Ron Tarvin, REMAX, WHP Katy/Cypress TX Luxury Homes for Sale, Family homes too

Hurricane Ike is gone and the clean up continues.

The building where my wife works, the Nottingham Building, is still without power and since it also had water damage, it's becoming a bigger and bigger job to do the clean up on that building. But other than that, most of the damage is starting to be picked up and the power is back on.

Taylor HS Field House

Nottingham Building (the reason they don't have power yet!)

First of all, GOOD BYE IKE!

What an incredible, scary storm!

First of all, our prayers are with those parts of the Houston Metroplex that bore the brunt of the storm. We do not yet know the extent of all the damage or possible loss of life. There have been a few tragedies associated with IKE, but not much has been released about actual storm related deaths. The count stands at about 30 right now but that is expected to rise as the rescue crews move through the areas hit hardest by Ike. The first that was reported was a young boy who was killed as his father tried to cut down a tree prior to the storm. There was a woman who was asleep during the storm that was killed when a tree came through her home. And one of the sadest one was the family in Fort Worth who lost their child when he was hit by a car at a gas station as the family evacuated the Houston area...

For the Katy Area, we were lucky. We were able to weather the storm. My family evacuated to Fort Worth, but we know that our power was off for only about 6 hours...heck, we didn't lose any food in our freezer with the power out so short.

We did lose my daughter's swing set. She will be sad but I think we can salvage it if we can get a new bar for the top.

We had a fense that now has to be rebuilt. The posts that hold the fence up are 4x4's sunk in cement and they snapped. Fence cost will be about $800 I guess, if I do it myself, that is.

My neighbor's tree gave way to the storm, but it fell harmlessly in the driveway, falling short of our main dining room/kitchen window (that would have been a mess!)

There is a branch or two that didn't happen to fall but is hanging over my garage, threatening to fall on the garage roof, but I think we'll be able to get that down harmlessly as well.

Our two big trees in the front of our home stayed in place. Other area trees were not as lucky, some of them being uprooted. I'll post some other photos of area damage in another post.

Well, all I can say is that my family was indeed lucky. Many were not and some are still not up and running (some small pockets of Katy still did not have power). I'm not talking about Houston because I have not ventured EAST of Barker Cypress yet, but I know the damage gets more extensive the further east and north that you go.

RENT VS OWN PART II

In the last blog entry we looked at the ups and downs of RENTING.

In this post we'll look at Home Ownership. Now right off the bat, as a real estate agent, it's assumed I think everyone should buy. Nothing could be further from the truth. Home ownership makes sense a lot of times but it doesn't other times. The National Association Of Realtors (NAR) has their own agenda of course, but that doesn't mean that every agent truly believes that it's always a good time to buy.

With that said, I do stand behind one of NAR's statements that: "This is the best market in years in terms of CHOICE" . This means that we are in a normalizing market and this isn't like it was a couple of years ago where homes came on the market and got multiple offers competing, thus driving prices etc...there is a legitimate selection of homes on the market now for the buyer who is ready to buy.

So what are the benefits of home ownership? Let's look at them.

UPSIDE TO OWNING A HOME

1. Putting down your roots. Yep, that's a big one for many people and families. To know that they are going to be in the same area for at least so many years. It might be because of school aged children, parents to take care of, family close by, many other reasons to want to be in one place.

2. Tax Savings--Interest on Mortgage payments on a first or even second home is tax deductible. Real estate taxes are deductible as well. So this can be significant if you lower your tax liability. For example:

Joe Taxpayer makes $100,000 a year. For simplicities sake, Joe is single with no children, no child support etc, just to make it easy. Joe buys a house and pays $18,000 in payments, 80% of which initially is INTEREST. Joe also pays $4000 in property tax and HOA.

With no home purchased, Joe's simple tax liability is based on $100,000-his standard deductions=92,500 and at a 28% tax rate, Joe pays $25,900 in income taxes this year.

With home purchased, Joe gets to take some additional deductions. $100,000-standard deductions-$14,400(mortgage interest)-$4000 Property tax/HOA=74,100 and at a 28% tax rate (assuming these deductions did not drop him into a lower tax bracket), Joe pays $20,748 or saves $5152 in taxes.

WHEW! That loses a lot of people but if you assume that you are going to live somewhere paying rent at basically the same amount per month that you would buying a home, then you've just saved over $5,000 year.

3. Appreciation--While homes do not always appreciate, it is a pretty steady, slow way to build wealth. If the home that you buy at $200,000 today appreciates only 8% over the next 8 years, that's only 1% per year and if you check with the county appraisal district, that is very conservative, then at the end of 8 years, your home is worth $16000. That's approximately an additional $2,000 per year in savings based on a VERY conservative appreciation estimate.

4. Amoritization--As you pay on your home, your loan balance decreases as well. So at the end of 8 years, like the example, you would have paid off about $35,000-40,000 of the mortgage balance. So that $200,000 house that appreciated to $216,000, you really owe $165,000 with the ability to sell around $216,000 or about $51,000 in built up equity over the 8 years discussed.

5. You are in control. You make the payment and you will not be foreclosed on.

6. What you do (within legal limits) is your own business in your home. If you want to have pets, you can. If you want to paint, you can.

So what are the downsides to being a home owner?

1. Maintenance--you are the owner and you are responsible for all maintenance. When the A/C goes ka-plooie, you get to have it replaced. When the water heater leaks, yep, that's on you too!

2. Harder to pick up and move. If you want to move, you have to sell, not just terminate a lease.

3. Getting into a home can be expensive. You can expect to have closing costs that can be quite a bit of money and some loan programs require large down payments...some as much as 20%. Of course some as low as 3% and up until recently, maybe no down at all!

Rent VS Own Part I

Should I rent? Does it make sense to OWN? What are the upsides and downsides to each scenario?

I hear these types of questions and discussions all the time. Not just at work, but whenever anyone sees me out and about at a party or where ever.

The answer on whether someone should RENT or OWN is easy.

It depends. It depends on many factors that ONLY the potential tenant or home owner can decide for themselves. NAR, the National Association of Realtors says: "When you have a family, it's always a good time to buy a home." I don't really subscribe to that theory. YES, it makes sense from the stand point of putting your family into a home where you are going to "put down roots", but it may make so sense at all from many other standpoints. So here is a brief synopsis of what you get when you buy vs rent a home in two parts.

Remember that a real estate agent can help you with renting a home OR with buying a home and the fees usually work the same. So you can still have the benefit of an agent who works for you, even if you rent!

Renting:
UPSIDE:

1.No property maintenance--most maintenance is done by the actual owner, your landlord. Sure you may have a "repair deductible" meaning that you have to pay the first $50 or $100 of a repair, but that's nothing compared with the cost of replacing a roof...or siding...or an A/C unit.
2. No Property taxes--once again, this is paid by the owner. Now it's an integral part of your rent, but it's still up to the owner to pay for it and ultimately their responsibility.
3. No HOA issues-- Home Owner Association dues and pool fees and letters from the association all fall on the owner, not the tenant.
4. Out of pocket to get into a home is minimal. You put up a security deposit and the first months rent and you're good to go. Then as long as you keep the property up, you get that deposit back.

DOWNSIDES:
1. In a lease, you are not building equity or value. You put your money in and when you walk away, you are done. It's like leasing a car or having TERM life insurance.
2. No tax benefit to leasing. There are tax advantages to owning a property that you do not get when you rent.
3. Property condition--pretty much you are either living in the property like it is or any improvements you do end up being an improvement to someone else's property.
4. You're not making the payment, so even though you are paying rent, if the landlord you are paying is not keeping up with the mortgage payments, then you will be booted out, just as if they had foreclosed on YOU!
5. Repairs are dependent on the owner. If you have a good landlord, they take care of things. If not....well.
6. PETS. If you are a pet lover, owners have become increasingly stringent with pets. Pets do damage to property, even well behaved pets, and so owners will often charge large pet deposits that may or may not be refundable and some even charge extra "pet" rent.

So there you have a brief overview of RENTING. Next time we'll look at OWNING a home.

Well, the answer to that question is pretty easy. There is strength in number and there is power in advertising and with that in mind, The KATY AGENT TEAM is proud to have accepted an invitation to join

Our New office is the RE/MAX GRAND office located just off the Grand Parkway at South Peek Road!

This move benefits our seller's in SO many ways it's just not possible to go into here on the blog so give a call and I'll tell you why with the tougher real estate market, it's more important that EVER to have the power of RE/MAX behind the selling of your home!

Same great service and all the honesty and integrity that you have come to expect from Ron Tarvin and the Katy Agent Team now with the power of Re/Max!

An unbeatable combination!

Contact us:

Ron Tarvin Direct- Cell 281-935-7152
Office 281-994-5747
On the web: www.katyagent.com
and by email:
katyagent@gmail.com