Ruth Karel Chicago Real Estate » Renting

RENTING–A GOOD OPTION TODAY?

Ruth Karel — Wed, 28 Jul 2010 20:18:10 +0000

A recent Fortune magazine article questions the concept of home ownership in a most informative way. The history of home ownership in our country is one of the most interesting facets of the article. Ever since my memory began, home ownership has been a part of living the good American life. Somehow there was an assumption that owning your home was better than renting your home. Since our first Great Depression president, Herbert Hoover, was Secretary of Commerce, our government has encouraged home ownership. One interesting facet is that Mr. Hoover thought that if people owned a piece of the country, they would be less likely to become Communists–the Red Scare was big at that time. The default rate later in the Great Depression was 50 per cent and massive government programs to help these home owners were begun. Franklin Delano Roosevelt instituted an agency to help people with low interest loans. After World War II there were loans to GIs so that they could buy homes and help transition our economy from a war-time economy to a peace-time economy. There are still lots of programs to help home owners and there may be a change in thinking to include renting.

Two reasons that renting is becoming more acceptable follow:

Ever-increasing equity in your home because of appreciation will no longer help you make the jump to a larger, more expensive home.

You can no longer use your home as a piggy bank for constant re-financing.

Capitol Hill is beginning to rethink the American Dream with regard to home ownership. Professor Joe Gyourko,
Wharton School, feels that the government shouldn’t blindly encourage home ownership.I agree with his feeling that government should “encourage people to make the right decision” and that could be renting rather than owning. In many parts so our country, the rental figures are increasing. The Midwest has shown the largest increase in rental households. To read the whole article, just click here.

Call me if you would like help making the decision to rent or to buy–312-607-1306 or e-mail me.

Other articles you might find informative:

Can’t Sell–Rent It Right?

Rent To Own, How Does It Work?

Home Affordability-A Balancing Act

MOVING MISERY MADE EASIER

Ruth Karel — Mon, 12 Jul 2010 19:23:28 +0000

It always amazes me that I make a living encouraging people to move–I consider moving to be a form of cruel and unusual punishment! Gregory Karp has an article in the Chicago Tribune that gives some very good moving tips that most of us would not think about. For instance, consolidating your belongings with other people’s belongings. If you can’t fill a full-size moving van, why pay for one? Flexibility about delivery dates and times is usually necessary for this kind of move and consolidation can be lots cheaper. Did you know that summer weekend moves around the 15th and 30th of the month are the most expensive? I surely didn’t. How about buying used boxes instead of new ones? Here is a tip that I thought was fabulous–mail books! If you are paying for weight and distance, let the Postal Service do the work for you. It is much cheaper. There is also excellent advice about choosing a mover. To read the entire article click here.

Need help finding a place to move from or to move to? Just call me, 312-607-1306 or e-mail me.

A HOUSING SHORTAGE? IMPOSSIBLE!

Ruth Karel — Tue, 15 Jun 2010 17:53:30 +0000

Maybe not–maybe we’ll be looking for a place to hang that Home Sweet Home sign and it will be a lot harder to find that place. A recent CNNMoney. com post gives some reasons why that shortage might happen. Here are a few of the highlights:

Household formation has been held down by the weak economy. Young people are moving back home–the boomerang effect–because jobs are hard to find. People are doubling up in some instances.
Inventory. Yes, there is a large backlog of vacant homes–and are they salable and are they in locations where people want to live? That remains to be seen.
Homebuilders are having difficulty getting money to finance new land purchases and new construction.
Number of homebuilders. Lots of small home builders went out of business during the recession and the ones who are still in business will encounter new regulations.
New regulations will cover how and where new homes are built. In some places all new homes will have to have a sprinkler system as well as storm water control systems–examples of what can be required.
Another concern mentioned in the article is the lack of rentals being built–they are not being built in Chicago or anywhere else and a rental unit is where most people start when they get their first out-of-college job or when they first move to a new city.

To read the entire article, just click here.

Questions about Chicago real estate? Just call me at 312-607-1306 or e-mail me–I’ve been answering real estate questions for 21 years!

Here are a few other posts that might be of interest:

Is Small Better?

Credit Boo Boo–Down With Your Fico Score

Out With the Old — In With the New Slowly!

SHAKY REAL ESTATE MARKET?

Ruth Karel — Thu, 25 Mar 2010 19:10:06 +0000

Money Magazine published an article yesterday titled “6 Housing Trends In A Still Shaky Market.” As you know, I fervently believe all real estate news is local not national. And with that I do have to admit that I found this article about national trends extremely interesting. The six trends are:

Distressed properties will keep prices under pressure.
Big homes are lagging small ones in the recovery.
Mortgage rates will rise as Uncle Sam exits the market.
Financing for condos, second homes, and jumbo loans are especially tough to get.
Buyers, rushing to beat the tax-credit deadline, will set off a flurry of spring deals.
Going green this year can save you more money.

The article is rather long. I suggest reading the whole thing or if not that, at least the sections that apply to your current thinking or questioning. To find the whole piece, just click here.

WHEN THE WSJ IS RIGHT, IT’S RIGHT!

Ruth Karel — Tue, 17 Nov 2009 22:04:28 +0000

The Wall Street Journal article “Ten Questions on the Volatile Housing Market” should be required reading for anyone with a yen to buy or sell a property at this time. There are a few additional tidbits that I found interesting. For example, “Help Wanted” ads can be a useful tool–if there are more than there used to be, then business may be starting to recover. The answer to the question about buying now if you are a renter is spot on–depends on your specific situation. Do take the time to read the whole thing. Click here and read!

Need an experienced Realtor to talk to about the questions? Do feel free to call me at 312-981-2360, direct dial, or cell, 312-607-1306. E-mail is great too!

CAN’T SELL–RENT IT RIGHT

Ruth Karel — Mon, 16 Nov 2009 17:45:08 +0000

Kay Severinsen has written an article that gives some good advice to sellers who can’t sell and want to rent. Many of the same suggestions that Realtors give owners who want to sell are spelled out. Kay brings up pricing, staging, accessibility, etc. These are the same issues that sellers face when they are selling there home. Kay also talks about the difference between a sale and in terms of time–renters don’t spend weeks looking for a place to live. A rental transaction is much more likely to be a “this is it or this isn’t it” type of viewing–and accessibility is key. Being totally available if you work can be tricky so you might consider hiring a Realtor. Many of my listings are for rent as well as for sale and whatever comes first is what happens. My clients frequently feel that having some income from their home is better than no income–even if it doesn’t quite cover mortgage payments, assessments and taxes. Being in a pet friendly building can doiuble your traffic and you need to decide if you want dogs and cats in your unit–you can also charge additional “pet rent” to cover any damage done by the pets. The article is worth reading–Help for Reluctant Landlords, just click and read.

Need a Chicago Realtor to talk to you about the sale of your property or renting a home? Just call, 312-981-2360–direct dial, or 312-607-1306, cell phone. I love e-mail too!

Other articles that might interest you are:

Real Estate Rapport

Keep Your Insurance Up To Date

Hooray for Home Sweet Home!

RENT TO OWN–HOW DOES IT WORK?

Ruth Karel — Tue, 05 May 2009 16:21:17 +0000

What are the benefits for a buyer in a rent with option to buy contract? And how does it work? Basically you have two contracts–one is a lease agreement and the other is a purchase agreement. The purchase price is agreed on and specified in the purchase agreement. The terms can be specifically tailored to suit the buyer-renter’s financial situation.
One of the most important benefits for a rent-to-own buyer is that there is usually a much smaller down payment and no upfront costs. An agreed upon portion of the monthly rent is held in escrow to increase the down payment for the eventual purchase of the home. Many developers in today’s challenging market are open to working with the lease-option buyer. This sort of arrangement coupled with the $8,000 tax credit that doesn’t have to be paid back makes first time home ownership possible for a lot of first-time home owners.

Would you like someone to help you find your perfect home and work with you through the lease-option process? If so, just call me at 312-981-2360 or e-mail me.

Related articles: Thinking Of Buying Chicago Real Estate?, 4-09; The Answers, 4-09, Exclusive Buyer Brokerage–Is It For Me?, 5-09

CAN’T SELL — THINK ABOUT RENTING!

Ruth Karel — Thu, 04 Dec 2008 19:00:24 +0000

Many home owners, especially condo owners, are finding that their homes aren’t selling and are wondering if renting is a viable option. It is certainly something to think about. Most agents today are willing to take a listing both for sale and for rent. Would we rather sell than rent the home–of course! Having said that, it makes sense to give the best possible service even if that includes renting a home at many less dollars than you would receive for selling that home. If, as an owner, you are faced with two mortgage payments, two tax payments and for a condo, two assessments each month, renting might make sense. Even if the rent doesn’t quite cover all the expenses it can be a powerful help in that direction. Probably one of the most common mistakes owners make is overpricing the rental listing. Sounds familiar, that’s what most sellers do too! It does not matter what you need to cover your expenses–fair market rent is just the same as fair market value for a sale and the market sets that value. Another area that gives prospective landlords a problem is screening prospective tenants. At a minimum a credit check and a background check should be pulled. A litigation check is also a good idea. Another thing to consider is the landlord’s ability to handle necessary repairs–are you suited to a midnight call that a hot water heater is leaking or the furnace has stopped operating in zero weather? It isn’t just a question of collecting a rent check each month–a certain amount of management must be done also. Here are some things to think about:

If you own a condo, does the condo association allow rentals? Most do with the requirement of a 12 month lease. The particular association that I live in allows rentals only after one year’s ownership. Coops most usually do not allow rentals.
Think about repairs–you might be inclined to postpone a repair, just live with something minor, but your tenant will want prompt service. It might be a good idea to set aside $100 or so each month to cover the costs of repairs.
Pets–do you want them or not? They can scratch hardwood floors, they can make messes, they can be a nuisance to the neighbors–is it worth it? Many owners charge a substantial amount for permitting pets in a rental. The amount can be determined by the number and size of the pets.
Inspection–the landlord should walk through with the tenant just before the tenant takes possession to be sure that the home is in the same condition when the tenant leaves–
Security deposit–In the Chicago market this is customarily one month’s rent. The tenant should not be allowed to use the security deposit as their last month’s rent. Any additional deposit for pets is over and above the security deposit.
References–three is about right and DO check them. This will give you additional information that is not on the credit check.

Renting is certainly something to think about. If you have more questions than I have answered in the article, Please do call me, 312-981-2360 or e-mail me if you have a question.