fighting to fill up rooms and putting pressure on governments to either eliminate Airbnb licenses or add layers to “making it more difficult” to be the owner of such and investment property.
- Before shopping for an Airbnb you’ll want to consider expenses such as
Business Structure (create a company that covers you – never put it in your personal name or your kimono is wide open if there’s a legal issue with tenants) Taxes (we can’t avoid Uncle Sam)
- Electricity (it’s on whether you’re place is rented or not)
- Permit costs (annual to your city)
- Property management costs (a big one)
- Cleaning costs
Sidebar: Cleaning costs should not be dismissed. A clean and well-maintained property will likely garner you better reviews and attract more guests, resulting in higher occupancy rates and revenue. This is a business you’re entering into.
Local city and county ordinances and regulations change. If you can’t Airbnb the property can you get a good rental rate?
What’s Your Long-term Plan For The Property
While short-term rentals can be a great source of income, the housing and rental market can be volatile and can change quickly. It’s important to have a plan in place for the property in case the market shifts and short-term rentals become less profitable or down right eliminated. It could happen.
You’ll also want to understand that appreciation and depreciation happen. It’s important to be conservative about what those numbers might look like and not to rely on historical appreciation. Ever. Especially since the years during the Pandemic and the Fed printing money created a false sense of appreciation that abruptly ended. Conservative is always the way to go when investing.
Gas Stoves: A closer look at the latest trends and news surrounding gas stoves and how they may affect the real estate market
Gas stoves have been a popular choice for homeowners and home builders for… well, forever. Recently, there has been (in my opinion “bogus”) news and “discussion” surrounding gas stoves and how they may affect the real estate market.
The focus on safety from gas emissions which we’ve known to exist all along. This isn’t “news”. Phasing out the installation of gas stoves in order to reduce the carbon footprint and air pollution wouldn’t begin to touch the amount of industrial carbon emissions. Please! Give me a break!
From a safety aspect, many manufacturers are now producing gas stoves with safety features such as automatic shut-off valves and sensors to detect gas leaks. This provides added safety for homeowners and can potentially reduce the risk of gas leaks and fires. Sounds good to me.
Thinking about making your next best move? We’d love to chat. The Jennifer S. Goodman Group is just a call or text or email away. You can reach us HERE.
Mark Karetskiy is a Mortgage Lender at Movement Mortgage. You can find him at Mark10k.com.
Thanks so much for tuning in, we’ll catch you next time!