Tag Archives: rental units

How to Buy a Second Home (Hint: It Won’t Be Like Your First)

As a home buyer, you braved the real estate buying circus when you bought your first home, and you have a great place to show for it. You’ve trudged through the open houses, experienced exactly how stressful closing can be, and dealt with legions of moving trucks. And still, a part of you wants something more: an escape in the mountains, a beach cottage, or a pied-à-terre in the city. You want to buy a second home.

With current mortgage rates at a historic low, you might be tempted to jump in. But beware; buying real estate as an investment property or second home won’t be the same as your first-time home-buying experience. Here are some differences and advice to keep in mind.

First things first: Can you afford to buy a second home?

If you scored a sweet deal on a mortgage for your primary residence, don’t expect lenders to give you the same offer twice.

“Second-home loans generally require more down payment and a better credit score than owner-occupied home loans,” says John Lazenby, president of the Orlando Regional Realtor Association.

You may have to pay a higher interest rate on a vacation home mortgage than you would for the mortgage on a home you live in year-round, and lenders may look closely at your debt-to-income ratio. Expect a lender to scrutinize your finances more than when buying a single-family primary residence.

“Lenders look carefully to ensure that second-home buyers are financially capable of paying two mortgages,” Lazenby says.

Make sure to review your budget with a second mortgage payment in mind, and make adjustments if necessary after you know what interest rate you will receive. And make sure you can afford the real estate down payment—a healthy emergency fund and cash reserves are essential if an accident or job loss forces you to float two mortgages at once.

Evaluate your goals

Understand exactly how you plan to use the property before you sign on the dotted line.

“Buyers should consider their stage of life and that of their children to ensure they are going to actually use the home for the amount of time that they’re envisioning,” Lazenby says. “A family with young children may find that their use of a second home declines as the kids grow older and become immersed in sports.”

If you’re certain you’ll get enough use and enjoyment out of your new purchase, go for it—but make sure to carefully consider the market.

For most homeowners, a second home shouldn’t be a fixer-upper. Look for homes in high-value areas that will appreciate over time without having to sacrifice every weekend to laborious renovations on your “vacation home.”

Buying in an unfamiliar area? Take a few weekend trips to make sure it’s the right spot for you. In the long term, you’ll want it to be a good investment property, as well as a place to play. Pay close attention to travel times, amenities, and restaurant and recreation availability, otherwise you might spend more time grousing than skiing and sipping wine. And make sure to choose a knowledgeable local real estate agent who will know the local real estate comps and any area idiosyncrasies.

Understand your taxes

You may be familiar with a bevy of home credits and tax breaks for your first home, but not all of them apply to your second.

For instance: You might be planning on using your new home as a vacation rental when you’re out of the area. If that’s the case, you need to calculate the return on your investment property purchase price that you can expect over the course of a year. How much can you charge per night or per week for your rental property? How many weeks will you rent out the property? And what expenses will you incur?

“Property tax rules and possible deductions for second homes used as rentals are complicated and vary widely, depending on both the number of days per year that the owner occupies the home and the owner’s personal income level,” says Lazenby.

vacation home offers more flexibility to buy based on your potential property tax burden—for instance, if you’re looking to buy in an area of high real estate taxes, consider widening your real estate search to another county, which can save you thousands of dollars. Your real estate agent should be able to help you find property you as a buyer can afford.

Lazenby recommends consulting with a tax professional about tax implications, especially if you’re planning on renting out the house.

A vacation home you use part time and also rent out may be considered rental property for tax purposes, depending on personal-use days as the homeowner, and the number of days you rent it out. If you rent out the vacation property for more than 14 days in a year, you must report the rental income on Schedule E of your individual tax return, and you can deduct the rental portion of expenses such as mortgage interest and property taxes. However, renting out your home as a short-term vacation home for 14 days or less in the year means you cannot deduct rental expenses, but the income from your renters is tax-free.

Jamie Wiebe writes about home design and real estate for realtor.com. She has previously written for House Beautiful, Elle Decor, Real Simple, Veranda, and more.
Source: Realtor.com –  | Aug 28, 2019
Tagged , , , , , ,

New short-term rental regulations you need to know if you own property in Toronto

New short-term rental regulations you need to know if you own property in Toronto Image

The City of Toronto will be moving forward with the new short-term rental regulations that were proposed and approved back in late 2017.

The Local Planning Appeal Tribunal recently dismissed the appeal of the City council-approved zoning regulations for short-term rentals, so Toronto will soon have a different rental landscape.

“This is good news for Toronto residents and a step in the right direction when it comes to regulating short-term rentals and keeping our neighbourhoods liveable,” said Mayor John Tory in a release. “When we approved these regulations in 2017, we strived to strike a balance between letting people earn some extra income through Airbnb and others, but we also wanted to ensure that this did not have the effect of withdrawing potential units from the rental market. I have always believed our policy achieves the right balance which in this case falls more on the side of availability of affordable rental housing and the maintenance of reasonable peace and quiet in Toronto neighbourhoods and buildings.”

There are a few new rules that will be implemented soon. Short-term rental will be permitted across the city in all housing types, but only in principal residences (and both homeowners and tenants can participate). If you live in a secondary unit, you can rent out your home short-term, but only if the secondary unit is your primary residence.

You’ll be able to rent up to three bedrooms or your entire residence. If renting your entire home while you are away, you can do so for a maximum of 180 nights a year. If you are renting out any part of your home, you must register with the City and pay a $50 fee.

For companies like Airbnb, they will have to pay a one-time fee of $5,000 to the City, plus $1 for each night booked. This way, the city is benefitting from the success of a company that is leveraging local housing to make a profit.

There will also be a Municipal Accommodation Tax of 4% that you will have to pay on any short-term rentals less than 28 consecutive days. Companies like Airbnb will be able to volunteer to collect and pay the MAT on behalf of their users.

It seems like these changes will mostly impact the condo rental market. Most investors renting their condo units through companies like Airbnb are not renting out their principal residence; it’s usually a secondary residence. Without short-term rental income as an option, we could see a slight drop in investors in the new condo market. Fewer investors means less sales and more supply for end-users. This could result in price moderation or even a price drop in the pre-construction market.

We could also see some condo units hitting the resale market and long-term rental market, as investors look to other options to profit off their properties.

There will be a transition period as investors figure out what to do with their condo units, but in the long-run, this change seems to make sense in that it delivers more supply to the people who are living in the city, as opposed to just visiting.

Source:  Newinhomes on Nov 20, 2019

Tagged , , , , , , , ,

Is investing in Canadian real estate still viable?

When a series of tax and mortgage rules was introduced in Canada in 2016 to prevent a housing market bubble, activity slowed down significantly in the years that followed. Given the current circumstances, is it still viable to invest in property?

In a think piece in Macleans, market watcher Romana King said even with fears of a global recession, real estate is still a smart way to invest.

“For investors, the key to making strategically smart decisions is to consider the underlying economic factors that impact your investment,” she said.

King said the housing market could climb out of negative growth forecasts this year. Citing figures from the Canadian Real Estate Association, she said the national sales activity was on target to increase by 5% in 2019 and could expand further by 7.5% in 2020.

“Canada boasts strong population growth, and government budgetary decisions are acting as stimulants for the national housing market, all of which point to a healthy future for Canada’s real estate market,” she said.

Investing in real estate, however, is not without risks. For investors, it is crucial to know some strategies to lessen the potential risks, King said. The first is to be aware of additional debt. Investors must keep an eye on their credit scores and pay bills on time.

“Most investors will require a mortgage to purchase rental real estate. This can alter your debt ratios, which can impact whether or not you get the best mortgage or loan rates. Talk to an advisor before applying for new credit or renewing a current loan,” King said.

Another must-have strategy is budgeting. King said investors need to control how much they spend on maintenance and repairs to ensure that their rental properties are cash-flow positive.

“An investor needs to budget for a contingency fund. If the anticipated monthly rent covers all monthly expenses, including a repair fund, then the property is cash-flow positive, which is fundamental for a good investment,” she said.

Getting insurance could also mitigate the risks of catastrophic events.

“Virtually all insurance policies will cover a catastrophic loss of a building, but as a real estate investor, you must also consider the loss of income due to damage or destruction. A comprehensive rental policy will provide a landlord with income to replace lost rent at fair market value,” she said.

Overall, investors need to treat real estate investing as a business. Citing Edmonton-based investor Jim Yih, King said the key to successful real estate investing is positive cash flow, and not just the purchase price and the potential sale price.

Source; Canadian Real Estate Magazine – by Gerv Tacadena 12 Nov 2019
    Tagged , , , ,

    Toronto to enforce new Airbnb regulations after tribunal rules in favour of stricter bylaws

    Short-term rentals were technically not permitted in Toronto while the proposed regulations were being appealed. But the rules were not implemented due to multiple appeals made to the province’s Local Planning and Appeal Tribunal. (Cole Burston/The Canadian Press)

    Bylaws were held up for nearly 2 years after lengthy appeals process

    A provincial tribunal has ruled in favour of Toronto’s plan to put stricter regulations on the city’s short-term rental market.

    The Local Planning and Appeal Tribunal (LPAT) made its decision Monday, nearly two years after the city first approved the bylaws.

    Under the rules, Toronto will require short-term rental operators to live at the home they list on sites such as Airbnb.

    Operators will also be allowed to rent a maximum of three bedrooms in their home or their entire property. They will be required to register with the city to rent out space in their homes.

    In his ruling, adjudicator Scott Tousaw described the regulations as “good planning in the public interest.”

    “This is good news for Toronto residents and a step in the right direction when it comes to regulating short-term rentals and keeping our neighbourhoods liveable,” said Toronto Mayor John Tory Monday in a written statement.

    The regulations are essentially designed to increase the availability of long-term rentals by decreasing the number of homes eligible to be listed on sites like Airbnb and VRBO.

    However, the rules were not implemented due to multiple appeals made to the LPAT, formerly known as the Ontario Municipal Board. The appeals were launched by several short-term rental operators seeking to challenge the city’s bylaws.

    The LPAT ruling means the city can now move ahead with the regulations.

    Ana Bailão, Toronto’s deputy mayor and housing advocate, said the ruling strikes a fair balance that will benefit both tenants and homeowners looking to leverage their properties.

    Ana Bailão@anabailaoTO

    LPAT rules in favour of City’s short-term rental by-law: regulation is a “reasonable balancing…has a solid basis and planning rationale.” After a long appeal, we can now move forward protecting long-term rental suites while still allowing short-term rentals where reasonable.

    Airbnb and other companies operating in the short-term rental market will now be required to pay a one-time license fee of $5,000, plus $1 for each night booked through their platform.

    Rental operators will also be charged with a four-per-cent municipal accommodation tax on all rentals that last less than 28 consecutive days.

     

    Thorben Wieditz of Fairbnb, a coalition that represents the hotel industry, along with property owners and tenants, called the decision a “major victory for tenants across Ontario.”

    The LPAT decision notes that some 5,000 units could return to the long-term rental market with the new regulations, though that number may also be somewhat lower, depending on how operators respond to the changes.

    “Whatever the number, one fact is indisputable: each dedicated [short-term rental] unit displaces one permanent household. That household must find another place to live,” Tousaw wrote.

    “This phenomenon is occurring in increasing numbers in Toronto’s residential areas, the very places that are planned, designed and built to provide housing for residents.”

    Source: CBC.ca – Nick Boisvert · CBC News · 

    Tagged , , , , ,

    Should We Airbnb a Room in Our Home?

    Young man and woman shaking hands

     

    With the booming sharing economy and travellers often preferring to forgo traditional hotel stays, the notion of renting out a room in your home (or the entire house itself) could seem appealing. But before you jump into peer-to-peer short-term rentals, there are some things you should consider:

    Costs of hosting: starting up, cleaning, higher utility bills and more

    Becoming an Airbnb host requires some startup cash along with ongoing expenses. These include the costs to set up and furnish the space, ongoing utility and cleaning fees which is usually not more than $30 per room.

    You’ll want to make sure each guest space is attractive and has all the amenities that a weary traveller needs such as fresh backup sheets and plenty of towels. A savvy host can reasonably furnish an empty room for about $1,000. However, $500 can do the trick if you already have an extra bed. Big box stores can help supply furniture for a range of pricing.

    The upside of being a host is that if you work hard, possess excellent customer service skills and treat the platform like your own personal business, the revenue generated from the listing can surpass the initial startup costs and provide a nice monthly return.

     

    Young man and woman shaking hands

    Permissions

    If your property is controlled by a homeowners’ association or co-op, check its rules to make sure you’re allowed to host; some may restrict Airbnb activity, while others may have no issue. If you rent, you’ll want to get your landlord’s blessing.

    A proportion of Airbnb hosts could very well be renters, who may or may not be telling their landlord. It is recommended to get your landlord’s approval through a signed agreement. In most Canadian provinces, tenants cannot rent out their apartments without the approval of their landlords.

    Airbnb Canada details here how tenants should go about this process.

    Bike hanging on living room wall.

    Taxes and business licenses

    Depending on where you live, you might require a business license and you might owe local taxes on any income you earn.

    Quebec law requires short-term rentals of less than 31 days to obtain a licence from Tourism Quebec. Vancouver has proposed regulations that only allow the issuing of short-term rental licences for a primary residence — meaning the host, whether owner or tenant, must live in the dwelling. This rule targets hosts with multiple investment properties who operate as commercial hosts and eat into the housing stock.

    Toronto has proposed a two-pronged approach to licensing, requiring both companies such as Airbnb and hosts to register and pay an annual fee. Hosts of short-term rentals in Toronto would be required to pay an annual fee ranging from $40 – $150.

    As tax is a relatively complex topic, Airbnb has provided some information about local regulations in different Canadian markets. Above all, it’s good to consult a tax professional to get more specific information.

    Clean + Declutter

    You’ll want to tidy your space, present it in the best possible light and hide your valuables before you photograph it.

    Like the listings you love to peruse here on REALTOR.ca, the photos and listing title are the first thing a potential guest will see on Airbnb. This is your opportunity to catch their attention.

    You can either take your own photographs or contract out a professional photographer. Many hosts opt for professional shots, given how important eye-catching photos are for your space’s profile.

    Before photographing, ensure that you prep by arranging suitable lighting conditions and use a quality camera (now available on most smartphones).

    Woman standing at bottom of stairs smiling

    Insurance and liability

    Airbnb’s Host Guarantee provides up to $1 million in insurance coverage for property damage in 29 countries, including Canada, the United States and the United Kingdom. Airbnb’s insurance is not a substitute for homeowner’s or renter’s insurance and it doesn’t protect against theft or personal liability.

    Airbnb states that damage to a host’s property (home, unit, rooms, possessions) in every listing is covered up to $1 million USD. However, hosts must provide documentation as part of the resolution process. Payments made through the Host Guarantee are “subject to Host Guarantee Terms and Conditions,” meaning there are exclusions, limitations and conditions. As well, it’s common for Airbnb hosts to receive emails from Airbnb, at random, informing them that various terms and conditions have changed.

    Call your insurance company to see what is covered, as some home insurance policies cover short-term rentals. But if there are multiple short-term visits, the insurance company might require you to buy a business policy that would cover a hotel or a bed and breakfast.

    Damage

    Airbnb’s host guarantee doesn’t protect against wear and tear to your place, but you can charge a security deposit to cover possible damage.

    Installing a reasonable security deposit is a no-brainer move for new hosts. Airbnb allows hosts to set up a security deposit to cover minor damages that would not be covered under the Host Guarantee. For example, if a guest breaks a door handle while staying at your property, you’ll want to replace that before the next guest comes.

    However, Airbnb won’t consider this damage to be major and won’t cover it under the Host Guarantee. As a result, this becomes an out of pocket expense for you, unless you charge the guest a security deposit. When guests make a reservation, they are not immediately charged for the deposit – only if a host makes a claim.

    Even if a host is only renting a single room, a security deposit is a safe move just in case anything gets damaged.

    Couple meeting with another woman.

    Getting paid

    Airbnb could require you to refund a guest’s payment if you cancel a reservation at the last minute, forget to leave the key, misrepresent your listing, don’t clean your home or otherwise fail to meet Airbnb’s hospitality standards. Airbnb suggests making sure you’re available during the guests’ scheduled check-in to address any concerns.

    Airbnb’s payment system is quick and efficient. Payments are sent through direct deposit after the guest completes their first night (regardless of the length of stay).

    When a guest books a host’s space, they also agree to the host’s cancellation policy, which dictates the percentage of the booking costs (minus Airbnb’s cut), if any, they will get back. Most moderate policies allow a guest to cancel within two days of the first night to get their money back. Less moderate policies allow the host to collect more of the booking money.

    Host cancellations also happen from time to time. One study found host cancellations are the top complaint on Airbnb, representing about 20% of all complaints.

    Depending on when a host cancels a stay, they’ll be deducted either $50 or $100. If a host cancels three or more reservations within a year, Airbnb may deactivate the listing.

    To Airbnb or not to Airbnb 

    If you talk to enough long-time Airbnb hosts, they’ll be able to tell you an endless number of stories about inspiring and interesting guests who shared their home. Others might have bad experiences. There are clear potential advantages and disadvantages to becoming an Airbnb host.

    However, if all the regulatory checks are taken care of, the space is up to par and you’re taking your hosting responsibilities seriously, the platform can serve as a nice way to earn extra cash and meet interesting travellers from around the world.

    The article above is for information purposes and is not financial or legal advice or a substitute for financial or legal counsel.

     

    Source: Realtor.ca – Joseph Czikk – Joseph Czikk is a Canadian freelance journalist. His work includes topics like homeownership, business, tech and personal finance. 

    Tagged , , , , ,

    Cash In While You Can! NYC Neighborhoods Where Prices Are Rising—or Falling—Fastest

    New York City’s reputation as one of Earth’s most expensive—and daunting—real estate markets is well-earned, thank you very much: $1.8 million studio apartments? Check. Full-cash offers everywhere you look? Check. Freakishly competitive open houses? You bet. Welcome to the big time—with the prices and killer views to match. It’s little wonder that housing is top of mind for just about all of the nearly 8.4 million folks who call the Center of the Universe home.

    Everyone, it seems, is angling to hit the NYC trifecta: a decent space in a good neighborhood at an affordable price. That’s why it’s so important to get a handle of what’s going to be the next big neighborhood, before it explodes in popularity and prices get out of reach.

    To find out which neighborhoods in this bellwether, nationally scrutinized market are seeing the biggest price climbs—and the biggest falls—we teamed up with real estate appraiser Jonathan Miller, co-founder of Miller Samuel. He compared the median home sale prices in all of New York City’s neighborhoods throughout the five boroughs in 2017 and 2018. We included only the neighborhoods with at least 25 sales in both years.

    What we found is a city going through churn, much of it due to the flurry of luxury development in some areas that traditionally have had older—and more affordable—homes. Prices go up, an area gets saturated, the luxury stock sells out, then prices go back down. Rinse and repeat. Meanwhile, the megadevelopment causes people to search out nearby areas that might be cheaper.

    It’s the NYC circle of life, and it’s accelerating.

    “Developers have left no stone unturned and developed wherever they could,” says Miller. “They went everywhere there was an opportunity. And that caused a lot of price fluctuations, especially in more modestly priced neighborhoods that saw a lot of new, high-end development introduced.”

    But New York City hasn’t been immune to national trends. The overall market is slowing throughout all of its five boroughs of Manhattan, Brooklyn, Queens, the Bronx, and “can’t-get-no-respect” Staten Island. The city has been particularly affected by the national tax changes that make it more expensive to own a home in pricier parts of the country, says Miller.

    More fun still: This month, New York state’s new mansion tax went into effect, upping the amount of taxes on properties $2 million and up. Sales had been down earlier in the year, but the prospect of giving more to Uncle Sam resulted in a rush of higher-priced home sales. Going forward, the number of sales is expected to fall back down again. Phew … Dramamine, please.

    High price tags are pushing many New Yorkers farther out into cheaper communities such as the Bronx, which doesn’t have the hipster cred or water views of Brooklyn. But dollars can stretch way further there.

    “A large shift or decline [in a New York neighborhood] is generally not a reflection of weakness,” says Miller. “It’s more of a reflection of … now it’s back to business.”

    So which neighborhoods are seeing the largest real estate price spikes? And which expensive communities are getting (a bit) more affordable?

    The New York City neighborhoods where home prices are rising the most
    The New York City neighborhoods where home prices are rising the mostTony Frenzel

    1. Fieldston, Bronx

    Annual median price increase: 122.7%
    Median 2018 home price: $612,500

    Tudor home on Livingston Ave. in the Bronx
    Tudor home on Livingston Ave. in the Bronxrealtorcom

    When folks think of the Bronx, the mix of grand TudorsGeorgian Revival estates, and midcentury modern homes and lovely winding streets in suburban Fieldston are rarely what come to mind. Homeowners in this privately owned enclave of tony Riverdale pay property taxes and fees to their property owners association, which maintains the streets and sewers and pays for its own security patrol.

    Prices are surging because word has gotten out: Buyers are increasingly drawn to its seductive combo of urban and suburban living. The historically designated community is near top private schools, which include the Horace Mann School and Riverdale Country School. It’s also only steps away from the Hudson River and the 28-acre green oasis of Wave Hill Public Gardens in the northwest swath of the Bronx.

    “In Fieldston, you are part of the city but you have the real suburban feeling,” says Chintan Trivedi, a licensed real estate broker with Re/Max In the City. “Here you’re getting a real home, a backyard and a private community.

    “For a good house with a larger backyard, a complete renovation, and maybe a pool, you can expect to pay $1.5 million to $2.5 million,” he says. But there are six-bedroom homes listed in the $1 million range. Just tryto get that in Manhattan. (Spoiler: You can’t!)

    2. Kingsbridge/University Heights, Bronx

    Annual median price increase: 41.2%
    Median 2018 home price: $275,000

    Single-family homes in Kingsbridge
    Single-family homes in Kingsbridgerealtor.com

    Just south of Fieldston are the middle-class communities of Kingsbridge and University Heights, where buyers can score deals for a fraction of the price. But the lack of homes for sale and little turnover are causing prices to heat up. And investors are buying up whatever lots and houses they can for new development or rehabbing.

    “The Bronx is the new Queens in the sense that there’s been an expansion of demand moving out from Manhattan as consumers search for affordability,” says Miller.

    The neighborhood’s become popular with 20- and 30-somethings looking for a reasonably priced community with an urban vibe. Hilly Kingsbridge is filled with century-old, single-family houses and midrise co-op and apartment buildings as well as plenty of shopping, parks, and public transit.

    These buyers “are[part of] the new generation that’s learning that real estate should be part of their planning,” says Trivedi. “They want to feel like they’re in Manhattan—a place where they can still go right downstairs and get a smoothie.”

    3. East Village, Manhattan

    Annual median price increase: 38.7%
    Median 2018 home price: $1,535,000

    East Village of New York City
    East Village of New York CityJJFarquitectos/iStock

    Over the past couple of decades, lower Manhattan’s East Village has shed its image as a sketchy, open-air drug market to become a sought-after place known for lively bars, great restaurants, and a defiantly boho vibe—as well as a slew of new, high-priced developments, causing prices to jump. They’re going up everywhere you look.

    The community is still mostly made up of low-rise, brick condo and apartment buildings with funky cafes and boutiques on the ground floor. There are also some townhouses, including this six-bedroom, nine-bathroom brick beauty for $28 million.

    But as the newly constructed luxury buildings reshuffle the neighborhood, locales are hoping the essential vibe of the area doesn’t change.

    “From Avenue A to Avenue D, you can walk past a gallery, a Puerto Rican garden, a pop-up party. There’s life and it’s vibrant here,” says Sydney Blumstein, a real estate agent with the Corcoran Group.

    4. Prospect Heights, Brooklyn

    Annual median price increase: 36.1%
    Median 2018 home price: $1,226,750

    Grand Army Plaza, on the southwestern border of Prospect Heights
    Grand Army Plaza, on the southwestern border of Prospect Heightsslobo/iStock

    Like the East Village, Prospect Heights has been rapidly gentrifying. Professionals, families, and a few stray hipsters are drawn to its charming rows of stunningly restored early 19th-century, multistory brownstones on tree-lined streets. The neighborhood is near several main subway lines and in close proximity to the 526-acre Prospect Park and the Brooklyn Botanic Garden. It also borders Barclays Center, home to the NBA’s Brooklyn Nets (and soon the team’s new dynamic duo, superstars Kevin Durant and Kyrie Irving).

    In recent years, Prospect Heights has become popular with folks priced out of neighboring Park Slope, a community long popular with upper-middle-class families. They gravitate to the brownstones as well as the new high-rises and the used bookstore, artisanal bakeries, and constant stream of new restaurants.

    Not surprisingly, the Prospect Heights neighborhood has attracted a slew of developers putting up luxury condo and apartment buildings wherever they can. Those high-end housing developments are skewing the neighborhood’s median prices up to new heights.

    For example, this two-bed, 2.5-bath condo with floor-to-ceiling windows and marble countertops is on the market for $1,750,000.

    5. Kensington, Brooklyn

    Annual median price increase: 34.6%
    Median 2018 home price: $875,000

    A row of apartment buildings in Kensington, Brooklyn.
    A row of apartment buildings in Kensington, Brooklyn.cmart7327/iStock

    As Prospect Heights has become more desirable (aka expensive), more Brooklynites have been turning to lower-priced Kensington. It’s a quieter community, far from aggressively groovy Brooklyn nabes such as Williamsburg. It’s known for its single-family homes, many of which come with cheerful porches and outdoor spaces out back. There are also plenty of condos, co-ops, and apartments in older brick complexes.

    This isn’t the kind of place where you’ll find buzzed-about restaurants—you’re more likely to stumble upon a dollar store than a bougie boutique. It’s a more down-to-earth community, populated by old-school Brooklynites, hipsters, as well as Pakistani, Orthodox and Hasidic Jew, Mexican, Chinese, and Latin American immigrant groups.

    The rest of the top 10 neighborhoods where prices are rising the most include Tompkinsville, Staten Island, where the median home price rose 33.6%, to $472,500. It was followed by Crotona Park, Bronx, at 31.3%, to $490,000; Cobble Hill, Brooklyn, at 29.7%, to $1,265,000; the Lower East Side, Manhattan, at 29.5%, to $1,075,000; and Melrose/Concourse, Bronx, at 26%, to $380,000.


    The New York City neighborhoods where home prices are falling the most
    The New York City neighborhoods where home prices are falling the mostTony Frenzel

    1. Downtown-Fulton Mall, Brooklyn

    Annual median price increase: -40.7%
    Median 2018 home price: $915,500

    Condo tower being constructed in Downtown Brooklyn
    Condo tower being constructed in Downtown BrooklynEpics/Getty Images

    Once grim downtown Brooklyn has been booming in recent years. It’s become home to a slew of glassy, luxury high-rises. So why are prices in such a vibrant area plummeting?

    Well, now there’s a glut of new construction, giving buyers more negotiating power as buildings compete against one another to lure residents. Plus, builders are putting up towers with some smaller, less expensive units. But in NYC, less expensive is relative. Buyers might save themselves a couple hundred thousand on a million-plus-dollar condo.

    But many of the condos here, some designed by famous architects, come with just about every amenity imaginable, including sun decks, hot tubs, dog runs, saltwater pools, and even music studios. This two-bedroom, 1.5-bathroom abode in a 57-floor building is going for $2,040,000.

    Some believe developers overshot their market.

    “Developers there created a mountain of homogenous product,” says agent Blumstein with the Corcoran Group. Buildings in the area “were built on the thought that people are demanding amenities. But the old-school, prewar neighborhood vibe is what’s in.”

    2. Civic Center, Manhattan

    Annual median price increase: -39.3%
    Median 2018 home price: $3,200,000

    Transit options in Civic Center, Manhattan
    Transit options in Civic Center, Manhattancnicbc/iStock

    Even many lifelong New Yorkers have never heard of the Civic Center neighborhood in lower Manhattan. The tiny community encompasses City Hall and courthouses as well as some high-rise co-op, condo, and apartment buildings. It’s just west of ultradesirable Tribeca, where prices are sky-high, and just below Chinatown, guaranteeing plenty of good Asian eats.

    Prices are down because the wave of development has pretty much played itself out, says Miller. Many of the older brick and limestone, midrise office buildings had been gut-rehabbed and turned into pricey condos. That led to a spike in prices. Now that those units have been bought, the real estate for sale is a mix of lower- and higher-end properties.

    It’s “run its course,” says Miller of the wave of development in Civic Center.

    3. Javits Center, Manhattan

    Annual median price increase: -30.2%
    Median 2018 home price: $450,000

    Javits Center on the west side of Manhattan
    Javits Center on the west side of ManhattanMBPROJEKT_Maciej_Bledowski/iStock

    Like Civic Center, Javits Center as a neighborhood isn’t very well-known—but that’s likely to change. Named for the sprawling convention center on the west side of Manhattan where the community is located, it’s wedged between trendy Hell’s Kitchen and Chelsea and abuts Hudson Yards.

    Even nonlocals have probably heard of Hudson Yards, Manhattan’s newest neighborhood, built on a formerly desolate stretch of disused train tracks. It’s a glam (and critics say overly generic) development of ultrahigh-priced condo and rental towers overlooking the Hudson River, complete with its own weird tourist attraction, the beehive-like Vessel. The Javits Center’s proximity to this buzzy development will likely have an impact on sales with prices shooting up.

    But in the meantime, prices fell because there simply isn’t much of the first wave of luxury real estate left on the market. Now what’s selling is less expensive, older condos.

    That’s likely to change as sales heat up in Hudson Yards.

    “Sales [in Hudson Yards] will help to increase values in the surrounding area,” says New York real estate agent Matt Crouteau. The place “was designed so people don’t have to leave.” Ever.

    4. Financial District, Manhattan

    Annual median price increase: -30%
    Median 2018 home price: $997,500

    The canyons of FiDi, on Wall Street
    The canyons of FiDi, on Wall StreetPgiam/iStock

    Just south of the Civic Center is the Financial District, home to Wall Street and the World Trade Center on the tip of Manhattan. Like all of the other neighborhoods on this list, FiDi (as it’s called) experienced a spike in development, then a market saturation.

    “It’s not that prices are collapsing,” says Miller. “The early wave of high-end new development drove prices higher. … After that activity cooled, the prices for the neighborhood are less than what they were.”

    But there are still plenty of new units to choose from, including this three-bedroom, four-bathroom condo going for $5,300,000. The unit features granite countertops, a waterfall island, high ceilings, and floor-to-ceiling windows. On the lower side of the spectrum, buyers can snag this studio with plenty of closet space for $480,000.

    The neighborhood is home to a few cobblestone streets, giving it an old-world charm, as well as the South Street Seaport, a tourist fave.

    5. Upper East Side, Manhattan

    Annual median price increase: -29.6%
    Median 2018 home price: $1,550,000

    Park Avenue, Upper East Side
    Park Avenue, Upper East SideOlegAlbinsky/iStock

    Thank the long-awaited Second Avenue Subway line for prices falling in the upper portion of the Upper East Side, from about 96th to 110th streets. Developers flooded the neighborhood putting up buildings near the new train extension, which opened in 2017 after being discussed, planned, and replanned for nearly a century. They believed—rightly so—that this least fashionable part of the Upper East Side would become far more desirable thanks to its close proximity to the new train line.

    “That’s essentially East Harlem, which has benefited from a significant amount of new development,” says Miller. Now development is mostly over and there’s fewer sales.

    “You’re not seeing the same amount of high-end [sales], because there’s not as much new housing being introduced,” he explains.

    The Upper East Side/East Harlem now has a mix of sleek towers, brownstones, low-rise brick buildings and townhomes, and apartment and public housing developments. This new one-bedroom, one-bath condo clocking in at just 609 square feet, which is near the new subway line, is on the market for $786,161.

    The rest of the top 10 neighborhoods where prices fell the most include the Flatiron, Manhattan, where the median home price fell 28.5%, to $1,870,000; Douglaston, Queens, at -28.4%, to $466,250; South Williamsburg, Brooklyn, at -20.4%, to $923,000; Brighton Beach, Brooklyn, at -19.9%, to $472,500; and Woodlawn, Bronx, at -18.8%, to $325,000.

    Chelsia Rose Marcius is a reporter, author, and journalism professor based in New York City. Her work has been published in the New York Times, Chicago Sun-Times, and New York Daily News. She has also appeared on MSNBC, FOX News, CNN, Inside Edition, BBC Radio, and WNYC.
    The realtor.com® editorial team highlights a curated selection of product recommendations for your consideration; clicking a link to the retailer that sells the product may earn us a commission.
    Source: Realtor.com –  | Jul 22, 2019
    Tagged , , , , , , , , , ,

    7-Step Process for Finding Great Contractors for Home Renovations

    To be blunt, most contractors are terrible. As a landlord, I deal with it all the time. 

    They don’t answer their phone. They don’t show up when they said they would. They don’t do what they said they are going to do.

    But there ARE gems to be found in the rubble. The problem is most people have no idea how to identify that great contractor from all the bad ones out there—until long AFTER they’ve already hired one.

    I want to share with you my seven-step process to identify a great contractor before hiring them. Whether you’re remodeling your own home, a rental property, flipping houses, or need a contractor for something else, here’s how to land a great one.

    How to Find a Great Contractor

    1. Build your contractor list

    What I mean by this is you need to get the names and phone numbers of a lot of different contractors in your area. I mean, if we’re searching for a needle in a haystack, we have to first get a haystack.

    You can find potential contractors in a number of ways, but my three favorite are: 

    1. Referrals, meaning ask people you know who they have used
    2. Referrals, so yeah, asking people you know who they have used
    3. You guessed it! Referrals.

    Human nature is to generally do what you’ve always done. It doesn’t guarantee success, but when you know a contractor has done great work in the past, it’s likely they’ll do it again.

    So get in the habit of asking your friends and family often—even when you’re not looking for a contractor. “Who did this work for you?” Then, keep track of those referrals.

    There are a few other ways to find contractors, as well. I like to talk to other contractors and ask who they like working with.

    Rockstars tend to party with other rockstars, and good tradesmen tend to work with other good tradesmen.

    For example, I have a great finish carpenter, so I can ask him, “Hey, do you know any great plumbers?”

    You can also build your list by snapping a photo every time you see a contractor sign on the side of a work truck, or by searching Yelp, or by asking the employees in the pro department of your local home store who they like.

    Related: The Ultimate Guide to Finding an Incredible Contractor

    1. Pre-screening on the phone and in person

    Just as with tenants, our opinion of the contractor begins the moment we start talking with them, whether over email, phone, or in person.

    Do they carry themselves professionally? Do they respond well to questions?

    Ask them some general questions, such as:

    • How long have you been in this line of work?
    • What skill would you say you are the best at?
    • What job tasks do you hate doing?
    • In what cities do you typically work?
    • How many employees work for you? (Or “work in your company” if you are not talking to the boss.)
    • How busy are you?
    • Do you pull permits, or would I need to?
    • If I were to hire you, when could you start knocking out tasks?

    Then, set up a time to meet and show them the project, if you have one. Set an appointment and be sure to show up a few minutes early, just to see exactly what time they arrive.

    Are they on time? Late? Early? Do they look professional? How do they act?

    If everything feels OK after this first meeting, move on to the next step.

    man sitting at desk working on a computer

    1. Google them

    The first thing we do now when looking for information on a certain contractor is to simply search Google for their name and their company name. This can often unearth any big red flags about the person.

    You’ll also want to add your city name and some other keywords to the search, such as “scam” or “rip off” or “court.”

    For example, if we wanted to find out more about First Rate Construction Company in Metropolis, we would search things like:

    • First Rate Construction Metropolis
    • First Rate Construction scam
    • First Rate Construction sue
    • First Rate Construction court
    • First Rate Construction evil

    These terms can help you discover major complaints about a contractor. But keep in mind, not all complaints are valid. Some people are just crazy.

    What this will do, however, is give you direction about what steps to take next.

    1. Ask for references

    Next, ask the contractor for references from previous people for whom they have worked. Photos are nice, but names and addresses are better.

    Then, do what 90 percent of the population will never do and actually call those references!

    You may want to ask the reference several questions, like:

    1. What work did they do?
    2. How fast did they do it?
    3. Did they keep a clean job site?
    4. You are related to [contractor’s name], right? (If they are, they will think you were already privy to that information and will have no problem answering honestly!)
    5. Any problems working with them?
    6. Would you hire them again?
    7. Can I take a look at the finished product? (This could be in person or via pictures.)

    These questions will help you understand more about the abilities and history of the contractor. Then, if possible, actually check out the work the contractor did and make sure it looks good.

    Another tip recently given to us by J Scott was to ask the contractor to tell you about a recent big job they’ve done. Contractors love to brag about their big jobs, so he or she will likely regale you with the story of how much work they needed to do and how great it looked at the end.

    Find out the address, and then go to the city and verify that a permit was pulled for that project. If not, the contractor did all the work without a permit, which is a good indication they are not a contractor you want on your team.

    1. Verify

    It’s okay to be trusting, but make sure the contractor is worthy of your trust first! To do this, first verify that they truly do have a license to do whatever work you intend for them to do.

    If they are an electrician, make sure they have an electrical license. If they are a plumber, make sure they have a plumbing license. If they are a general contractor, make sure they have a general contractor’s license.

    Next, make sure they do actually have the proper insurance and bond. As we mentioned earlier, you could ask them to bring proof, but you can also simply ask the name of their insurance agent and verify it with that agent. Either way, just make sure they have it.

    Remember: this protects you.

    1. Hire them for one small task

    Before hiring the contractor to do a large project, hire them to do just one small task, preferably under $500 in cost. This will give you a good idea of what kind of work ethic they have and the quality of work that they do.

    If the work is done on time and on budget, and if it meets your quality standards, consider hiring them for more tasks.

    Even if the contractor has passed through the first several steps of this screening process, 75 percent of them will still likely fail at this step, so don’t settle with just one contractor. Hire multiple contractors for multiple small jobs and see who works out the best.

    Related: 14 Killer Questions to Ask Your Contractor

    1. Manage them correctly

    Ninety percent of the time, when I have a disastrous situation with a contractor, the blame lies on no one but myself. If I had managed the job correctly, I wouldn’t be caught in the positions I’ve been in.

    Here’s an example. I hired a contractor to paint a bedroom. He says $500. I say, “Great.”

    He calls me, tells me he’s done, and I send him the $500.

    Now, I go check out the property and what do I see? He didn’t paint the ceiling, despite the obvious need for it. And there are a couple paint splatters on the floor that are easy to clean—but now I have to do it.

    I call the contractor and he says, “Well, you didn’t say I needed to do the ceiling,” and “No, the floor was perfectly clean when I left. Someone else must have made the drips on the floor.”

    Now, you might be saying, “But that’s ridiculous! It’s clearly his fault.”

    But it’s my responsibility to manage him correctly. Therefore, when you work with a contractor, always get a detailed scope of work that clearly lays out 100 percent of what is going to be worked on, what’s included, and what isn’t.

    Then, never pay anything until you’ve inspected the work. On larger jobs, be sure to spread out payments over the course of the job, so they don’t get too much money up front. You always want them hungry for the next paycheck.

    To help with this, I put together a really simple “Contractor Bid Form” over in the BiggerPockets FilePlace—100% free—so you can fill this out every time you work with a contractor. Just go to BiggerPockets.com/bigform.

    The Bottom Line

    Whether you’re a real estate investor like myself or not, you’re going to need to deal with contractors in the future. By following this seven-step process, you’ll save yourself time, stress, and a lot of money.

    Source: BiggerPockets.com by

    Tagged , , , , , , , , , ,