Bugs Around The House

As bug infestations tend to peak this time of year in most areas, now is a good time to familiarize yourself with some of the critters that can cause damage to you and/or your home. Hopefully, you will have no more than a casual encounter with a few of these pests. While most homeowners understand that termites can cause serious structural damage, here is a brief primer on some other common insects found around homes. Homeowners can deal with some of these insects, however, the HouseMaster Technical Staff recommends contacting a professional exterminating company in the case of a termite infestation or a serious infestation by any other insects.

CARPENTER BEES
Characteristics: Broad head; metallic blue/black with yellow or white hairs; ¾” – 1” (18-25 mm) in length. Location: Dry wood on the outside of homes, barns, fences; twigs or tree limbs.Diet: Plant nectar.Damage: Cuts ¼” – ½” tunnel at a 90° angle to the entry hole; usually in exterior trim pieces; can cause extensive damage if recurring.Comments: Prefers to nest in unpainted/untreated soft wood, such as pine, cedar and redwood.
CAVE CRICKETS
Characteristics: Straw-color with 3 dark bands on the head; ¾” body length (18 mm). Location: In warm, dark places in homes, trash dumps in warm weather. Diet: Plants and other organic matter, including cloth. Damage: They can make an annoying noise; presence usually indicates moisture concerns. Comments: Infestations can include a large number of insects, particularly in suburban areas. BROWN RECLUSE SPIDER
Characteristics: Brown with violin shaped marking on back; 3/8” (10 mm). Leg span 1 to 1½” (25-35 mm). Has three eyes. Location: Lives in cracks and crevices and other dark areas; spins fine cotton-like webs near its shelter. Diet: Insects. Damage: Poisonous; can cause skin damage around bite and serious secondary infections. Comments: If a brown recluse bite is suspected, or any reactions occur from a bite by an unknown insect, see a doctor immediately.
CARPENTER ANTS
Characteristics: Variable but typically black or reddish/black; ¼” – ½” (6-12 mm) in length. Location: Trees, stumps, logs, houses. Diet: Insects, meat, sweets, fruit, eggs. Damage: Can cause structural damage. Excavations in wood; tends to be localized but can be extensive if untreated. Comments: Needs moisture, migratory; will drop onto houses from overhanging trees.
SCORPIONS
Characteristics: Brown, gray, black or yellow; ½” – 2½” (12-60 mm). Location: Under rocks, trash, crawl spaces, attics. Diet: Soft-bodied insects. Damage: Will sting humans if provoked; can be very poisonous. Comments: All stings should be treated by a doctor immediately. Generally found across the southern United States.
BLACK WIDOW SPIDER
Characteristics: Black with red hourglass on underside of abdomen or back; ½” body length (12 mm). Location: Seldom found in homes; more common in wood piles, porches, outhouses. Diet: Insects. Damage: May bite humans; can be very dangerous. Comments: If bitten, see a doctor immediately.
Remember, these tips are only general guidelines. Since each situation is different, contact a professional if you have questions about a specific issue. More home safety and maintenance information is available online at www.housemaster.com.

Copyright © HMA Franchise Systems, Inc.

Reprinted from the Housemaster eNewsletter July 2008

How Much of a Mortgage Can I Afford?

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.

Rent: _________________________
Multiplier: x 1.32
Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.For more help, use Fannie Mae’s online mortgage calculators.

Reprinted From Realtor Magazine Online July 2008 with permission from the National Association of Realtors. Copyright 2008. All Rights Reserved.

Do You Know Someone Who Rents?

Here are some facts they won’t get from their landlord:

• It’s a Buyer’s Market
• Homes are Priced Competitively
• Mortgage Rates are Affordable
• Their Rent Pays the Landlord’s Mortgage

That last one is a biggie! Paying rent is like throwing away money because there is no residual economic benefit from the expense. Instead, the same renter, affording their own home, would be making an investment in their long term net worth.
The economic benefits of homeownership are tremendous! Tell your renter friends and relatives to contact me today to learn how to unlock their door to personal wealth through homeownership!

Real Estate as a Retirement Tool

4 Ways to Make Money on Real Estate Investments Many real estate professionals use their experience in buying and selling properties to finance a comfortable retirement. "As real estate professionals, we're uniquely qualified to implement various investment strategies and to see opportunities that many people are never exposed to. Those who don't participate are missing a golden opportunity," says Dan Bohlke of Bell-Key Properties Inc. in Hampton, Va. Consider these real estate investment strategies.1. Buy and hold for rental income. For the last 14 years, Bohlke and his business partner-wife, Karen, have been systematically buying well-located single-family homes at or slightly below the current median sale price for their area—from $80,000 to $120,000. Most are acquired by assuming existing mortgages of former owners or through owner financing. Once the properties are paid off, they generate about a 7.5 percent to 8 percent annual rate of return. That means a $100,000 house that is paid for should produce about $7,500 to $8,000 a year in spendable cash flow after paying real estate taxes, insurance, maintenance, management, and other fees. "You need just $1 million in paid-for real estate—or 10 homes costing $100,000 each—to produce a real retirement income of $75,000 to $80,000 per year," Bohlke explains. "It self-adjusts upward with inflation, so you won’t be living on a fixed income. And as the properties increase in value, so does your net worth.”TIP: Buy properties near each other; it’ll make management easier.TIP: Using a professional property management company to manage your investments creates a liability barrier between you and your clients because the property manager handles all day-to-day operations and assumes a portion of the risks from issues such as lead-paint disclosure and fair housing practices. —Daniel Bohlke, Bell-Key Properties Inc., Hampton, Va.2. Buy, hold, and eventually sell. Another strategy used by Dan Bohlke is what he calls “the real estate garden concept." Periodic, sequential investing involves acquiring properties at the rate of one or two per year and then systematically reselling them after 12 to 15 years. "The soil is your local real estate market, the seeds are the properties you acquire, and the fruit is rental and sale proceeds," he explains. "When your crop matures after 12 to 15 years, you can start selling the properties each year in the order of their purchase, using a portion of the proceeds of each sale to reseed your garden (acquire more properties) and using the remainder to live on in retirement." With this approach, two properties acquired per year and sold after 15 years should produce a perpetual income stream of more than $100,000 a year, even after setting aside enough money to continue acquiring two properties per year. Another choice is to sell off half the properties you've acquired over the years and use the sale proceeds to pay off the other half. This would create a cash flow from the remaining paid-for properties as in the buy-and-hold strategy above.3. Buy and resell. Real estate professionals often have the advantage of recognizing changing markets or houses with untapped potential and are able to capitalize by buying low and selling high. Eric Goosen, Goosen Realty Services, St. Clair Shores, Mich., buys two-to-four-unit rental buildings. Because he lives at each property, Goosen’s often able to put only 10 percent down, as opposed to 40 percent or more for investment property. Often he holds the property for two years, so he can take advantage of the $250,000 capital gains exemption on the sale of a personal residence to avoid a portion of the taxes on the sale. Goosen also renovates the properties to increase their value. TIP: Institute a guaranteed sales program to buy the homes that don't sell by the end of the listing period at your company; it can create a ready made pipeline for new real estate investments. —Bill Watson, Watson Realty Corp., Jacksonville, Fla. TIP: Don’t take advantage of a buyer’s plight and buy a home at an unfair price. It will damage your business reputation in the community. 4. Build and sell. Developing properties isn’t for everyone, but your market knowledge often helps you identify up-and-coming areas where in-fill development is justified. In New Orleans, Bill and GiGi Burk of Burk Realty use a computer-based analysis program he developed to determine the highest cost-per-square-foot price the market will bear. He then compares that cost to the actual estimates for buying land and completing construction and determines if he can sell the property for a high enough return (15 percent to 25 percent or more) to justify the risk. Equally tough is paperwork and patience needed to obtain permits and local zoning approvals. Downtimes in the market are a great time to execute a develop-and-sell strategy, says Bill Burk. “We’ll be ready when the market comes back.”TIP: You can use pre-tax retirement dollars to investment in real estate through a “self-directed” IRA. All income and expenses from the property are paid for by the IRA, but you can make buy and sell decisions with the approval of the account’s custodian.

Reprinted from Realtor Magazine Online (April 2008) with permission of the National Association of Realtors. Copyright 2008. All rights reserved.

Did You Know it's a Buyer's Market Out There?

Unfortunately we keep getting inundated with negative news about the housing market. There is no question that in some areas of the country the market is bad. Home loans made to borrower’s who could not afford them in the long run coupled by depreciation in value are fueling the vast majority of the problems. But not in our area! The Rochester area has been fairly insulated from this mess.
In Rochester, I think, our housing market problems continue to be a result of the media reports which have made both buyers and potential sellers extremely skittish. But, out of this adversity comes an incredible opportunity, first for buyer’s and then for sellers.
What I have been noticing lately is the affordability of the existing inventory and the value that can be found in every corner of the community. When a buyer joins this affordability with low mortgage interest rates, opportunity abounds!
The Rochester real estate market provides buying opportunities for both owner-occupants and investors. If you are thinking about buying a first home or a new home, NOW is the time to buy! If you want to increase your investment holdings, NOW is the time to buy!
Contact me today so that I can help you take advantage of the Rochester Buyer’s Market Today!