Aspire Real Estate Group BlogRecently posted or modified blog posts in the category - Investing in Real Estatehttps://www.aspirelouisville.com/blog/Copyright AspireLouisville.com2023-12-13T14:10:45-07:00tag:aspirelouisville.com,2012-09-20:21992How To Turn Homeownership into a Side HustleHow To Turn Homeownership into a Side Hustle
<br /><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231204/20231206-How-to-Turn-Homeownership-into-a-Side-Hustle.png" width="600" /><br /><br />
Does the rising cost of just about everything these days make your dream of owning your own home feel less within reach? <a href="https://www.bankrate.com/personal-finance/side-hustle-survey/#millennial-gen-z" rel="noopener noreferrer" target="_blank">According</a> to Bankrate, many people are seeking additional income through side hustles, possibly to cope with those increasing expenses and save for a home. This trend is particularly popular with younger individuals who may be dealing with student loan debt (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231204/20231206-Nearly-two-in-five-US-adults-have-a-side-hustle.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231204/20231206-Nearly-two-in-five-US-adults-have-a-side-hustle.png" /></a>
Here are two strategies that can not only make <a href="https://www.simplifyingthemarket.com/en/2023/11/23/why-homeowners-are-thankful-they-own/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">homeownership</a> more affordable in the short term, but turn it into a lucrative side hustle that can pay off down the road.
Transforming the Challenge of a Fixer-Upper into an Opportunity
One thing you could do to help you break into homeownership is consider purchasing a fixer-upper. That’s a <a href="https://www.simplifyingthemarket.com/en/2023/11/21/are-there-actually-more-homes-for-sale-right-now/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">home</a> that may be a bit less appealing and as a result has lingered on the market longer than normal. <a href="https://realestate.usnews.com/real-estate/articles/buying-a-fixer-upper-everything-you-need-to-know" rel="noopener noreferrer" target="_blank">According</a> to a recent article from U.S. News:
“The current state of the housing market may have you expanding your options to try to find a home that you can afford. A fixer-upper that needs some updating and a little love can feel like a welcome alternative to move-in ready houses that go off the market before you can even take a tour.”
By opting for a home that requires some work, you may see two big benefits. For starters, you may find it’s easier to find a home because you’re not looking for that perfect option. Plus, it may also help you enter the housing market at a lower <a href="https://www.simplifyingthemarket.com/en/2023/11/22/home-prices-still-growing-just-at-a-more-normal-pace/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">price point</a>. This strategy provides a more affordable way to <a href="https://www.simplifyingthemarket.com/en/2023/11/08/thinking-about-using-your-401k-to-buy-a-home/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">become a homeowner</a> while also offering the potential for future profits.
Yes, the home may need a little elbow grease, but investing time and effort into gradually enhancing your house not only makes it a home but also increases its future market value. So, while you enjoy the satisfaction of turning a house into a home, you're also <a href="https://www.simplifyingthemarket.com/en/2023/11/07/homeowner-net-worth-has-skyrocketed/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">building equity</a> that can be unlocked when it's time to sell.
Renting Out a Portion of Your Home To Make It More Affordable
Another savvy strategy is to <a href="https://www.simplifyingthemarket.com/en/2023/11/03/the-benefits-of-buying-a-multi-generational-home-infographic/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">purchase a home</a> with the upfront intention of renting out a portion of it. <a href="https://zillow.mediaroom.com/2023-11-16-Interest-in-house-hacking-explodes-among-Millennial-and-Gen-Z-home-buyers-seeking-extra-income" rel="noopener noreferrer" target="_blank">According</a> to a recent press release from Zillow, renting out a part of their home is already very important for most young homebuyers (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231204/20231206-Percent-of-buyers-who-find-it-very-or-extremely-important.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231204/20231206-Percent-of-buyers-who-find-it-very-or-extremely-important.png" /></a>
This approach serves a strong purpose. As Manny Garcia, Senior Population Scientist at Zillow, <a href="https://zillow.mediaroom.com/2023-11-16-Interest-in-house-hacking-explodes-among-Millennial-and-Gen-Z-home-buyers-seeking-extra-income" rel="noopener noreferrer" target="_blank">says</a>:
“For those first-time buyers navigating the ‘side hustle culture,’ where a regular 9-to-5 might not quite cut it for homeownership dreams, rental income can step in to help . . .”
Basically, it can help you afford your monthly mortgage payments. So if you’re open to it, renting out a portion of your home not only helps with <a href="https://www.simplifyingthemarket.com/en/2023/11/16/people-are-still-moving-even-with-todays-affordability-challenges/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">affordability</a>, but it also positions you as an investor and turns <a href="https://www.simplifyingthemarket.com/en/2023/11/01/what-are-accessory-dwelling-units-and-how-can-they-benefit-you/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">your home</a> into a source of income.
Bottom Line
In the face of today’s <a href="https://www.mykcm.com/2023/11/14/home-prices-keep-climbing-in-most-markets/" rel="noopener noreferrer" target="_blank">affordability challenges</a>, both of these strategies offer more attainable paths to <a href="https://www.mykcm.com/2023/11/24/why-homeowners-feel-thankful-for-their-homes-infographic/" rel="noopener noreferrer" target="_blank">homeownership</a>, especially for younger buyers. If you want to discuss these options and see how they might play out for you in our local market, let’s connect.2023-12-18T08:00:00-07:002023-12-13T14:10:45-07:00Delancey Velatag:aspirelouisville.com,2012-09-20:21892What Are Accessory Dwelling Units and How Can They Benefit You?What Are Accessory Dwelling Units and How Can They Benefit You?
<br /><img src="https://files.keepingcurrentmatters.com/content/images/20231030/20231101-What-Are-Accessory-Dwelling-Units-and-How-Can-They-Benefit-You.png" width="600" /><br /><br />
Maybe you’re <a href="https://www.simplifyingthemarket.com/en/2023/10/18/what-are-the-real-reasons-you-want-to-move-right-now/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">in the market</a> for a home and are having a <a href="https://www.simplifyingthemarket.com/en/2023/09/29/explaining-todays-low-housing-supply-infographic/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">hard time</a> finding the right one that fits <a href="https://www.simplifyingthemarket.com/en/2023/10/16/are-higher-mortgage-rates-here-to-stay/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">your budget</a>. Or perhaps you’re already a homeowner in need of extra income or a place for loved ones. Whether as a potential homebuyer or a homeowner with changing needs, accessory dwelling units, or ADUs for short, may be able to help you reach your goals.
What Is an ADU?
As AARP <a href="https://www.aarp.org/content/dam/aarp/livable-communities/housing/2023/slideshow-abcs-of-adus/Presentation-The%20ABCs%20of%20ADUs-2023-0706.pdf" rel="noopener noreferrer" target="_blank">says</a>:
“An ADU is a small residence that shares a single-family lot with a larger, primary dwelling.”
“An ADU is an independent, self-contained living space with a kitchen or kitchenette, bathroom and sleeping area.”
“An ADU can be located within, attached to, or detached from the main residence. It can be created out of an existing structure (such as a garage) or built anew.”
If you're thinking about whether an ADU makes sense for you as a buyer or a homeowner, here's some useful information and benefits that ADUs can provide. Keep in mind, that regulations for ADUs vary based on where you live, so lean on a local real estate professional for more information.
The Benefits of ADUs
<a href="https://sf.freddiemac.com/docs/pdf/fact-sheet/adu-fact-sheet.pdf" rel="noopener noreferrer" target="_blank">Freddie Mac</a> and the <a href="https://www.aarp.org/content/dam/aarp/livable-communities/housing/2023/slideshow-abcs-of-adus/Presentation-The%20ABCs%20of%20ADUs-2023-0706.pdf" rel="noopener noreferrer" target="_blank">AARP</a> identify some of the best features of ADUs for both buyers and homeowners:
Living Close by, But Still Separate: ADUs allow loved ones to <a href="https://www.simplifyingthemarket.com/en/2023/10/10/are-grandparents-moving-to-be-closer-to-their-grandkids/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">live together</a> while having separate spaces. That means you can enjoy each other’s company and help each other out with things like childcare, but also have privacy when needed. If this appeals to you, you may want to consider buying a home with an ADU or adding an ADU onto your house. <a href="https://sf.freddiemac.com/docs/pdf/fact-sheet/adu-fact-sheet.pdf" rel="noopener noreferrer" target="_blank">According</a> to Freddie Mac:
“Having an accessory dwelling unit on an existing property has become a popular way for homeowners to offer independent living space to family members.”
Aging in Place: Similarly, ADUs allow older people to be close to loved ones who can help them if they need it as they age. It gives them the best of both worlds – independence and support from loved ones. For example, if your parents are getting older and you want them nearby, you may want to buy a home with an ADU or build one onto your existing house.
Affordable To Build: Since ADUs are often on the smaller side, they’re typically less expensive to build than larger, standalone homes. Building one can also increase your property’s value.
Generating Additional Income: If you own a home with an ADU or if you build an ADU on your land, it can help generate rental income you could use toward your own mortgage payments. It’s worth noting that because an ADU exists on a single-family lot as a secondary dwelling, it typically cannot be sold separately from the primary residence. But that’s changing in some states. Work with a professional to understand your options.
These are a few of the reasons why many people who <a href="https://www.simplifyingthemarket.com/en/2023/10/04/understanding-the-benefits-of-owning-your-first-home/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">benefit</a> from ADUs think they’re a <a href="https://www.simplifyingthemarket.com/en/2023/10/02/unpacking-the-long-term-benefits-of-homeownership/?a=10755438-18fd14121f0b72ca9e79fd59f38417ea" rel="noopener noreferrer" target="_blank">good idea</a>. As Scott Wild, SVP of Consulting at John Burns Research, <a href="https://www.wsj.com/economy/housing/tiny-homes-are-the-hot-new-homeowners-accessory-71cc05a9" rel="noopener noreferrer" target="_blank">says</a>:
“It’s gone from a small niche in the market to really a much more impactful part of new housing.”
Bottom Line
ADUs have some great advantages for buyers and homeowners alike. If you're interested, reach out to a real estate professional who can help you understand local codes and regulations for this type of housing and what’s available in your market.2023-11-03T07:00:00-07:002023-11-27T11:53:13-07:00Delancey Velatag:aspirelouisville.com,2012-09-20:19348The Perks of Owning More Than One HomeThe Perks of Owning More Than One Home
<img width="750" height="410" src="https://files.mykcm.com/2022/02/18112554/20220222-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="The Perks of Owning More Than One Home | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/02/18112554/20220222-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/18112554/20220222-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/18112554/20220222-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
Many things have changed over the past couple of years, and real estate is no exception. One impact is an increased desire to own more than one home. According to the recent <a href="https://www.luxuryhomemarketing.com/assets/LMR_NorthAmerica.pdf" title="Luxury Market Report" target="_blank" rel="noopener noreferrer">Luxury Market Report</a> from Luxury Home Marketing:
“As trends such as remote working and flexi-hours took hold in 2021, so too did the flexibility of relocating as well as the growth of second homeownership.”
This may be because the pandemic has altered how we think about our homes. Where we live has become, more than ever, our <a href="https://www.simplifyingthemarket.com/2022/02/14/are-you-ready-to-fall-in-love-with-homeownership/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="safe space">safe space</a> and our getaway. And with the rise in <a href="https://www.simplifyingthemarket.com/2022/02/04/how-remote-work-impacts-your-home-search-infographic/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="remote work">remote work</a>, more people are reconsidering where they want to live and buying second homes to give them greater flexibility. If you fall in that category, here are just a few of the perks you’ll enjoy, and how owning a second home may be a great decision for your lifestyle and your future.
Enjoy a Change in Scenery (or Weather)
When you have two homes, you can alternate between them as the weather changes or as you crave different scenery. Do you want to live in an area with a particular season? Would alternating between a resort and a suburban setting be ideal? With two homes, you have those options. Being able to move between homes based on which location best suits you at the time gives you added flexibility and variety that can help increase your <a href="https://www.simplifyingthemarket.com/2022/02/01/why-a-move-could-bring-you-more-happiness-this-year/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="happiness">happiness</a>.
Build Your Wealth Faster
You may have heard that <a href="https://www.simplifyingthemarket.com/2021/12/21/the-average-homeowner-gained-56700-in-equity-over-the-past-year/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="home equity">home equity</a> is skyrocketing, thanks to ongoing home <a href="https://www.simplifyingthemarket.com/2022/01/13/whats-going-to-happen-with-home-prices-this-year/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="price appreciation.">price appreciation.</a> CoreLogic <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/" title="reports" target="_blank" rel="noopener noreferrer">reports</a> that the average homeowner gained $56,700 in equity over the last year. With home prices projected to continue rising, if you purchase a second home, you could benefit from rising equity on both properties to build your wealth (and your net worth) even faster.
Be Closer to Loved Ones
The pandemic has also reignited the importance of being near our loved ones. One option worth exploring is whether you want your second home to be near the people who matter most in your life. This makes it easier to see your loved ones but still gives you your own dedicated, private space so you can be nearby for major life events or longer visits.
Lock in Your Expenses
Buying a second home today and locking in your mortgage rate may be a good option if you’re looking to stabilize your housing costs for the long haul. If you’re approaching retirement or are looking to use your second home as your permanent residence in the future, buying that house now with today’s rate and price may be a good <a href="https://www.simplifyingthemarket.com/2022/01/21/americans-choose-real-estate-as-the-best-investment-infographic/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="financial decision">financial decision</a>. That way, no matter what happens with <a href="https://www.simplifyingthemarket.com/2022/02/02/the-top-indicator-if-you-want-to-know-where-mortgage-rates-are-heading/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="rates">rates</a> and prices in years ahead, your monthly payment is locked in for the next 15-30 years.
Bottom Line
Having multiple homes has considerable benefits. If owning a second home is something you’re interested in, let’s connect to explore your options, discuss the benefits, and take the next step to start your home search.
2022-02-23T08:00:00-07:002022-02-22T08:48:28-07:00Delancey Velatag:aspirelouisville.com,2012-09-20:19346Real Estate Voted the Best Investment Eight Years in a RowReal Estate Voted the Best Investment Eight Years in a Row
<img width="750" height="410" src="https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share.jpg" class="attachment-entry size-entry wp-post-image" alt="Real Estate Voted the Best Investment Eight Years in a Row | MyKCM" loading="lazy" srcset="https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share.jpg 750w, https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share-600x328.jpg 600w, https://files.mykcm.com/2022/02/18105859/20220221-KCM-Share-100x55.jpg 100w" sizes="(max-width: 750px) 100vw, 750px" /><br /><br />
In an annual <a href="https://news.gallup.com/poll/349607/americans-expect-home-prices-rise-divided-buying.aspx" title="Gallup" target="_blank" rel="noopener noreferrer">Gallup</a> poll, Americans chose real estate as the best long-term investment. And it’s not the first time it’s topped the list, either. Real estate has been on a winning streak for the past eight years, consistently gaining traction as the best <a href="https://www.simplifyingthemarket.com/2022/01/21/americans-choose-real-estate-as-the-best-investment-infographic/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="long-term investment">long-term investment</a> (see graph below):
<a href="https://files.mykcm.com/2022/02/18105653/20220221-MEM-ENG.png" target="_blank" rel="noopener noreferrer"><img class="aligncenter wp-image-101232" src="https://files.mykcm.com/2022/02/18105653/20220221-MEM-ENG.png" alt="Real Estate Voted the Best Investment Eight Years in a Row | MyKCM" width="600" height="450" /></a>If you’re thinking about purchasing a home this year, this poll should reassure you. Even when inflation is rising like it is today, Americans agree an investment like real estate truly shines.
Why Is Real Estate a Great Investment During Times of High Inflation?
With inflation reaching its highest level in <a href="https://www.cbsnews.com/news/consumer-prices-inflation-highest-rate-in-40-years/" title="40 years" target="_blank" rel="noopener noreferrer">40 years</a>, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board. That includes goods, services, housing costs, and more. But when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing housing payments. James Royal, Senior Wealth Management Reporter at Bankrate, <a href="https://www.bankrate.com/investing/inflation-hedges-to-protect-against-rising-prices/" title="explains" target="_blank" rel="noopener noreferrer">explains</a> it like this:
“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
If you’re a <a href="https://www.simplifyingthemarket.com/2022/01/04/avoid-the-rental-trap-in-2022/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="renter">renter</a>, you don’t have that same benefit, and you aren’t protected from increases in your housing costs, especially rising rents.
History Shows During Inflationary Periods, Home Prices Rise as Well
As a homeowner, your house is an asset that typically increases in value over time, even during inflation. That‘s because, as prices rise, the value of your home does, too. And that makes <a href="https://www.simplifyingthemarket.com/2022/01/12/two-ways-homebuyers-can-win-in-todays-market/?a=723394-5d03a7b8da6603c42c58bb14a65a541d" title="buying a home">buying a home</a> a great hedge during periods of high inflation. Natalie Campisi, Advisor Staff for Forbes, <a href="https://www.forbes.com/advisor/mortgages/homebuying-can-hedge-against-inflation/" title="notes" target="_blank" rel="noopener noreferrer">notes</a>:
“Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.”
Bottom Line
Housing truly is a strong investment, especially when inflation is high. When you lock in a mortgage payment, you’re shielded from housing cost increases, and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.
2022-02-22T08:17:00-07:002022-02-22T08:20:02-07:00Delancey Vela