Page 15 of 75

The Benefits of Owning Investment Property

June 20, 2023 / Tom Bonetto

Investing in real estate, specifically purchasing an investment property, can offer a multitude of advantages that go beyond traditional investment opportunities.

Buying an investment property provides individuals with a unique opportunity to grow their wealth, generate passive income, and gain long-term financial security.

Let’s take a look at five key benefits of investing in real estate…

Appreciation and Wealth Accumulation

One of the primary advantages of investing in an income-generating property is the potential for property value appreciation over time.

Real estate almost always increases in value year-over-year, making it a reliable long-term investment – and you can find more on that here. As the property value increases, so does your net worth!

Moreover, you can leverage this appreciation to build equity, enabling you to secure additional loans or invest in other properties, leading to further wealth accumulation.

Steady Cash Flow and Passive Income

Owning an investment property allows individuals to generate consistent cash flow in the form of rental income.

By renting out the property, you can earn a steady stream of passive income, even while you sleep. This reliable income can be used to cover mortgage payments, property maintenance expenses, and other financial commitments.

With careful management and regular tenant screening, you can maximize your rental income and achieve financial stability.

Tax Advantages and Deductions

Investment properties come with several tax advantages that can significantly benefit property owners.

These include deductible expenses such as mortgage interest, property taxes, insurance premiums, and maintenance costs. Additionally, real estate investors can take advantage of depreciation deductions, which allow them to offset their taxable rental income.

These tax benefits can help reduce your overall tax liability and increase your net income from the investment property. Please contact your tax accountant for the specifics!

Portfolio Diversification and Risk Mitigation

Investing in an income property provides an opportunity to diversify your investment portfolio.

Real estate typically has a lower correlation to other asset classes like stocks and bonds, which means it can act as a hedge against market volatility. By diversifying your investments, you can spread the risk and reduce the impact of a single investment’s poor performance.

Real estate’s stability and relatively consistent returns can provide a solid foundation for your overall investment strategy.

Long-Term Financial Security and Retirement Planning

Investing in an income property offers a long-term strategy for building financial security and planning for retirement.

By consistently collecting rental income and building equity, you can create a reliable income stream for your retirement years. Furthermore, as you pay off the mortgage on the property, your monthly cash flow will increase significantly.

Real estate investments can serve as a tangible asset that appreciates in value and provides financial stability for your future.

In Conclusion

Purchasing an investment property offers numerous benefits that are easy to understand and can be advantageous for individuals seeking financial growth and stability.

The potential for property value appreciation, steady cash flow, tax advantages, portfolio diversification, and long-term financial security are compelling reasons to consider investing in real estate.

While investing in property requires careful research and management, it can be a rewarding endeavor that provides both immediate and long-term benefits. Do reach out to me for more and how to finance the purchase of an investment property.

Staying Ahead: Off-Season Baseball Workouts

June 1, 2023 / Tom Bonetto

Do you want to take your baseball skills to the next level? Off-season workouts are a fantastic way to stay in shape and improve your game, even when the regular baseball season is over.

Let’s look at some fun and effective off-season baseball workouts that can help you stay ahead of the competition and make the most out of your time off the field.

Strength and Power Training

Building strength and power is vital for baseball players. It can help you throw harder, hit the ball farther, and improve your overall performance.

Incorporate exercises like push-ups, squats, lunges, and planks into your routine to strengthen your muscles.

Additionally, consider using resistance bands or light dumbbells to add resistance to your exercises. Always remember to prioritize proper form and technique to prevent injuries.

The key here is to make these workouts a regular part of your week.

Conditioning and Cardiovascular Exercises

To be your best, it’s essential to have endurance and a strong cardiovascular system…especially for pitchers.

Engaging in activities such as running, biking, or swimming during the off-season can help improve your overall fitness and coordination levels.

You can start with short distances and gradually increase your stamina over time. You might even consider joining a local running club or participating in other sports that involve running to make your workouts more enjoyable and social.

Agility and Speed Drills

Baseball requires quick reflexes and agility. Utilize drills that focus on improving your speed, footwork, and reaction time.

For example, set up some cones or markers and practice running through them in various patterns. You can also try ladder drills, side shuffles, or jumping exercises to enhance your agility.

These drills will help you become more nimble on the field, whether you’re fielding ground balls or chasing down fly balls.

Flexibility and Stretching

Maintaining flexibility is crucial for preventing injuries and improving your range of motion.

Incorporate stretching exercises into your routine, focusing on your shoulders, hips, legs, and core. Consider activities like yoga or Pilates, which can improve flexibility while also providing relaxation and mental focus.

Make sure to warm up before stretching and avoid pushing yourself too far to prevent strains or muscle pulls.

Mental Training and Rest

Baseball is not just about physical strength; it also requires mental toughness and focus.

Take time during the off-season to work on your mental game. Visualize yourself succeeding in different baseball situations, practice positive self-talk, and set goals for the upcoming season. Read a books from Dr. Patrick Cohn or H.A. Dorfman or reach out to Austin Byler…

Additionally, remember the importance of rest and recovery. Take days off to allow your body and mind to rejuvenate, as this will help you come back stronger and more motivated.

In Conclusion

Off-season baseball workouts are an excellent opportunity to improve your skills, stay in shape, and get a head start for the upcoming season.

By incorporating conditioning exercises, strength training, agility drills, flexibility exercises, and mental training into your routine, you’ll be well-prepared to take on the challenges on the baseball field.

Remember to have fun, stay committed, and always prioritize safety while engaging in off-season workouts. With dedication and hard work, you’ll be ready to shine when baseball season comes around again!

Debunking the Myth: You Don’t Need a 20% Down Payment for a Mortgage

May 30, 2023 / Tom Bonetto

The idea of needing a 20% down payment for a mortgage has long been fixed in the minds of prospective homebuyers. However, this traditional belief doesn’t hold true in today’s dynamic housing market.

With evolving loan options and changing financial landscapes, it’s important to debunk the myth and explore the advantages of bringing in a small down payment when securing a home loan for a primary residence.

Accessibility and Affordability

Requiring a 20% down payment can be a big hurdle to homeownership for many. For first-time buyers or those with limited savings, this amount may be prohibitively high.

Fortunately, many mortgage programs exist that allow for lower down payments, such as Federal Housing Administration (FHA) loans, which require as little as 3.5% down.

VA loans for those in our military and our veterans can require no down payments whatsoever!

These options make home ownership far more accessible and affordable for a broader range of would-be buyers. This provides new opportunities for individuals to enter the market and build equity.

For today’s most widely-used purchase mortgage programs, down payment minimum requirements are:

FHA Loan: 3.5% down payment minimum
VA Loan: No down payment required
HomeReady/Home Possible Conventional Loan (with PMI): 3%
Conventional Loan (with PMI): 5%
Conventional Loan (without PMI): 20% minimum
USDA Loan: No Down Payment required

PMI is “private mortgage insurance”…and you can find out more about that here…

You can also find out more on the specifics of multiple mortgage types here…

By allowing lower down payments, lenders offer more financial flexibility to aspiring homeowners. This means that you can become a homeowner sooner and start building equity in your own home right away!

Opportunity for Building Wealth

Rather than waiting until they accumulate a large down payment, individuals can enter the housing market sooner by utilizing mortgage programs with lower down payment requirements.

white paymaster ribbon writer adding machine placed on tabletop

This early entry enables homeowners to benefit from potential property appreciation, which can be a valuable source of wealth building over time.

By leveraging their down payment funds to secure a mortgage and invest in a property, individuals can start building equity and potentially generate significant returns in the long run.

Would-be borrowers can also utilize gifts from relatives for their down payment and closing costs. Find out more on that here…

Flexibility and Financial Freedom

Earmarking a significant portion of savings towards a down payment may leave homebuyers financially strained, limiting their flexibility and ability to handle unexpected expenses or invest in other areas.

Opting for a lower down payment allows buyers to retain more cash on hand, providing a financial safety net and allowing for future investments or potential home improvements.

This increased flexibility enhances financial freedom and offers peace of mind in managing homeownership-related expenses.

In Conclusion

The belief that a 20% down payment is necessary for obtaining a mortgage is no longer an absolute truth.

While a larger down payment can offer certain advantages, such as lower monthly payments, it is essential to recognize the benefits of alternative mortgage programs with lower down payment requirements.

These options promote accessibility, affordability, and the opportunity for investment and wealth building. By understanding the evolving landscape of mortgage financing, prospective homebuyers can make informed decisions that align with their financial goals and aspirations.

So please do reach out to me for more, as it would be my pleasure to help you structure your loan and down payment options.

Consumer View of US Housing Market Reach New Lows – But Is It Correct?

May 22, 2023 / Tom Bonetto

Only 21% of Americans say it is a good time to buy a house, the lowest percentage ever in Gallup’s polling sample.

Prior to 2022, for example, 50% or more respondents unfailingly thought it was a good time to make a home purchase, and you can find the specifics of the poll here….

Graph of Percentage of People Who Said It Was a Good Time To Buy a House

The latest results are from Gallup’s annual Economy and Personal Finance poll, conducted over 3 weeks in April. Unbelievably, 78% percent of those surveyed say it is a bad time to buy a house right now.

To add some context, Gallup first asked Americans about their thoughts on the housing market in 1978, when 53% thought it was a good time to buy.

Per Jeffrey Jones’ report, “thirteen years later, when the question was asked again, 67% held that view. The record high of 81% was recorded in 2003, at a time of growing homeownership rates and housing prices.”

No doubt the respondents are sure of their positions, but does the data really bear that out? And what does the future hold?

The Current Situation – Two Viewpoints

Per Jones, “in the past two years, as housing prices have soared and the Federal Reserve has raised interest rates to try to tame inflation, houses have become less affordable for many Americans, and views of the housing market have tumbled.”

Graph of Americans That Expect Home Prices to Rise

However, another housing survey, this one from the industry specific MBS Highway, showed in April another solid increase in buying activity as the spring selling/buying season kicked into high gear. This marks the 4th-straight month of improving sentiment for their report. You can find out more on that here…

68% of respondents characterized their market as ‘active’ and 33% of respondents indicated that they were now seeing price increases.

Media Bias Might Be To Blame

The latest Existing Home Sales report showed that the median home price declined on an annual basis for the first time in almost 11 years. That seems like a big headline, right?!

ABC News of Red Flags in Mortgage Market

This is a classic case of the media trying to gain and keep viewership with shock headlines.

In many ways, our mainstream media is not truly interested in digging deeper for the facts and truth. You can find out more on that here…

First of all, the decline was only 0.2% – and it was for the median home price, which is NOT the same as appreciation.

FHFA’s latest appreciation report showed that home prices rose 5.3% year over year. And according to Case-Shiller, they rose 3.8% year over year.

These are the two best ways to measure home price appreciation.

The Real Inside Scoop

Although no one can deny that higher mortgage rates are keeping would-be buyers on the sideline, the story that no one is talking about is the lack of housing supply. You can find out more on that here…

More importantly, let’s take a closer look at active listings in the US:

Graph of Active Existing Home Listings in the US

You might remember from your Econ 101 class that supply and demand is what sets prices. Smaller supply means that a higher price is to be paid…so I do believe that home prices will not be going down any time soon!

Cartoon Graph with House in the Background

All things considered, the opportunity in this market appears to be very favorable. If you are trying to wait to time the market, that home you are waiting for will just be more expensive down the road.

And if you make that purchase now and interest rates fall (as many think will happen), you can easily refinance into a lower rate!

In Conclusion

Per Jones, “it is likely that Americans’ pessimism about homebuying reflects the high prices and high interest rates that are conspiring to make mortgage payments less affordable. These attitudes may keep many prospective homebuyers out of the market.”

If that’s the case, that means there is a window of opportunity for buyers ready to act today.

Do reach out to me to find out more, as it would be my pleasure to help you finance that investment property or the home of your dreams.

Recession and the Housing Market

May 17, 2023 / Tom Bonetto

Many experts are once again predicting recession as economic production seems to be slowing.

The definition of a recession has been typically recognized as two consecutive quarters of economic decline, as reflected by Gross Domestic Product (GDP) in conjunction with monthly indicators such as a rise in unemployment.

Many are concerned that the recession will dramatically and negatively impact the housing market…but historically that isn’t the case.

Real Estate During Recession

Believe it or not, outside of the “great recession” of 2007 (which was caused, in part, to a housing crisis), home values and real estate generally appreciate historically during times of recession.

That seems counter intuitive…but because interest rates generally drop during recessionary periods, homes become MORE affordable to potential buyers. Even though property values are higher, buyer see lower payments provided by those lower rates.

When more people can qualify for homes, the demand for housing increases – and so do home prices.

Mortgage Rates During Recession

When a recession hits, the Federal Reserve prefers rates to be low. The prevailing logic is low-interest rates encourage borrowing and spending, which stimulates the economy.

During a recession, the demand for credit actually declines, so the price of credit falls to entice borrowing activity.

Here’s a quick snapshot of what mortgage rates have done during recessionary periods:

Obtaining a mortgage during a recession might actually be a good opportunity. As mentioned, when the economy is sluggish, interest rates tend to drop.

Refinancing or purchasing a new home could be a great way to get in at the bottom of the market and make a healthy profit down the road.

With that said, borrowers should be market-wise and financially savvy when considering large real estate purchases in a recession.

The Great Recession and Home Prices

Home price appreciation continued during previous downturns, except for what is called the “Great Recession”. While the recession officially lasted from December 2007 to June 2009, it took many years for the economy to recover to pre-crisis levels of employment and output.

So what made the Great Recession different? The housing boom that preceded the last recession was largely driven by an explosion in both home-building activity and mortgage credit.

Home buyers were able to get mortgages with no documentation of their income and no down payment. Many loans had introductory 0% interest periods that made them cheap to start but more expensive as time wore on.

Today, those loan products are no longer in existence.

Today’s Market

The growth in home prices seen during the current economic expansion has not been fueled by increased access to mortgage credit. In essence, today’s recession isn’t at all similar to the prior one.

Rather, it’s a simple reflection of supply and demand. Many Americans want to become homeowners, but the supply of homes available for sale is very low, pushing prices upward.

Mortgage rates are much higher than they were a few years ago, but I have a feeling that they will be coming down relatively soon. And more activity will push home prices higher.

In Conclusion

Although no one likes to see recession, you can observe that it actually can be beneficial for homeowners and would-be purchasers to refinance or purchase during these periods.

If you have more questions and or would like to strategize about purchasing or refinancing, don’t hesitate to contact me, as it would be my pleasure to help you!

The Lending Coach

Page 15 of 75

The Benefits of Owning Investment Property

Appreciation and Wealth Accumulation

Steady Cash Flow and Passive Income

Tax Advantages and Deductions

Portfolio Diversification and Risk Mitigation

Long-Term Financial Security and Retirement Planning

In Conclusion

Staying Ahead: Off-Season Baseball Workouts

Strength and Power Training

Conditioning and Cardiovascular Exercises

Agility and Speed Drills

Flexibility and Stretching

Mental Training and Rest

In Conclusion

Debunking the Myth: You Don’t Need a 20% Down Payment for a Mortgage

Accessibility and Affordability

Opportunity for Building Wealth

Flexibility and Financial Freedom

In Conclusion

Consumer View of US Housing Market Reach New Lows – But Is It Correct?

The Current Situation – Two Viewpoints

Media Bias Might Be To Blame

The Real Inside Scoop

In Conclusion

Recession and the Housing Market

Real Estate During Recession

Mortgage Rates During Recession

The Great Recession and Home Prices

Today’s Market

In Conclusion

Apply Now – Online Application

Schedule Appointment With Tom

Guild Mortgage

Contact Tom

About The Coach

Categories

BLOG ARCHIVES