The 2019 U.S. Houzz & Home report shows that costs have steadily risen in recent years, a trend expected to continue

 June 5, 2019
Houzz Editorial Staff. Writing about the cost of renovation and what it takes to...More
 
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Spending on renovations of kitchens and bathrooms in the U.S. rose significantly last year, a new Houzz study shows. The increase is likely a result of the ongoing trade war with China.

For kitchens, the median national spending amount jumped 27 percent from 2017 to 2018, according to the 2019 U.S. Houzz & Home report, the largest publicly available survey of residential remodeling, building and decorating activity in the United States. Spending on master bathroom renovations went up 14 percent, while spending for nonmaster bathrooms rose 17 percent. And the trend is expected to continue this year. 

“Last year’s 10 percent increase in tariffs on imported building materials is clearly hitting consumer pockets in areas such as kitchens and bathroom remodels that are heavily dependent on imports of cabinetry, countertops, ceramic tile, plumbing fixtures and vinyl flooring from China,” says Nino Sitchinava, Houzz’s principal economist. “We expect similar effects to take place in 2019, given the recent breakdown in trade negotiations.”

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May 06, 2019

Real Estate Agents Answer: What Are The Most Costly Mistakes Property Investors Make?

 
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Investing in real estate is a gamble, one that either pays off big or sets you back. With that in mind, I've taken it upon myself to ask veteran real estate agents to share their experiences. I asked them to point out the most costly mistakes that investors make. They're listed for you below. Be sure to read them over so that you do not fall prey to the same expensive pitfalls.

Not having a set buying strategy:

"Understand who you are as an investor. Are you looking to invest long term or do you want a quick return on your money? It is important that you have a set plan and do not deviate. A long term plan would be to buy a property, collect income form rent and grow the equity in the property over time. A short term plan would be buying at a good price, doing some improvements, and selling the property in a timely manner for a profit."

Ralph DiBugnara, President of http://homequalified.com/about/" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">Home Qualified and Vice President at https://cardinalfinancial.com/" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">Cardinal Financial in New York, NY.

 

 

Hiring the wrong agent:

"If you're purchasing a luxury condominium you want to hire an agent familiar with that market. If you're buying a ten-unit, multi-family apartment building, you'll need someone with experience in that market. Unfortunately, sometimes I see investors hiring agents who are not familiar with the neighborhood or type of property that they're selling."

http://www.ChicagoRealEstateSource.com" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">Jose Hernandez, Real Estate Consultant with Coldwell Banker in Chicago IL.

 

Forgetting to do their due diligence:

"Investors are always attracted to properties that appear to be priced below the market, but many don't dig too deep to understand why that is the case. This is an especially common concern with all-cash buyers who at times don't bother with inspections and just assume they can take care of any hiccups that arise."

Andrew Weinberger, CEO at https://www.propertyclub.nyc" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">PropertyClub in New York, NY.

Underestimating capital expenses:

"Repair and maintenance costs will be one of the biggest surprises for many beginning real estate investors. Experienced investors will set aside a percentage on the value of the property for ongoing maintenance and repair costs. As the property gets older, the appliances and HVAC system will wear out and the roof will need replacing. You don’t want to be caught unprepared for these capital expenses."

- Scott Hines with https://www.premierbuyersagent.com/" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">Premier Buyer's Agent in Nashville, TN. 

Over-improving the property:

"A huge mistake that investors make is making their property the nicest one on the block. Some investors believe that if they add the most expensive furnishings or decorations it'll guarantee a higher price. This is sound logic if other homes in the area are sporting these same features.

However, if you're the first (and only) investor to add these premium features, it might mean that the buyers in that area aren't interested in a luxury rain shower head or sliding barn doors. Know what repairs will actually produce an ROI as opposed to creating a money-pit of an investment."

-   Marie Oates with https://www.thehivelaw.com/real-estate-lawyer-atlanta-ga/" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">The Hive Law, Real Estate Lawyers in Atlanta, GA. 

Trying to go it alone:

"We see people try to do it alone, without building a solid team. It's really hard to do all things well, and investing in real estate is no different. Unless it's going to be a full-time job, investors should look to assemble a team that will help them execute on their strategy and bring their expertise. Build a team that includes an investment savvy real estate agent, contractors, property management professionals, and accounting and legal expertise."

- Kevin Ortner, CEO of https://www.renterswarehouse.com/offices/minneapolis-st-paul" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">Renters Warehouse in Minneapolis, MN.

As a real estate blogger and content creator from a family of Realtors, home buying and selling is what I know. In addition to Forbes, my work can be found on Realtor.c

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Important Mortgage Tips For First-Time Buyers

 
Be as happy with your mortgage as you are with your new home

Be as happy with your mortgage as you are with your new home

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With the peak spring-summer home buying season in high gear, first-time home buyers are stressed. Finding that dream home in today’s market where affordability is beyond a challenge is often like winning the lottery. Especially for many who are suffering from “buyer fatigue.” Then once you find that ideal home, you should secure a mortgage that makes financial sense both today and for the future.

Here are some “insider” mortgage tips for first-time home buyers. Today, rates for https://www.bankrate.com/finance/mortgages/current-interest-rates.aspx" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">30-year fixed mortgages are at 4.29% and 3.67% for 15-year mortgages according to http://bankrate.com" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">bankrate.com.

Apply For the Mortgage You Can Afford Today

“In today’s market, especially in Southern California where home prices are so high, first-time buyers can end up buying too much home. They may qualify for that mortgage but making that steep monthly payment will impact all other parts of their lives,” advises Miron Lulic, founder and CEO of https://www.supermoney.com/" style="box-sizing: border-box; background-color: transparent; cursor: pointer; color: rgb(0, 56, 145); text-decoration: none; -webkit-tap-highlight-color: rgba(0, 0, 0, 0);">SuperMoney,  an online financial comparison platform. “When you’re committing to pouring you money into an asset like a house, you can put yourself in a tough situation and not have money left over each month to pay for other things like travel and savings,” Lulic observes.

 

 
 
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Comparison Shop

“Asking the right questions when shopping for a mortgage is crucial. Failing to do so could cost you thousands of dollars,” Lulic cautions. Yes, filling out a mortgage application is painful, yet he suggests that should not stop you from applying for a mortgage from more than one source.

“It’s the same as shopping around for any large purchase you’re making. You need to apply for a mortgage and get competitive rates. Now with all the online sites you can quickly submit multiple applications to get an idea of the rates you’ll be offered,” Lulic says. According to Lulic, “more than one in three in for borrowers go with the first lender that gives them a quote.”  You could save a significant chunk of money over time by comparison shopping.

Another word of caution do not immediately go with a lender your real estate broker recommends. Large national brokerage firms often have mortgage subsidiaries that may not offer the best rate.

Getting A Better Rate

“You may be surprised by the options available to obtain a more favorable interest rate.  The obvious things you can do which may have lenders offering a lower rate is increasing your down payment and or reducing that key debt-to-income ratio,” Lulic said.  Some fortunate first-time buyers receive help with down payments from their parents. If both parties are willing, adding parents as a co-signer can trim rates.  “Increasing that down and adding a co-signer reduces a lender’s risk often resulting in a lower rate,” Lulic notes.

Buying Points For a Lower Rate

Buying points is a way lenders often draw borrowers to get their lower advertised rate. “This doesn’t always work to the borrower’s advantage. “It’s a way for lender to get interest revenue upfront instead of over a longer time period,” Lulic cautions.  For example, if you buy $5,000 in points, you pay that upfront as opposed to paying that $5,000 out as part of your mortgage over time. “The lender will give you a lower rate but if you are not planning on staying in the house for a significant amount of time, it just doesn’t make financial sense,” Lulic continues.  To figure it out, factor in the interest rate reduction and how long would it take to reach that break-even point if you bought points. Remember points are a form of pre-paid interest.

Understanding The Rate Lock

When a lender approves you and guarantees a mortgage rate, it has a specific time period until that rate lock expires. If something goes wrong during escrow and it looks like you may be late closing and funding will have to be delayed, you need to ask the lender and get it in writing on what happens specifically and where that rate goes to after the lock expires.

Now you are armed with important information on mortgage hunting. Do take it as seriously as you do finding that first dream home.

I have covered the business of real estate (both residential and commercial) for over twenty-five years. I spent 12 years in the Forbes Los Angeles bureau reporting and ...