How to Afford a Second Home or Vacation Property

If you're a homeowner looking for ways to build wealth and invest in the future, you may want to consider buying a second home.

This is possible even if you don't have the cash on hand for these types of investments, as you can purchase a second home or vacation property with a variety of financing options. Here's a three-step plan to secure your vacation home or second home.

Set Your Financial Goals
If you're thinking about buying a second home, one of the most critical things is your finances. You need to figure out how much you can afford and what kind of financing you want. If you have a stable job or other sources of income, you may be able to get a second mortgage. And as with any loan, there are terms, regulations and requirements that you must meet.

Determine Your Budget
Whether you are buying a seasonal residential home or a vacation property that you plan to rent out, budget is important to consider. If you don't know how much you can borrow based on your salary, ask a loan professional what other factors to take into account. These may include the minimum down payment and the interest rates. An advisor can help you determine what type of loan will be best for your situation.

Find Your Preferred Loan Program
The most effective way to find the most suitable loan program—and get approved—is to work with an experienced lender. Start by figuring out how much you want to borrow and what kind of property you want. For instance, institutions like Raw Land Lenders offer a variety of loan types, including hard money loans, raw land loans and bridge loans. You may even be able to release equity from your properties, pay off demanding banks and consolidate your debts.

The Benefits of Owning a Second Home or Vacation Home
Owning a second home or vacation home can be a worthwhile investment, but you need to know all the pros and cons. Some people don't want to buy a second property because they think they won't have enough time to enjoy it, or their job doesn’t allow them to travel. However, owning a second home can be useful for many reasons. These include generating rental income, having an emergency place to stay and being able to take a vacation in your favorite state without having to pay for hotel accommodations. 

Take these factors into consideration when deciding whether a second home is right for you.

Read more on RISMedia.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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The Hidden Costs of Buying a Condo

A condominium may appear to be an excellent investment at first glance.

Most come with numerous amenities, maintenance-free living, and a great location. However, there are hidden costs that are often talked about. Nobody likes financial surprises as they can cause excessive stress levels.

Let’s take a look at a few of the hidden condominium buying costs that must be accounted for before purchasing.

Homeowner’s Association Charges

Condo owners can avoid landscaping, roof repair, deck repair, and sometimes even window repair charges. However, their investment isn’t entirely maintenance-free. Condos have annual, monthly, or quarterly charges in the form of homeowner association fees that cover typical building maintenance.

These fees tend to increase at per with the property value and as the property ages and requires more maintenance.

Understanding property association fee amounts, frequency of payment, and rules governing increases are critical in ensuring they don’t overeat into your pocketbook or wallet.

When buying a condo, carefully look over the financial statement. Ensure there is economic stability and plenty of money in the reserve fund.

Special Assessments Are Unplanned Expenses

Property association charges generally cover typical costs. However, unplanned expenses are inevitable and must be passed over to condominium owners when they occur. These are known as special assessments and are typically significant expenses.

They can be a tough pill to swallow, especially for new owners who have just purchased and weren’t aware of them.

A typical example would be expenses to rebuild a balcony that has been deemed unsafe. If all balconies must be redone, the cost is generally shared among all condo owners. Another example is the roof on the clubhouse needing replacement. These costs can add up quickly.

Most unplanned expenses aren’t optional and need to be met by every property owner. The importance of knowing a condominium’s prior unexpected expenses history can’t, therefore, be overlooked.

It also helps to know the protocol for unplanned expenses. There are many questions to be asked when buying a condo and anything related to fees is crucial.

Additional Insurance

While the property must have insurance, condominiums have unique insurance needs. Even if you take a mortgage to finance your purchase which typically comes with insurance, you should consider severe but commonly overlooked risks.

For instance, condominiums spread across the beach to offer expansive ocean views come with additional risks. Proximity to the beach is a great marketing tool. However, standard homeowner insurance policies don’t cover damage linked to hurricanes, flooding, and wind.

The location of many oceanfront condos makes them susceptible to flooding. Most are located in or near flood zones demanding additional insurance protection. It’s therefore up to a condominium owner to take additional coverage for their unit.

To avoid hidden insurance costs, it’s advisable to see what the current insurance protects before buying the condo. The exclusions at this stage can be used to negotiate for a better buying price.

Alternatively, you’ll be able to see if the additional insurance cost makes sense. Insurance agents can assess current coverage to identify further needs.

Consulting an insurance agent ensures you uncover hidden insurance costs that help you make a more informed condo purchasing decision.

Final Thoughts

Owning a condo is a great way to have a vacation property or downsize after retiring without compromising on most things. However, the above information highlights the hidden costs of owning a condo that is commonly overlooked. Acknowledging these costs of buying a condo is critical to ensure your condominium investment makes sense in the long term.

Before making that final purchase decision, talk to the Realtor, insurance agent, loan provider, and property association manager. These professionals should be part of the final process in determining if purchasing a condo is right for you.

Keep reading on RISMedia.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Colorado mountain towns can now use tourism tax revenue to deal with visitor hordes, housing shortage

House Bill 1117 was signed into law Thursday by Gov. Jared Polis after passing the Colorado legislature with bipartisan support.

Voters in mountain towns could soon redirect lodging taxes traditionally collected to lure visitors toward housing and recreational infrastructure. 

Gov. Jared Polis signed House Bill 1117, the bipartisan legislation allowing that option, into law Thursday in Edwards. Since 2002, voters in 29 Colorado counties have approved a lodging tax for tourism marketing. The new legislation allows counties and local marketing districts to spend as much as 90% of lodging taxes previously collected for tourism on affordable housing, child care for local workers and “enhancing visitors experiences,” which includes investment in recreational infrastructure such as trails.

It’s the kind of proposal that tourism officials in Colorado traditionally have opposed. But after the last couple years, with a pandemic-driven real estate frenzy fueling a housing crisis and labor shortage that is threatening rural communities overwhelmed by visitors, many of Colorado’s tourism boosters support the plan to repurpose marketing dollars.

“There’s been a lot of consternation around this. A lot of hard conversations. But tourism is not opposing this,” said Lucy Kay, the president and CEO of the Breckenridge Tourism Office. Her office in 2016 changed its mission from “come here!” marketing to include managing visitor impacts. “We all need housing. This helps us support issues that are critical to the hospitality industry. We would love these places to be better by having tourism and not have tourism considered as just an impact.”

Many of Colorado’s strongest regional tourism organizations — including in Aspen, Breckenridge, Telluride and Vail — shifted away from pure marketing several years ago. Those groups are now in the business of lessening the impacts of visitors, spending lodging taxes on things like luring new businesses to town and training workers and tourism campaigns that educate visitors about taking care of natural resources and respecting local communities. 

But Colorado’s laws for marketing districts that collect lodging taxes prevented spending on capital projects other than tourist information centers. House Bill 1117 changes that, marking a fundamental shift in tourism spending, with focus not just on visitors, but locals. The bill allows voters to decide how to divide lodging tax revenue between tourism promotion, housing, childcare and recreational improvements, but it requires that at least 10% remain dedicated to tourism marketing.

“A visitor’s experience is also heavily influenced by the host community’s ability to support their residents and local workforce with housing and other essential services, as well as a strong quality of life that comes with our amazing natural and cultural assets,” the bill reads. “Robust support for our residents’ needs is essential to the long-term health of both our communities and our economy.”

Gunnison County changed the name of its tourism association to the Tourism and Prosperity Partnership in 2019, using a 4% lodging tax collected by the county’s marketing district to support economic development, Western Colorado University, and local entrepreneurs and businesses, while also promoting visitor-friendly events.

Keep reading on The Colorado Sun.

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Are You Ready for Real Estate Investing?

Real estate investing is among the oldest and most rewarding asset classes.

It's a great way of building wealth and can be one of the more reliable types of investment. New investors are usually aware of these benefits, but some are not aware of the several different categories of real estate investments available.

For a savvy investor, focusing your efforts on a specific niche can be the first step in succeeding in your pursuit of financial independence and the benefit of a passive income. What do you need to know about the best types of real estate investment opportunities for your needs? Let's find out.

Types of Real Estate Investing

In 2020, the revenue from the property management field reached an unprecedented $88.4 billion in the U.S. If you're a prospective investor determined to develop, acquire, own or flip real estate, you should first understand the industry by dividing property investment into its various categories.

Residential

Based on US Census Bureau records, renter-occupied housing units accounted for about 30.4% of the overall inventory during the fourth quarter of 2020. Renting just makes sense for a large portion of the population, even if they have a choice to rent or own a property. These properties include houses, apartment buildings, vacation houses, and townhouses where individuals or families pay you to reside in the property. Details about their length of stay are stated in the rental or lease agreement.

Pros: short leases (due for renewal every 6-12 months) allowing you to capitalize on any positive adjustments in the market conditions.

Commercial

Office buildings and skyscrapers basically constitute commercial buildings. Property owners lease out these spaces to companies or small business owners, who then pay rent to use the property. Commercial real estate prices have been on an upward trend. This statistics indicates this category has a considerable ROI in the long term.

Pros: Benefit of longer leases, usually multi-year. Typically, this approach helps generate greater stability in cash flow and often cushions you as the property owner from rental rates decline.

Cons: Markets fluctuate, and its possible rental rates may increase rapidly within a short period. Due to the dated agreements, a property owner may not have the flexibility to increase the rent to match the competitive market rates.

Industrial

These properties generate income from customers who frequent properties such as industrial warehouses, storage units, distribution centers, manufacturing facilities, and other purpose-built properties. As a real estate investor, you charge significant fees and earn service revenue as a means to increase your return on investment.

Retail

Retail properties include shopping malls, strip malls, retail storefronts, among others. Depending on the agreement type, property owners can also receive a portion of sales generated by the stores alongside a base rent. This strategy helps create an incentive for them to maintain the property in remarkable condition and attract shoppers.

Mixed-Use

Typically, mixed-use properties blend any of the above classifications into one project. This catch-all category of real estate investments is attractive for those with considerable assets since they offer a level of built-in diversification that helps control risk.

Real Estate Investment Trusts (REITs)

REITs have risen in popularity in the real estate investment community as an alternative way to invest in real estate. They are popular with investors who don't want the responsibility of overseeing the management of an investment property.

But what's a REIT? This real estate investing strategy involves investment in shares of a corporation dealing or owning real estate properties and allocating a considerable amount of its earnings as dividends.

Cons: tax complexities. Dividends don't enjoy the same favorably low tax rates common stocks attract. But REITs can be an excellent addition to your investment portfolio, preferably when you buy them at the right value—with an adequate margin of safety. Besides, you can also opt for more esoteric areas like tax lien certificates.

As a rule of thumb, lending money for real estate is regarded as real estate investing and can also be accounted for as a fixed-income investment. Akin to investing in bonds, you generate your returns by lending money in favor of interest income.

Investing in a real estate/building and later leasing it back to a tenant, for instance, as a restaurant, is at par with fixed income investing instead of an actual real estate investment. In this case, you're simply financing a property—but this somewhat hedges between investing and financing. Overall, you technically own the building and have a claim to its appreciation and profits.

Getting Started in Real Estate Investing

Every kind of investment has its share of potential benefits and shortcomings, and real estate investing is no different. Smart investors minimize their risks by anticipating the twists in cash flow cycles, economic cycles, potential for natural disasters, and changes in lending traditions. So, it's best to analyze and weigh the opportunities very thoroughly before deciding if real estate investing is the right choice for you.

Real estate investing can carry many rewards with benefits potentially lasting a lifetime. If you apply due diligence, you can capitalize on the available opportunities in what can be a fun and lucrative path.

Read the full article on RETechnology.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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How to Paint a Front Door and Increase Your Home’s Resale Value in the Process

A small but impactful project like painting your front door a fresh hue won’t just give your exterior an instant facelift.

There’s an even bigger payoff: This simple upgrade could increase your home’s resale value by several thousand dollars. (Psst: You’ll want to embrace the dark side.) What are you waiting for? If you’re all geared up with your new color and brush in hand, we tapped Behr manager Octave Villar to guide us through the process. For his tips on how to paint a front door—and steer clear of the typical pitfalls—read on.

Common Mistakes to Avoid When Painting a Front Door

Not Considering the Environment

Yes, this project is a minor one, but that doesn’t mean diving in without thinking of the impact that temperature, humidity, and airflow will have on the process. Schedule your job for a clear, sunny day (not too breezy) with mild temperatures to help with even application and a quicker drying time.

Painting Without a Plan

Haphazardly applying paint does not a happy homeowner (or door) make. Villar suggests starting with the inside panels and working outward so you can paint smoothly and uninterrupted.

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Skimping on Tools

Villar points out that investing in proper, quality tools will save you time and the hassle of potentially having to redo a messy job due to low-grade rollers that leave nap fibers on the surface or a worn-out brush that creates a rough finish.

Adding Another Layer Before the Previous One Dries

Villar says water-based paints typically take two to four hours to dry, while oil-based ones can take up to 24 hours. If you skip this step, you run the risk of creating streaks and bubbles that can be a headache to repair. 

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How to Paint a Front Door

The Supplies

• Mild detergent

• Sponge

• Bucket

• Warm water

• Lint-free cloth

• Paint scraper

• 400-grit synthetic sandpaper (or ultrafine sanding sponge)

• Trash bin

• Stir stick

• Paint tray

• Painter’s tape

• Short nap roller

• Nylon/polyester paintbrush or paint sprayer

• Angled paintbrush

• Exterior paint

• Water-based primer

Step 1: Remove All Nonpermanent Hardware and Clean the Door

This includes knobs and hinges (if you’re taking the door off the frame). Be sure to label the pieces and set them aside in a safe place until you’re ready to reattach them. Then fill a bucket with warm water, add a bit of detergent, and use a sponge to clean any dirt or grime off the surface. Rinse with fresh water and wait until the surface is completely dry before moving on to the next step. 

Step 2: Get Rid of Any Peeling Paint

Gently clear the surface of flakes from the last paint job with a paint scraper. Sweep the remnants into a trash bin.

Step 3: Sand the Door

Use fine-grit sandpaper to lightly go over the door surface to help extend the life of the new coat and make sure that it sticks. Wipe off any sanding dust with a lint-free cloth.

Step 4: Cover the Remaining Hardware With Painter’s Tape

Tape around the edges of any fasteners or fixtures on the door (think: hinges, doorknobs, the peephole) to shield them from paint splatters.

Step 5: It’s Time to Prime

With the roller, apply the primer, starting with the large, flat areas on the back of the door. Villar recommends an angled nylon or polyester brush for corners and crevices. Let the surface dry (depending on the type of primer you bought, the outside temperature, and the door material, this could take from one to four hours), then repeat the process on the front of the door.

Step 6: Sand and Wipe Down the Door

Once the primer completely dries, use the sandpaper to lightly scuff the primer, carefully clearing the surface of any uneven spots. Wipe the door with the lint-free cloth to clear away any sanding dust.

Step 7: Now Let’s Paint!

Finally, the moment you’ve been waiting for—grab a brush, roller, or paint sprayer to apply a single coat (don’t forget to give it enough time to dry!). Then go over the door with the 400-grit sandpaper again. Add another coat and repeat the sanding process once more.

Step 8: Remove the Painter’s Tape

You don’t need to watch the drying process happen (everyone knows it’s a total snooze), but you do need to give it time. Once that’s done—you’ll know if you gently dab an unnoticeable spot with your finger and it doesn’t feel wet or sticky—carefully remove the tape and discard it.

Villar says water-based paints generally dry in two to four hours, whereas oil-based may take up to 24. To be on the safe side, wait as long as possible before using the door so your handiwork lasts.

Step 9: Reattach the Hardware

Put the doorknobs, hinges, and any other accessories back on. If you took the door off the hinges, hitch it back onto the frame. This first impression is, in fact, everything.

Get more tips like this.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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