Auburn/Opelika Real Estate Blog
Stay up to date on changing Auburn/Opelika real estate news and economic developments that impact local real estate markets. Get critical insights from market reports, sales info and important trend data for our area.
April 2019 Local Market Snapshot
posted May 13, 2019 by the Invest-Auburn.com Team
April was another good, although somewhat mixed month for home sales in the Auburn and Opelika markets. The average Auburn home sale increased in price by 2.1% from April 2018 while the number of homes sold decreased from a robust 153 units in 2018 to 99 units last month.
Conversely, home sales in Opelika increased from 52 sales during April 2018 to 59 sales in April 2019. The average Opelika sales price decreased by 2.4% in April compared to last year.
Interest rates for 30 yr fixed conventional mortgages ended April at 4.14%, continuing their downward trend since their recent peak of 4.94% in Nov. 2018.
For a PDF with these data and historical data going back to 2008, send us an e-mail by clicking here.
Building Wealth Through Home Ownership
According to the U.S.Census Bureau (Current Population Survey/Housing Vacancy Survey - April 25, 2019) approximately 2/3 of the U.S. population own their homes. The home ownership rate increases to 75% for people aged 55 and older. Americans apparently still believe the old adage that “renting is just throwing money away.” Homeownership continues to be a foundational pillar of the American Dream and endures as a key feature in building family wealth over the long term.
When you buy your own home you become a real estate investor. Chris Hogan of DaveRamsey.com says: “Paying off your home is one of the best long-term investments you can make. It’s so important that I recommend you do that before investing in any other type of real estate. Owning your home outright is a huge part of achieving financial peace.” Mature Americans know that paying off the mortgage allows the build-up of equity leading to outright ownership of your home – free and clear. There is no better feeling than that!
A recent study (Yun and Evangelou, 2016) of published peer-reviewed research found that homeownership also brings significant social benefits to families and their communities. Yun and Evangelou note that “Owning a home is different from renting. With the home purchase comes the pride of ownership and the sense of belonging in a community where one has a financial stake in the neighborhood. Perhaps homeowners are ‘happier’ just from having achieved the so-called ‘American Dream’ – a sense of accomplishment, a milestone. Also, ownership entails greater individual responsibility. Homeownership requires a large (if not the largest) financial outlay of a person’s life and often requires the responsibility of a mortgage spanning 30 years.”
The American Dream of homeownership can build family wealth, bring financial peace and open doors to many new opportunities for you and your family down the road. It is not an easy path forward. It requires personal responsibility and discipline. Nevertheless, Americans across many generations have found success in homeownership and you can too!
Buying Your First Rental Property
posted May 20, 2019 by the Invest-Auburn.com Team
There are many reasons why people choose to rent and not buy a home. Some folks are still saving for the down payment. Other people only plan to be in the area for a short time and don’t want to get locked into a specific house. Renters need places to rent and there is a shortage of non-student rentals in the Auburn area. Investing in rental properties can be a wise decision as long as a few key issues are fully considered.
1) Focus on your long-term, wealth building goal. Investing in rental property is a business and must be approached as a business. It is a marathon with an investment horizon spanning many years. Rental properties can generate regular cash flows if costs are carefully controlled and honest, reliable tenants are obtained. In addition, rental properties can offer long-term appreciation potential if carefully selected for purchase.
2) Rental properties can be of almost any type: residential (houses, condominiums, duplexes, apartment buildings), commercial (retail properties, office space, farmland, etc.) or industrial (small scale or large). Most beginning investors start in the residential marketplace.
3) Study and understand the local market for both buying and renting real estate. Properties should be in desirable areas – places where people want to live and/or do business. Bargain properties in areas that are hard to lease and with little appreciation potential often turn out to be no bargains at all! Auburn and Opelika are both blessed to have many areas very desirable for long-term investments. If you would like to receive quick and timely information when new properties come on the market, click here.
4) Don’t get too greedy. One goal of many real estate investors is regular and positive cash flow. If the desired rent is priced too high, the property can sit empty without generating income for months.
5) Owning rental property provides a range of tax deductions to the investor such as deducting the property’s management and maintenance costs. In addition, depreciation costs of the building and structures can be taken over their expected lifetimes. An experienced tax accountant and/or attorney on your investment team are a prerequisite for these complex and ever-changing details. Specifically HOW you invest can decide the value to you of the potential tax advantages available. Contact us now for further details!
6) Property Management: Managing and maintaining rental property requires expertise in many diverse areas. Some beginning investors successfully choose the do-it-yourself route. Other investors, especially when they have acquired multiple rental properties, elect to hire professional property managers to take care of the many details that arise at the worst possible time, 24 hours a day, 7 days a week!
- Tenants must be found and selected when older tenants move out. Wise choices here can save many problems later.
- Problems erupt at odd hours of the day or night. Water pipes can burst, air conditioning systems can quit, roofs can begin to leak, toilets can clog and overflow, ants or termites can suddenly appear. Property managers will take the calls and schedule the appropriate plumbers, electricians and various other contractors to handle the maintenance tasks.
- Property managers also cope with the legalities of taking care of tenants who cannot seem to pay their rent on time. Although you may have empathy for the circumstances causing your tenants’ financial trouble, you need the rental income to pay your own bills. You will need to treat your rental property like the business it is. For many investors, a property manager is invaluable for collecting rents and, when necessary, organizing eviction proceedings.
Investing in your first rental property can be a financially rewarding but intimidating and scary experience. If you are thinking about investing in rental property, contact us today for more information about local opportunities as well as additional professional resources to help you along the way!