Explanation on How Some Hidden Holding Costs Can Lead to Losses for Home Sellers

Have you checked your hidden holding costs?

Selling a house with the help of a real estate agent and listings method is the usual go-to approach for most home sellers. However, it isn’t necessarily the best method for sale for everyone. Besides the staging, marketing, and commission costs, certain costs slowly add up as owners wait for a deal to go through. Identifying these costs can help home sellers assess if sale via listings is a lucrative option for them in the long run. 911Houses.com dives into some of these holding costs that can ambush an owner. 

What are holding costs?

In real estate, ‘holding costs’ entails all expenses incurred by an owner of an investment property of any type pending receipt of rental income from a tenant or the proceeds on the sale of the property to another party. 

Home sellers must be aware of these costs so they can make better decisions regarding their home sales.

1. Property price drop

The real estate market can be unpredictable. Home sellers may have posted a listing for a certain price, to begin with. But as time progresses, this price may not remain aligned with the market. A house that remains on the market for too long may force an agent to lower the price as a last resort. But while this may seem wise at that moment, the expenses made to hold the property may exceed the profits expected at the new sale price. 

2. Utility bills

When potential buyers come to view a property, they will always inspect the utilities such as heating and lighting. Therefore, home sellers with vacant houses must retain their utility services. The temptation to save money by disconnecting the services must be overlooked as the cost of losing a potential buyer will be higher.  

3. Property taxes

Besides the size, the location such as the township, city, or county determines the property taxes. The property owner is obligated to pay the tax to the government to avoid a penalty. This holding cost will continue until the property is legally signed over to a new owner. Home sellers must assess if they can afford to pay property taxes for vacant property and if their final sale price will be worth this holding cost.

4. Maintenance and repair costs

Before the staging event, an owner may decide to invest in the repairs to receive a good offer. However, with or without the staging events, a home requires maintenance and may sometimes need an unexpected repair. From light fixtures, lawn maintenance, a/c filters, and other unexpected repairs like termites and mold, home sellers must be prepared to spend. They must also calculate if the expected sale price will compensate for these expenses. Is it worth it?

5. Insurance coverage

Insurance is an expected expense. Often it is included in a homeowner’s mortgage payments. However, a homeowner’s insurance policy doesn’t cover everything. Homes in flood-prone areas or any water damage coverage requires owners to buy extra insurance. This can be expensive, especially if the home is lying vacant waiting for a buyer.  

6. Miscellaneous costs

Other costs such as HOA fees for homes in private communities and property management fees (to manage the home sale and maintain the house in an owner’s absence) can prove to be big expenses.  

When a home seller can calculate these holding costs and compare them with the expected sale price, profits and losses are easy to surmise. In case of high holding costs and potential losses, a home seller may want to opt for a cash sale instead. This not only ensures a fair sale price but also takes away all the associated hassles of selling a property via listings.  

Why 911Houses.com?

911Houses.com is a reputable real estate investment company that buys houses for cash in Tampa, FL, and the surrounding areas. Unlike regular real estate companies, with 911Houses.com, property owners don’t have to list their homes, pay for expensive repairs, or worry about a prospective buyer backing out due to lack of financing. 

911Houses buys homes directly from owners and closes the deal within 7 days. Ready to get started with 911Houses to sell home fast for cash?

Visit www.911houses.com/ or call (813) 345-2660 for more information.

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source https://btgh.com/press-releases/explanation-on-how-some-hidden-holding-costs-can-lead-to-losses-for-home-sellers/

Florida real estate market - the investor’s paradise

 

Come 2022, Florida remains one of the hottest real estate markets in the country. From home value index, home price growth, rent index, and gross rent multiplier, everything looks promising for the real estate market in 2022. Bay To Gulf Holdings discusses the factors that will continue to keep Florida real estate an investment worth making.

Florida is an international tourist destination with stunning beaches, near-perfect weather, and world-class theme parks. Its economy is dynamic and diverse, with dozens of global business headquarters and a government that is both pro-business and pro-development.  

Here are some of the factors that continue to boost the real estate market in Florida: 

1. Population growth

The US Census statistics show that Florida’s population reached 21.5 million in 2020, up 14.6% in the past decade. The work-from-anywhere trend since the advent of pandemic accelerated the influx of new population, which is expected to continue in the coming years. The State of Florida expects 845 new residents per day through April 2025, representing an annual compound growth rate of 1.39%.

2. Job market

The pro-business and pro-development government rules make Florida one of the most ideal business locations. The job market in Florida continues to attract new high-wage jobs for workers who can compete on a global scale.

Job growth in Florida increased 5.4% between January and September 2021, compared to just 0.8% nationally. Jacksonville and Tampa are ranked by MoneyGeek as two of the best six cities for job seekers. Florida is also one of the top five states with the best business tax climates.

3. Real estate market

Statistics show that home sales and prices are rising, inventory is decreasing, and the number of buyers paying in cash for single-family homes has increased by almost half. Every metropolitan area in the state has experienced an increase in home prices by double-digits in the third quarter of 2021. 

4. Strong renters’ market

With the new population gravitating towards the state, there has been a record hike in rents. The in-migration from the Northeast and West Coast by Florida’s thriving job market, lack of state income tax, and abundant sunshine have put the landlords in a very strong position to demand high rents.

34% of the houses in Florida are on rent indicating the growth in the rental market. The median household income in Florida is $59,227 and per capita income is $32,887. This bodes well for real estate investors in Florida.

5. Historic price changes & affordability

The latest Index shows that home prices in Florida have increased by more than 156% since October of 2000. According to the US News & World Report, Florida is ranked at #31 in affordability, meaning that it has one of the least affordable housing markets among all 50 states. 

6. Mortgage rates and equity

The mortgage rates in 2021 have been historically low and even though the rates may go up slightly in 2022, they will still be in the 3-3.5% range. This low mortgage rate makes homes in Florida affordable for investors. Moreover, the statewide appreciation of home values will help buyers tap into their increased equity when they make purchases. 

7. Quality of life

With a perfect work-life balance, great job opportunities, near-perfect weather, rich culture, and thriving recreational activities, Florida is a magnet for many people due to these reasons. US News & World Report ranks Florida as the 10th-best state in the country, including top-ten ratings for education, economy, and fiscal stability. Florida has more than 1,300 golf courses, hundreds of miles of white sand beaches, numerous outdoor recreation activities, stellar theme parks, international shopping venues, and a vast array of sporting events.

 

Why Bay to Gulf Holdings?

Bay to Gulf Holdings is the umbrella company that runs Rehab and Flip, and 911Houses. 

Rehab and Flip specialize in helping investors looking for Florida real estate investment opportunities through its custom searches, rich network, and industry insights. Whereas 911Houses helps homeowners sell their homes for quick cash, no matter the condition of the house. 

With its quick closings, quick rehab turns, quick flips, convenient move-outs, paperwork handling, and smooth sale and purchase mechanisms, Bay to Gulf Holdings makes real estate investment in Florida a breeze. 

To sell a home for quick cash or invest in lucrative real estate, email investment.team@btgh.com or call at (813) 476-3199.