How To Avoid Major Foundation Issues

Source: Realtor Magazine

Water is not always good. Water can enter a home from the exterior and interior, both buyers and homeowners should keep their eyes open to some of these signs or issues. The first step in keeping your home water resistant is to protect the outside. Here’s a few things to look for:

  • Keep large trees or plants further away from the house. Large trees can ruin water lines and the foundation of the home from the roots. If this problem occurs the tree or plant will likely need to be removed by a specialist. Keep in mind the best time to remove these plants are during the winter months when they are dormant.
  • Installing Gutters is another water to move water away or off the house. Having gutters and downspouts installed will ensure that rainwater is disbursed far away from the house to cause no roof or foundation problems. Keep in mind for gutters and downspouts to continue working efficiently they need to be cleaned time to time.
  • Understand why patio floors or interior floors may start to slant. This could be two things, an older house settling, or water being trapped underneath the flooring. If the floor or patio was once level and now slants this could be due to water damage. Inside flooring like carpet, tiles, wood, can be removed and replaces. Outside patios would need to be removed and have a drainage system installed, or a membrane to insure a long-lasting patio.

The good news is there’s plenty of experts that can help if these issues occur. Even with no issues homeowners should start by doing everything possible on the outside of a home to correct these problems or divert water away.

What You Need To Know About Mortgages

Source: Forbes

Whether you’re a buyer or investor you’ll want to know the up to date and different types of mortgages, the qualifications, and the benefits. Here’s the three most common mortgages:

Fixed-Rate mortgages offer the same interest over the loans entire life. This means the monthly payments are always going to be the same. These mortgages come in 10,15,20,30 years. Fixed-rate mortgages do come with the highest interest rates with the most common loan products.

Adjustable-Rate are mortgages that have a fluctuating interest rate. These usually are listed for 5, 7, or 10 years. These usually offer a fixed rate period upfront before the interest rate resets, usually including a cap on how much your interest can adjust and how often. Adjustable rates can be 0.5 to 1% lower than a fixed rate loan.

Interest-Only loans are where the borrower only pays the interest on the loan, not the principal, for a set amount of time, usually 5-7 years. At any time, the borrower can make a large payment towards the principal with no payment penalty. As long as your real estate property has appreciated by 12%, you’ll be ahead with the minimum interest-only payment.

Qualifications vary depending on each mortgage loans. Usually, the riskier the loan the tougher the qualifications are. An interest-only loan will usually require higher credit scores, higher income levels, and more cash compared to a traditional loan. The most important thing to do up to a year in advance is to pay off credit card balances, make on time payments, avoid any other major purchases before the loan.

Rental Market Update

Every one of the nation’s 100 largest metro areas has seen month-over-month rent growth. This has been occurring the past 5 months. Zillow data shows the national increase as well, up an average of 11.5% or $200, compared to last year. Some single-family suburbs and neighborhoods have been seeing price spikes from 15-21%.

Home prices first spiked after the pandemic due to everyone entering back in the market at once. While the renter market is slower paced and took longer for the surge of renters to come back in the market. The increase of people moving is causing increased demand in both rent and homes since there is a limited supply helping inflate these prices.

Many view renting as a steppingstone to home ownership. This past year many people are moving from cities into suburbs and smaller towns. The main reason for this is due to the price’s cities are charging for rent and homes prices many can’t afford so are forced to relocate. This causes an increase in demand for rentals and homes when’s there’s not enough supply to keep up. Vacancy rates are at historical lows and have shrunk 36% this year. Currently only 3.8% of rentals are still vacant.

All of this is accompanied by seasonal trends, summer is known for a hotter market and higher growth for rentals. Entering fall and winter this tends to slow down and rentals aren’t in such of a hurry. The resumption of evictions could cause a reduction of price pressure by opening up new vacancies. Prices of course will be higher going into 2022 then they were entering 2021.


Signs That You Need To Replace Your Septic Drain Field

Source: WSDOH/ Pink Plumber

Nobody likes foul-smelling sewage backup in their yard and there are plenty of things you can do to prevent this problem from happening. Although sometimes it’s easier to just invest in a new one. You’ll want to make sure it really needs to be replaced since it’s an expensive investment.

Here are some signs of needing to be replaced:

Age Of System- While the septic tank itself can last up to 30 years this can also be fixed and have maintenance done, on the other hand a septic drain field lasts around 10-20 years and its easy to shorten the life expectancy of one.

Backup- When a septic drain field fails this can lead to water backup in sinks, showers, or water draining very slowly.

The Yard- If the yard is greener near the septic field or the area is soggier, this can be a sign the system has failed.

These systems can fail due to various reasons but the most common reason for failing early is too much solid waste made it to the drain field which caused it to fail. However, if too much water has saturated the drain field there’s a possibility it can be dried out and rehabilitated. If any of these issues occur after multiple septic tank services, this could be a sign the field needs to be replaced. It’s always best to contact a service specialist to assess the situation.

Using Real Estate As An Inflation Hedge

Source: Realized

Inflation benefits real estate investors that earn income from their properties. This benefits the investors with multi-family rental units the most. This is because higher home prices often mean higher rent. Being able to increase your properties rent while keeping your mortgage the same gives an opportunity to pocket more monthly income.

Real estate gives a unique opportunity, as home prices rise over time it lowers the loan-to-value of any mortgage debt, this acts as a discount to any investor with a mortgage. This causes the property equity to increase while the fixed-rate mortgage payments remain the same.

Property values tend to be on an upwards curve over time. This acts a good investment but also can provide a steady cash flow for investors over time. Investing in multi-family properties is one way to use real estate as a hedge. These include shorter term leases allowing an investor to adjust rent prices more frequently to adjust with the market. Unlike commercial real estate where the lease terms which usually have multi-year business terms.

Apartment complexes are unique as they are always in demand. The demand for these tends to increase when home prices rise as well. This means apartment complexes would be likely to have many long-term leases and tenants, giving investors the opportunity to start new leases at adjusted rates.

While there are many aspects of inflation that are difficult to avoid, real estate is one way to protect yourself.