Should I Sell or Rent My Home? A Quiz to Help You Decide

To sell or to rent. It’s a tricky question, especially in a down market. If you are relocating or just ready to move on from your ball and chain of a house, renting might make more sense than selling. Here is a quiz to help you decide whether you should sell or rent your home.

Can You Afford to Sell Your Home?

Here’s an example of a situation where a couple had to examine how affordable it was for them to sell their house. The couple knew they wanted to move to a new home, but they live in an area of Florida where houses have halved in value since the peak in 2006 - the same year their house was purchased. As they debated whether to sell their home, they realized that if they chose to sell, they would be forced to take a $150,000 cash loss, not including closing costs. They looked at the numbers and decided they could not afford to sell their home. For them, it made more sense to rent their home and purchase a second home that then became their primary residence. When you rent, you may take a loss on a monthly basis, but you do not have to come up with the cash to satisfy the loan immediately upon sale. If you sell at a loss, then there is no tax benefit.

Can You Afford to Rent Your Home?

Research the going rents in your market using tools like the MLS listings and craigslist.org. Look for comparable properties in your neighborhood or similar neighborhoods to get sense for what your home might bring in as a rental. It is important to take features like square footage, number of rooms and upgrades such as granite kitchen counter tops, location and proximity to desirable schools into consideration while looking for comps. You can also talk to real estate agents and property managers to get their take on pricing. If it turns out that you can’t cover your mortgage with the projected rent, then calculate how much of a loss you can take to still be able to afford to rent the house.

Do You Need Tax Deductions?

You can often take losses and costs from rental properties as tax deductions. In addition to deducting the cost of your mortgage beyond the rental income, landlords can often deduct all expenses associated with the rental, including property management and maintenance fees. Consult your accountant to ensure that you know what the costs and benefits will be from a tax perspective before you make the decision to rent rather than sell your home.

Can Your Credit Take the Hit of a Short Sale?

If you don’t mind sacrificing your credit score for a few years, you can’t afford to rent and you really need to get out of your house, then a short sale is always an option. A short sale is a real estate transaction in which the bank agrees to accept less than the amount owed on the mortgage to release the owner from their financial obligation. For example, if the mortgage on a home is $200,000 and a buyer makes an offer for $150,000, the bank may accept this offer and forgive the additional debt. Besides mucking up your credit, a short sale can also contribute to your tax bill. Often, the forgiven amount (in this case, $50,000) can be added to your tax bill as taxable income. It is important to consult a lawyer or accountant so that you know the details of how a short sale will impact your taxes and your credit before you move ahead.

Should You Sell or Rent Your Home?

Depending on your immediate financial situation and long-term outlook, it can make more sense to rent rather than sell. In some cases, a short sale is the best remedy for escaping an underwater property and moving on with your life. Before you make any decision about renting or selling, be sure to consult a lawyer or accountant for customized consultation so that you fully understand the tax ramifications and benefits given your unique situation.

*** For more real estate market tips and resources, visit TulsaHomeGuru.

How to Pick a Property Manager

Investing in rental property? Think of property management as a tool, and possibly leverage your resources:

A stranger is about to move into what very likely used to be your home. And you're busy. You don't have time to manage the details of your own household much less fix broken toilet handles at your rental property. Enter property management companies. For those of you who enjoy finding renters, running background checks and putting up with service calls from your residential tenants, have fun. If you'd rather not deal with the grit, grime and daily responsibility of renting out a residential property, here are some tips on finding a property manager who will find a responsible tenant and give you comfort that your property is well-leased and is being properly maintained.

Do your own research
Research local rents by checking out rental listings on craigslist.org, and check zillow.com rent Zestimates for homes in your area with similar features and square footage. Property managers are motivated to rent your home for the maximum that they can get since they typically take a percentage of the rent as their fee, but they might not be tuned into values for your type of home in your particular neighborhood. Also, laws differ from state to state. Do your due diligence on the tenant-landlord laws for the state that you live in to understand your rights as a landlord before you enter into conversations with property management companies.

Get recommendation
Never hire a property management company without a recommendation or two that you trust. If you can, try to find both a realtor and a landlord who have worked directly with a given company. Get local recommendations and keep in mind that performance of a national company can vary from market to market.

Explore your options
Some companies offer leasing services only, which can be cheaper than leasing and maintenance. It really depends on how much time you have to dedicate to the rental. Make sure you understand the tenant-landlord laws in your state so that you know how long you have to respond to a tenant request - and whether you want to deal with that.

Tune into their communication processes
Interview a few different companies and see how they respond to your inquiries. If they get back to you immediately, that's agood sign. If it takes a few days, weeks or months to connect - not so good. If they're late to appointments, don't show up or don't call, also not so good. Take this as a sign of how they'll work with you throughout your relationship.

Read the leasing agreement
Ensure that you're covered and have the power to remove a tenant who doesn't pay the contractual rent and that property damages are covered by an extra month's rent and security deposit. Also make sure that, based on the laws in your state, the leasing agreement allows you to release yourself from the relationship with the property management company if they do not hold up their part of the agreement.

Gut check their process
Ask your property management company representative about tenant approval process. Find out how they market properties, what kinds of tenants they install, and what a typical lease period looks like at their company. Also make sure that you understand their background checking process to ensure that both credit and criminal background checks are performed, as well as character references.

Expect to pay for it
Most property management companies charge one month's rent plus 10 percent of the monthly rent, which normalizes out to an 8.5 percent fee. You have to decide if this is worth it to you. Choosing to go with a property management company can make your life easier since all you have to do is wait for the direct deposit. Just make sure that you understand what you're getting into before you sign up.

*** For more real estate market tips and resources, visit TulsaHomeGuru.

TEN GREAT REASONS TO BUY A HOME IN 2012

Re-claim the American Dream!

1. Quality of life – a home provides stability and security for you and your loved ones, and membership within a community of neighbors.

2. Pride of home ownership – a home is a personal haven, a place that you can decorate, shape, and share over time because it’s yours.

3. Excellent affordability – lower home prices combined with low interest rates means there are tremendous opportunities for buyers. 

4. Historically low interest rates – around 4 percent in the U.S. gives better purchasing power to those who qualify.

5. Appreciation potential – your home investment can grow in value. 

6. Equity buildup and debt pay down – homeowners enjoy an average net worth of approximately $184,000 vs. $4,000 for renters. 

7. Leverage – where else can you buy an investment of this magnitude with about 3 percent down? 

8. Tax deduction advantages – property tax and mortgage interest write-offs.

9. Tax exemption – up to $500,000 per married couple or $250,000 per person on sale of a primary residence in the United States.

10. The real cost of renting – at $800 per month, with the average 6 percent rental increase per year, you will pay $126,536 over a 10-year period but have zero ownership of the property.

*** For more real estate market tips and resources, visit TulsaHomeGuru.

How to Find the Right Neighborhood for You

There are many factors to consider when selecting a neighborhood that is right for you. Think about the location in terms of commute time to work, distance from leisure-time activities, and proximity to shopping, schools or any other places you frequent. You may think of others factors that are important to you. Please take some time to write them on your Home Search Criteria form.

Scout out the Neighborhood!

• It is important that you scout the neighborhood in person.  
• Talk to people who live there. 
• Drive through the entire area at different times of the day, during the week, and on weekends. 
• Look carefully at how well other homes in the area are being maintained - are they painted; are the yards well cared for; are parked cars in good condition? 

Neighborhood Factors to Consider

• Look for things such as access to major thoroughfares, highways, and shopping.  
• Listen for noise created by commerce, roads, railways, public areas, schools, etc.  
• Smell the air for nearby industry or agriculture.  
• Check with local civic, police, fire, and school officials to find information about the area.  
• Research environmental topics such as soil and water quality, as well as floodplain implications. 
• Study traffic patterns around the area at different times of the day and measure drive time from the area to work.  
• Is the neighborhood near parks, places of religious worship, recreation centers, shopping, theaters, restaurants, public transportation, schools, etc.?
• Does the neighborhood have a Homeowner’s Association?

*** For more real estate market tips and resources, visit TulsaHomeGuru.

Considering Alternative Energy for Your Home

Whether or not one believes global warming is an issue to be concerned about, it’s hard to refute the evidence that the world’s carbon dioxide production is the main cause of the warming of our planet. To slow the effect, more individuals and corporations are doing their part to minimize their carbon footprint.

Recent advancements in and an explosion of research on alternative, or renewable, energy are making it possible for homeowners to lessen the impact of their energy usage. Increasingly, there are more options that provide comparable or better performance to current energy sources.

Three of the more common renewable energy sources are solar power, wind power and hydro power. Note that while these are “more common,” they are not necessarily widely used in homes … yet.


Solar power is exactly as it sounds: power that comes from the sun. By the same token, wind power comes from the wind. Hydro power comes from the force of moving water. This article focuses on solar energy.

Determining solar power for homes

By various estimates, sunlight can meet the energy needs of the entire human population many times over. Imagine, using the sun’s energy to heat your home, take hot showers, power up all your electronic gadgets and kitchen appliances and keep your lights on!

There are, of course, heavy initial costs involved to using solar power to run your house. At the same time, there are ways you can use the sun’s energy for many years without a long-term expense.

If you’re building a new home, work with your designer to make the most use of the sunlight that falls on your lot. For example, place doors and windows where they’ll work best for you. If you live in a cooler climate, don’t put windows on the shady side. Also in this environment, avoid high ceilings unless you absolutely must have them (they are really nice to have, just keep in mind that you’re heating a lot of space you don’t use).

In warmer temps, plan for the back of the house to get the hottest sun of the day and put fewer windows on the hotter sides.

If you’re in an existing home, plant trees and perennial bushes near doors and windows. During the summer the growth will keep your house cool and in the winter the bare branches will let the sun in. You might also board up windows on the “wrong” side of the house or use insulated window coverings.

For either a new home or existing one, consider installing a solar power water heater. It can be a big expense initially, but you’ll recover the cost through energy savings within 10 years. Even if you don’t plan to be in your house that long, having a solar power water heater will add to your home’s value at the time of sale.

Installing a solar power system

There are a variety of factors to consider when researching solar energy for your home. How much you intend to use it will determine how many solar panels you’ll need. If you’re going completely off the grid, i.e., independent of your local power company, you’ll obviously need more than if you continue to use supplemental power.

Another factor is where to put the system. Rooftops are the logical choice, but since solar energy systems are designed to last for several decades, will your roof hold up that long? (Much solar power installation happens with new construction.) If not, you could mount the panels on poles, on a shed or on the ground.

As with any purchase, you’ll want to shop around for your solar power system and interview a few installers to make sure you’re comfortable with the product and service you’re getting. The outfit you buy it from may offer installation or at least have suggestions for reputable installers. Another option is the ever-increasing “do-it-yourself” project.

For an in-depth look at solar energy technologies, go to the Department of Energy website.

Why is solar power a great way to save money?

Sunlight is free! It’s really as simple as that in the long-term. But as indicated earlier, the short-term, up-front costs can be steep.

One way to reduce your costs is to do it yourself. Build your own panels and install them with a little help from your friends. It does seem like a daunting task, but it is possible and more people are turning to this solution.

One D-I-Y’er offers a number of articles and insights on building and installation.

IMPORTANT: Before you commit to a system, be sure to check with your city or county government permitting office to ensure your system meets current laws such as zoning and height restrictions. Better yet, know what they are before you even begin the process!

Is it true that solar power = no pollution?

Not entirely. There are the fumes associated with manufacturing, transporting and installing solar power systems. Once in place, however, they don’t contribute to acid rain or urban smog! You can be assured that your energy system is much better for the environment all around.

A word of caution: while a solar power system doesn’t emit pollution once installed, its efficiency can be affected if used in heavily polluted areas.

*** For more real estate market tips or to search for a relo, visit TulsaHomeGuru.

Alternative Home Energy Installation: What are Forms of Renewable Energy

Three forms of renewable energy (the most common) are solar, wind and hydro. Less-known are tidal (sea waves), geothermal (natural heat), biomass (decomposed matter), fuel cell (hydrogen and oxygen) and nuclear energy.

We continue here with a look at wind power for home use, along with sources for further research and information.

Why is wind power important?

Simply put, it's good for your pocketbook and for the environment. At a time when saving money is on top of everyone's mind, regardless of an individual's financial health, opportunities to reduce the cost of basic expenses such as utilities are worth considering. And just as wind is a renewable resource, the savings on wind power are sustainable for the life of your home.

Natural gas power vs. wind power

From a short-term cost perspective, natural gas power, currently at a low price, is the better deal. However, even after considering the expense of installation, a wind power system is the most cost-effective way to go, thanks to a 30 percent tax credit for systems in service before December 31, 2016.

Environmentally speaking, although natural gas is among the cleanest of the fossil fuels, it still releases pollutants. Wind power systems do not, once the manufacturing and installation processes are complete.

In terms of reliability, natural gas power comes out on top. It's readily available, whereas wind can be intermittent. This takes us to a look at the most ideal circumstances for wind systems to be most effective.

A flat, open expanse makes for the best situation in harnessing wind energy, as tall buildings and close, surrounding homes break wind patterns. In this situation, you have the option of going completely off the grid. In a more developed area, it's not practical to expect there will be enough wind to run all your energy needs.

Want to see if you live in a region that has powerful winds? Find high-resolution wind maps and estimates of wind resource potential at Wind Powering America.

How does a wind energy system work?

The most common home system involves the use of turbines, which convert the kinetic energy into mechanical power. (Wind turbines/windmills are among the oldest forms of renewable energy, dating back to medieval times!) The kind of turbine you'll need depends on where you live and how much you plan to use wind as your source for energy.

If you live in a remote area where wind is easy to come by (and height restrictions are less stringent), you have a choice of a rooftop turbine or one that sits on the ground and towers over your home. The latter can go as high as 120 feet!

As noted, living in a developed area isn't conducive to using wind for all your power needs so a small rooftop turbine should be enough to generate the most feasible amount of energy in that environment.

Learn more about small wind systems for your home through the U.S. Department of Energy's FAQs.

Where can I find home energy kits?

Save money at the start by doing it yourself! A quick search on the Internet yields a long list of sources for wind energy systems, so finding one will be easy enough. The key to finding the right one is doing some thoughtful research. Whether you make and install your own system or have it done for you, refer to the American Wind Energy Association for some helpful tips first.

In general, alternative home energy installation is the wave of the future. In fact, already there are those who would prefer the word “alternative” no longer be used as “renewable energy” becomes more mainstream.

Converting to renewable energy in an existing home is a major commitment. Be prepared to spend a lot of time on research, looking at the history of your energy use and predicting what it will be in the future. A growing family will gradually need more while empty-nesters may begin to use less. Saving money and “doing good” can only be positive things, but you'll have to decide if all the work is worth it. We close with some general comments for your consideration.

Is renewable energy for me?

If you're thinking about transitioning from fossil fuels for your energy needs, whether for financial or environmental reasons, the same considerations apply.

How much do you intend to use it? Where will you put it? (A wind or water turbine is more cumbersome than the nice flat panels of solar power.) What is your budget? What are the local zoning laws? Do you want to do it yourself?

Advantages and disadvantages of renewable sources of energy

First, the good news. The sun will shine and the wind will blow. Generations hence, these natural sources will be in abundant supply. The same can't be said for fossil fuels.

Renewable sources don't release toxic chemicals into the atmosphere, making them environmentally sound and safe for all.

While initial costs to transition to renewable energy can be steep, the long-term cost-savings can be substantial. If you start with these alternatives in a new home, the savings are more immediate.

As for the not-so-good news, the main drawback (other than initial costs for existing homes) relates to the first note above. While the sun will shine, there will be cloudy days when not enough sunlight can be harnessed. Likewise, the wind may be, well, less windy. These can be worked around by storing energy during peak conditions, but it will take extra effort and solid planning.


*** For more real estate market tips or to search for a relo, visit TulsaHomeGuru.

Are Relocation House Purchases a Good Deal?

Relocation... to purchase or not to purchase
A lot of people ask, "Are relocation house purchases a good deal?" If you're asking this question,
you are most likely interested in purchasing a house from a relocation company. By buying a house from a relocation firm, often called a "relo," you can get a good deal if you take a few precautions as you go through the home buying process.

Relocation companies typically buy homes at a discount, but with the increased number of foreclosures and short sales in the past couple of years, they may be more willing than ever to make a deal. With the glut of properties available at great prices, take your time, do your due diligence, and you should be able to drive a hard bargain.

Steps to Make Relocation House Purchases a Good Deal

Find a reputable real estate agent from a well known company who specializes in relocation properties. Make sure this agent works with more than one relocation company. In order to get a good deal on a relocation house purchase, you want to know that you're not being steered to only one relocation company's listings. Let the real estate agent know you are interested in seeing listings of properties owned by relocation companies.

You need to find out the pricing history for the home and the neighborhood. Is the relocation company pricing the property to move? Get pricing opinions on the properties you select. This will usually be called a Comparative Market Analysis or CMA. Make an offer only after you have all of this information. Also, remember that a relocation company is an unemotional seller, and this can help you get a good deal on a relocation house purchase. Unlike an individual owner, there's virtually no risk of ôoffendingö the seller with a low offer.

Buying a House from a Relocation Firm

Most properties owned by relocation companies will be sold "as-is." This means your home inspector's inspection needs to be as thorough as possible when buying a house from a relocation firm. Be sure the home inspector knows the home is a relocation house being sold by a relocation company. This is really important for all real estate transactions, but especially when buying from a relocation company. The relocation company's property disclosure form will likely say that they have "no knowledge of any problems." In other words, they can say whatever they want, and you'll have a virtually impossible time trying to prove otherwise. Make sure your inspector is extra thorough on your inspection and looks for things like water damage, evidence of poor drainage, foundation settling ... anything that could cost you money fixing after you've purchased the house.

Get pre-approved and not just pre-qualified by your mortgage lender. Pre-approved means you've filled out a mortgage application. This way your offer, even if it's a low one, will get more attention. The more complete your offer is, and the quicker and easier the relocation company perceives the closing to be - regarding what percentage you can put down, how quickly you can get settlement, and your credit score - may end up being more important than your offer.

As with other real estate listings, the length of time a house is on the market will have an impact on how willing the relocation company will be to negotiate on price. You will have the greatest bargaining power with homes that have been on the market longer. If you offer a low price on a house that has only been on the market a few weeks, the relo company may not budge. But, if you find a relocation house that has been on the market for a few months or one that has already had several price reductions, you may be able to get a really good deal.

It all depends on inventory, time on the market, and market conditions. You cause no harm by offering low, and you just might get a deal. The worst that can happen is the relo company says no. Unless you are in a seller's market or the home is already deeply discounted, your chances of getting a good deal on a relocation house purchase are good.

If the relocation company purchased the house, they are paying the utilities and taxes as well, so they may be in a good position to sell at a lower price to a quick and secure settlement. Ask if they'll pay or split closing costs if they won't lower the price.

You want someone looking out for your interests, not those of the relocation company, so you should hire a real estate attorney to review the documents. Most relocation companies require the use of their sales agreement forms, which differ from standard realtor-approved forms, and you don't want to end up in a bad mortgage deal.

Many people have successfully purchased houses from relocation companies. With a good real estate agent and a well-constructed offer, in this market, you should be able to get a good deal on a relocation house purchase. Which brings us back to the question, "Are relocation house purchases a good deal?" With the right market and a little effort from the buyer, they can be.

*** For more real estate market tips or to search for a relo, visit TulsaHomeGuru.