Buying a Home Archives

Renting vs. Owning in San Diego – What’s Smarter in 2022

In today’s real estate market, people looking for a new home frequently wonder whether to rent or buy. It’s a difficult question to answer. Real estate prices in San Diego are relatively high, whereas rents are lower in comparison when it comes to a monthly payment. However, just because the cost of something is lower doesn’t mean it has more value. Today we will be looking into renting vs. owning in San Diego and deciding what’s smarter in 2022.

If you haven’t decided whether you want to buy or just rent, look around and see what’s available in San Diego. If you’re going to make the best decision possible, you must first understand what is available.

Before We Begin

Before deciding whether to rent or own in San Diego, you should always learn everything you can about the location you’re moving to. People are easily swayed by the idea of moving to a new location without looking deeper than the surface level. Before you relocate, consider the following:

The cost of living
The economic growth potential
What the weather and climate are like
What the traffic is like
How the public transportation works

These are just some things you should know about San Diego prior to making it your home permanently. Of course, bear in mind that these are only the key aspects to look into before moving to this area, as life in an area is much more than just the traffic and the cost of living.

The Benefits of Renting in San Diego

Renting may not seem like progress, but that doesn’t mean it’s not the best option for you right now. The truth is that there are several significant advantages to renting, including the fact that you are not tied down to a house or how your local real estate market performs.

Flexibility

Flexibility mostly comes down to the type of person you are. For people who like to travel and discover new areas and places, renting is the best option. If you don’t want to be tied down to just one place, renting is the way to go. Renting is also a better option if you change careers or jobs often. Purchasing a property in San Diego may restrict your ability to pack up and relocate in the near future.

woman walking in a terminal — You are not tied to anything if you rent, which is a very important pro for those considering renting vs. owning in San Diego

Avoiding the Costs of Homeownership

Every homeowner is well aware of the possibility of unexpected bills on top of the monthly mortgage payment. According to HOA estimates in San Diego, monthly HOA dues could range between $400 and $800. Approximately $6,000 per year is spent on average on property taxes in San Diego. Take into consideration the costs of furnishing and decorating your home as well as the costs of fixing problems with the property, plumbing, landscaping, and general upkeep. The benefits of owning a home are available to you as a renter, but you are not responsible for the financial obligations of home maintenance.

Liquidity

In general, you can’t transform a property into cash instantly. Many individuals place their entire life savings into a property, placing the majority of their net worth into an illiquid asset. There is a danger in investing a significant amount of your capital in such an asset. Renting provides you with freedom as well as other investing opportunities.

Increasing Your Credit Score by Renting vs. Owning in San Diego

Everyone needs a good credit score for almost everything we do. No matter if you want to get a big 4K TV or you need a new car. While renting may not improve your credit as much as buying a house, building a history of on-time rental payments can help you qualify for a mortgage in the future. However, you need to have your landlord send your payment information to a credit bureau to make this work. There are also third-party services that may assist you in reporting this information on your behalf.

The Benefits of Buying a Home in San Diego

Renting may have its benefits, but there are also a lot of benefits to owning a house in San Diego in 2022. The obvious advantage is that you can have something of your own. When you own a home, you are not at the mercy of a landlord who can change the terms of your lease or, worse, sell the property without warning. The flexibility that renting offers comes with a lot of risk and uncertainty.

Less Fluctuating Costs

Your landlord decides how much the rent will cost. They don’t have to warn you or justify themselves when they increase the rent. However, if you take out a mortgage, you can be sure that it will not increase over time if you are making the payments on time. This is in stark contrast with rent, which increases following the property’s market value plus inflation.

A minimalist living room with a couch, a television, and a fireplace. — You don’t have to worry about fluctuating rent costs if you own your own home.

Benefits from Taxation

In your capacity as a homeowner, you may be able to deduct a variety of associated expenses from your taxable income. Aside from that, all interest paid on a mortgage is tax-deductible up to $750,000. Additionally, deducting expenses such as mortgage interest may help you avoid IRMAA surcharges while also lowering your overall tax liability.

Diversification

In the same way that you can invest in stocks and other similar assets through brokerage and retirement accounts, you can also use real estate as another asset class to diversify your portfolio. Apart from that, because it is a physical asset, real estate appeals to many other people willing to invest or buy the property.

You Can Sell or Rent Your House In The Future

It is possible to build equity in your home by paying down your mortgage over time. If you own the house, you can invest in it, remodel it, and increase its value. After that, you can sell it for more than you paid for it. You can do whatever you want with it when you own the house outright. So, if you ever decide to relocate, you can make money from it. And when deciding whether renting vs. owning in San Diego is the better choice, one ought to think about the future.

Conclusion

So, renting vs. owning in San Diego – what’s smarter in 2022? As you can see, the answer is not so simple. Depending on the type of person you are, your goals, and your preferred lifestyle, you may need different things. However, in our opinion, it is always a better idea to buy if you have the means. If you don’t have that option, you should try to save so that you can make it happen in the future.

If you are thinking that buying or selling your home in San Diego, contact the McT Real Estate Group. We are here to help with the process.

Move, Launch, Learn: How to Simultaneously Tackle Big Life Events

Starting a business is an exciting venture, but many people find that when they launch an entrepreneurial endeavor — particularly one that’s based from home — there’s often no adequate space to effectively combine work and family life.

If you think your current home isn’t going to be large enough to accommodate your operations, working with a reputable realtor and timing a move to a larger house while simultaneously starting a business can be beneficial in many ways.

Assess Your Space Needs

All home-based businesses require different accommodations. For example, consultants or computer programmers may only need a dedicated office space for a computer and file storage. On the other hand, if you’re making, storing, and selling handmade soaps (for instance), you’re going to need a lot more room for inventory, taking photos for your website, and maybe even packing products for shipping.

According to the U.S. Small Business Administration, it’s wise to make a detailed assessment of how much space you’ll need to successfully operate your company while keeping it separate from “home.” Keep in mind that home-based business owners can deduct costs associated with home office space and business operations. This can help offset the cost of a new and larger home purchase if that’s what you ultimately decide you need.

Working With A Real Estate Professional

While you can certainly start or even conduct your entire house-hunting journey online, a seasoned real estate agent can be a good resource for helping you find properties that meet your very specific home-based business needs, as well as the needs of your family. This person should be an advocate with knowledge and experience in helping people who need to combine work and home. For example, they’ll know to look for properties with a casita or a separate private entrance or a home with a master bedroom or office space located in a secluded area of a home away from household traffic. If you decide to work with an agent, be very specific about your needs so they can help you find the perfect property.

Coordinating Your Business Launch And Move

If you ultimately end up moving to a new home and launching your business at the same time, you can reduce stress by carefully coordinating your logistics. Getting your office and workspace set up and operational should be a top priority. Keep all of your business-related materials in one place, and consider transporting them yourself, rather than handing them over to movers. This way, you’ll know where everything is and have easy access to it.
If possible, go with a soft launch rather than a grand opening, so you can successfully get settled into your new home. Ask for help as necessary during this period to ensure you can focus on your business.

Successful Business Operations

As you settle into your new home and get your business up and running, you’ll likely be focused on understanding your target demographic and learning how best to market and promote your product or services. You may find at some point that pursuing an advanced degree is beneficial to helping you grow, diversify, and expand your operations. This is particularly true if your business is related to internet technology, an industry where it’s critical to be well-versed in the most up-to-date technologies.

Consultants also benefit from advanced education, either in their field of focus or in business and marketing. Look into online programs that allow you to learn at your own pace in your own space. You’re also likely to find that you’re able to start incorporating what you’re learning into your everyday work right away.

Simultaneously starting a business, making the move, and staying educated on best practices in your industry can sound like a tall order. However, it’s also an ambitious and exciting undertaking that can pay big dividends. Plan accordingly and map out all of your needs before making any decisions, and don’t shy away from asking for outside help. For real estate advice and more, reach out to McT Real Estate Group at 619-736-7003.

Have You Outgrown Your Home Office?

Working from home can be a dream come true for many small business owners — flexible schedule, no commute, casual dress code — but the McT Real Estate Group knows it has its drawbacks as well. Sometimes your home office is merely a designated nook, a space in your kitchen, or an extra bedroom that is just too small.

Here are a few indications that you may have outgrown your current home office:

You’re constantly having to move things in order to get work done.
Business supplies or equipment are in other areas of the house.
Noise is a problem.
In-person meetings need to be held in the kitchen or living room.
You find it difficult to concentrate.

woman sitting at her desk working on the computer from home — working from home

Remove the Barriers to Productivity

For an optimal work environment, it’s not necessary to have a large home office, but it should be as self-contained as possible, with plenty of room for storage. Ideally, there is room for at least one additional chair, so you can meet with clients or vendors privately, or just to step away from your standard workspace to brainstorm or meditate. In addition, it’s preferable to have your office in a quiet part of the house with a solid door to muffle sounds.

Your desk or work surface should be conducive to your specific job, with the right amount of space and storage. A comfortable, supportive chair makes a huge difference if you spend hours at your desk. You may even want to have a mini-fridge and coffee maker in your office, so you don’t need to make trips to the kitchen throughout the day.

Consider whether your desktop computer or laptop is in need of an upgrade. As more services move to the Cloud and applications grow more powerful and demanding, older models can struggle to keep up. That doesn’t mean you have to shell out a ton of money, however. Discounts and online sales can net you good deals on many models and styles of electronic equipment.

Make the Move

If your office isn’t set up for the success of your business, it may be time to remodel your home or search for a new house that has the kind of office space you need. San Diego real estate is always in demand, so if you’re looking to make the move, it’s best to start the process early and give yourself time to find the best options available.

Use a mortgage calculator to factor in your household income, debt-to-income ratio, credit score and approximate down payment, so you can determine how much you can afford.
Apply for mortgage pre-approval before actively searching for a home, so you can jump quickly on the right house when it comes on the market.
Find a real estate agent who is knowledgeable about your desired area, price point and requirements as a home-based business owner.

Form an LLC

If you haven’t done so already, consider forming an LLC, or limited liability company. As SmartAsset notes, it provides legal protection for your personal assets and avoids double taxation, because your business income isn’t taxed before you draw personal income from it. An LLC has more flexibility and requires less paperwork than a corporation. Best of all, you don’t need a lawyer to facilitate the process. Skip an attorney’s fees by completing the process yourself online through a formation service. Rules for forming an LLC vary by state, so make sure you know the local regulations before proceeding.

Your home office is “command central” for your livelihood, so it should work as hard for you as you do for your business. If your current space is hampering your productivity or frustrating your efforts, it might be the right time to explore new options. Connect with McT Real Estate Group for help in finding the right space to help take your personal and professional life to the next level!

Kids’ Opinions Matter When Buying a Home in San Diego

Recently, Harris Poll conducted a survey that SunTrust Mortgage released. It stated that the kids’ opinions under 18 played a large role in their home buying decision.

When looked at in detail, the results showed that 74% of homeowners, parents ages 18-36 said their kids’ opinions paid a huge role in choosing which house they bought when buying a home. Eighty-three percent of renters said their children’s input would be taken strongly into consideration when buying a home in the future.

Here are some of the most important features that matter to a kid when parents are buying a home

Kids’ most important-desirable part of any new home is that they will have their own bedrooms. A nice backyard came in right behind. This is so true when selling houses in North Park, South Park, and other San Diego urban neighborhoods. We can witness it when we do our open houses on the weekends. Kids are very vocal when they like the house. When they don’t, they also are vocal and want to be heard.

Todd Chamberlain, Head of Mortgage Banking at SunTrust, explained the train of thought behind the survey.

“As a parent of two kids, I know from experience that including children in the home buying process is not only fun for the whole family, but also educational for our homebuyers of tomorrow.”

Conclusion:

If you have a home that you are thinking of selling, remember to emphasize the kid-friendly features that come with your house that kids will love. After all, they will have a huge impact on whether their parents are buying the home or not.

Lastly, contact the McT Real Estate Group at 619-736-7003 for expert Real Estate advice. We will assist and guide you through every detail to help you receive the highest dollar amount for your investment.

See Tips for Selling Your House in San Diego

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Are Mortgage Lending Standards Too Loose…or Too Tight These Days?

With home values in North Park and other neighborhoods in San Diego appreciating at record rates, some people think we may be heading for an additional housing bubble; just like the one, we went through about 10 years ago. Some of the blame for that housing boom and bust was the loosening of standards of lending for mortgage credit.

At the University of North Carolina, there was a study done after the crisis that revealed the following:

“Lenders began originating massive numbers of high-risk mortgages from around 2004 to 2007, and loans from those vintage years exhibited higher default rates than loans created either before or after.”

A study completed by John V Duca, John Muellbauer, and Anthony Murphy revealed those risky mortgages caused the housing crisis.

“Our findings indicate that swings in credit standards played a major, if not the major, role in driving the recent boom and bust in US house prices.”

How does mortgage lending from 2004 to 2007 compare to today’s lending for mortgages?

The Mortgage Bankers’ Association tracks mortgage Standards through appreciating at record rates(MCAI) The lending standards are tightening as shown in the decline indicated in the MCAI, although loosening of credit is also seen in the increases in the index. The chart below shows that we are nowhere near the standards that aided the housing bubble, although, you can see the index going back to the time between 2004 and 2007 when the loose standards caused the housing bubble.

Conclusion:

Mortgage standards today have become very tight in some areas. There are many qualified home buyers out there having a hard time getting a mortgage. If you have been thinking of buying a home but are not sure how this all works, contact the McT Real Estate Group right away. We will be able to sit down and go over a comprehensive plan of action with you that is in line with your goals.

What Are Some Homebuyers Mistakes Made?

Mistakes Homebuyers Make

Buying a home is a big deal and requires a lot of thought and preparation. I have seen homebuyers mistakes many times so decided to share them with you so you can learn from them. Preparing your finances upfront is something that you should do before going out and searching for houses. In today’s competitive Real Estate Market homes are sold quickly. Being prepared will help you get the home you want without missing out on a great opportunity because you did not have your financials in order. I have seen buyers going around searching for homes, and they have not talked to a lender yet. Without speaking to a lender and going over your finances, you are not sure what your affordability is. You may be looking at houses that are way under or over your price range. Once speaking to a lender you will be able to find out exactly what you should be looking at.

Already Found A Realtor

If you already found a Realtor that you would like to work with but you have not found a lender, no worries. An experienced Realtor will have a few great lenders that they can refer you to. A lender will be able to pinpoint what price range to look at based on your budget, qualifications and your comfortability of a certain monthly payment. As a Realtor, we encourage you, the homebuyer, to do this so that we can understand what target price of homes to search for and focus on finding you and your family the best home in that price range.

Cleaning Up Your Credit

Another reason to speak to a lender before searching for a home is that there may be a few dings on your credit that you did not know about. This will increase the interest rate you will have to pay on a mortgage loan. By speaking with a lender before searching for a home, we may be able to take care of these things so that they come off your credit pretty quickly. This will increase your credit score which will make your payment lower on that possible dream home that you would like to buy.

Having a lower credit score could be ½-1or point more from someone with a higher credit score. What does this mean? It means that the person with a lower credit score will pay $200-$400.00 for the same house. So preparing yourself before you go out and look at houses is extremely important. Falling in love with a house to then find out at that very moment that you just can not afford the monthly payment with break your heart.

Getting New Credit Cards

When buying a home, it is extremely important that you stop shopping. Seriously, homebuyers mistakes include shopping for things they really don’t need at that time. Do you need another pair of slacks or one more pair of shoes? Well, if you do, this is ok but when you get to the cash register and they ask you if you would like to save 10% on today’s purchase, “JUST SAY NO”! BTW, this also includes furniture that you may want for your new home or even a car. This is one of the worst things you can do if you have gotten your offer accepted and you are “In Escrow”. You will most likely get a call from your lender because now, your credit score would have dropped and you may not qualify for the loan that you were trying to get. This is a big deal, so DON’T DO IT!!

Hate Your Job?

You may not like your job anymore and may have been offered a new one. Another one of those homebuyers mistakes is quitting that job before you close escrow on your new home. Here is another bit of advice; DO NOT QUIT YOUR JOB!!. No matter how much you hate it, stick it out. Once your loan has been approved and you are moved into your new home, you can then decide if changing jobs is what you want to do. Hopefully, you will have your next one in line because you now the proud owner of a new house and have a mortgage payment at the end of the month:-)

If you have not spoken to a lender yet or would like a referral to one, just email us or call us at 619-818-8122. We have several high-level professional lenders that we have been working with for years. They would be able to help you figure out what target market you should be looking at based on the information that you give them. Once that is done, we can get you on the road to homeownership.

Should I Buy a Home Now Or Wait Until Next Year?

Buying a home in San Diego can be very exciting but can feel scary at the same time. If you think about it too long and listen to too many people who don’t own a home or even some that do, you may become paralyzed with fear and never jump in. It is ok to be careful and do your homework. But, over analyzing for too long can hurt you in the long run. Constantly asking yourself, “Should I buy a home now or wait until next year”? I can remember meeting people that came in through our Open Houses during 2012- 2016. Some of these people wanted to buy a home but kept saying that they would wait for the bubble to burst. It is 2018 as I am writing these words. I still see a few of these people around that still haven’t bought. They are kicking themselves for not buying back then. We also helped many people buy homes during that time period, and then they decided to move out of San Diego. We then sold their homes, and they left with a lot more money than they had when they initially bought their house. They were sure happy! With this being said, yes, you do have to put much thought into it. It is a big financial decision. But no matter what time it is, it always seems like mortgages are high, and one wonders how they will pay their mortgage.

How Will I Pay The Mortgage?

So, you’re either going to pay your mortgage, or you are going to help your landlord pay theirs. Either way, you are paying a mortgage. Why not it be your own.

My parents bought houses back in the 1970s and 1980s. There were times when interest rates were way up at 18%. Sure, the purchase prices were lower. However, with interest rates as high as they were, so was their mortgage. They, too, asked themselves, “how are we going to pay this mortgage.” Today, they are sure happy they took those risks. This allowed them to have a large safety net to retire with and not have to work in their golden years.

Should I Buy a Home Now?

So, are you asking yourself, “should I buy now or wait until next year”?

Buying a home today at $700,000 with interest rates at 4.3%, your mortgage will be approximately $3223.00. With projected interest rates for next year at 5.10% and the price going up to $735,000, your mortgage payment will be approximately $3,629.00. That is a difference of $406.00 a month.

If you are thinking of buying a home and would like to sit down and go over a plan of action, contact the McT Real Estate Group at 619-736-7003. Together we will look at your long-term goals and see if buying a house is the best thing for you today.

San Diego Homes for Sale Coming Soon

Homes for sale in San Diego are hard to find these days. With a limited inventory, finding a home and getting your offer accepted before someone else is getting more difficult these days.If you have been searching for “coming soon“ real estate listings but have not been successful at it, here is a good place to start. The McT Real Estate Group are real estate experts in the San Diego area. We always have a list of homes for sale in San Diego County that on other Real Estate Websites. Before we put homes on these other sites, we spend time with the seller preparing the home for sale, so they are the nicest homes in the area for their price range.

What Do I Mean By Preparing the Home For Sale?

How one lives in a place and how one sells a home is quite different. When we live in our home, we tend to fill it up with stuff we love and make us feel good. When we are getting ready to sell a home, there are certain things that one should do that a home buyer will look at before entering your house. It starts right when they drive up to your house. If the front is not tidy and cared for, they may not even want to step inside.

With this being said, when the McT Real Estate Group gets a listing, we work with our sellers and help them with this process of getting their home to look nicer than the competition. Do make sure to check in with us to see what we have in the pipeline, what we will be putting on the market soon and how to be the first to see it. Call us at 619-818-8122 right away!

See Our Current List Of Homes Coming Soon for Sale

Affordable Homes for Sale in North Park

North Park, like other neighborhoods in the San Diego Metro Communities, has gotten expensive throughout the years. However, with today’s low-interest rates and the cost of renting a house, it may be better to search for an affordable home for sale in North Park in the long run.

Check out the most affordable homes in North Park today!

Top Reasons for Buying a Duplex as a First Home

You have decided to buy your first home in San Diego. This is great news! The first thing that comes to mind is, should you buy a Single Family Home, a Condo, or a Townhouse? These are all great options but let’s not forget about another great option. What about buying a Duplex or a Triplex? These are great investment strategies to think of.

There are a lot of advantages in homeownership with buying a Duplex for Sale in San Diego. Having someone else help pay for your mortgage is one of these advantages that owning a Single-Family Home does not have.

Below are some of the reasons and advantages and why you should consider buying a Duplex instead of a Condo, Townhouse or even a Single-Family Home:

Mortgage Relief

When you apply for a mortgage, banks will have lower interest rates if you will be occupying the home as opposed to someone who is buying a home to rent out. Also known as a non-occupied loan. When you apply for a loan to buy a Duplex or a Triplex, they still consider this an owner-occupied loan since you will live in one of the units. You will also qualify for a larger loan because the other units will be helping you pay the mortgage loan.

Tax Write-Off

One of the beauties of homeownership is writing off the mortgage interest when having an owner-occupied property. However, if you own a Duplex or a Triplex, you cannot write that off on the units that you don’t live in. Still, you can write off other things such as the cost of any repair done to the other units, the cost of managing the other units and the costs that it takes to get those units rented out. Other costs would include if you share the electric, cable/internet, and water.

Short Term Rental Vacation Rental

You may not want to be a long-term lease landlord. Being a landlord is not for everyone. You may not want to live in such close quarters with a tenant. Another option is to use the other unit/units as Vacation Rentals. This side business can bring in a lot more money than a regular long lease tenant would. It would also give you the flexibility of not having the same tenant for such a long period. You can even open it up to family and friends who would like to visit town and visit on occasions. You may also want to keep it as a home office. This, of course, takes you back to tax savings and something to discuss with your accountant.

Duplex Investment Strategy

Ok, so you’ve lived in your home for 2 years, and you feel good about being a landlord. You can now go out and buy another duplex or triplex home and use the rental income from the other units to qualify for the loan. As long as you will move into the new property, you can get another owner-occupied loan and benefit from the lower interest rates. This is a great way of creating and building wealth for your future with residual income.

Buying a Duplex with 3.5% Down Payment

You can buy a Duplex Home with as little as a 3.5% down payment. As long as you are going to live in the home, you can apply for an FHA loan, which is a great way of getting into the market. Yes, they have MI (mortgage insurance)that you have to pay, but this is the cost of doing business. Once you can prove that you have 80% equity in the property, you can speak to your lender and re-fi out of the FHA and eliminate the MI insurance.

For more information on how to get started with buying your first Duplex or Triplex home in North Park, South Park or any other neighborhood in San Diego, contact the McT Real Estate Group right now.

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