Author: Cami Jones

Location, location, location! You’ll see this phrase mentioned in almost any moving or real estate buying tips—and for a reason. The area you’re moving to or buying a property in is one of the most, if not the most, important factors to consider.

Why Location Matters

While “location, location, location” is a common mantra in real estate, not many people realize what it actually means or why, exactly, location matters.For one, the neighborhood that a property belongs to determines the value of that property. Rough neighborhoods may have more affordable properties, but you risk security. Better neighborhoods, meanwhile, have everything you need that makes investing your resources worth it.But what exactly makes a good neighborhood? We discuss the components of one below.

It’s accessible

A good neighborhood is a diverse neighborhood occupied by people from different backgrounds. As such, everyone should have the means to navigate the area comfortably, making it fully accessible.The first measure of accessibility is a neighborhood’s walkability. Can you walk to markets and restaurants, or are most establishments only reachable by driving? Are there sufficient sidewalk spaces and other car-free areas you can safely walk on?Walkability is a key component of a good neighborhood because it allows you to leave your car keys at home and simply stroll from one place to another. This helps you save on fuel and reduce the number of vehicles on the road.Walkable neighborhoods also indicate that everything is within reach, making them ideal places to live in even. Plus, it encourages walking, which is an excellent exercise for people of all ages.Another important measure of accessibility is the presence of public transportation. This is essential for residents who don’t have their own vehicles but need an easy way to get to parts of the neighborhood that are farther away.Are there bus, tram, or train systems in your neighborhood? Do they allow pets, and can they accommodate people with special needs, such as the elderly and those using wheelchairs?In Kansas City, for example, several forms of public transport exist. These include the free-to-ride Kansas City Streetcar, which travels 2 miles through the heart of downtown and RideKC, the local bus system with dozens of routes across the metro.

It provides safety and security

An ideal neighborhood provides security for every resident. That means parents can feel comfortable seeing their children play outside, and everyone can feel safe walking alone at night.Before deciding on where to move or buy a property, make sure to check the crime rate in the state or, even better, the specific city and neighborhood you’re looking into. If the crime rate is high, you might want to consider searching elsewhere.Of course, no place is completely safe and free of the possibility of a crime occurring. But if there are neighborhood watch groups and the local government has police-community engagement activities like crime prevention courses, you can rest assured that it’s a place that places importance on everyone’s safety.

You have a full range of public services

The presence of quality public services, or services provided by the government for the people, is an indication of a good neighborhood. It means residents have access to services vital to their everyday lives.Examples of vital public service providers are police stations, fire stations, and emergency services. Public transportation, like bus and train systems, as well as libraries and other public utilities, are also types of public services.These are vital to your everyday life because they provide services during emergencies or enrich and supplement your normal activities. When residents of a neighborhood have access to these resources, life within the community is easier and more peaceful, hence a great neighborhood.

Great schools mean great neighborhoods

Apart from public services, the quality of schools in and around an area is another indication of how good a neighborhood is.While the quality of an educational institution does not always reflect a student’s performance, you cannot deny that sending children to a school with the right facilities and faculty contributes to how well they can perform in school.You must also keep in mind that a “great school” doesn’t always mean a pricey private institution. In fact, quality public education is what makes a successful and dynamic local community.When everyone in your neighborhood, no matter their background, has access to free quality education, the entire community prospers together. And since the existence of public schools is a part of a local government’s public services, it further highlights the latter’s importance.As such, it’s important to look at neighborhoods with highly rated schools, especially if you have children or plan to have them in the near future.

Essential establishments are within reach

There are plenty of establishments vital to a good, thriving neighborhood. Hospitals, pharmacies, and banks are just some of them. Convenient access to these places is essential, especially because they serve emergency purposes, too.Even grocery stores and pet stores need to be within reach. It’s not ideal to live in a place where you have to drive an hour for a loaf of bread or a carton of orange juice.The proximity of these establishments means you don’t waste time stuck on the road, and you can instead use your time to do better things. And when residents of a neighborhood are happier and more productive, the whole community thrives.

It provides leisure and recreation options

While convenient access to establishments that provide access to essential needs, like hospitals and schools, is necessary, you can’t forget about leisure and entertainment, too.A good neighborhood offers an array of recreation options, from well-maintained parks and hiking or biking trails to swimming clubs and tennis courts. These outdoor spaces not only give you options for recreational activities, but also make the neighborhood look more attractive.A bustling nightlife also makes a neighborhood better. Movie theaters and clubs or bars where adults can have fun and let loose provide entertainment and help the local economy thrive.

It promotes sociability

Good neighborhoods promote sociability. After all, a tight-knit community can make for a comfortable place. Spots where you can spend time with your family, meet up with friends, or socialize to meet new ones, are important in keeping that sense of community alive.Spaces like parks and playgrounds allow children to meet other children their age who could be their potential best friends. They are also places where new parents can meet other parents and bond or where dog owners can run into other dog owners and become friends.Knowing who you share the neighborhood with makes it easier to connect with your community. This is why spaces that promote sociability are essential for a great neighborhood.

It fits your lifestyle

Suffice it to say, a suburban gated community neighborhood may not be the perfect fit for a single young professional in the same way that an apartment in a bustling downtown neighborhood may not be ideal for a family with small children.As such, a good neighborhood is a neighborhood that fits your current lifestyle. If you’re young in age or at heart and looking for fun, you may want to look into hip and trendy neighborhoods. If you’re career-driven, then a bigger city with a wider selection of job opportunities may suit you.And if you have a family or are starting one, you want a place that gives you and your family enough space to grow.

You have a choice of housing types

While different neighborhoods appeal to different lifestyles, there are plenty of places that allow all of them to coexist. This type of neighborhood is perfect for people transitioning from one point in life to another without wanting a huge change in their environment.As such, a great neighborhood is one that offers a variety of housing options. In these neighborhoods, people can find a home in a small studio apartment or a two-story house with a wide backyard and picket fence.When you have these choices, you can start in that place as a single person living in a one-bedroom apartment and, years later, move your family into a bigger, more suitable home.This way, if you loved the place when you were younger, you don’t have to say goodbye to it and can still enjoy its many benefits even as you move on and grow.

Find the Perfect Place in the Perfect Neighborhood

Kansas City is Midwestern hospitality at its finest. It features a vibrant food and art scene and is known for jazz and fountains, hence the nickname City of Fountains.But that’s not all that Kansas City has to offer. With beautiful neighborhoods surrounded by the best educational institutions, global businesses, and excellent healthcare facilities, it has everything one would want in a place to live.If you want to move to the City of Fountains, let Cami Jones & Company help. We are a team of real estate professionals, providing clients with the best options for homes in Kansas City.We offer a boutique approach to our real estate services, ensuring that you see every property that fits your needs. You can expect help in every step of the home buying process from a team that works efficiently to ensure all your goals are met.Find your ideal home in one of Kansas City’s beautiful neighborhoods. Contact us today.

You must have heard it before: winter is the best time to buy a house. Historically, you’ll be able to get the best pricing during the winter months, making it the perfect time to go house hunting or close a deal.But real estate experts Cami Jones & Company from Overland Park, Kansas has more valid reasons to offer. In this blog, find out why winter is the best time of the year to buy a new home.

1. The Market is Slower

House sales tend to slow down in the winter, so it’s a good time to look for a home. You won’t be competing with as many buyers as there are during the rest of the year. If you’re sure about making a purchase in winter, consider hiring an agent who specializes in year-round transactions to help you search for potential properties.

• Expert Tip: Consider looking for properties that need repair or renovation. You can make a lower offer on the property and do the repairs yourself or hire contractors.

2. It’s Cheaper to Heat Your House

If you’re planning to buy a home with an oil-based heater, you can save money this winter because heaters are cheaper to acquire in winter than in other seasons. Conversely, central air conditioning is more expensive during the winter months when heating costs are lower.

• Expert Tip: Instead of installing a new heating system, you can improve the performance of the current heater. For example, if the home for sale has radiators without grates, you can get covers to help direct the heat back to your rooms.

3. Moving Costs Less Money

Since demand for moving is less in the winter months, most moving companies charge less. It’s cheaper to transport your belongings in winter when you move into your new house. Moving costs may be 20% to 30% lower during winter compared to the peak seasons.

• Expert Tip: Ask your moving company if you can save additional money by combining two or more moves. For example, if you’re planning to buy a new home in the same town as the one you currently rent, ask if they’ll give you a discounted rate for both moves at once.

4. It’s Easy to Get Mortgage Approval

If you’re planning to buy a home this winter, now is the best time to get pre-approved for a mortgage. Lenders are always looking for clients during the slow winter months before interest rates rise in early spring.By getting approved now, you’ll have a better chance of finding your dream home before other buyers do.

• Expert Tip: To get the best mortgage rate, make sure you check with several lenders and compare rates before you commit. Also, shop around online for other types of loans such as auto loans and personal lines of credit because interest rates tend to be lower this time of year.

5. You Can Do Year-Round Repairs

Contractors who do septic, roofing, and other types of work are usually booked solid in summer. Winter may be a  good time to book home repairs for your newly bought house because contractors are not too busy. Plus, the freezing ground makes it easier to dig up septic tanks and find underground lines.

• Expert Tip: Get quotes from several contractors for each type of work you plan to do. This way, you can decide which ones to hire after comparing the prices and services they offer. Some may offer more than one service that you need.

6. HUD Homes Are Available

If you’re considering buying a foreclosed property, winter is a good time to search. The U.S. Department of Housing and Urban Development (HUD) often lists foreclosed homes for sale during the winter months when fewer people are looking to buy.

• Expert Tip: Make sure you get pre-approved for a mortgage before you start searching for HUD homes because they tend to carry stricter financing guidelines than regular listings. Also, ask your real estate agent if they know lenders who specialize in foreclosure properties.

7. You Can Bargain for a Bigger Home

If you’re looking to upgrade from a starter home, this is the best time of year to do it because there’s less competition from other buyers for larger homes. Cold winter months keep most people at home and out of the real estate market so fewer homes are on the market.

• Expert Tip: If you want to get the best deal possible on a bigger home, work with an agent who specializes in larger homes or knows someone who does.

8. Your Commute Will Be Easier

It takes less time and money to commute during the winter months because there are fewer cars on the road resulting in shorter driving times. It’s also cheaper to fill up your tank with gas this time of year because prices tend to drop as demand for fuel falls between December and March.

• Expert Tip: If you’re planning to buy a home that’s not close to where you work and you don’t want to drive to and from your workplace, ask your real estate agent to recommend the best public transportation options in the area.

9. You’ll Get a Better Deal on Utilities

Utilities such as gas and electricity are often cheaper to use during the winter season, so your heating bill will be lower than during a warmer climate. And because most people stay indoors during cold weather, there’s less demand for electricity in general. This means you can get lower rates all year round.

• Expert Tip: Ask your real estate agent for recommendations on how to save on heating costs for your newly purchased home, or compare rates from different providers online to find out which one is cheaper.

10. You’ll Get a Better Deal on Appliances

Winter is also the perfect time to purchase unfurnished homes because appliances are typically cheaper at this time. Demand for products like furnaces, heaters, fireplaces, and other home essentials decreases.Retailers also offer deals on these items when they need to clear out inventory before warmer weather arrives in spring.

• Expert Tip: Make a list of appliances you want to replace and do some research to find out how much you should save. Compare the prices of different models and ask for help from your real estate agent or homeowner’s insurance provider if you have questions about warranties.

5 Things to Consider When Purchasing a Home During Winter

Here are five things to remember when buying a home during winter.

1. You Cannot Close on Your Home If Your Lender Requires an Inspection

If your lender requires you to have an inspection before approving a mortgage for your new home, make sure it doesn’t conflict with your closing date, which should be scheduled after the coldest days of winter.Your lender will have to reschedule the inspection if the day is too cold or snowy. It’s best to avoid closing during winter because you can’t be sure when your lender will give you the money.

2. You Might Need to Pay Extra to Get Things Done Quickly

If there are urgent repairs that need to be done to your new home, don’t expect the seller to do them for free if you offer to close earlier or pay extra fees. The majority of home repairs are usually done in summer when more contractors are looking for work.

3. You Might Need to Pay Extra for Your Mortgage Insurance

If you need mortgage insurance, make sure to ask your lender about the dates when rates change because they can be much higher during December and January than in other months of the year. And, if you plan to close earlier in winter, remember that most lenders will require you to pay your first six months of insurance in advance.

4. You Might Need to Pay Extra for Your Title Insurance

You must ask your real estate agent about the dates when rates change for title insurance and about any other closing costs you might need to pay before winter so you know what they will be and whether or not it’s worth it to close earlier or pay extra for these services. You can also ask about discounts that might be available this time of year.

5. Your Home Inspection Might Take Longer Than Usual

If you’re planning to buy a home in winter, don’t expect your home inspection appointment to take the normal amount of time. Inspectors need more time to cover all the areas of your home, so they don’t have to go back during warmer weather.

Consider Buying a Home During Winter

Winter is a great time to buy a home. There are many benefits of buying during this season, including lower heating bills and less traffic for you to contend with when looking at homes because most people have already closed on their new house by the winter months.If you’re thinking about purchasing your first home or an investment property soon, it’s best not to put off making that decision any longer!Cami Jones & Company is a real estate company that offers a boutique realty experience. If you are looking for a new home this winter, get in touch with us today. Our team will be happy to walk you through the process of finding a new home.

As of the second quarter of 2021, homeownership in the US was placed by the US Census at 65.4%. While that is lower than last year’s percentage, the fact that it’s only two points lower than last year is a sign that Americans still hold great value over homeownership. Many people are still buying their own homes instead of renting, even during the pandemic.Having your own home and one’s own land and property indicates stability and independence. Most of all, it’s a sign of good finances and money that isn’t going anywhere anytime soon. And this is precisely why people put their money into real estate.In fact, real estate has consistently been seen as an excellent investment compared to any other. And historically, especially in the past seven years, people have placed solid trust in real estate as a long-term investment tool.From what financial consultants and specialists around America have observed, in tandem with the experience of veteran realtors like Cami Jones & Company in Kansas City, homeownership could be the beginning of an individual’s path towards long-term wealth. Having your own home is just the beginning of future financial stability and success.

Homeownership versus Renting

Having your own home is the first step towards stability, and that’s helped along by the policies surrounding homeownership. In the US, getting your own home is supported by federal policy (such as tax subsidy on mortgage interest, numerous federal mortgage guarantee programs, and others).It’s all part of wealth building. After all, the payment goes to a landlord every month when you rent a home, but you don’t have true ownership over the property. It’s not designed to be a permanent home unless you rent to own.But when you buy your own home and pay the mortgage, your stake in owning the property with no strings increases with every payment. It doesn’t just lead to equity in your home, but it also increases your own net worth as the homeowner.The National Association of Realtors has created the formula of personal wealth as associated with homeownership. It sums up to price appreciation gains along with principal payments leading to the housing wealth gain.And finally, in terms of wealth-building, your home is less susceptible to sudden changes in cost. Unlike monthly rent, your mortgage would stay at a more stable rate every month as a predictable and fixed expense. With rent, you’re not quite sure when you’ll have to shell out a bit more when you renew your lease. But with your own home, you know how much you’ll have to pay until it’s paid off completely and set money aside for other things.

How Does Homeownership Bring You To Long-Term Wealth?

Homeownership leads to the accumulation of wealth or financial assets in the following ways:

• Tax benefits

As previously mentioned, your home gains value. But as it does, you also get to save some money for yourself through the tax benefits. The policies discussed above on homeownership extend towards tax benefits that vary depending on each state’s laws.For example, in Kansas City, your property taxes get a rebate based on a local government program. If you’ve lived in Kansas for at least a year, you can get a rebate from the Homestead Refund program of up to $700 a year.Homeowners may be able to write off specific home maintenance and repair expenses. Don’t forget to check in with your realtor and local state laws to gain these valuable benefits and save up some money to pile up in the long run.Furthermore, let’s say that you earn a profit from an investment in the stock market. You might have to pay capital gains tax. But if you profit by selling your home, this profit can’t be taxed, apart from some limitations. It’s more money in the bank for you with reduced taxable income.

• Forced savings

Let’s say you’re not in the habit of setting money aside consistently. When you’re a homeowner, you’re forced to do exactly that. Part of gaining financial freedom is having a cushion of healthy savings you can add to every month. Without it, the slightest change in circumstances could be catastrophic.But a home can act like “forced savings.” Your monthly mortgage payment pays your principals and builds your equity. This leads to better net worth, and your money is safe in the form of investment: your property.

• Low-interest loan rates

There are also historically low-interest rates with home loans at present. So now is your opportunity to get that home for less. Mortgages usually require you to commit to a specific interest rate until the loan gets paid off. But with the low interest, you won’t be paying as much as you would be on any other instance in time.Consider all the different channels that can give you home loans and the benefits of each one. Everything from federal loans to local bank loans—consider your options to find the one that benefits your financial plan the most.

• Homes gain value with time

And your home isn’t only going to be a means of savings. It could also grow that money in time. In particular, real estate appreciates at a national average of 2% over a month and 14.5% over a year. It’s going to keep appreciating, too; the Federal Housing Finance Agency has a House Price Index that states that homes have averaged an appreciation of 3.6% every year since 1991.Your home, therefore, will be worth more than what you paid for it years down the line. If you’ve been paying off your mortgage, that will build even more equity in your home and further increase your personal net worth.

• Good inflation

Apart from the low-interest rates and tax breaks, homeownership allows you to experience inflation that actually works in your favor. Because home mortgages and property taxes stay more or less the same over the years, you can add it up later down the line to see significant results.Your return on investment gets more substantial as the years go by. It’s appreciation combined with leverage, and if you used money that wasn’t even yours—let’s say, a bank’s, for example—you could’ve already doubled the investment you made.

• The wealth becomes generational

Because real estate and homes continue to appreciate in value over time, the longer it’s kept in your possession, the bigger the returns grow. And real estate assets are easily transferrable, especially between family members. So, the grantor can transfer the wealth attached to the property as easily.This is wealth that can get passed to later generations. This is one of the reasons that the wealthy ensure that they can set up a trust to hold their real estate assets. At the death of the grantor, the ownership transfers through the trust they have set up. And it’s a lot less complicated than transfers of business assets. Your children will be able to gain the wealth you’ve set up.

• Even a starter home can help build wealth

The “starter home” is a common term these days for the initial home that a person buys before they can build enough wealth to purchase a “better” home or a larger one to accommodate a family. But even these starter homes are an excellent way to build wealth.It’s important to remember that even starter homes are more affordable now. Today’s mortgage rates are seeing historically low numbers, which is why so many people have decided to purchase a home (even just a starter home) during this time. It’s an ideal opportunity to get started on addressing the wealth-building process, and you need less time to build up the down payment.Apart from all the previously stated benefits, starter homes are still an affordable means of building on your wealth and help you towards your goals. The ideal scenario should show that once you’ve outgrown the starter home, it would’ve already developed significant equity and help you kickstart the process once again with your next home.

• It builds your retirement plan

This is one of the best benefits of having a home—you’re essentially paying yourself and paving your way to a comfortable retirement. The equity that’s built up from your homeownership added to your retirement fund, 401(k), and other retirement finances builds to tremendous equity that can bring you an incredibly comfortable retirement.Even if you consider that retirement is still a long way off, your property can be a significant addition and makes a big difference on how much you’ll end up with when the time comes. Retired renters have significantly less net worth than retired homeowners; the former could have more than $6,000 in net worth, while the latter of the same age could have as much as $320,000 net worth.

Homeownership isn’t just a wise investment: it’s a line towards financial freedom

Becoming a homeowner can completely change your life plan towards financial freedom and wealth building. Numerous benefits come with owning a home, and these benefits can last for years, impacting your personal net worth, financial freedom, and that of your family’s in the future.Looking for more reasons to make that big home purchase today? Consult with Cami Jones Homes today. Or you can browse for even more informative homeowner information on the blog.

Starter homes are often townhomes, single-family houses, or condominium units that are on the lower end of the housing price range. Although they are smaller and have fewer amenities compared to a forever home, starter houses are easier to acquire since they require a smaller down payment.So if you’re tired of renting, buying a starter home is a quick route to homeownership. Additionally, you have multiple loan programs available to you if you’re a first-time buyer, which alleviates the financial burden of buying a new home.Finding the perfect starter home, however, involves many considerations and decisions. If you’re planning to buy your first house, check out this guide for things you should consider when buying a starter home.

1. Location

The location of the property affects two things: accessibility and the housing market. Let’s first look at accessibility.

Accessibility

Of course, you want a house that’s near your work, grocery stores, hospitals, and other necessary services. Being close to these establishments makes your day-to-day routine and dealing with emergencies easier.Another factor of accessibility is transportation. Does the location have a decent public transportation system? If it doesn’t, you might need to buy a car to get around the area, especially if you go outside the city frequently. You have to account for that cost on top of your home buying expenses.

Local Housing Market

You need to consider the location’s real estate market. Aside from home prices, make sure to ask your real estate agent about the competition because a property’s selling price isn’t always the price you’ll end up payingWhen several buyers are interested in a house, they can start bidding wars and drive the price out of the range of first-time buyers. If you’re eyeing a property in a hot market, you need to be prepared to pay more than its going price.You don’t want to buy in a slow market either, though. Remember that you’re buying a starter home; it’s likely that you’ll move out of it eventually. Prices are always going up in hot housing markets, which means you can make a good profit on the house if you do decide to sell in the future.If the housing market isn’t strong, however, then there’s a high chance that the property will depreciate, meaning you won’t earn that much or anything at all from the sale.You should also inquire about the mortgage interest rates in the location. A volatile interest rate market might force you to pay more than you expected or budgeted for.

2. Financing Options

After the location, you also need to look at your financing options, meaning available loan programs and any perks offered by the seller.

Federal and State Loan Programs

Search for loan programs you’re eligible for if you’re a first-time home buyer. Federal government agencies like the Federal Housing Administration and U.S. Department of Agriculture offer programs and grants for first-time buyers, provided that you meet their criteria for eligibility.The government-sponsored enterprise Fannie Mae also offers a financial program for first-time home buyers. Its HomePath Ready Buyer program provides a three percent closing cost assistance for foreclosed Fannie Mae properties. You only need to complete the required educational course.Aside from federal loan programs, state governments also offer their own loan schemes for first-time home buyers. This is another reason to think twice about the location you’re buying a property in.Kansas, for example, has the First Time Homebuyer Program. It provides a loan of 15 to 20 percent of the property’s purchase price to help you with your down payment and closing costs.You don’t need to have a high credit score to qualify for this Kansas Housing program, but you do need to meet the income requirements. You can learn more about the income condition here.

Seller Concessions

Other than loan programs, you also want to consider seller concessions. Seller concessions are when the seller pays a part of your closing costs, which usually contribute two to five percent of a property’s purchase price. The seller may be able to cover some or all these closing costs:

• Title insurance
• Property taxes
• Inspection fees
• Appraisal fees
• Loan origination fees
• Recording fees
• Attorney’s fees

You won’t receive the funds in cash, though. The seller often pays these fees by taking the amount from the sale. For example, if they received $100,000 from the sale but agreed to pay $2,000 in concessions, then they’ll only take $98,000.Concessions are often made by sellers who want their houses sold fast. They’re also commonly offered for properties that have been on the market for too long, which is a common case for slow housing markets.

3. Home Features

Again, starter homes generally have fewer amenities compared to forever homes, but this doesn’t mean you can’t be selective about the property you’re getting. Determine your non-negotiables and where you can be flexible beforehand to make the process easier on you.For example, outdoor amenities like a garage or a fully landscaped lawn are easier to let go of compared to indoor features, such as a downstairs bathroom or built-in storage. You can always build a garage or do your own landscaping, but it’s more difficult and more expensive to have a new bathroom constructed.Here’s a tip: a home’s exterior is generally easier and cheaper to fix than the interior, so this is where you can make wise concessions.If you’re planning to acquire a home at the lowest possible price, consider looking at fixer-uppers or homes that require repairs. These sell at much lower prices than houses that have been repaired and staged before the sale. The best thing about fixer-uppers is that you can turn them into properties that can eventually be sold at a much higher value.Note, however, that some repair issues are harder and more expensive than others. Cosmetic problems are forgivable but make sure to avoid homes with structural issues.Avoid fixer-uppers if they require you to do the following expensive repairs:

• HVAC system replacement
• Roof replacement
• Water damage repair
• Electrical rewiring
• Window replacement
• Complete bathroom or kitchen remodels
• Plumbing line replacement
• Mold removal
• Termite damage repair
• Foundation repair

4. Sellability

If you’re only planning to live in your starter home for a handful of years, then you should think about how well the property would sell once you’re ready to let go of it. Some factors that influence a home’s value are location, interest rates, the housing market, and the property’s condition and features.As we’ve mentioned before, properties in hot markets have high chances of appreciating after several years. If you can afford a house in a booming market, then you should grab the opportunity to invest in a real estate property in that location. This investment can yield a high return, which you can use to finance your forever home.You can also slowly increase your property value by working on its curb appeal, updating its interiors, and adding some smart technology upgrades. Among these three, improving your curb appeal is the easiest and most affordable option since there are many home exterior improvements that don’t cost much but yield a high ROI. In fact, a good curb appeal can increase your property value up to seven percent.You can have the lawn landscaped, the front door repainted, the sidings replaced, and smart outdoor lights installed. These are features that many home buyers look for in houses, making your property more attractive.If your starter home isn’t easy to sell, you can rent it out instead. This is a wise idea because it gives you a second source of income, which you can use to pay your mortgages for your forever home.

5. Personal Goals and Timeline

Finally, consider your long-term plans. These have a huge impact on the home you’ll purchase, even if you won’t be living in that house forever.For instance, if you have little kids or are planning to have kids soon, then you should look at properties that are near schools. It also helps if you get a starter home in the same area where you wish to get a forever home someday. That way, your kids wouldn’t have to deal with the emotional turmoil of changing schools and moving far away from their friends.The bottom line is that even though you won’t be living in your starter home forever, it should still help you achieve your long-term plans at your ideal pace, whether those are professional or personal goals.

Buying Your Starter Home

In some ways, choosing a starter home is more challenging than buying your forever home. Since you don’t see yourself living in the house for the rest of your life, you need to have an exit strategy for when you’re ready to move. The last thing you want is to be stuck with a property when you’re already planning the next phase of your life.As such, make sure to seek the advice of a realtor when buying your first real estate property. They’ll help you find a house that suits your current needs and goals but will be profitable and easy to sell once you’re ready to buy your forever home.If you need help navigating the real estate market, Cami Jones Collaborative is here. Our boutique-style service gives you a personalized experience, making sure that you have the undivided attention of one of our real estate agents. You can utilize our team’s advanced market research strategies and expert negotiation skills to find your ideal starter home.Ready to buy your first-ever home? Call us at (913) 521-5584 or fill out our online form to book an appointment today.

Depending on what you’re using it for, you can receive several financial benefits by buying a second home. If you were to turn it into a rental property, for instance, you’d get an extra source of income. You’d also have tax advantages because you could deduct your taxes from the property’s income instead of your own.However, you also need to consider that mortgage rates typically run higher for second homes compared to your primary residence. The rates for second homes are usually higher by less than .50 percent and about .50 to .75 percent higher for investment properties. If you’re thinking of buying a second house, you need to be aware of the pros, cons, and financial considerations involved in the purchase.

Vacation Home

Buying a vacation property can be a wise move if you visit that location frequently throughout the year. An Aspen or Hamptons home, for instance, is a worthwhile investment if you spend two months there each year. Your annual mortgage payments on the property could be almost equivalent to what you pay for two months of rent.Additionally, you’ll be building your equity in the house over time instead of just giving your money to someone else.You can also rent out your vacation home when you’re not using it. As long as you’re renting it for less than 15 days, you won’t have to report your income to the IRS. Keep in mind, though, that if you spend less than two weeks in your vacation home and rent it for the rest of the year, the IRS will consider it as an investment property. This means you have to report your earnings.Below are some financial factors to consider before buying a vacation home.

1. Potential Tax Breaks

You can receive tax breaks for mortgage interest and property taxes if you’re using your second home primarily as a vacation home. You can deduct up to $10,000 of your real estate, state, and local taxes on your vacation home – $5,000 if you’re married and filing separately.You’ll need to keep in mind, however, that the deduction limit is low. Many people who buy a second home may already exceed the limit with their first home, so they don’t get additional tax savings from their second home.It’s also important to be aware of the tax break you won’t get on a vacation home. When you sell a primary residence, you can exclude as much as $250,000 in capital gains from your taxes. If, for example, you paid $400,000 for your primary home and sold it for $500,000, you don’t have to pay any tax on your profit.On the other hand, selling a vacation home for the same figures doesn’t afford you the same advantage. Your $100,000 will be taxable.

2. Other Expenses

Owning a second home involves many expenses apart from your mortgage and taxes. You’ll have to pay for insurance, utilities, and homeowners association dues and memberships. The location of your property can also balloon your expenses, especially if you’re buying in a popular vacation spot.You’ll need to spend money on property maintenance, too. Since the house will likely be unoccupied for most of the year, you’ll need to hire property management professionals like handymen, painters, gardeners, and even snow-shovelers. These services can add up to thousands of dollars a year.There’s also the matter of security. It’s smart to beef up your second home’s security system, so you can keep an eye on it even when you’re not around. Invest in outdoor surveillance cameras, a video doorbell, and a home alarm system that will alert the local police if a breach occurs.Equipment costs vary, but they are generally more expensive if you’re getting professional installation and 24/7 monitoring services.

3. Vacation Home Insurance

Buying a second home means purchasing an additional set of insurance policies for coverage. You need the right insurance for your vacation home because you’ll be leaving it empty for most of the year, making it vulnerable to burglary and negligence-caused damage.A vacation home insurance policy should be enough to cover a home you own but don’t live in full-time. This type of policy differs from traditional homeowners insurance in that it only protects against named perils. A named perils insurance policy provides coverage only for losses caused by events or risks identified in your plan.Typical vacation home insurance policies cover damage from fire and smoke, lightning, explosions, and theft. Properties located in areas prone to flooding, earthquakes, and hurricanes are subject to higher premiums because they’re more likely to be damaged.Note that insurance rates are generally higher for second homes. Insurers see them as riskier assets because of their vulnerability to break-ins and property damage. Moreover, if you’re planning to use the house for short-term rentals, you’ll also need to get short-term rental insurance.

Rental Property

Renting out your second house helps cover the expenses of buying the property. You can use your profit to pay your mortgage and have the renter pay for the utilities and some of the property upkeep expenses.Being a landlord, however, entails certain responsibilities to your property and your tenants. You need to comply with rental laws and other requirements to make your property safe for your tenants. You’re also responsible for the maintenance of the property and its utilities, meaning you’ll have to attend to issues regarding water, heat, and other services agreed upon in the lease.Here are some of the financial aspects of owning a rental property that you should consider.

1. Tax Deductions

Owning a rental property can generate some great tax breaks. For one, the mortgage interest and property tax of your rental unit are tax-deductible because they’re technically business expenses. You need to remember to file the deduction on your IRS Schedule E (Form 1040) when you file your tax return.Rental properties are business assets that depreciate, meaning their worth decreases over time. You can deduct that depreciation each year on your tax return. The calculation is complicated, though, so it’s recommended to have a tax specialist handle it for you.Rental expenses, such as repairs, maintenance, and other operating costs, are also tax-deductible. Some examples are fixing busted garbage disposals, patching holes in the wall, or replacing the light bulbs. Only necessary expenses can be deducted, though, so the cost of improvements isn’t included.

2. Rental Real Estate Loss Allowance

This allowance gives you a federal tax deduction of $25,000 per year in losses from rental properties. You can deduct the loss from other income sources you have.Rental real estate loss allowance, however, is subject to passive loss rules. Rental losses are always considered passive losses, which can only be deducted from a passive income. Passive income is the income you earn from activities you don’t “materially participate” in, meaning you spend less than 500 hours on it each year.Investments, rental properties, and peer-to-peer lending are some common sources of passive income.In short, you won’t be able to deduct your rental losses until you have enough passive income to offset the amount.There are exceptions to the passive loss rule, though. You can qualify for the allowance if your adjusted gross income doesn’t exceed $100,000. You also need to be actively participating in rental activities. This means having more than a 10 percent ownership interest in the property and participating in meaningful management decisions regarding the rental.Your deductible losses, however, may be limited if your rental expenses exceed your rental income, as indicated in the Passive Activity and At-Risk Rules.

3. Income and Expenses Reporting

You need to report all your rental income using Schedule E. List your expenses, total income, losses, and depreciation for each rental property you own.If you have more than three rental properties, attach as many Form 1040s to list all your properties. Complete lines 1 and 2 for each property, but fill out the “Totals” column only on one form. The figure you’ll put in this column should be the combined totals of all your Schedules E.Make sure to keep records of your rental activities, including financial statements, receipts, and tax return documents. You’ll need these in case you’re selected for audit. If you’re audited and cannot provide evidence to support the items you reported on your tax returns, you might be subjected to penalties and additional taxes.

4. Landlord Insurance

You’ll need landlord insurance to cover the unique risks of renting out your property for prolonged periods. The coverage varies per insurer, but most policies cover damage to the structure of your property, damage to items contained inside the house, and rental income loss.Rental property insurance often includes landlord liability protection. This clause helps you pay for someone’s medical bills or legal expenses if they’re injured on your rental property and you’re found responsible.Let’s say, for example, your tenant fell down the stairs and the court determined that you failed to maintain the railings, which led to the accident. You would be held responsible for your tenant’s recovery expenses. Your landlord liability coverage can help pay for those expenses, as long as the costs are within your policy’s limits.

Buying a Second Home

As you can see, buying a second home is a huge financial decision regardless of whether you’re using it as a vacation home or a rental property. Do your real estate homework first and learn more about the location you’re eyeing and the financial responsibilities involved in buying a second house. Use online mortgage calculators to get an estimate on your down payment and monthly costs.Make sure to seek the advice of an expert real estate agent to make the right choice. If you need guidance in buying a second home, look no further than Cami Jones Collaborative. Named one of 2018’s top residential real estate agents and teams in Kansas City by the Kansas City Business Journal, we help clients in all their home buying and selling needs.With Cami Jones Collaborative, you get more in-depth services than the average agent. We use our advanced market research strategies and fearless negotiation skills to help you find your dream home. You’ll get a bespoke, full-service experience that takes care of your sale or purchase from beginning to end, taking the stress out of the entire experience.Planning to buy a second home in Kansas City? Call us at (913) 521-5584 or fill out our online form to book an appointment today.