The area around the University of Puget Sound is one of North Tacoma’s finest. In addition to a number of beautiful historic homes, the area is dotted with rentals for UPS students to live in while they are attending college.
From seasoned investors to parents looking to find a great place for their kids to live and make a great investment in the process, there is always a strong interest in the rentals around UPS. We regularly assist clients with purchasing and selling investment properties by UPS and around the rest of the county. We think that in the current climate of climbing rents, historic low prices, and rock bottom interest rates make this a great time to invest in a rental near UPS. Here are some answers to some commonly asked questions about buying rentals:
How much do I have to put down?
Most lenders require between 20-25% down for non-owner occupied purchases of investment properties. There are lots of factors involved (mainly your income and credit history) but that’s about average. If you are considering an owner occupied rental (for example, buy a duplex and living in one unit while renting out the other) you can purchase the property for as little as 3.5% down using FHA financing.
How do I figure out how much the units can rent for?
The price per square foot of a rental varies by location, condition, and amenities. In the UPS area you can probably assume about $1 per square foot as a minimum and explore the rents of similar units on Craigslist, but nothing beats the expertise of a good local property manager. We can recommend some.
What are the tax advantages of having a rental?
This is easily one of the main advantages of owning a rental property. While income you make from your rental must be reported as income, many repairs and improvements you make to the property are tax deductable. Things like your mortgage interest, depreciation, property management fees, and insurance are also deductable. There are so many potential deductions it’s worth it to have an accountant go over your books.
While finding the right rental property at the right price can take some time, the combination of excellent interest rates, historically low prices, and our extensive knowledge could make this a golden moment for buying a UPS rental property. Contact us today to get started!
We have sold tons of homes in Tacoma’s north end--probably numbering in the thousands between us. Our job, day in and day out for nearly two decades has been positioning homes in the marketplace, creating effective marketing plans to reach likely Tacoma buyers, as well as negotiating and shepherding pending sales through to closing. If you’re are planning on selling your home in the next 6 months, check out our list of 5 steps to take before selling your North End Home.
Step 1: Call David, Matt or myself!
"Wait!" you say, "I don't want to sell for six months. Why would I call a Realtor now?” The answer is that we can help you create a plan to list your house. We can make suggestions about repairs that will or won’t improve the value or saleability of your property as well as take a look at the current market to give you an idea of what your home is worth. The upper end of the Tacoma market is quite different from the midrange and lower price ranges. The strategy and pricing scenarios will account for these differences. We can also calculate the costs associated with selling and give you an idea of the proceeds you might realize from the sale, which should help with planning your next move.
Step 2: Start Taking Care of Necessary Repairs
We won't ask you to go all HGTV here. You won't be remodeling. Remodeling is rarely money well invested. Instead, assemble a list of things around the house that need to be repaired or projects that need to be finished. From small things like replacing broken outlet covers to larger things like attaching a drooping gutter or repairing a broken window- there's no time like the present to get started.
Step 3: Financing and Clear Title
If you are also hoping to buy a house, this is a great time to get in touch with a lender to make sure you will qualify. It is also a good idea to pull a title report on your present property to see if there are vesting issues, or liens to clear up prior to a sale. We can order that for you. Better now than when you and your buyers have your entire lives in moving trucks waiting to close.
Step 4: Stand Outside and Start Thinking Like A Buyer
Research shows that buyers often make judgments in the blink of an eye, before they ever walk in the door. No matter what time of year you are selling your house, make sure your house looks great from the street. Trim bushes, clear walkways, mulch, put a fresh coat of paint on the front door and trim if necessary. The other day I was showing a Craftsman near 6th Ave and I noticed that they had done a sloppy job painting the front door and most of the sloppiness was right at eye-level. Don't get sloppy at the entrance! And if you must, do it somewhere less visible than eye-level.
Step 5: Purge and Stage
As your target listing date approaches, take a close look at your house. Very few of us live in a constant state of show-readiness. Having a lot of large furniture and stray items in a house (aka clutter) can make rooms seem smaller. Remember, you’re moving. Maybe now is the time to begin packing and purging your home of extra things, like the doll collection. Your collection, while lovely, not only occupies space that might otherwise feel ample to buyer, it also distracts them while they are trying to view the house! Your dolls are awesome, really, but pack them safely away for now. Thin your closets of off-season clothing. If you are not going to wear it for 6 months, box it. You want a buyer to open the closet door and see space. No one wants to buy a clutter problem. Donate or put what you can into storage before you put your home on the market and consider hiring a home stager or decorator to help you arrange your furniture to show off your homes best features.
After the holidays new buyers enter the market. The second or third week in January is historically a great time for selling. Late May there can be another influx of buyers and activity. Don't wait until the night before you'd like to sell to start the process. Plan ahead! We are happy to stop by for a consultation.
Signs of winter abound; Christmas decorations, ski areas opening, snowflakes in the forecast, red Starbucks cups, an open air ice skating rink downtown. Truly, that is happening. It could be a nice tradition and a further enhancement to our already vital downtown. "Franciscan Polar Plaza" will transform Tollefson Plaza at 17th and Pacific for the entire holiday season. Franciscan Health System, Tacoma Art Museum, City of Tacoma and other sponsors have partnered to bring us a downtown winter destination. It is a temporary thing, opening the day after Thanksgiving and running through January 2. Admission will be $8 and $2 for skate rental. “We love Tacoma and we’re confident that this will be a success for the city and the community,” said Cameron Fellows, Deputy Director of Tacoma Art Museum. “The community has come together to support this effort and we hope this will become a new tradition that enlivens downtown for years to come.” The ice rink will also be available for private events. For more information about Franciscan Polar Plaza including hours, visit www.PolarPlaza.com.
As mentioned above, thanks to a pile of new snow, Crystal Mountain is opening today. Snowqualmie opens tomorrow. White Pass is watching the sky to see what falls. As of this writing, they hadn't made any announcements. Some are predicting a great season at local ski resorts due to a second consecutive La Nina winter.
Our real estate market continues to see incremental improvement. I read today that Washington State's Chief Economist said our state is ranked 47th in the U.S. for 30 day mortgage delinquencies, which could bode well for early 2012 in that it suggests relatively fewer foreclosures here. The north Tacoma real estate market specifically is also seeing gradual improvement, especially homes priced below $350,000. Right now there are 100 pending sales in the north end and 89% of those are below $350,000. I can currently call the $150,000 to $200,000 price range a seller's market. There are more than half as many pending sales as active listings, which means the market is absorbing inventory well and there may be slight upward pressure on values in that small price band. We had one of our best months of the year in October, believe it or not, after a lackluster spring/summer.
Where ever you plan to spend Thanksgiving this year, we would like to wish you a safe and happy holiday!
Two months ago a wrote about an experiment. I thought my home's value in Zillow was low and noticed they had erroneous property information. I claimed ownership of the house and edited the info, promising to report back as to what effect this had on my Zestimate. Nothing changed. It did not go up--and in fact the information is back to being wrong!
I am going to give Zillow a second chance. I do understand what happened. Zillow cancelled my personal account because of conflicts with my business one and along with it went the changes I made a few days prior. My wife is helping me. She created a user account and made the changes. I'll set myself a reminder to look at the value in 6 weeks and report any improvement, or lack thereof.