Wednesday, December 23, 2015

2015 has come to an end.

I want to express my gratitude to those whose questions I have tried to answer here. Also thanks to all of you who stop me around town to comment on those answers!

I want to welcome your questions concerning real estate matters in general and Vashon issues in particular as we move into 2016. It is always my hope that people will learn from the mistakes of others. It can save you a lot of money, time and anxiety.

This has been a very busy year in real estate. Over 180 homes have sold this year in every price range from $165,000 to over $1,500,000. Land sales were also vigorous with over 34 parcels selling this year. I recall that one year, during the depths of the recession, we sold only 7 parcels of land and 75 homes. The reason for the jump in home sales this year and last is partially because homeowners were waiting out the recession, hoping for a better market to sell. We anticipate that 2016 will be a great year too. Most of our sales are a result of folks moving off the Island because of a job transfer, or because of divorce or death. Rarely have I heard of anyone leaving because they just don’t like it here.

We always have a significant number of sales involving people already living on Vashon who are just moving to a different type of property on the Island. Their kids get older and now they want acreage for horses, or the owners are aging and want to buy down to a smaller place. Then there are those people who are doing very well and want a larger or nicer home, maybe something on the water or with a big view.

Whatever the market, I want you to know I will continue to be available to show you homes and land. Moreover, I am always available to consult, answer questions and just be a resource for our wonderful Vashon Maury Island community. It’s a pleasure and an honor to serve you.

Thursday, December 10, 2015

Q: We bought an investment property from you many years ago and have been very happy with it.

We’ve had a good renter in there for the last couple of years who pays on time and takes good care of the place. However, people keep telling us we should raise the rent to match the current rental market. The tenants we have in there now are not able to pay much more but we don’t really want to lose any money on this. Suggestions?

A: You probably can raise the rent and get other tenants who can pay more. However, you should do the math. Let’s say you have been changing $1,600 a month for your three bedroom rambler. You could raise it to $1,800 which would give you an added $2,400 per year. But you should also figure in at least one month’s lost rent for the change over between tenants. That’s assuming you rent it right away. That would bring your gain down to $600.00 for the year.

You also have to decide if you want to get rid of good, responsible tenants who have been paying rent on time and taking good care of the place in favor of someone new you don’t really know. In addition, you may have to repaint between tenants and do other small repairs. That could eat up any gain you might see. Of course you would get that increased income for the following years, assuming you get a good tenant who pays on time, takes good care of the property and stays for awhile.
Each time you have a turnover of tenants there are costs and losses. Of course it’s tempting to squeeze a bit more out of your investment. But you always have to consider the costs. You should also keep in mind that your rental is an excellent investment in the future since you will probably make a good profit when you sell it. That’s why it pays to take care of the property and be sure you have tenants who take good care of it too.