If you are renting and are on the fence about buying a home in 2014, continue reading!

If you are considering purchasing a home in North County San Diego, call The Lawhead Team if you want a professional and extremely knowledgeable team on your side!

Here are some benefits to owning rather than renting a home:

Forced Savings – When paying your mortgage, homeowners are putting money away into their house which they own, instead of paying for someone else’s mortgage if they were to rent.  If you sell your home and your home is worth more than when you bought it, there is a good chance you will walk away cash in your pocket from equity of the home.

Second Line Of Income – If you have a separate entrance, extra driveway space, etc, you can rent that area out.  In some areas, homeowners even rent out small patches of grass for people who want to grow vegetables.

Energy Efficiency – There are many ways you can make low cost improvements within your home to save on monthly utility bills when you buy.  You can add solar panels, install an energy efficient roof or upgrade your air conditioning unit to save overall in utility bills.

Customize Your Area – No need to get approval from your landlord to knock down a wall and make a larger master bedroom.  When owning your home, you have the freedom to do whatever you’d like to change and improve your home.

No Landlord – Sometimes when renting the landlord may be forced to evict you should he sell the home, rent to someone else or otherwise end the lease.  If you have a fixed income, in particular, homeownership is the way to go, especially if you plan to stick around for a while in that area.

Ready to buy your new home?  Contact The Lawhead Team to get started!

Wondering if buying or renting is better? This is a GREAT Infograph from the California Association of Realtors on buying vs. renting that you must check out. Share this with a friend, the information is valuable!

Are you looking to upgrade into a larger home and rent out your current home?  Make sure to check out these helpful tips to renting your home and protect your property.

Find a Good Tenant – You can find tenants by advertising in local newspapers, both in print and online. Also spread the word through friends, relatives and coworkers you are renting your home.

Ask potential tenants to fill out an application form, listing their basic information: name, employer, salary, previous landlords and references. You’ll also need their Social Security number and signed authorization to check credit reports and criminal history. If you hire an online agency to provide background checks, make sure it is accredited by the Better Business Bureau.

Do your own background checks by when renting by:

• Pulling credit reports. You can conduct your own research through one of the credit reporting agencies — Equifax, Experian or TransUnion — as long as you follow the guidelines of the Fair Credit Reporting Act, or FCRA.
• Checking criminal history. Search state and local records online or find an agency. Landlord.com offers tips on conducting tenant screening.
• Checking references, contacting employers and talking to previous landlords.

Determine How Much Rent to Charge – Get an idea of rent amounts by checking newspapers, online resources or neighborhood rental signs. Be realistic about rent levels. The rent may be lower than your mortgage payment, but if you want to find a tenant, the rent must be comparable to what’s in the market.

Protect Your Rights with a Lease – Make sure to have a written lease so both parties understand their rights and obligations when renting.  A good lease complies with fair housing, rental, tenant and insurance laws of your region.

A lease should spell out the following:

• Lease term: A month-to-month lease offers more flexibility if you are selling, while an annual lease provides more stability if you are holding on to the property.
• Security deposit, usually one month’s rent or more
• Rental due date and late penalties
• Repairs and who’s responsible for what
• Routine upkeep and maintenance responsibilities, such as lawn care
• List of tenants
• Rules of behavior, including noise levels, neighborly conduct and smoking
• Pet policies and related deposits
• Who pays homeowner association dues
• Association rules that the tenant must follow
• Arrangements for showings, if you plan to put your home on the market while it’s being rented
• Eviction terms, such as not paying the rent or damaging the property

Protect Your Property with Insurance – Protecting your property with the correct insurance policy is extremely important. You need a different policy if you’re renting a property to a tenant versus using it as your primary residence.  As a landlord, you’ll need rental property insurance. This policy covers your home’s structure, legal costs, medical expenses and loss of rental income, if repairs are needed. Since you are not responsible for the tenant’s belongings, you should encourage tenants to buy renters insurance.

Hire a Management Company – Fees are charged primarily for two services: finding a tenant, which includes advertising and background checks, and managing the property. The fee for filling a house  when renting can range from 50% to 150% of one month’s rent, depending on the area. Monthly management includes collecting the rent, charging late fees, handling repairs and dealing with early vacancies and evictions.  One big advantage of using property managers is emotional distance.

Prepare Properly for Evictions – You’ll need an attorney to evict a tenant. If the renting tenant doesn’t leave willingly, you can’t just go and move their personal property and kick them out. How much is an eviction? Legal fees alone can range from $300 to $1,000.

Bottom line make sure to research everything to make sure your rental process goes as smoothly as possible.  Nothing can be more stressful than a bad renter.

There is a lot of focus lately regarding the fact that it is less expensive to buy your home rather than rent in San Diego county.

In San Diego Country it now makes more sense to buy your home than rent one for monetary reasons.  We’d like to share this article from the Business Insider:

Southern California Housing Market

In the areas around San Diego, the all-in cost of renting a house is more expensive than buying a house.North County Times (via Calculated Risk):Monthly payments on a house are now cheaper than monthly rents on a similar house in most of North San Diego and Southwest Riverside counties, according to an analysis of county-supplied and Realtor data by the North County Times….”I don’t think this has ever happened before,” said G.U. Krueger, a principal economist for HousingEcon.com. “It’s a function of the huge housing price collapse which has left a lot of people in the lurch.”Or, as Carlsbad real estate agent Tyson Lund put it: “This is crazy.”

This inversion of the costs of renting and buying a house is something that’s garnered a fair amount of buzz over the last several months.

Warren Buffett has called buying distressed properties, and renting them out his #1 business idea.

In a recent interview, Paul McCulley said he was intrigued by Southern California real estate, in part because it’s so out of favor..

One think to think about, however, is that if a homebuyer assumes that the value of said home will continue to fall after purchase (a reasonable assumption, given that the direction of housing still appears to be going down) then it makes perfect sense that rent would be more expensive, since the homedweller is not risking a monthly loss of equity.

Meanwhile, other measures of housing affordability, such as the NAR’s index that compares the price of a home to income is surging off the charts.

Of course, a major impediment to a housing rebound is credit and mortgage availability.

A lot of people who are renters can’t make the jump to homeownership since they can’t get a mortgage.

As this recent chart from Nomura showed, inability to get a mortgage is a growing reason why realtors are seeing deals fall through.

Nomura

But as the jobs market starts to creep back — something that is happening the fastest in these ex-bubble areas — this impediment should begin to dissipate.

It is a crazy scenario – it is less expensive to buy a home than rent.

If you are looking to move and contemplating renting or owning your next home, The Lawhead Team would like to share some helpful information to help you decide.

A few years ago, it was less expensive to rent in Southern California than to own.  However, the tables have turned and owning is now less expensive than renting.  Not only can you spend less money a month owning your house than renting, but it has become and investors market as new property owners can finally break even and sometimes even have a positive cash flow from a Southern California property.

The North County Times reported that San Diego has now become cheaper to own than rent and this scenario is being repeated among other major metropolitan areas across the nation.  While the falling home prices are bad news for already underwater homes, new home buyers have a once in a lifetime opportunity to grab great deals on foreclosures.  The only snafu is that lending conditions are extremely tightened but if you can make it happen, interest rates are at an all time low.

With interest rates lingering around 4.0 percent and other factors combined, an opportunity has been created to get a better deal than renters after the down payment is paid.  For investors, since rental prices are up it is a great time to buy and investment property.  Not only will you most likely at least break even, with home prices at an all time low your investment will most likely continue to go up in price.  Read our article “Home Prices On The Rise”.

Take advantage of low housing prices and once in a lifetime low interest rates and own your home.  The Lawhead Team is on your side and have the knowledge you need on your side when looking at buying a home.