Charleston Real Team

Mount Pleasant, South Carolina

We are constantly asked, “Should I sell my home or rent it out for a few years until the market recovers?”

This, of course, is a loaded question with many factors needing to be considered:

• When did you buy your home?
• What did you pay for it?
• What do you owe on it?
• What kind of mortgage do you have - Conventional/Jumbo/ARM, etc?
• Why do you want to sell?  For financial reasons/job relocation, etc?
• Will you eventually move back into your home?

and on and on. 

If you bought your home within the last 3-6 years it is likely that it is worth less or the same as it was when you bought it.  Thus, you will need to get an estimate of the worth of the property and the cost of selling it in order to see what your net proceeds/deficit will likely be.  If you are likely to be in a deficit situation, you will need to determine if you will be able to bring to closing whatever amount you will owe your lender after the sale is consummated.

This is where it gets tricky for most people.  Most of us are not used to the proposition of bringing money to closing when we are selling a property (Many of us actually weren’t thrilled with bringing money to closing even when we were buying a property, which is one of the many reasons we are in the mess we are in!).  We are used to selling our homes and getting a check at closing.  Regardless of how long we owned the home, what we paid over the years on the mortgage, what we paid for it versus what we sold it for…we just love to leave the closing with that check.  So when the concept of writing out a check or having to negotiate terms for a home we are selling hits most people - we look for alternatives/options.

“I can rent out my house for a few years until the market recovers and then sell it.”  This is a tricky concept and is influenced by many factors.  Depending on the timing of when you bought your home and at what price, you may have to wait 10 years or more to see the same prices again.  I know a lot of people with a lot of varying opinions on the market and its recovery.  What I do know is this - no one knows for sure.  What if you house is worth today more than it will be worth again for a long time - more than 5 years?  My point here is to seek honest, credible advice using real data and credible estimates of value and future value in the process of making a decision.  Further, it is critical to also understand your options not just about selling or renting but your mortgage/financial options from a credible and neutral  mortgage/financial professional.  You may learn that there are more or better options available to you.

So you decide to go the rental route - here are some things to consider:

• What is the going rental rate in your market? 
• How does this compare to your mortgage payment?
• Are you prepared to make up the difference if needed?
• Do your property takes go up if your residence becomes and investment property?  In South Carolina, the property tax rate for an investor is 6% versus 4% for a resident.
• Will your homeowner’s insurance go up or stay the same?  In SC, the rates change a bit on investment property?
• What kind of were and tear will tenants have on my property?  Who is responsible for what?  How is that determined?
• Should I rent it out myself or hire a property manager?  What are the costs?
• How will renting out my home effect my taxes?

and so on.

On the rental side of the equation, you also need to seek out qualified, professional advice for the financial/tax implications and for the real estate/property management process.  When I used to think of property management, Duane Schneider of “One Day at a Time” or some other shady character always came to mind.  Now that I own a property management company - I am afraid Duane looks pretty good.  In some ways I am kidding, but unfortunately in some ways I am not.  

Finding a professional, established property management company that can provide references is critical.  You may choose to go the route of managing your own property - in this case seek out others who do it themselves for advice and guidance.  I firmly believe hiring the right property management firm to handle it for you is the way to go.

The property management company should be able to explain to you and provide for you in writing a detailed outline of their services - marketing the property, screening and selecting tenants, pet policies, collecting rent, paying net rent to owners, profit and loss statements, end of the year tax statements, how repairs/damages are handled, communications with tenants/owners, options for home maintenance, eviction procedures, etc.  You should invite your prospective property manager to come to your home and walk thru it.  They should then be able to give you information/advice on pricing, the time expected to secure a tenant, as well as specific recommendations to get your home ready for marketing/tenants.

Exhausted/scared yet?  Feel free to email us or respond to this blog post for more advise or information.  Our company websites are also at your disposal: 

For real estate sales: www.charlestonrealteam.com

For property management: www.palmettostatepropertymanagement.com

 - Jim Grady - Owner/Partner The Charleston Real Team - Keller Williams Realty; Owner/Partner Palmetto State Property Management, LLC Mount Pleasant, South Carolina

Charleston Regional Business Journal Staff Report
Published Feb. 24, 2010

While statewide home sales in January increased 15% over sales in January 2009, Charleston area home sales increased 11.8%, according to numbers released by the S.C. Realtors Association Tuesday.

Sales in the Greater Columbia region dropped 3.7% to 362 homes sold in 2010 from 376 in 2009.

However, the total number of statewide homes sold in January was 2,487 up from last January’s total of 2,159. Several markets reported large increases in year-over-year home sales, including a 103.6% increase in the Hilton Head area, a 50.4% increase in the Grand Strand and a 42.6% increase in the Aiken area.

However, not all the news is good. Statewide home sales dropped 29% from December to January, the association reported.

Statewide, the median home price dropped slightly from $140,500 in December to $140,000 in January and the number of days a home sat on the market increased from 153 to 155.

MLS Stats January 2010

Courtesy scbizmag.com Staff Report

CHARLESTON — An analysis by a Dow Jones financial markets publisher has put Charleston in the Top 50 best cities in which to do business.

MarketWatch scored the nation’s 101 largest metropolitan areas — those with 500,000 or more people — using 10 metrics, including five that measured companies per capita and five that looked at economic stability, including employment, growth and gross domestic product.

South Carolina’s major markets were in the middle third of the list:
• Charleston ranked 47.
• Columbia ranked 56.
• Greenville ranked 67.

The three best places for business were:
• Des Moines, Iowa
• Washington, D.C.
• Omaha, Neb.

The bottom of the list included:
• Scranton, Pa., at 99.
• Fresno, Calif., at 100.
• Youngstown, Ohio, at 101.

See the entire list and scores from MarketWatch online.

Happy New Year from the Charleston Real Team and Palmetto State Property Management.  Here is to a great year - 2010!  Please always keep us in mind for all of your Charleston South Carolina real estate needs.

This beautiful 5 bedroom 3 and one half bathroom Lowcountry home boasts over 3000 square feet of living space and sits on a private lot featuring beautiful Live Oaks. The home features a full front and wrap-around side porch w/gas lanterns at the front entrance. First floor features include: hardwood floors; crown molding; dramatic vaulted ceilings; formal Dining Room w/wainscoting and chair-rail; an open Great Room w/ a gas-log fireplace with granite surround and built-in bookcases and base cabinets; the spacious gourmet kitchen has maple cabinets, stainless steel appliances to include wall ovens and a gas cook top, granite countertops, and an eat-in breakfast area that has access to the side porch; the laundry room is located off the kitchen and has a ceramic tile floor. The large Master Bedroom is also on the first floor and features a tray ceiling, crown molding, and access to the large screen porch at the rear of the property. The master bathroom has tile floors, double bowl vanity, Jacuzzi tub, separate shower, and two large walk-in closets. Upstairs are three large bedrooms and a full hall bathroom with a double bowl vanity and ceramic tile floor. The finished room over the garage (FROG)/bonus room can be the fifth bedroom and has its own full bathroom. Other features of this home include a large screen porch w/ views of the two beautiful Live Oaks in the spacious and private backyard, side entry two-car garage, security system, and beautiful landscaping with a full irrigation system. Hamlin plantation amenities include…A beautiful Plantation-style Clubhouse, junior size Olympic pool with water slide, fitness center, tennis courts, beach sand volleyball court, basketball court, walking and bike trails and boat storage facility.

Click here for a  Virtual Tour 

Call Gary Short - (843) 296-2046 or Jim Grady (843) 460-4939 for a showing. 

Click here for more pictures and information - Home Website

Temporary tax credit for first-time homebuyers, low prices drive boom

Not a bad article - they did not misquote me but did not use the full context of our 20 minute interview…

Call it the first-time homebuyer bump.