Category Archives: Real Estate Investment

Investing in Massachusetts and Rhode Island real estate, whether commercial property, multi family residential property, retail space, or single family homes, this blog is all about all of it.

Renting Vs. Owning Your Home: Which is Best In the Current Market?

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This post gives a pretty good argument for purchasing in our current market where mortgage rates are near all time lows, where home prices are at historic lows, and where there is so much inventory to choose from, that perhaps owning is a better idea than many think.

While many think renting is in some ways safer than purchasing, there is virtually no investment value to renting, while from what we can tell, the residential market is nearing its decades long low in pricing, mortgage rates are very low, and housing is the most affordable it has been in Rhode Island since the 1970s…

“In this uncertain real estate market, where so many people are feeling trapped by their ‘underwater’ homes, I’ve had a lot of folks telling me that they’ve made the switch from buyers to renters, and they’re never going back. The reasoning behind this is that they are then free to move as the job market dictates, without being trapped by a collapsing market. They can also look around and choose where they want to live if circumstances change – without the burden of having to sell the home and potentially losing equity and time, along with the stress of having strangers traipse through the house while it is listed!

“Sounds reasonable, but let’s take a look at the other side. Sure, we’re going through a severe market correction, but market corrections don’t last forever. When the market is heading up, it’s nice to see the equity building in your largest asset: your home. It’s only if you have to sell that you really feel the pain in a down or collapsing market. The home that you live in doesn’t change its location or amenities just because its value has decreased, and you can put money and sweat equity into your home to make it a nicer and a more comfortable place to live. You’re hardly likely to feel motivated to do that to your landlord’s property – plus, you can choose the colors you like and the changes you want without their approval! Shelter is one of the three basic human needs (besides food and water), and I don’t see it going out of style anytime soon – one proof being that even our children are willing to move back and live with us under our rules because they have to have a place in which to live.

“There are also tax advantages to owning your home. While you cannot deduct the rent you pay for your living space, you can deduct interest charged against your mortgage and real estate property taxes that you pay. Additionally, you have the security of knowing that the landlord cannot kick you out or raise the rent to outrageous levels if the rental market takes off. There is some talk in congress about removing or modifying the interest deduction; with a down market and high unemployment, the last thing we need is an additional tax burden. It might be a good idea to let your local representatives know how you feel.

“Contrarians I talk to say that now is the time to buy, when everyone else is selling, but I would say you should only do it if you won’t get in over your head. If you have the time, money, and inclination to purchase real estate, then now is the moment; otherwise, you might have to hunker down and ride this one out.

“I don’t think inflation and population increases — which will eventually raise all our real estate values — are going away. The sci-fi image of desolated cities with squatters who are not paying rent, living wherever they can get in, is just that: a fiction and not a reality. The reality is — and I heard this on the evening news — that they are offering homes in some cities to firefighters and police officers for $1,000 to encourage them to move into certain down sections of town. The deals are out there and I can see inflation hitting us in the not too distant future. This will be when the depressed and short sale housing you bought today will be worth a lot more money than you paid for it!

“Someone I know bought a nice co-op for $50,000 in Manhattan during the garbage strikes in 1974, when everyone thought that that was the end of the city. That same co-op today, combined with the unit next door, was recently published as one of the top closed sales of 2010 for selling at $25 million. Of course, my friend had sold in the 80’s when the apartment went for $1.5 million and thought he had cleaned up then. Timing is everything!”

By Rick Grosvenor, Newport RI

All I can say is that timing has some merit, but we should by no means expect our home to turn us into $$ millionaires $$ over night… nor should we  by a property as our primary residence based solely on investment value, but rather should account for education facilities (also important for resale) neighborhood, proximity to work, style and space, and much much more.

For some assistance in choosing, finding, and acquiring the home of YOUR dreams, give us a call 401-293-0631 or send us an email.

HUD Redefines “Foreclosed” to Include 60-Day Delinquencies

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HUD has announced that it’s changing how it defines foreclosed to include properties in default and abandoned with lingering code violations. Effective immediately, HUD is classifying any property that is at least 60 days behind on the mortgage or the property owner is 90 days or more delinquent on tax payments as a “foreclosed” home.

In addition, HUD is expanding the definition of an “abandoned” property to include homes where no mortgage or tax payments have been made by the property owner for at least 90 days or a code enforcement inspection has determined that the property is not habitable and the owner has taken no corrective actions within 90 days of notification of the deficiencies.

HUD officials say the new definitions will help communities acquire, rehabilitate, and re-sell foreclosed and abandoned properties more quickly under the Neighborhood Stabilization Program (NSP) and help prevent further decline in hard-hit neighborhoods.

Also, the FHA has a moratorium in RI for three months on foreclosures due to the flooding.

Mandie Sullivan, ABR, SFR: 2 closings last week, one this week, and 4 more scheduled

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I just wanted to congratulate Mandie Sullivan on her 2 closings last week and on the one scheduled for this week… For short sales, foreclosed properties, investment properties, first time buyers or second home seekers, Mandie is your best bet for professional, high quality service.

She would have had three close last week, but one of her listings had a buyer who although pre-approved, somehow failed to let the lender know that he was not employed until June… how the guy was pre-approved is beyond my ability to understand.

Great Job Mandie!

Also want to congratulate Nancy Rosedale for her never ending energy and focus in dealing with her commercial clients… if ever there was an agent that understood cap rates, cash flow, rental markets, and commercial financing, it is Nancy Rosedale.

We are looking forward to a great season ahead, and are able to handle some additional buyers and listings… give us a call at 401-293-0631 or use our contact form for sending an email.

Has housing reached a turning point or a point of no return?

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While the pundits and politicians discuss the housing crisis and the various ways to effect a recovery, the question to consider is: Has housing reached a turning point or a point of no return? It appears that housing is unlikely to return to its most recent glory days. But that’s not necessarily a negative interpretation; it just means that the housing market of the future will look dramatically different from that of the past decade.

graph trending upwards

We now know that the housing boom of 2004 – 2006 was temporary and artificial. It wasn’t an indication of forever escalating prices; though many seemed to believe so. The boom market was a bubble of inflated prices and irrational expectations of outlandish profits. Just as the stock market bubble that preceded the Great Depression created investors of doormen, maids, construction laborers, bartenders, and others seeking to capitalize on skyrocketing stock prices; the housing bubble created a wild frenzy of speculation and inflated home prices that was impossible to sustain.

Homeowners who purchased anticipating great profit, as well as investors, flippers, real estate agents, mortgage brokers, and those who bought early enough to borrow against their profits, have seen their dreams of easy cash and growing equities vanish. More than two million of those homes have fallen to foreclosure, and millions more are doomed to follow.

Hindsight is great, and shows the error of such paths. We should have known better, but we didn’t want to miss what appeared the opportunity of a lifetime. Homes, however, are not a commodity to be traded like soybeans, pork bellies, or precious metals. Homes are just that, a place to live, raise a family, create memories, and find solace at the end of day.

So, has housing reached a turning point or a point of no return? Perhaps it’s done both. Perhaps we’ve learned a valuable lesson—some of our most important ones come at a great price—and though the cost for many has been unbearable, the lessons remain. The bursting of the housing bubble may ultimately restore order to both housing and the financial markets; and the artificial market is doubtful to return until some future time when its memory has been erased.

roasting marshmallows

With that in mind, should anyone buy a home today? Of course, those who need one. However, some of those motivated solely by profit may find disappointment. Will home prices increase? Without question. But there is a question of time, and how  much will be required before prices increase. History tells us that the prices of those homes bought with careful consideration of both location and value will increase at a rate above the rate of inflation. If we do better, that’s great. If we don’t, we mustn’t lament, for we bought a home; and that can be worth far more than money in the end.

Happy Holidays From Focus Professionals, Inc.

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We would like to take this opportunity to wish all of our friends, clients, and associates a very happy holiday season.

It is at this time of year we sit down and take stock of what has transpired over the course of the previous year, and work to set our goals and methods for achieving them. For certain, the last year has been a challenging one for the real estate industry, and especially for the market in Rhode Island. Never the less we have had a record year in terms of the number of transactions, and close to a record in terms of revenues to the company and to our investors. We are planning the coming year with the idea that we can do at least as well, if not better, despite continued pressure on the market.

We plan to bring this same purpose and methodology to our clients and investors in the coming year.

We hope that you have a very prosperous 2010, that you and yours remain or gain in health and joy, and that the new year proves to be among the best you have had.

Thank you for your continued support. Have a very wondrous holiday season, and a very good new year!