Maximize Your Return on Investment with Outdoor Living Spaces

 

Outdoor Living, Year Round

 

Western Washington is known for its relatively mild weather, but we do have seasons.  An outdoor living space that’s enjoyable to use during our Pacific Northwest summers may not be the most practical choice in the winter months. The solution?  An outdoor living space that can flex with the seasons.  My personal favorite is an outdoor living room with a partially covered patio or deck, an outdoor fireplace and an outdoor kitchen/grill area.  Add a little drama with large sliding glass doors or bi-fold walls that open to your outdoor living room from the inside.  By creating an outdoor living room that can be used year round, you essentially double your capacity for entertaining.

 

 

Adding Value with Outdoor Improvements

 

The best way to maximize your return on investment is to add outdoor amenities that are easy to maintain and usable rear round.  Adding a swimming pool may sound like an attractive idea right about now, but pools aren’t as practical in the Pacific Northwest as some people might hope.  Most potential buyers think pools will involve more work than pleasure.  That’s exactly what you do NOT want with an outdoor space.  When clients ask me for suggestions for outdoor upgrades that will add value, three things come to mind. 

     1. Functionality.  Make sure the improvements you have in mind will actually increase your usable space. 

     2. Lighting.  Put some thought into lighting for your outdoor living space and your landscaping.  I can’t overstate the importance of outdoor lighting.  It can add a completely new element to the mix, transforming an average outdoor landscape into a work of art. 

     3. Water features.  A well executed water feature can add more impact to your landscaping than you might think.  It doesn’t         necessarily need to be an elaborate waterfall.  An attractive plug and play fountain can do the trick.

 

Simple Exterior Upgrades to Consider Before Listing

 

Knocking out a few small weekend projects before putting your house on the market can have a big impact on your sale price at a relatively small cost.

     1. Garden bed clean up.  Weed the beds, prune the plants, shape the hedges and add some black mulch to give your garden beds a fresh, well-maintained look and create a nice, sharp contrast to your house and your lawn.

     2. Lawns.  Hopefully you’ve been fertilizing your lawn on a regular basis.  It’s a practice that’s often overlooked, but you’ll be thankful if you did it.  Either way, make sure your grass is mowed and edged.

     3. Staining.  If you have a fence or deck that’s been crying out for a face lift, spend a day or two and give it a quick pressure wash and a fresh coat of stain. Stain will make a HUGE difference.

 

 

If you’re thinking about putting your house on the market and you’d like some additional guidance from me, please don’t hesitate to give me a call.  I’m here to help.

 

Miles Eaton is a top-producing Realtor with Windermere Professional Partners, specializing in residential real estate in Tacoma, Gig Harbor, University Place and Lakewood.

 

Miles Eaton: (253) 355-5862

MilesEaton@Windermere.com

 

Posted on June 30, 2019 at 8:39 pm
South Sound Property Group | Category: Investing In Real Estate, Selling Your Home

Investing in Real Estate in Tacoma’s North End

Jeff and I recently bought a duplex in North Tacoma that we’re pretty excited about.  We weighed the pros and cons of purchasing in the current market and ultimately decided that the property met our needs, both for the short term and the long.  In light of our recent purchase, I thought it might be a good time to share some thoughts and observations about investing in real estate in Tacoma’s North End.

 

According to a recent report from Redfin, Tacoma has the hottest housing market in the nation.  That doesn’t come as a complete surprise to brokers in the know. Tacoma has a lot to offer potential residents in terms of amenities and culture, but a big part of the city’s appeal has to do with affordability.  You just get more for your housing dollar in Tacoma than you do in neighboring Seattle.

 

 

Not surprisingly, rents are on the rise in Tacoma.  Between April of last year and April of this year, rents in Tacoma rose about 10%.  Developers have been building new apartment buildings, but not enough to outpace demand.  That means rents are likely to continue rising for the foreseeable future, making a strong argument for investing in rental properties in Tacoma.

Investing in real estate is a great long term strategy for accruing wealth but, like any type of investment, it does involve risk.  That’s why it’s important to educate yourself before becoming a landlord.

 

5 Things to Consider BEFORE Becoming a Landlord

  1. Will you manage the property yourself or will you hire a property management company?  If you decide to manage the property yourself, you may still benefit from assistance with screening potential tenants and/or evicting tenants if things don’t work out.  Landlord Solutions is a great local resource for those types of services.
  2. Will you allow pets?  Cats? Dogs? Large? Small?  Allowing pets will obviously increase your potential applicant pool, but pets can take a toll on a house, which might cost you more than it’s worth in the long run.
  3. If your property is located near the University of Puget Sound, Tacoma Community College or UW Tacoma, will you rent by the room to attract students?  You may be able to earn more income if you rent by the room, but you can also expect more wear and tear on your property.
  4. Have you talked to your insurance company to find out if there will be an increase in your premium if you convert a homeowner’s policy to a landlord’s policy?  Our preferred insurance agent Jerry Hallman at Farmers is a great resource for exploring your insurance options.
  5. Have you spoken with your accountant about the potential tax implications associated with owning a rental property, converting your primary residence into a rental or selling a rental property?  What expenses can be counted as deductions on your tax returns? How can you avoid capital gains taxes when selling a rental property?

 

 

 

Short Term Rentals?

With the emergence of marketing platforms like VRBO and Airbnb, short term rentals have become a very popular way for homeowners to generate income. Short term rentals may offer a greater return on your investment than a traditional rental property, but it feels like the short term rental market in Tacoma is becoming saturated.  Jeff and I were initially thinking about using our new duplex units as short term rentals but are now leaning towards a more traditional long term rental approach.

 

If you have questions about investing in Tacoma real estate, please don’t hesitate to contact me.  I’m here to help.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mark Pinto is a top-producing Realtor with Windermere Professional Partners, specializing in residential real estate in Tacoma, Gig Harbor, University Place and Lakewood.

Mark Pinto: (253) 318-0923

MarkPinto@windermere.com

 

Posted on June 20, 2019 at 9:31 am
South Sound Property Group | Category: Investing In Real Estate, Market Statistics, North Tacoma | Tagged , , ,

Five Major Considerations When Buying an Old House

As a commissioner for the City of Tacoma's Landmarks Preservation Commission and a former board member of Historic Tacoma, I've had a lot of experience with historic properties.  I've also been buying, renovating and selling historic homes myself for more than twenty years (45 houses and counting).  Not surprisingly, clients often seek my advice when they're thinking about buying an older house.  With the busy spring home buying season upon us, I thought it might be a good time to share some thoughts about what to consider when buying a historic home.  Below, I describe some of the “big ticket” replacement and repair costs that you may incur during the restoration of an older home.  It's important to note that there are loan programs and tax credits available to help defray some of these costs if you are buying a historic home in Tacoma.

 

1.  Not all old houses are created equal.  In my experience, houses built before 1900 were generally more poorly constructed than those built from 1900-1950.  The exception to this rule would be what I call the "robber baron" homes.  These turn of the century mansions were built with higher quality materials and engineering practices than more modest cottages built at the same time.  The grander homes are standing the test of time well.  The worker cottages, less so.  Smaller Victorian (pre-1900) homes were often built on posts and piers or loose rock/brick and mortar foundations.  In some instances, these foundations were later replaced or supplemented with concrete or block foundations, and settling issues are common.  This isn't necessarily a deal breaker.  Newer technologies allow for the levelling and repair of these foundations without breaking the bank.
 

 

 2.        Old houses aren’t usually insulated.  Builders didn't really begin insulating homes until the late teens and early twenties, and even then they generally just added cellulose (paper pulp) to the exterior walls and attics at very low insulating levels.  If you’ve ever demolished the ceiling in an older home, you'll know what I’m talking about.  You’re probably still discovering bits of the pulverized paper in your hair, ears and clothes.  If you’re doing a major remodel to a home, it makes sense to strip off the old interior plaster down to the studs so that the wiring and plumbing can be updated and insulation can be added.  If you’re not doing a major renovation, my advice would be to simply add insulation to the attic and underneath the first floor to increase the insulation value as much as possible.    Learn more about insulation at energy.gov.

 

3.      Are the mechanical systems up to date?  When buying an old house, people often encounter things like knob and tube wiring, galvanized and lead pipes, oil burning furnaces the size of a Winnebago and broken sewer lines.  Older systems aren't necessarily a problem, but a thorough pre-purchase home inspection can identify failing systems in need of immediate attention.  Be sure to factor the cost of plumbing, electrical and heating system upgrades into the purchase price of a home before you make an offer, and make sure you can afford to repair or replace these systems as it becomes necessary during your ownership.

 

 

4.       Original windows and doors are great.  Leave them alone!  Nothing frustrates me more than buyers who immediately think they have to replace all of the original doors and windows in a house.  It is significantly more cost effective to repair original windows and doors and install storm windows.  They’ll be just as energy efficient and will last exponentially longer than their cheap vinyl counterparts.  For more details regarding wood windows versus vinyl, check out my blog post regarding that subject here. 

 

 

 

5.       How many layers are on the roof?  Many older homes in Tacoma originally had wood shingle roofs with no underlayment to support a modern roof.  Over time, home owners have simply shingled over the original roof.  If a roof has three layers or more, it's no longer a candidate for re-shingling.  The roof will have to be completely torn off, and an underlayment of plywood or particle board will need to be installed before the new roofing material can be added.  Tear offs are three times as expensive as simple re-shingling so it's helpful to know how many layers a roof has before writing an offer to purchase an older home. 

 

 

 

Jeff Williams is a top-producing Realtor with Windermere in Tacoma specializing in the purchase and sale of historic and luxury homes.  Click here to email Jeff or give him a call at 253-303-1135.

 

 

 

 

 

 

 

 

 

 

Posted on April 2, 2014 at 3:18 pm
South Sound Property Group | Category: Buying A Home, Historic Homes, Home Remodel, Investing In Real Estate | Tagged , , , , , , , , , , , , , , , , , , , , ,

Investing in Houses in Tacoma’s North End

The demand for rental homes in Tacoma’s North End is high, with landlords charging as much as $1800-$2000 per month for a nice three bedroom house in a desirable location like Proctor or the Stadium District. 

Many homeowners were able to secure extremely low interest rates by refinancing when the market was low, which prompts some to consider holding on to their primary residence as a rental property when purchasing their next home.  Residential real estate in Tacoma’s North End is certainly a great investment.  With the economy stabilizing and job growth expanding in our area, some are predicting as much as a 20% gain in market values over the next 3 years.  

 

So whether it’s a property that you purchase specifically as a rental or a primary residence that you’ve decided to convert into a rental, it’s important to ask yourself a few questions before deciding to become a landlord.

 

                5 Questions to Ask Yourself BEFORE Renting Your Home

1.    Do you know how to screen potential tenants?  Credit-worthiness?  Employment and rental history? You can find out more about tenant screening at Bigger Pockets.

2.    Will you allow pets?  Cats?  Dogs?  Large?  Small?  Allowing pets will obviously increase your potential applicant pool, but pets can take a toll on a house which might cost you more than it’s worth in the long run.

3.    If your house is located near the University of Puget Sound, will you rent to students?  You may be able to earn more income if you rent by the room, but you can also expect more wear and tear on the property.

4.    Have you talked to your insurance company to find out if there will be an increase in your premium if you convert to a landlord’s policy?  You can find out options from our preferred insurance agent Jerry Hallman at Farmers.

5.    Have you spoken with your accountant about the potential tax implications associated with owning and/or selling an investment property?  Capital gains taxes are easier to avoid when selling a primary residence than they are when selling a rental property.

Another route to consider would be purchasing a property for use as a short term rental.  The startup and maintenance costs (furnishings, utilities, supplies etc.) may be greater and the property will require more hands on attention, but the earning potential of a daily, weekly or monthly rental will be higher.  There are a number of sites available for marketing a short term rental, including www.airbnb.com, www.homeaway.com and www.vrbo.com.  Lastly, if you’re reluctant to deal with the active management of a rental property, you can always enlist the assistance of a property management company.  Locally we recommend Parkwood Property Management and McNally Property Management .  If you’re interested in purchasing an investment property, let us know.  We’d be happy to help you navigate the waters.

 

Mark Pinto is a top-producing Realtor with Windermere in Tacoma specializing in the purchase and sale of historic and luxury homes.  Click here to e-mail Mark or feel free to give him a call at (253) 318-0923.

 

 

 

Posted on March 11, 2014 at 6:21 pm
South Sound Property Group | Category: Investing In Real Estate, North Tacoma, Tacoma Real Estate | Tagged , , , , , , , , , , , , , , , ,