All posts by Doran

To maximize returns on investment properties, real estate investors should focus on thoughtful, high-impact rehab improvements that enhance both functionality and appeal, moving beyond simple cosmetic fixes, and cater to evolving buyer trends. 

Small Kitchen Changes Could Make Buyers Fall in Love at First Bite

You’re absolutely right, a few strategic kitchen upgrades can significantly enhance a space without requiring a full renovation!Updating lighting, hardware, or even a backsplash can make a big difference in creating a modern and welcoming kitchen. 

Here’s a breakdown of why and how:

Why these upgrades matter:

• Modernization:Outdated elements like old-fashioned lighting or hardware can make a kitchen feel dated and less appealing. 
• Enhanced Functionality:New lighting can improve task lighting and overall ambiance, while updated hardware can make cabinets and drawers easier to use. 
• Increased Value:These upgrades can add value to your home, both aesthetically and practically. 
• Affordability:These upgrades are often less expensive than a full kitchen remodel. 

Specific upgrades to consider:

• Lighting:
  • Replace outdated fixtures:Consider modern or industrial-style pendant lights, recessed lighting, or under-cabinet lighting. 
  • Install dimmer switches: This allows you to adjust the lighting to create different moods. 
• Hardware:
  • Replace cabinet knobs and pulls:Choose hardware that complements your style and cabinet design. 
  • Upgrade drawer pulls: Consider sleek, modern options for a more contemporary look. 
• Backsplash:
  • Install a new backsplash: A backsplash can add a pop of color or texture to your kitchen. 
  • Consider peel-and-stick tiles:These are easy to install and can be a budget-friendly option. 
• Other ideas
  • Countertop resurfacing: This can give your countertops a fresh look without the expense of full replacement. 
  • Paint or wallpaper: Changing the paint color or adding wallpaper can refresh the backdrop. 
  • Add open shelving: This can create a more airy and modern look. 
  • Update flooring: Consider wood plank tile or luxury vinyl plank (LVP) for a modern look

How Bathroom Remodels Impact Home Value

Simple bathroom upgrades like a filtered rainfall showerhead, a sleek floating vanity, and updated lighting can transform small or outdated spaces into luxurious retreats without a full remodel. 

Here’s a breakdown of how these upgrades can make a difference:

1. Showerhead Upgrade:

• Filtered Rainfall Showerhead:A rainfall showerhead provides a spa-like experience, and incorporating a filter can improve water quality and skin health.
• Benefits:
  • Relaxation: The gentle, wide spray of a rainfall showerhead can be incredibly relaxing.
  • Water Quality: A filter can remove impurities and chlorine, leading to softer water and healthier skin and hair.
  • Aesthetic Appeal: Modern rainfall showerheads often have sleek, contemporary designs that enhance the bathroom’s look. 

2. Vanity Upgrade:

• Sleek Floating Vanity: A floating vanity creates a sense of spaciousness and modern elegance.
• Benefits:
  • Aesthetic Appeal: Floating vanities have a clean, minimalist look that can elevate the bathroom’s style.
  • Space Optimization: By mounting the vanity to the wall, you gain floor space, making the bathroom feel larger.
  • Easy Cleaning: Floating vanities are easy to clean, as there’s no base to collect dust and debris. 

3. Lighting Upgrade:

• Contemporary or Energy-Efficient Fixtures:Updating lighting fixtures with modern designs and energy-efficient LED bulbs can brighten the space and save money.
• Benefits:
  • Enhanced Ambiance:Contemporary lighting can create a more sophisticated and relaxing atmosphere.
  • Energy Savings: LED bulbs use significantly less energy than traditional incandescent bulbs, saving money on electricity bills.
  • Longer Lifespan: LED bulbs last much longer than traditional bulbs, reducing the need for frequent replacement.

WHAT ENERGY-EFFICIENT UPGRADES ARE BUYERS LOOKING FOR

To make your home more appealing to buyers in 2025, consider smart and energy-efficient upgrades like energy-efficient appliances, solar panels, programmable thermostats, LED lighting, energy-saving windows, and upgraded HVAC systems. 

Here’s a breakdown of those and other smart and energy-efficient upgrades that can boost your home’s appeal:

Appliance Upgrades:

• Energy-Efficient Appliances:Replacing older appliances with energy-efficient models (refrigerators, washing machines, dishwashers) can save buyers money on utility bills, making your home more attractive.
• Smart Appliances:Consider appliances with smart features like Wi-Fi connectivity and remote control, which can add convenience and appeal to modern buyers. 

Smart Home Features:

• Programmable or Smart Thermostats:These allow buyers to control their home’s temperature remotely and save energy, a popular feature for modern buyers.
• Smart Lighting:Invest in smart lighting systems that can be controlled via voice or app, adding convenience and a touch of luxury.
• Smart Security Systems:A modern security system with smart features like motion sensors, cameras, and remote access can enhance security and appeal to buyers. 

Energy Efficiency Improvements:

• Solar Panels:Solar panels can reduce or eliminate electricity bills, making your home more sustainable and appealing to eco-conscious buyers. 
• Insulation:Ensure your home has proper insulation to reduce energy consumption and maintain a comfortable temperature year-round. 
• Energy-Saving Windows:Upgrade to energy-efficient windows with features like double or triple glazing and low-emissivity coatings to minimize heat loss and gain. 
• Upgraded HVAC Systems:A modern, energy-efficient HVAC system can save buyers money and provide better comfort, making it a valuable selling point. 
• Attic Ventilation:Ensure your attic has proper ventilation to prevent moisture buildup and improve energy efficiency. 
• Air Sealing and Insulation:Air sealing and insulation work together to prevent drafts and improve energy efficiency, which is a significant selling point. 
• Exterior Siding:New siding can enhance curb appeal and improve energy efficiency, making your home more attractive to buyers. 

Turn a Flip Into a Home With Muevo

Upgrading an investment property requires careful planning and smart choices to maximize ROI without depleting your cash reserves, focusing on cost-effective upgrades and smart financing options. 

Here’s how you can upgrade an investment property without depleting your cash reserves:

1. Prioritize High-Impact, Cost-Effective Upgrades:

• Focus on Kitchen and Bath Remodels:These are often the most impactful areas for increasing property value and tenant appeal. 
• Choose Durable and Attractive Flooring:Opt for long-lasting options that are both aesthetically pleasing and easy to maintain. 
• Improve Energy Efficiency:Upgrades like new windows, insulation, and smart thermostats can reduce long-term operating costs and attract environmentally conscious tenants. 
• Consider Smart Home Technology:Simple, cost-effective tech upgrades like smart locks, security systems, and automated lighting can enhance the property’s appeal and safety. 

2. Smart Financing Strategies:

• Home Equity Lines of Credit (HELOCs):HELOCs can provide flexible financing for renovations, allowing you to borrow against your existing property equity.
• Personal Loans:If you have good credit, a personal loan can be another option to fund renovations.
• Hard Money Loans:These are short-term loans from private investors, often used for quick flips or renovations before refinancing.
• Cash-Out Refinance:Refinance your existing mortgage to take out a larger loan and pocket the difference for renovations.
• Consider a HELOC:A HELOC is a revolving credit line that allows you to withdraw funds as needed, similar to a credit card. 

3. Build a Strong Cash Reserve:

• Regularly Allocate Funds:Set aside a portion of your rental income each month to build a reserve fund for unexpected repairs and maintenance. 
• Review and Adjust:Periodically review your reserve fund to ensure it’s adequate to cover potential expenses and adjust as needed. 
• Document Everything:Keep detailed records of all expenses, including repairs, maintenance, and upgrades, to track your spending and budget effectively. 
• Consult Professionals:Seek advice from property managers or financial advisors to determine the optimal reserve fund level for your specific situation. 
• Consider a Rent Guarantee:Some services offer rent guarantees to help reduce the financial risks of renting and protect your income during periods of vacancy. 

The vacation rental investment market has seen significant growth recently because it offers the potential for high rental income due to short-term rentals, flexibility in pricing based on demand, and the ability to capitalize on popular tourist destinations, often generating a higher return on investment compared to traditional long-term rentals. 

This statement is accurate; when the economy improves and people have more disposable income, they tend to spend more on leisure activities like vacations, as increased disposable income directly translates to greater spending power for discretionary items like travel.

This statement means that while a vacation rental property is technically a form of real estate investment, it comes with significantly different dynamics compared to a typical long-term rental property, often requiring more active management, higher turnover rates, and greater dependence on seasonal demand, making it a more complex and potentially riskier investment choice. 
Yes, understanding local markets and projected revenue is important when buying a vacation rental property. You should also consider the costs of operating the property, such as maintenance, cleaning, and marketing. Before purchasing a vacation rental property, prospective buyers should carefully consider the location, thoroughly analyze the market to understand rental potential, be realistic about potential income, research local regulations, calculate potential ROI, factor in maintenance costs, and ensure the property has necessary amenities like quality bedding and chargers for guests. 

Steps for Investing in Vacation Rentals

Before considering a vacation rental property purchase, you should first determine your desired location, research the local rental market to understand demand and average rates, assess potential income and expenses, analyze local laws and regulations regarding vacation rentals, calculate potential return on investment (ROI), and factor in anticipated maintenance costs and insurance requirements. This statement means that buying a vacation rental property isn’t just like buying a regular home, as it involves unique considerations like analyzing peak tourist seasons, local regulations regarding short-term rentals, potential maintenance needs due to high turnover, and understanding the market dynamics to maximize rental income, thus requiring a specific approach to research and decision-making. This statement means that while some people might think starting to invest in vacation rental properties is a complex and daunting process, the reality is that it can be more accessible than most people believe, with potential entry points for investors even with a moderate level of experience or capital. This statement means that the process being described has been simplified into five clear, straightforward steps that even someone with a strong work ethic but without extensive expertise can understand and execute effectively, emphasizing the importance of thorough investigation and careful consideration throughout the process.This statement means that before making any real estate investment decisions, regardless of the type of property or strategy, it’s absolutely crucial to thoroughly research and gather information about the market, potential properties, and related factors to make informed choices and minimize risk. 

Do Your Homework

“Location, location, location” is a real estate mantra that emphasizes the importance of location when buying a property. It’s often repeated three times for emphasis. This statement is generally considered true in real estate, as the location of a property is often seen as the most crucial factor influencing its value and desirability, since it cannot be altered unlike features within the property itself. This statement means that when considering buying a property to use as a vacation rental, the most crucial initial decision is to choose the right geographic location, as it significantly impacts the potential for rental income and demand from travelers. When evaluating a potential location for a vacation rental property, key factors to consider include: strong tourist demand, a healthy local economy with good employment rates, favorable weather conditions for outdoor activities, proximity to major attractions and amenities, a balanced inventory of rental options, and limited competition in the desired property type; while also taking into account local regulations, property taxes, and potential maintenance costs associated with the area and property type. This statement means that when buying a property, especially one intended for rental purposes like a vacation home, it’s crucial to not only focus on the raw financial numbers (price, potential return on investment) but also prioritize the location’s appeal and convenience for potential guests, as a desirable location will significantly impact how easily you can attract renters. 

Conduct an In-Depth Market Analysis

When you’ve narrowed down your potential business locations, the next step is to deeply analyze the market in those specific areas to understand the level of demand for your product or service, including factors like customer demographics, competitor presence, local economic conditions, and potential market size to ensure your business can thrive there. When evaluating a potential vacation rental investment, the key is to assess whether the location has enough diverse, appealing attractions to draw consistent tourist interest throughout the year, ensuring a sustainable income stream regardless of season, and to consider if the type of property you’re considering aligns with current vacation trends in that area; essentially, ask yourself if you would personally want to vacation there and what kind of experience you’d be looking for. Key points to consider:

• Attraction variety:
  • Diverse activities: Does the area offer a mix of outdoor activities (hiking, water sports, skiing), cultural attractions (museums, historical sites), nightlife, dining experiences, or unique local events that appeal to a wide range of travelers? 
  • Seasonal appeal: Do the attractions maintain their appeal throughout the year, or is the demand heavily concentrated in peak seasons like summer or winter? 
• Location proximity:
  • Accessibility: How easy is it for guests to access the main attractions from your potential rental property? 
  • Neighborhood character: Does the surrounding area offer amenities like restaurants, shops, and public transportation? 
• Market research:
  • Occupancy rates: Analyze data on average occupancy rates for similar vacation rentals in the area to gauge potential income. 
  • Booking trends: Identify peak seasons and events that drive significant visitor traffic 
  • Competition analysis: Evaluate the quality and pricing of other vacation rentals in the immediate vicinity 
• Property type suitability:
  • Guest demographics: Consider who your target traveler is (families, couples, groups) and choose a property type that caters to their needs 
  • Unique features: Does your property offer something special like a private pool, stunning views, or proximity to a unique experience? 

Example scenarios:

City center:Consistent demand year-round due to cultural attractions, dining, and business travel 

Understand the Rhythm of Vacation Rentals

When considering a vacation rental property investment, it’s crucial to understand that income is highly seasonal, meaning demand and prices fluctuate significantly depending on the time of year. A house near the beach will be most popular in summer, while a ski lodge will see peak demand during winter.You need to research expected income during peak and off seasons to accurately assess the potential profitability. 

Beyond seasonal variations, owning a vacation rental involves additional costs beyond traditional homeownership. Furnishing, cleaning, and maintenance are regular expenses. Insurance costs might be higher due to the nature of the property (near water, potential for floods). A larger down payment and higher interest rates are typically required when purchasing a vacation rental. 

Key points about vacation rental seasonality:

• Peak season: The time of year with the highest demand and rental prices. 
• Off-season: The period with lower demand and potentially lower rental prices. 
• Market research: It’s essential to study the historical data for your specific location to understand seasonal trends. 

Calculate Your Expected Income and Expenses

When evaluating a potential vacation rental property, focus on markets with high demand and positive cash flow projections; aim to set rental rates 10-20% higher than your monthly mortgage payment, adjusting based on local competition; anticipate seasonal fluctuations by factoring in a 25% vacancy rate, and always consider additional costs like HOA fees, maintenance, and property management fees to ensure your potential income surpasses all associated expenses before committing to a purchase. 

Key takeaways:

Professional Management:If investing remotely, strongly consider hiring a property manager to handle day-to-day operations and maximize rental income. 

Market Research is Crucial:Thoroughly research the area to understand demand levels and set competitive rental prices that align with the local market. 

Pricing Strategy:Set your rental rate at least 10-20% above your monthly mortgage payment to ensure consistent profit, but be mindful of not pricing yourself out of the market. 

Seasonal Fluctuations:Account for potential downtime during off-peak seasons by factoring in a 25% vacancy rate in your calculations. 

Consider All Costs:Don’t just consider the mortgage;include HOA fees, maintenance costs, and potential property management fees when assessing your potential profitability. 

Beach town:High summer demand due to swimming, sunbathing, and water sports, but potentially lower occupancy in winter unless there are winter activities like whale watching or birdwatching. 

Mountain resort town:Peak season in winter for skiing and snowboarding, with potential for hiking and outdoor activities in the summer 

Advertise Your Property

When marketing your vacation home, the most effective strategy is to list your property on popular platforms like Airbnb (ideal for city rentals and high-traffic areas), VRBO/HomeAway (good for consistent rentals in high-demand locations), and consider niche sites like Rent Like a Champion for event-based bookings; additionally, creating your own dedicated website with detailed information and visuals can further attract potential tenants and maximize your booking potential. 

Key points about each platform:

• Airbnb:Most widely recognized, best for urban rentals and popular destinations, has no annual fee, and offers a user-friendly mobile interface. 
• VRBO/HomeAway/VacationRentals.com:Includes multiple platforms with a large listing pool, but comes with a higher annual fee, suitable for high-traffic areas with consistent rental demand. 
• Rent Like a Champion:Perfect for locations hosting periodic events like college football games or major races, allowing you to capitalize on short-term demand in niche markets. 
• Your own website:Provides a dedicated space to showcase your property with detailed information, high-quality photos and videos, and allows you to link directly to your listings on other platforms, giving potential renters a complete picture of your vacation home

Is Owning A Vacation Rental Investment Worth It?

Investing in a vacation rental property can offer significant benefits for investors, primarily through consistent cash flow generated by short-term leases on platforms like Airbnb or VRBO, especially when the property is located in a high-demand area;additionally, tax advantages arise from treating the vacation home as a business, allowing deductions for various rental-related expenses like utilities, management fees, and mortgage interest; furthermore, owners can personally utilize the property for vacations and potentially even use it as a future retirement home. 

Key points about vacation rental investment:

• High Cash Flow Potential:The primary benefit of a vacation rental is the ability to generate substantial income through short-term rentals, often leading to higher cash flow compared to traditional long-term rentals.
• Tax Advantages:When rented out for at least 2 weeks per year, a vacation home is considered a business for tax purposes, allowing deductions for various expenses like utilities, property management fees, and mortgage interest.
• Personal Use:Owners can still use the vacation rental property for their own personal getaways whenever they choose.
• Future Retirement Option:A vacation home can be strategically chosen as a potential retirement residence down the line. 

Important considerations when investing in a vacation rental:

• Location Analysis:Selecting a location with high tourist demand is crucial to maximize rental income. 
• Market Research:Understanding local regulations regarding short-term rentals is essential. 
• Property Management:Deciding whether to manage the property yourself or hire a professional management company. 
• Maintenance Costs:Accounting for potential maintenance and repair expenses associated with frequent guest turnover. 

Pros Of Vacation Rental Investments

Owning a vacation rental property offers several advantages, including the potential for significant additional income, the ability to use the property as your own personal getaway, tax benefits through write-offs on maintenance and operating costs, and the potential to secure your finances and retirement by generating consistent rental income from a valuable asset. 

Key benefits of vacation rental investments:

• Increased Income:Vacation rentals can provide a substantial additional income stream, particularly if located in popular tourist destinations, with platforms like Airbnb and VRBO facilitating easy access to a large pool of potential guests. 
• Personal Getaway:You can use your vacation rental property as your own personal getaway whenever you want, allowing you to enjoy the location and amenities without additional booking costs. 
• Tax Advantages:Renting a property for more than two weeks qualifies it as a business, enabling you to deduct various expenses related to maintenance, repairs, cleaning, insurance, mortgage interest, and even hosting fees from your taxable income. 
• Financial Security and Retirement Planning:Vacation rental investments can contribute to long-term financial stability by providing a steady income stream that can be used for future healthcare costs, travel, or even serve as a retirement home. 

Important Considerations:

• Location Matters:Choosing a well-located property in a desirable tourist area is crucial for maximizing rental income and occupancy rates. 
• Property Management:Managing a vacation rental can require significant time and effort, including guest communication, cleaning, and maintenance, so consider hiring a property manager if necessary. 
• Local Regulations:Be aware of local laws and regulations regarding short-term rentals in your chosen area. 
• Market Fluctuations:While generally considered a stable investment, vacation rental income can be impacted by seasonal fluctuations and economic downturns. 

Cons Of Vacation Rental Investments

Drawbacks of vacation rental investments include: high maintenance costs due to frequent guest turnover, potential for unpredictable income based on seasonality, significant management responsibilities including guest communication and cleaning schedules, potential legal restrictions on short-term rentals in certain areas, and the need for specialized insurance to cover potential damages from guests; all of which can significantly impact profitability and require careful planning and management. 

Key points about vacation rental disadvantages:

• High maintenance and repair costs:Frequent guest turnover leads to increased wear and tear on the property, requiring more frequent repairs and replacements compared to long-term rentals. 
• Seasonal fluctuations in income:Depending on the location, vacation rental income can vary significantly throughout the year, with potential for low occupancy during off-peak seasons. 
• Management overhead:Managing a vacation rental requires significant time investment, including guest communication, booking coordination, cleaning schedules, and responding to issues. 
• Potential legal restrictions:Local regulations may limit short-term rentals in certain areas, impacting the ability to rent out a property or requiring specific licensing. 
• Guest-related issues:Potential for damage to property by guests, noise complaints from neighbors, and managing guest expectations. 
• Insurance complexities:Special insurance policies may be necessary for vacation rentals, potentially adding to the cost of ownership. 
• Marketing and advertising costs:Continuously marketing the property to attract guests can be a significant expense. 
• Potential for vacancy periods:Even in desirable locations, there can be periods where the property sits empty, impacting cash flow. 

Vacation Rental Property ROI

When evaluating a vacation rental property, a “good” cash-on-cash return is generally considered to be above 10%; however, this can vary depending on the specific market and investment, with many investors aiming for even higher returns, particularly when considering short-term rentals, while long-term rentals might see a more moderate cash-on-cash return between 5-10%. 

Key points about cash-on-cash return for vacation rentals:

• Calculation: (Annual Cash Flow / Total Cash Invested) x 100 = Cash-on-Cash Return. 
• Focus on upfront cash: This metric only considers the cash invested initially, not including financing or potential future property appreciation. 
• Higher potential for short-term rentals: Due to the ability to charge higher nightly rates, short-term rentals often offer a higher cash-on-cash return compared to long-term rentals. 

Financing A Vacation Rental Property

Most investors will have to seek out a source of financing for their new rental property. Luckily, there are several options ranging from short-term to long-term. Conforming loans, portfolio loans, multifamily loans, and short-term contracts like a bridge loan or hard money are all available to you.

1. Conforming Loan: This is a popular option for vacation rentals because the criteria for qualification are not as strict as those for a primary residence. A good credit score (680+) and a down payment of around 20% are common.
2. Portfolio Loan: Portfolio loans are often used by investors with either multiple properties or one multi-unit property. Qualifications for these loans are more lenient than other types.
3. Multifamily Loan: Multifamily loans are used for 2-4 unit vacation properties or apartment buildings with more than 4 units. Portfolio loans fall under this umbrella, along with conventional mortgages, government-backed loans, and short-term multifamily loans.
4. Short-Term Loan: A short-term loan is a great option for investors who need cash to purchase a vacation property before they have secured long-term financing. Bridge loans and hard money both fall under this category.

When Is The Best Time To Buy?

While some advise buying a vacation rental during the “slow season” for better deals, a strong argument can be made to purchase during the peak seasonto fully experience the property as your future guests would, allowing you to identify potential issues that might be missed otherwise, especially in locations with seasonal variations in usage like a mountain village where winter demands different considerations compared to summer. 

Key points about buying during peak season:

• Directly experience guest perspective:You can personally witness the property’s selling points and potential drawbacks during the time when most guests would be using it, providing valuable insights into what needs to be optimized for rentals.
• Identify hidden issues:In a seasonal location, purchasing during the off-season might not reveal crucial issues like inadequate heating in colder months or parking challenges during high traffic periods.
• Better preparedness for guest needs:By experiencing the property firsthand during peak season, you can proactively address potential concerns and make necessary upgrades to ensure a positive guest experience. 

Example scenario:

• Mountain village vacation rental:If you buy a cabin in a mountain village during summer when it’s quiet, you might overlook the need for a robust snow removal system or a powerful heating system, which are critical for winter guests.

Eliminating Short Term Vacancies

To reduce short-term vacancies, you can try to understand the local market, improve your property, and screen tenants. 

Understand the market 

• Research the local rental market and the value of your property
• Consider making upgrades to increase the property’s value

Improve your property Use attractive photography and detailed listings, Offer video or online tours, and Keep the property in good condition. 

Screen tenants Have good tenant screening practices in place and Streamline the application process. 

Maintain good relationships with tenants 

• Don’t wait until the last minute to ask about lease renewal
• Be mindful with rent increases

Other strategies

• List your home on 12-month terms during peak seasons 
• Use an application tracking system (ATS) to streamline the hiring process 

Summary

While a vacation rental investment can be a good path to passive income, it’s crucial to conduct thorough research and understand the potential risks before diving in;with proper planning and due diligence, the benefits like tax advantages, strong cash flow, and the ability to use the property for personal vacations can make it a worthwhile investment for the prepared investor. 

Key points:

• Not purely passive:Although considered a passive income source, managing a vacation rental still requires some active involvement, including guest communication, cleaning, and maintenance. 
• Market research is key:Before buying, thoroughly analyze the local market to understand demand, competition, and potential rental rates in your chosen location. 
• Consider regulations:Be aware of local laws and regulations regarding short-term rentals, including permitting requirements and restrictions. 
• Financial analysis:Calculate potential income, operating costs, and potential return on investment to ensure the property is financially viable. 
• Tax benefits:Depending on your situation, vacation rentals can offer tax advantages, but it’s important to consult a tax professional to understand the specifics. 
• Personal usage:One advantage is the ability to use the property for personal vacations while still generating rental income.

1. Understand homeshoppers and how to help them

Understanding the diverse needs and preferences of different buyer groups is crucial in real estate. It allows you to tailor your approach and identify the most relevant solutions. You can provide targeted resources to effectively address each group’s unique challenges. This ultimately facilitates a smoother home-buying process for everyone involved. .

For millennials with limited savings wanting to buy a home, securing a mortgage is a key concern. They focus on finding a mortgage with a low down payment. Understanding the pre-approval process is crucial. Popular options include FHA loans which require as little as 3.5% down, while various state and local down payment assistance programs can also help bridge the gap for qualified buyers. 

A top impediment for Gen Xers is finding a house that fits their family’s needs and is within budget. Be ready with ideas about broadening their home search. You can also refer them to general contractors to discuss renovation options and more.

Boomers are often looking at retirement. Finances can be less of a problem. However, finding a smaller-sized house that fits their desires can be a hurdle. They seek quality construction, a larger lot space for privacy, and a safe neighborhood.

2. The art of timely response

As soon as you receive an online lead, reach out to them via phone call right away. Prepare a set of key points beforehand. Have relevant information readily accessible. Ensure you’ve practiced your pitch beforehand through role-playing. This will help you deliver a smooth and confident conversation. Consistently apply your sales “talk tracks” in real calls to quickly memorize them. 

Hi [Lead’s Name], this is [Your Name] from [Your Company]. I’m calling about the property at [Property Address] that you expressed interest in through [Lead Source]. Could we take a quick five minutes to discuss your needs and how this property might fit for you?“

If you try to contact a potential customer (lead) and they don’t answer the phone, call them again. Alternatively, leave a voicemail message before the day is over. Then, follow up by sending them an email. This ensures they are aware of your interest. It keeps your company in their thoughts. Consistently following this process with all leads is key to building a positive relationship. It also increases the chances of converting them into customers.

The Realtor.com® professional dashboard offers tools to enhance your connection with leads. Review the intel available there, such as a market insights report. Utilize the suggested follow-ups and task reminders.

3. Reach non-responsive leads

When trying to re-engage unresponsive leads, use phrases like “homes are selling fast, don’t miss out” to create urgency. Keep your messages concise. Always end with a question or clear call-to-action to prompt a response from the lead. This tactic encourages them to actively engage with your communication.

Surprise! We’ve got a deal so good, you’ll want to do a happy dance. Check your inbox for details! 

4. Level up your online presence

Don’t forget consumers’ home search often includes researching agents. Search your name to see where you can be found online. Then, take control of how and where you are represented. Ensure it’s a current and positive reflection of your real estate business.

Ensure your profile is updated and consistent across your free Realtor.com profile, personal website, brokerage or MLS-affiliate site, and social media sites. Claim your business on Google and Yelp, and get into the habit of gathering ratings and reviews on your Realtor.com profile and other sites.

5. Go mobile

This statement emphasizes the critical need for real estate agents and businesses to prioritize mobile optimization on their websites. Most potential homebuyers now use their smartphones to search for properties. Agents should further engage with customers by actively utilizing popular social media platforms like Facebook and Instagram. 

For more tips to grow your business, visit the Realtor.com Resource Center to learn about upcoming results, educational webinars, resources and more. Now’s the perfect time to sign up for Connections Plus to connect with new leads during the Cyber Sale. 

around. Driving and walking are the most common modes of transportation, but prospective buyers and renters are also increasingly considering public transportation.

In 2018, only 30% of buyers said a new home’s proximity to public transit was “very important” or “extremely important,” according to the 2023 Zillow Consumer Housing Trends Report. But in 2023, 43% said so — the largest increase of any neighborhood characteristic. 

Thirty-seven percent of renters said living near public transportation was “very important” or “extremely important,” the highest level in the past six years. While many people may want to be close to public transit for career purposes, the benefits may extend beyond work.

“Living near public transportation is more important to today’s buyers and renters than it’s been in at least the past several years. 

Still, it’s likely not the deciding factor for many movers — more say living in a walkable neighborhood, living near leisure amenities and living near family are important to them,” Zillow senior economist Nicole Bachaud told ConsumerAffairs.

“While the importance of living near public transportation has been on an upswing for homebuyers, the importance of commute times has stayed relatively steady. That could indicate buyers are interested in public transit for more than just their trips to the office and back.”

Knowing how you’ll get around your new hometown is vital before hiring moversto take you there. To help, the ConsumerAffairs Research Team investigated and ranked the nation’s 50 largest cities to see which have the best public transit systems. The analysis is based on 2022 data from the U.S. Department of Transportation’s National Transit Database, and it takes into account how useful, safe, affordable and efficient transit services are in the nation’s top cities.

Key insights

Bigger isn’t always better. While the country’s most populous metro area, New York City, had the highest-scoring transit system, second place went to the much smaller San Francisco metro area. 

Only three of the top 10 transit systems are in the nation’s top 10 most populous cities. Good transit spans the country.

Among large cities, the top 20 for transit include locations on the Atlantic and Pacific Coasts, the South, the Mountain West, the Midwest and along the Great Lakes.

Transit is safe. The average rate of major safety events across the 50 largest U.S. cities’ transit systems is 3 per 1 million miles traveled by transit vehicles.

Transit is affordable. The average transit trip in the nation’s largest cities costs $2.56 one way, even when accounting for varying prices by distance, peak hours and monthly passes.

Major advantages of public transit

Some advantages of public transit systems include their eco-friendliness, shorter commute times and connectability. 

Transit vehicles emit far fewer greenhouse gases per passenger mile than a regular car, and you don’t have to fight traffic yourself or pay for parking at your destination.

Transit lines also usually connect, making longer trips possible, such as weekend getaways.

Personal advantages abound, too. Riding on local public transit can allow you to see diverse neighborhoods and meet other people you share the city with. Relieved from driving, you can also rest, read or otherwise relax during the journey.

Artificial intelligence can also make public transit systems more efficient and save riders time by analyzing different routes and schedules to get you to your destination faster and without as much of a hassle.

A 2020 report from the International Association of Public Transport found AI offers the potential to adjust transit services in real time, responding to heavy traffic, heavy ridership and sudden emergencies. 

The report found that AI systems can also help users plan journeys that combine multiple stops and interconnecting services and adapt fares to meet specific goals for both revenue and equity. They can also save agencies money by optimizing fuel efficiency and maintenance services.

Since that report came out, the U.S. federal government has spent millions of dollars helping transit agencies around the country develop AI systems that aim to improve service, reliability and cost in transit systems. 

The starting point for many of the nation’s most populous cities is already quite good — but there is still much room for improvement everywhere.

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U.S. public transit systems, ranked

In this study, we examined a range of data points from the U.S. Department of Transportation’s National Transit Database and calculated a score for each city, with a maximum number of 100 points achievable. You can read the full methodology below.

Here’s how the cities stacked up:

1. New York, New York

• Annual public transit trips per metro area resident: 144.2
• Share of stations ADA-compliant: 51.4%
• Safety score (combining fatalities and serious injuries): 13.07 out of 20
• Average fare revenue per trip: $1.75

The nation’s most populous metro area is served by a large number of transit agencies, with trains and buses covering the five boroughs of New York City itself, as well as areas well into New Jersey, Connecticut and downstate New York. While the average fare revenue is higher than most, it’s still cheaper per trip than in Pittsburgh, Pennsylvania, and Buffalo, New York.

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2. San Francisco, California

• Annual public transit trips per metro area resident: 53.6
• Share of stations ADA-compliant: 97%
• Safety score (combining fatalities and serious injuries): 13.91 out of 20
• Average fare revenue per one-way trip: $1.63

With the third-worst commuter traffic in the nation, San Francisco residents might be desperate for other ways to get around. Fortunately, Bay Area Rapid Transit connects the city with its suburbs, and the Muni bus and train system – including the city’s famous cable cars – gets people around the city itself. There are also free shuttles to get people to and from public parks.

3. Los Angeles, California

• Annual public transit trips per metro area resident: 29
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 16.48 out of 20
• Average fare revenue per one-way trip: 49 cents

Los Angeles, well known as a sprawling car-oriented metropolis, has a transit system that doesn’t get as much use per capita as other cities’ services. However, it’s one of the safest and most affordable transit systems nationwide.

4. Richmond, Virginia

• Annual public transit trips per metro area resident: 8.5
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 18.27 out of 20
• Average fare revenue per one-way trip: 24 cents

With free local bus fares across the city, including high-speed buses with some dedicated lanes that provide service every 10 minutes on weekdays and every 15 minutes on weekends, Richmond’s public transit system is safer and more efficient than many other large cities’ services. Unfortunately, it is used less frequently than any other system mentioned in our top 10 list.

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5. San Diego, California

• Annual public transit trips per metro area resident: 21
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 14.74 out of 20
• Average fare revenue per one-way trip: $1.10
• A new safety initiative, expanded service and upcoming investments in new vehicles, including electric buses, are drawing riders to San Diego’s trolleys and buses, which serve the downtown area and the surrounding communities.
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• 6. San Antonio, Texas
• Annual public transit trips per metro area resident: 12.6
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 18.44 out of 20
• Average fare revenue per one-way trip: 58 cents
• San Antonio’s bus service spans the city and is set to expand in the coming years. The agency that runs it, VIA Metropolitan Transit, is also working to make its service schedules and maps more comprehensible to prospective users. The city is also considering new zoning rules that would make denser housing along high-capacity bus lines easier for developers to build.
• 7. Boston, Massachusetts
• Annual public transit trips per metro area resident: 47.5
• Share of stations ADA-compliant: 78%
• Safety score (combining fatalities and serious injuries): 14.57 out of 20
• Average fare revenue per one-way trip: $1.63
• In Boston, a city well known for confounding even local drivers with one-way streets and hairpin turns, it’s tempting to let someone else handle navigation. Even with a relatively expensive average fare and incomplete ADA compliance at stations, the city’s MBTA trains and buses are relied on more heavily than transit vehicles in other large cities.

8. Seattle, Washington

• Annual public transit trips per metro area resident: 36.7
• Share of stations ADA-compliant: 99.1%
• Safety score (combining fatalities and serious injuries): 14.52 out of 20
• Average fare revenue per one-way trip: $1.57

Seattle’s public transit system, which includes buses, trains, and ferries, links its suburbs, downtown area and nearby islands. In 2024, the city is asking voters to raise their taxes to pay for a 20-year transportation plan that includes pothole repair and expanded transit services.

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9. Washington, D.C.

• Annual public transit trips per metro area resident: 36.7
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 15.41 out of 20
• Average fare revenue per one-way trip: $1.29

The D.C. area’s roads are so famously congested that people joke there is no rush hour at all — except all the time. Fortunately, the Metro system encompasses trains, buses and subways run by city officials and state and local agencies in neighboring Maryland and Virginia.

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10. Salt Lake City, Utah

• Annual public transit trips per metro area resident: 26.7
• Share of stations ADA-compliant: 100%
• Safety score (combining fatalities and serious injuries): 11.83 out of 20
• Average fare revenue per one-way trip: $1.07

Bus and rail lines crisscross the city and the surrounding county. The city’s plans for transit expansion call for additional services by 2030 and are being used to tempt Olympic officials to consider it as a location for the 2034 Winter Games.

Why you should consider moving to a city with a good public transit system

When you’re looking for your next place to live — whether near where you already call home or somewhere farther afield — it’s worth noting how close transit services are and how well they’ll get you where you want to go.

According to Nicholas Julian, the senior program manager for land use at the National Association of Home Builders, builders and developers are noticing this interest. He observed that the move toward “transit-oriented development” has been decades in the making, with governments and private companies working to build housing along existing transit routes to reduce traffic and pollution.

 He noted that many cities are also rethinking minimum parking requirements to reflect residents’ desire to drive less and discourage additional cars from clogging the roads.

Although Julian works most directly with people involved in suburban development projects not designed explicitly around transit, he notes that “any type of access to public transit …  will be advertised” to prospective buyers or renters.

He pointed out that some developers are stepping forward to reduce driving while improving people’s ability to get the services and experiences they want. For example, Culdesac Tempe, in Arizona, is a development that actively discourages residents from owning cars while providing free transit, reduced ride-sharing costs and free e-bikes to at least some residents.

“If you can build a car-free community in Tempe, it’s probably possible just about anywhere,” Julian said. That may also mean you can live a car-free or car-light lifestyle in just about any other city, too.

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Methodology

The ConsumerAffairs Research Team conducted a comprehensive analysis of the public transit systems in the 50 most populous metropolitan areas across the United States and scored each on a point scale from zero to 100. To determine which cities had the best public transportation, we looked at the following metrics:

• Usefulness to riders: We defined how useful a transit system was to its city’s residents based on three factors:
  • First, we calculated how many independent passenger trips the population took in 2022 in relation to the metro area’s population. This information was based on the National Transit Database annual metrics for 2022. (25 possible points)
  • Second, we calculated how far passengers traveled in 2022 per resident in the metro area. (20 possible points)
  • Third, we looked at how easy the main public transit system was to access for people with physical disabilities. We used the 2022 National Transit Database information on transit stations to calculate the percentage of all ADA-compliant systems. (10 possible points)
• Safety: Based on the National Transit Database’s Safety & Security Major Event Time Series data for 2022, we calculated the number of major events, including collisions and derailments, per vehicle revenue mile in 2022. (10 possible points)
  • We also calculated the rate of fatalities and injuries in major events per 2022 vehicle revenue mile. (5 possible points each)
• Affordability: We looked at the fare revenue per unlinked passenger trip based on the National Transit Database annual metrics for 2022. We compared that with the median household income in 2022 for that metro area according to the U.S. Census Bureau’s American Community Survey. (15 possible points)
• Efficiency: We determined the average operating cost per passenger mile based on the National Transit Database annual metrics for 2022. (10 possible points)

CHICAGO – As National Homeownership Month comes to a close, the Illinois Housing Development Authority (IHDA) wants to remind individuals that free assistance is available to overcome the financial barriers to owning a home. IHDA currently offers up to $10,000 to help individuals, families, veterans, and others realize that the dream of homeownership is achievable and more than within reach.

“Every Illinoisan deserves the opportunity to become a homeowner regardless of their zip code,” said Governor JB Pritzker. “That’s why my administration is committed to helping prospective homeowners—especially those from historically disadvantaged communities—overcome the financial barriers of owning a home. Through IHDA’s Access Mortgage programs, Illinoisans who would otherwise not be able to afford a down payment or closing costs can apply for forgivable or deferred assistance loans.”

Launched in 2018, the IHDA Access Mortgage programs are open to both first-time and repeat homebuyers. Available statewide, each mortgage option comes with an affordable, fixed interest rate and up to $10,000 to assist eligible borrowers with their down payment and closing costs for the purchase of a new or existing home. The unique program offers three tiers of assistance depending on the needs of the homebuyer.

“Last year, one in every thirteen people who bought a home in Illinois utilized an IHDA program to help overcome down payment costs and other hurdles,” said IHDA Executive Director Kristin Faust. “Homeownership helps foster strong communities, create generational wealth, and provide family stability. Everyone in this state deserves the opportunity to buy a home for their families and IHDA is ready to help make that a reality.”

Eligibility for an IHDA mortgage is based on the borrower’s credit profile, household income, and the purchase price of the home. In addition, potential homebuyers are required to complete pre-purchase homeownership counseling to ensure they are making the best decision for them.

Roushaunda Williams, a resident of Chicago utilized IHDA Access Mortgage in 2023. “If I hadn’t received assistance from IHDA, this purchase would not have taken place for some time,” said Williams. “Everyone was very helpful throughout the purchase of the property. I am now a homeowner, and this dream may have been deferred if it wasn’t for IHDA.”

“The IHDA Access program gave me the opportunity to give my kids a better life,” shared Jose Alberto Gonzalez Ramirez of Crestwood. 

All IHDA Mortgage programs are offered through a vast network of more than 180 lenders throughout Illinois. Many of these loan officers have worked with IHDA for years and are experts in affordable mortgage financing. IHDA programs can be stacked with local assistance programs to add even more value to the homebuyer. If you are interested in buying a home with help from IHDA Mortgage, you can find a participating lender near you to discuss your options at www.ihdamortgage.org.

Additionally, for those still uncertain if owning a home is the right step, IHDA has partnered with the Federal Home Loan Bank of Chicago to administer the Community First® Housing Counseling Resource Program (HCRP) who can help answer those questions and determine if it is the right time for you. HCRP is a three-year program that provides grants to nearly two dozen HUD-approved housing counseling agencies in Illinois to expand service to minority and low- and moderate-income homebuyers. These agencies have already provided free counseling to more than 15,250 individuals and helped 1,955 households purchase a home in Illinois after receiving housing counseling services.

About the Illinois Housing Development Authority

IHDA is a self-supporting and mission-driven state agency dedicated to financing the creation and preservation of affordable housing in Illinois. IHDA offers affordable mortgages and down payment assistance for homebuyers, provides financing for the development of affordable rental housing, and manages a variety of assistance programs to create communities where all Illinoisans can live, work, and thrive. Since it was established in 1967, IHDA has delivered more than $27.8 billion in state, federal, and leveraged financing to make possible the purchase, development, or rehabilitation of more than 327,000 homes and apartments for low- and middle-income households. For more information on IHDA programs, visit www.ihda.org.

New YorkCNN — 

Help may not be on the way for first-time homebuyers frustrated by high mortgage rates and even higher home prices.

Economists at Bank of America warned this week that the US housing market is “stuck and we are not convinced it will become unstuck” until 2026 — or later.

The bank said home prices will stay high and go even higher. The housing shortage will persist. And mortgage rates may not fall much — even if the Federal Reserve finally delivers long-delayed interest rate cuts.

“This will take many years to work itself out. There isn’t a magic fix,” Michael Gapen, head of US economics at Bank of America, told CNN in a phone interview. “The message for first-time homebuyers is one of patience and frustration.”

Housing affordability is a major problem in America.

Home prices spiked during Covid-19 and then the Fed’s war on inflation sent mortgage rates surging.

The one-two punch has made it a historically unaffordable time to buy a home.

“It’s been a weird combination. Mortgage rates rose substantially but so did home prices. That typically doesn’t happen,” said Gapen.

The supply of homes simply cannot keep up with demand. Prices have had nowhere to go but up.

The median price of a previously owned US home climbed in May for the 11th month in a row to a record $419,300 — up 6% from a year earlier.

Bank of America expects home prices will climb by 4.5% this year and then by another 5% in 2025 before eventually dipping by 0.5% in 2026.

‘Lock-in effect’ could persist for eight years

One major problem hurting supply is the “lock-in effect.”

People who already own their home are effectively locked into their property after refinancing or getting a mortgage during the pandemic when ultra-low rates were available. Buying now at current rates would require them to pay hundreds of dollars more per month on interest alone. Plus, home prices have gone up.

For many, it just doesn’t make sense to move. And because those homeowners are not moving, the supply of existing homes on the market is limited.

“Why would I sell unless I have to?” said Gapen. “Prices have gone up and the mortgage rate is a lot higher. So, I’m content to stay where I am.”

Bank of America warns the lock-in effect could persist for another six to eight years, keeping a lid on supply during that time.

That’s because the mortgage rate of people who already own is historically low. And the rate for new buyers is elevated. Bank of America doesn’t think that gap will shrink much for years.

This problem helps explain why pending home sales fell in May to a record low, according to data released on Thursday. Pending sales, tracked by the National Association of Realtors since 2001, are a forward-looking gauge of home sales that measures contract signings.

‘They can’t take their mortgage rate with them’

Dave Liniger, who co-founded real estate giant RE/MAX with his wife in 1973, said the lock-in effect means people who want to size up to a bigger home can’t, and the next generation can’t even get their foot in the door for a starter property.

“The move-up market does not exist,” Liniger told CNN. “Starter homes have doubled in value and the owners would like to move up but the problem is they can’t take their mortgage rate with them.”

Liniger agrees that the housing market is stuck, for now at least.

“We have to muddle our way through this for a period of time,” he said.

But Liniger urged first-time homebuyers to remain patient. “Don’t give up the dream,” he said.

In theory, a flood of supply of new homes would help unstick the market.

However, Bank of America expects housing starts — which is a measure of newly constructed homes — to remain flat for the coming years. And housing starts have still not recovered from the bursting of the housing bubble in the mid-2000s.

Divide between haves and have-nots

The forecast for a “stuck” housing market cuts both ways.

The spike in home prices has padded the net worth of existing homeowners and given them additional financial flexibility.

The longer they are prevented from buying, the more time they miss out on wealth creation.

In a recent Gallup poll, just 21% of Americans said it is a good time to buy a house, tied for the worst reading in Gallup history. An overwhelming majority — 76% — say it’s a bad time to buy.

Gapen, the Bank of America economist, said if the US economy achieves the soft landing that he expects, meaning that inflation cools without triggering a recession, there is a risk that home prices will rise even more than anticipated.

On the other hand, if the durability of the recovery has been overestimated and a recession is on the way, home prices could tumble and affordability would ease.

“But, obviously, you don’t want to go through a recession to have better housing affordability,” he said.

TAMPA, Fla. – A recent report is unpacking the impacts of rising homeowners insurance costs in Florida. 

According to a new report from online realtor Redfin, nearly three-quarters (70.3%) of Florida homeowners say they or the area they live in have been affected by rising home insurance costs or changes in coverage (e.g., their insurer dropped them) in the past year. This compares with less than half (44.6%) of homeowners nationwide.

The report is based on a Redfin-commissioned survey in February of this year. The survey was fielded to 2,995 U.S. homeowners and renters.

“Insurance is top of mind for homeowners in Florida and California because those states are the epicenters of the insurance housing crisis,” Kenneth Applewhaite explained in an April 17 news release. 

Applewhaite elaborated that many homeowners have seen their premiums skyrocket, and some have lost coverage altogether because intensifying natural disaster risk has prompted many insurers to stop doing business in Florida and California. 

In the Sunshine State, 11 insurers have liquidated amid growing flood and storm risk,” he wrote. 

Mounting insurance costs and natural disasters are prompting some people to relocate. According to Redfin, in Florida, 11.9% of survey respondents who plan to move in the next year cited rising insurance costs as a reason — roughly twice the national share of 6.2%. 

But while some people are leaving disaster-prone areas, there are still more people moving in than out, a separate Redfin analysis found.

Homeowners living in areas where insurance premiums are surging are at risk of seeing their properties gain less value than homeowners in areas with stable premiums — and in some cases, they may even lose money,” said Redfin Chief Economist Daryl Fairweather. “Homes with low disaster risk and low insurance costs will likely become increasingly popular, and thus more valuable, as the dangers of climate change intensify.”

Condo prices in some parts of Florida have already started to fall amid an increase in insurance costs and HOA fees.

As a property developer or home builder, you know that time is money. While you can choose from many construction loan lenders, private or hard money lenders offer significant advantages over a traditional mortgage lender. Here are just some of the advantages of hard money loans:

• Loans close much faster than traditional mortgage loans.
• Programs range from home construction loans to condominium and multi-family construction loans.
• Terms are based on your experience and the project’s prospects for success.
• Loans come with interest-only payments and a balloon payment on completion.
• There are no prepayment penalties.

Interested? Read on…or contact us for details or book an appointment to learn more.

When financing construction projects, whether you are building or renovating, it is important to thoroughly understand your construction loan – its features, how you benefit, what’s required to qualify, and the application process. Financing a construction project is different than financing a home purchase with a standard mortgage loan. Your real estate investment in the lot, construction costs, and activities in each construction phase will affect your profit. Therefore,when choosing a lender for your construction loan, you must know your options and what considerations to weigh to help you select the right one.

At Muevo, we’re committed to educating borrowers about the financing alternatives available for their projects and helping them secure the right hard money loan to meet their unique needs. In this blog, we’ll review the ins and outs of construction loans – how they work, why they can be advantageous, what you’ll need to apply and be approved, and why you should consider a private lender like Us as your financing partner. We’ll also share some potential challenges and how to overcome them as well as several tips to ensure you successfully qualify for our construction loan program.

Understanding Construction Loans

Construction loans are used to finance the building of a range of property types. At Muevo, we offer them for the construction of:

• Condominiums
• Single-family residences
• Two-to-four units
• Multi-family homes
• Townhouses
• Other property types (on a case-by-case basis)

There are several distinct advantages of obtaining a construction loan for these particular projects. First, a construction loan provides the necessary funds to cover embedded costs including labor, materials, permits, and other related expenses. Securing such a large amount of capital upfront for a construction project would be challenging without financing.

Second, a construction loan ensures proper cash flow management via the draw process, which we’ll explain in greater detail later in this blog. Third, these loans make it possible to seize construction opportunities in high-demand areas – which yield higher returns once completed. You also stand to benefit from increased property value and rental income (if you are planning to rent once the project is completed). Finally, financing via a construction loan will help you build equity for your next project.

Qualifying for a Construction Loan

Once you’ve determined that a construction loan is the best way to get your project off the ground and ultimately completed, you must prepare to qualify with a lender.

Before all else, become familiar with the credit score and financial requirements necessary to be approved for the construction loan from your lender. And know that both your personal and business financials will be thoroughly reviewed. As such, your lender will require you to provide related documentation and paperwork for verification purposes. They will make an assessment of your financial situation by also weighing income and debt considerations.

Other important financial requirements to be aware of are the required down payment amount and your loan-to-value ratio. These also factor into whether you can qualify.

In addition, you will need to furnish information about your project and those involved in its construction, such as:

• Contractor credentials
• Property information and proof of lot/land ownership (title deeds, zoning info, property surveys, etc.)
• Insurance coverage
• Any legal contracts with the construction team, architect/engineers, or other parties involved

You may also be asked to provide even more documentation as the information a lender needs can vary by project. At Muevo, we use this property data to properly assess its value and ensure compliance with local regulations.

The Construction Loan Process

When applying and obtaining approval for a construction loan, the process is fairly straight forward.

1. Pre-application phase – Borrower investigates requirements, gathers necessary documentation
2. Loan application and approval – Application and documents are submitted, reviewed, and approved
3. Construction contract and plans review – Lender reviews all required property-related information
4. Loan disbursement and draw schedule determination – Funds are distributed in accordance with outlined draw schedule
5. Inspections and project monitoring – Lender conducts necessary inspections and continually monitors the progress of the project
6. Transition to permanent financing – Draw schedule concludes and regular payment schedule commences

Finding a Private Lender for Construction Loans

When it comes to construction loans, there are some district benefits in working with a private lender. Private lenders offer more flexible terms and loan amounts than traditional lenders.

Their loan application and funding process is much quicker too. Private lenders are also well versed in the local real estate markets in which they operate. In addition, once you have established a partnership with a private lender, there is the potential for additional financing opportunities once your project is successfully completed.

However, to select a private lender that is a good fit for your project, you must consider a number of factors:

• Reputation
• Experience
• Loan terms
• References
• Financial stability

Research and compare private lending companies in your area based on these factors to identify where you can most easily navigate the application and approval process. For example, loan terms can vary considerably. At Muevo, our standard new construction loan terms are as follows:

• Max Loan Amount: $10,000,000
• Max LTC/ARV (Loan to Cost / Loan to After Completed Value):
  – Experienced Investors: The Lesser of 82.5% LTC or 70% ARV.
  – Inexperienced Investors: The Lesser of 65% LTC or 55% ARV.
• Rate: Starting at 10.5%
• Term: 12-24 months
• Payments: Monthly Interest Payments with Balloon at Maturity
• Prepayment penalty: None

Managing Construction Loan Funds

One of the most important steps that must be taken to complete a construction project successfully is to create a detailed budget. This is where the draw process comes in. Rather than receiving a lump sum check, construction loans pay out the loan amount over the course of the project. The installments are called draws, as the lender draws funds from the account. A draw request is necessary to ensure disbursement of the funds.

Many lenders do prorated draws, typically 80% financing/20% equity ratios on every draw. Our loans start once the 20% has been completed. Should you have investors, it is important that they understand the draw process and the difference between money spent and job completed.

In the end, the draw process ensures the proper allocation and use of funds and allows for contingency planning in case there are any unexpected costs.

You have questions. We have answers.

Who are the best hard money lenders in Florida?

Are you looking for private or hard money lenders for your construction loans? Do your research! The best private lenders, whether in Florida or anywhere else, have proven track records that are easily accessible on your County Recorder of Deeds website. Don’t just take their word for it. Ask your lender to show recent transactions they have funded and provide a link to the recorded documents. Beware of companies that advertise as lenders but are just brokers, adding additional fees. As a builder or investor, take your time to research potential lenders and ensure they are legitimate before proceeding. Experience counts. Muevo has brokered over 3,000 loans totaling more than $300 million in the last 10 years. Our loan programs have financed thousands of projects with attractive construction loan rates, reasonable closing costs, and, most crucially, flexible loan terms and speed!

Will the bank or private lender let me be my own general contractor?

Yes, many home builders and contractors utilize construction loans to fund their own construction projects. You will be subject to the same requirements as those developing investment properties using a third-party general contractor. Acting as your own general contractor should not affect your hard money loan as long as you have experience and a history of successfully repaying your construction loans.

Tips for a Successful Construction Loan Experience

Inherent to the construction process are several potential challenges that can impact your financing. These include construction delays and cost overruns, changes in market conditions and interest rates, and unexpected construction issues all of which require contingency plans. To that end, there are several things you can do proactively to mitigate these risks.

First and foremost, be sure you are engaging with professionals, such as seasoned architects and experienced contractors. And do all you can to communicate clearly and constantly with your lender and construction team. Closely monitor the progress of your project and resolve any issues that arise as promptly as possible. Finally, stay organized. One of the best ways you can do that is by maintaining accurate, up-to-date documentation throughout the course of your construction project.

Now that you have a good understanding of how construction loans work, how to qualify, how you benefit, how to select a private lender and how to ensure a smooth experience, you can confidently move forward and secure the financing you need for your construction project. Take the next steps in obtaining a new construction loan with RBI! Click here for more information.

For professionals seeking quick and flexible financing solutions, hard money lenders are an invaluable source of opportunity in the real estate industry. While these lenders offer a lifeline for those looking to seize lucrative opportunities, navigating the terrain requires caution. In this article, we’ll shed light on common mistakes professionals make when borrowing from hard money lenders and provide valuable insights to steer clear of these pitfalls.

Mistake 1: Underestimating the True Cost

One prevalent mistake is underestimating the true cost of borrowing. Hard money loans often come with higher interest rates and fees compared to traditional financing options. Professionals must meticulously analyze the total cost of the loan, including interest rates, origination fees, and any other associated charges. By doing so, borrowers can make informed decisions about whether the investment remains profitable in the long run.

Tip: Always request a clear breakdown of all costs associated with the loan and carefully assess how they align with your overall financial strategy.

Mistake 2: Ignoring the Terms and Conditions

Another common pitfall is neglecting the fine print in the loan agreement. Hard money lenders may impose strict terms and conditions, such as short repayment periods and high penalties for default. Professionals must thoroughly review the terms, seeking clarification on any ambiguities. Ignoring these details can lead to financial stress and potential legal complications.

Mistake 3: Overleveraging Without a Cushion

One critical oversight is overleveraging without a financial cushion. Some borrowers make the mistake of borrowing the maximum amount without considering unexpected expenses or market fluctuations. This can lead to financial strain and increase the risk of default.

Tip: Build a financial cushion into your borrowing strategy, considering potential unforeseen expenses, market uncertainties, and other risk factors.

Mistake 4: Failing to Have an Exit Strategy

A crucial oversight is neglecting to establish a clear exit strategy. Hard money loans are typically short-term, and professionals need a well-thought-out plan for repayment. Without a viable exit strategy, borrowers may find themselves scrambling to secure alternative financing or facing unfavorable terms for an extension.

Tip: Develop a comprehensive exit strategy before obtaining the loan, considering potential challenges and outlining specific milestones for repayment.

Conclusion

Borrowing from hard money lenders can be a strategic move for professionals in real estate and investment. However, avoiding common mistakes is essential to ensure a positive and profitable experience. By thoroughly understanding the costs, scrutinizing the terms, being cautious about overleveraging, and having a well-defined exit strategy, professionals can navigate the terrain of hard money lending with confidence and success.

ROCKFORD, Ill. – The nation’s top housing market in 2024 might come as a surprise to some: Rockford, Illinois.

According to the Wall Street Journal and Realtor.com’s Housing Market Ranking, Rockford has secured the coveted No. 1 spot.

The city’s ascent to the top ranking is attributed to its abundance of affordable housing options and its burgeoning industries in healthcare, aerospace, and logistics. Additionally, its central location, within reasonable distance of major urban centers like Chicago, Milwaukee, and Madison, adds to its allure. A forthcoming direct train line from Rockford to Chicago is expected to further enhance its accessibility.

Rockford’s remarkable growth has led to a surge in median home prices, with the average home listing in March reaching $235,000—an increase of nearly 52% compared to the previous year, as reported by the Wall Street Journal. In contrast, the national median listing price stands at $424,900.

Moreover, Rockford stands out favorably against other Midwestern cities due to its lower susceptibility to natural disasters, offering a potential reprieve for homebuyers increasingly concerned about high insurance costs associated with wildfires, floods, and hurricanes.

Social life in Rockford revolves around the scenic Rock River, dividing the city between east and west and serving as the focal point for a vibrant arts and culture scene. The city also boasts an impressive 7,000 acres of parkland and public gardens.

In terms of job opportunities, Rockford’s manufacturing sector alone employs over 20,000 individuals, underscoring its robust business environment.

The top 10 housing markets in 2024, as per the Wall Street Journal and Realtor.com rankings, include:

1. Rockford, Illinois
2. Canton-Massillon, Ohio
3. Ann Arbor, Michigan
4. Akron, Ohio
5. Springfield, Missouri
6. Fort Wayne, Indiana
7. Manchester-Nashua, New Hampshire
8. Columbus, Ohio
9. Kingsport-Bristol-Bristol, Tenn.-Va.
10. Portland-South Portland, Maine

The rankings take into account various economic and lifestyle factors, including housing supply, housing demand, property taxes, unemployment rates, and proximity to retail and restaurant establishments. Additionally, they consider the risk of extreme weather events such as heatwaves, windstorms, poor air quality, floods, and wildfires over the next three decades.

For the full list and report, click HERE.