Buying vs. Renting – Building Wealth Through Real Estate

 

It is sometimes said that real estate is a great investment. Sometimes people equate this fact to owning property and earning rental income, purchasing land and developing it for commercial and residential real estate ventures, or the value of land or property as it appreciates over time.

According to the a report released by the National Association of Realtors, on average, homeowners in the low, middle, and upper income levels nationally accumulated $98,900, $122,100, and $150,800 in wealth by owning their own home. Putting aside the equity earned while making mortgage payments on a home that you own, as well as the interest that can be written off for tax purposes, the benefits of

owning vs. renting translates into actual accumulated wealth, according to this report.

The report by the National Association of Realtors focused on the “built-in” wealth of home appreciation. The amount of equity in a home that appreciates in value over time automatically adds money to a homeowner’s portfolio. Specifically, around the state of Louisiana, the low, miiddle, and upper income homeowners in the New Orleans-Metairie metro areas accumulated $41,110, $75,030, and $75,680 respectively. In Baton Rouge, low, middle, and upper income homeowners achieved an additional $60,020, $73,500, and $102,980 in additional personal wealth.

Owning a home has so many more benefits than renting because all of the money put into the home and the payments made on the homes is money working for you. In the West St. Tammany Parish area, rents and mortgage payments are now closer in price than ever. Consider purchasing a new home for sale or building a custom home. If you’re ready to begin, Contact Us for a Consultation Today!

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Vapor Barriers in New Home Builds

 Vapor barriers are an important part when it comes to building a home. Here is some science behind the reason why.

There are six sides of a new construction home which are in three categories, the walls, the roof and the foundation. All of these sides need to be protected from both liquid water and vapor water.

The side of every new construction home consists of a building envelope. This is where we want to keep moving such as liquid water, air, water vapor and thermal energy. There are several ways that water can sneak into your home. By liquid progress (wind-driven rain hitting up against walls), water vapor diffusion (movement of water vapor and its concentration level), and airflow (movement of air and its pressure levels).

A vapor barrier does not only need to block these areas but needs to also control the movement through them. This is done by using an air barrier (the material layer that will prevent the flow of air between air-conditioned air to unconditioned air), water-resistive barrier WRB (this material layer prevents liquid water from seeping into the house), waterproofing (this is a system that helps prevent and manage build liquid water infiltration), vapor retarder (a material layer that stops water vapor movement by diffusing it), insulation (the material layer that is used to help with the loss or gain of thermal energy).

So basically the goal is to keep your building’s envelope dry, efficient, comfortable and healthy. Remember there are different ways to control water, air, vapor and heat. Here are the reasons why, they all can move in or out of a home in both directions, they can move at different rates and degrees, and they can affect each other.

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Financial Benefits of Downsizing

 You do not have to wait to downsize just because you become an empty nester. Sometimes downsizing to a smaller home can have its advantages no matter what stage of life you are currently in. Here are some nice advantages for those who want to downsize.

1. More Financial Freedom

A smaller home will have a less expensive sale price than a larger home in the same area. If you have a good bit of equity in the home you are downsizing from, you might even be able to purchase a smaller home outright. If this is the case, you do not have to worry about a monthly mortgage payment. If you cannot purchase a smaller home without a mortgage, then you will more than likely get a good chunk out of the equity for a large down payment. The larger down payment will allow you to enjoy a smaller monthly payment, low-interest rates and more cash each month.

2. Greater Ability to Diversify Your Assets

The wise old saying, “don’t put all your eggs in one basket” can apply to your assets as well. If you have all of your cash tied up into residential real estate and the housing market crashes, you could stand to lose a lot of money. If you buy a smaller house, you will have extra cash that you can invest in assets other than just real estate.

3. More Energy Efficient

A smaller home, equals less square footage to heat and cool and light. This not only helps you save money, but you also reduce your carbon footprint.

4. Less Time Spent Cleaning

A bigger home makes for a bigger space to have to clean. Even if you do not use all of your rooms on a daily basis, dust still gathers in the space. It takes less time to clean a smaller space, making way for other things to enjoy.

5. Cozy Atmosphere

You can feel lonely in a big space but a smaller home feels cozy and homey. Having one family room area is a great benefit because it gives you a lot of time to bond with loved ones. A smaller home encourages closer relationships with those you live with.

If you are looking to downsize, contact a local real estate agent who can help you find the right home for your needs. Remember you do not have to be an empty nester to downsize into a smaller home.

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A New Mandeville Lakefront Development

 A new age-restricted community was approved called Sucette Harbor which will house 201-unit apartments, an events venue, restaurant, marina and an 82-room boutique hotel all along Mandeville’s lakefront. The Mandeville Planning and Zoning Commission approved the plans so now it will be up to the Mandeville City Council to say yes to the 55 and older development.

The land is being leased by Woodward Interests, who is the developer, from LSU Health Foundation. Al Copeland’s family dedicated the land to the LSU Health Foundation. The proceeds from the leased property will be split up with 60% going to cancer research and 40% going to scholarships.

Although the development will help with a good cause, residents in Mandeville have some questions and concerns. There is a concern out there that the development would attract enough older residents to the area that qualify to live in the age-restricted apartments. Another big concern is the traffic it will bring to the community and the removal of old southern oaks.

Many commission members are also concerned about the project. Claire Durio suggested reducing the size of the hotel but this was shot down. Mike Pierce also agrees that the project might be too big for the community calling Sucette Harbor an anomaly that doesn’t fit with the older surrounding neighborhoods and fails on compatibility.

Other commission members say the development will be an asset to the community. Nixon Adams feels that it is a better option than just leaving the land vacant. He says that the area needs a hotel because there is not one in the area. He also suggested the city bring a walking and biking path to the lakefront which will open up the lakefront.

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New Home Sales Rose in March

 New Home Sales climbed again in March, making it the fourth month in a row. Those in the industry say that this is due to the ease in mortgage rates and the low inventory of existing homes. Buyers are now looking at new construction more than ever.

According to the US Department of Housing and Urban Development and the US Census Bureau, there was a 9.6% rise in new construction home sales from February to March. This could be a good sign that the housing market is starting to stabilize. Sales of new single-family homes in March were at a seasonally adjusted annual rate of 683,000 which is still down from a year ago at 707,000. New home sales rose from $438,200 in February to $449,800 in March.

“Buyers have begun to adjust to the elevated mortgage rate levels, especially in areas where home prices have adjusted downwards to compensate. Despite signs of economic uncertainty in March, which included news of bank failures, buyers are still showing demand for new homes,” said Kelly Mangold of RCLCO Real Estate Consulting.

“Demographic drivers remain strong as more households move into family years, and remote hybrid work continue to have a foothold in many industries, driving buyers to seek space for extra bedrooms and/or office space in their homes,” says Mangold.

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Questions To Ask Your Homebuilder When It Comes to the Foundation

 It is a great adventure to take when it comes to building a new home. There are many exciting decisions to make on building materials, floorplans, etc. The home’s foundation is not one of the components that most homeowners want to think about. The foundation is what your home is literally built on and is the most critical part of the home-building process. Since you only get one chance to do it right, the professionals in the industry suggest asking your building these five questions.

1. What type of foundation will I have for my home?

There are three foundation types to choose from, slab-on-grade, crawl space or basement. Some homes found around the country can have a combination of the types of foundations. The foundation of your home will be based on where you live, the climate, and the local soil and moisture conditions. If you live in a colder climate, then the frost line will be important to factor into your decision-making.

When determining the foundation type, your builder can use a geotechnical report to help with the decision on what foundation is best. A geotechnical report will provide the builder with soil data to ensure that the appropriate design is used. In all three options, moisture management is the key.

2. How will my home be protected from liquid water?

As mentioned before, moisture management is the key. The goal is to keep liquid water out of your home. Moisture seeping through into your home, can hurt the foundation, dampen your comfort level and cause a potential health problem. Water doesn’t just come from mother nature, in some climates bulk water pressure from a water table going up and down can cause problems as well as landscaping irrigation.

There are many ways your builder can design your foundation area and products they can use to help repel liquid moisture. There are different building codes in specific areas around the country. Your builder will be familiar with your areas’ minimum building code requirements. You will want to always make sure you have the proper grading around your home so that water never becomes a hindrance.

3. How will my home be protected from soil vapor?

Soil vapor can seep into any type of foundation in any location into a home’s envelope. The natural flow of water vapor is to move from greater concentration to lesser concentration called diffusion. Your foundation needs to be checked to make sure this is not happening. If it goes unchecked, it can lead to issues with floor coverings, coating failures, mold growth and overall poor indoor quality. It can also cause your HVAC system to not run properly.

Water vapor can be just as menacing as liquid water but protecting your home from water vapor is different from protecting your home from liquid water. Remember to ask your home builder what steps they will take to make sure there is no diffusion of water vapor under your home. Builders can use a water vapor barrier under a slab foundation or overexposed earth in a crawl space.

4. What about comfort and efficiency?

A home needs to be both comfortable to live in and energy efficient. Homeowners turn to solar panels, air conditioning and insulation to make a home more energy efficient. The comfort level in your home actually starts below the living space. If you live in a colder climate, then the home’s foundation will need to be insulated. Even if you live in a milder climate, having your foundation insulated can help maintain comfortable temperatures and keep utility bills down.

5. What products do you use?

Choosing the right products can make a huge impact. Choosing the correct foundation is a big deal because it is hard to replace a foundation once it is installed. If you do have to replace a foundation, it is very costly and can affect other systems throughout your home.

Builders know all the ends and outs of the foundation systems they use in their area. They can explain to you how they work and if they have a warranty or if your home buyer warranty package includes the foundation.

Remember the construction of the foundation of your home is very important. Talk with your builder and get familiar with the choices. Understanding what goes on with the foundation helps to give you peace of mind to know that everything is working as it should.

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Sucette Harbor Comes to Mandeville Lakefront

 The LSU Health Foundation wants to build an age-restricted community along the Mandeville Lakefront. Sucette Harbor would be located on land that was donated by Al Copeland’s family. Many residents are not thrilled about the proposed development because they feel it will create traffic problems.

Although the development is planned to be for tenants 55 and over, it has to be 80% filled with tenants that are 55 and older in order for the age restriction to be enforced. Many Mandeville leaders and residents are afraid they will not be able to draw in that many tenants that are 55 and older. If this happens, then the development will go back to a regular multi-family complex.

Woodward Interest, the developer that will be leasing the land from LSU Health Foundation, believes that traffic will not be an issue. If the development did lose its age restriction, and younger people were to live in the complex, Mandeville’s land use regulations will still hold for the traffic standards.

The chair of the planning commission, Brian Rhinehart, still feels this could be a problem because older tenants are expected to have fewer vehicles but they still might not draw enough older tenants. Rhinehart wants Woodward Interest to do a study showing traffic that would be generated by a non-age-restricted multi-family complex.

“There’s always a level of mistrust when the developer hires a consultant. Citizens need that to have confidence that this isn’t a big snow job,” says Kevin Vogeltanz.

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