Spring is finally here, and that means a few things for real estate. Often I like to end the lease at the end of March, so there’s enough time to find the next tenants. For this year, I’m happy to announce that all the residents who are eligible to end the lease decided to renew. This is good news for you, as that means you don’t have any extra expense of finding new tenants, fix up cost, or vacancy. This is also good news to me, as I feel at least part of the reasons they are staying is that I am doing my job.
That said, spring also means that new legislation will be introduced at IL General Assembly. Before I go any further, I want to make clear that I respect your decision regarding politics, and I’m not here to sway you in one way or another. There are so many bills out there it’s almost impossible for us to keep track of which one will affect us real estate investors in what way. That is why I’m here to share some of the bills that might affect us if they pass. Ideally, I would share them in a way that doesn’t make it sound one-sided. However, I’m not qualified to do so, so I’ll just share the page that was prepared by Illinois Rental Property Owners Association or IRPOA. You can read the views of IRPOA regarding various bills introduced here. One final thing I want to bring up regarding politics is that whether you decide to get involved or not, you ARE involved. If you are inactive, it just means that you decided to have others decide on your behalf. Nothing wrong with it. I do that all the time with the properties I have in IN. I have no idea what is going on in IN when it comes to politics. I don’t get involved. I just let the people in IN decide.
Vendors’ Corner
If you want your roof replaced, you probably should get a few quotes. Different companies can quote widely different prices. So I should get multiple quotes when I arrange repairs for your properties also, correct? Well, not so fast. In the past, I wrote a blog called, “4 Reasons Why I Do NOT always Get Multiple Bids for Repairs.” Well, I just expanded to “8 Reasons Why I Do NOT always Get Multiple Bids for Repairs.” In other words, I’m more convinced than ever NOT to get multiple quotes for repairs. You can read the blog here.
Crazy Market
You probably heard that the real estate market is crazy hot right now. Even when you discount the fact that the news media like to exaggerate reality, I have to say it is quite hot out there! One of the main reasons the market is so hot is because of the low inventory level. Take a look at the below chart.
As you can see, the monthly supply is at an all-time low. The red line is the entire MLS Area, which means more or less the entire Chicago land. The blue line represents the Like County. So how do you buy a property when the market is crazy like this? Below are steps you can take when you are looking for a property. (Before I go into some tips, I want to clarify that not ALL properties are crazy hot right now. The high-end market tends to act differently. Some rural areas or condos may act differently.)
1. Do you really need to buy a property now? While I’m not predicting anything regarding what will happen in the future, I think it’s wise to assume that the crazy appreciation we are experiencing can not continue indefinitely, and also it might be wise to prepare to lose money if you buy a house right now and have to sell it in the next few years. Waiting for the market to normalize might be a better option for some.
As you can see, the price tends to go lower during the wintertime. Maybe waiting will winter might be the right option.
2. Know your limit. If you still want to buy a property, make sure you know your limit. Because money is so cheap to borrow these days, it’s so easy to get caught up in a bidding war and end up paying more than you can afford.
3. Act fast. This means not only have a search set up to receive properties as soon as they hit the market but also to set up the showings as soon as you can at the earliest time you can go see. When a property is very attractive, the showing slots fill up quickly, and by the time it’s your turn to see it, the seller may cancel the showings when there are too many showings.
4. Act REALLY fast. A lot of people don’t know this, but we agents have access to what is called a “private network.” Many agents list the properties that will hit the market soon there. Make sure your agents are checking the private network also.
5. Make a great offer. While the offer price is important, there are other things you can do.
- A cash purchase is usually better than a purchase with a mortgage.
- A conventional mortgage is usually better than an FHA mortgage.
- Larger earnest money is usually better than smaller earnest money.
- Having a pre-approval letter is a must.
- Send proof of funds also.
- Buy as-is.
*Make sure you consider your situation and consult with your agent before making any major decisions.
If you are considering selling or buying or know someone who is looking for some help, I’m here to help you. Thank you for reading, and enjoy the beautiful season!
