Where is the Best Place to Get Started in Real Estate?

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If you’ve been thinking of working in the real estate industry, you’re going to enjoy every moment. This field is exciting with flexible working hours and the opportunity to meet and interact with customers from different demographics. Statistics indicate that there are close to 1.2 million realtors currently working in the US. That’s a clear indication of how a career in real estate is a viable option.

Consider this example: The average sales price for houses in 2019 was $299,400. If you’re working on 6% commission, a single sale gains you $18,000. It’s not surprising that many professionals working in other spheres opt to show houses as a second job, eventually moving on to taking up the career full time. If this sounds like something you’d like to do, here’s how to get started.

Get Licensing to Work as a Realtor in Your State

The first step is to check your state real estate commission’s website where you can get detailed information about the licensing requirements applicable in your state. You’ll also find a list of accredited pre-licensing agencies that offer training in the mandatory courses. You have the option of taking the course online or in person. Expect to train in the legal aspects of the business along with gaining an understanding of real estate practices like how to assess a property’s value. You’ll also learn about terms like “encumbrance,” “lien,” and “escrow,” among others.

The required number of hours vary by jurisdiction and state. For instance, if you intend to get licensing in Oregon, the mandatory hours is 150, including 30 hours of Real Estate Law, 30 hours of Oregon Real Estate Practices, and 20 hours of Real Estate Brokerage. On the other hand, California realtor licensing requires a total of 135 hours of training, including 45 hours of Real Estate Practices and 45 hours of Real Estate Finance.

Having completed your training, you’ll take the state licensing exam for a fee of $100 to $300. Expect to answer 60 to 100 multiple-choice questions that test your knowledge of general real estate principles and both state and federal laws. The pass rate is typically 50%, so it helps to take preparation seriously. Take the California Real Estate license practice test as many time as you need to evaluate your competency and raise your chances of passing. Once you clear the exam, you’ll get the necessary licensing to work as a realtor.

The Real Estate Industry is Multi-Faceted and Interesting

Once you gain adequate experience working as a realtor, you can consider specializing in a particular area. If you’ve always thought that real estate was all about helping clients buy and sell property, that’s not exactly accurate. You can choose careers such as:

Property Management

If you also have a degree in finance, think about working as a property manager. Such professionals can work for a company or as a freelancer. Your job description includes taking care of property issues for owners who don’t have the time or expertise. For instance, overseeing maintenance and repair tasks, marketing the rentals, collecting rent on schedule, dealing with evictions, and responding to complaints and problems that the tenants may have.

Apartment and House Sales and Purchases

Many people approaching retirement like to move to locations where the weather is warmer. They often seek a lower cost of living, or they just to be closer to family and friends. Others prefer to move into smaller apartments that are more economical and easier to maintain. You could assist senior citizens moving to Eugene, Oregon, starting with finding a good buyer for large houses and purchasing compact apartments or assisted living facilities.

Retail Leasing

Realtors who specialize in retail leasing have an extensive database of prime properties that become available for leasing. You’ll find locations ideal for your retail company clients to set up their business. Helping with the legal requirements and preparing the necessary paperwork for renting the property are all a part of your job in retail leasing. Most such professionals work over the weekends and after hours to identify viable options that their clients might like.

Real Estate Appraisal

Since determining the value of a particular property is a part of your training as a realtor, you could find a job with a business broker in NJ. When finalizing deals for mergers and acquisitions, one of the key elements of the process of due diligence is conducting evaluations of the partnering companies’ assets. Your job involves checking for the validity of the lease or ownership deeds and whether it is necessary to retain the property for ongoing operations.

A real estate appraisal can be critical to the outcomes of the merger deal since its value can influence the status of the balance sheets. Accordingly, your expertise may also be needed to check for the site’s profitability if it is sold, leased out, or used as is.

Real Estate Development

As a realtor, you’ll find and identify properties that have the potential for bringing attractive ROI for their buyers. Such buildings may be run-down, empty, or obsolete. Your job is to evaluate the cost of repairing the structures to make them fit for living, leasing, or accommodating a running business.

If you’re planning to work as a specialist realtor, you might need to get additional training and licensing. Check for the regulations in your state when choosing the career that interests you most.

How to Become a Real Estate Agent

Things to Consider Before You Buy a House that Needs a Lot of Work

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Most people want to make a few changes to a property when they buy it, to make it their own, and bring it to their particular standards. However, if you’re planning to buy a fixer-upper, be aware of what you might be getting yourself into.

While a renovator project is going to be less costly to buy upfront than an already refreshed place, you must do your due diligence to ensure you don’t bite off more than you can chew. Consider and research a variety of factors before you sign on any dotted lines.

Know What You Can Afford

Many people think that buying a fixer-upper for a lower price then doing a few renovation tasks will have them seeing profits in no time. However, in reality, remodel work tends to be both more time consuming and more expensive than expected. As a result, it’s easy to get into a situation where you’ve spent much more money than planned or perhaps can even afford. Sometimes buyers can’t even finish their project because they’ve run out of funds.

To avoid landing in this situation, get clear on exactly how much money, in total, you can afford to spend. Have a set allocated figure, and work back from there. Anytime you look at properties, you subtract the likely purchase price from your budget and see if you’ll have enough funds left over to renovate adequately.

When factoring in financial elements, try to allow for every cost that could arise. This means more than simply the purchase price of the home and laborer and material fees. Don’t forget things like realtor and legal fees, demolition and removal charges, insurance costs, home warranty to cover appliances and other home systems, inspection costs, and so on.

Be Clear on Goals and Expectations

Be clear on your goals for the project, too. That is, are you buying a house to do up to your personal specifications and live in for years? Or are you tackling the task to flip the home ASAP after you’ve renovated it? Perhaps, alternatively, you’re planning to refresh a property so you can rent it out for a top dollar? No matter what you plan to do with the home after its facelift, you need to know what you hope to achieve. Let this guide you when shortlisting properties.

Know your expectations, too. With so many home-renovation reality shows on television now, many people think the process is straight forward and always results in a profit. However, believing you’ll get the same outcomes as the people on TV who usually have years of experience and a vast support system behind them can set you up for failure. Try to have reasonable expectations and plans in place for how you’ll deal when things go wrong.

Organize Inspections

One of the top tips for buying a fixer-upper is to invest money in proper inspections conducted by licensed, experienced, and adequately trained contractors. Before you commit to purchasing a property, know what you’re getting. Some houses look fine on the surface, like they only need a few inexpensive cosmetic touches, but when you start to get into the renovation work, you discover all sorts of more significant problems.

Some of the checks to consider include roof certifications, pest inspections, engineering reports, sewer line inspections, and building reports. Be on the lookout for fundamental, structural, and costly issues that people bring to your attention, such as roof or gutter replacements, shoring up foundations, building garages or additions, and pouring concrete for new driveways.

Other expensive work includes complete kitchen or bathroom remodels and replacing electrical wiring, sewer lines, and plumbing systems. Plus, think hard about buying homes that require you to outlay money on installing replacement windows throughout the house, getting rid of asbestos, mold, and mildew, and replacing or installing HVAC systems.

A fixer-upper home is always going to need work, which takes time and money, but it’s vital to separate extensive rehab needs from more affordable cosmetic tasks. At the end of the day, though, the rehab you can afford and want to do comes down to your specific situation and preferences. Speak with builders and contractors to get quotes on work (and add extra for unforeseen costs), so you can work out if you have the potential to make enough of a return on investment or not.

Buying a rundown property and turning it into something fresh, appealing, and updated is both exciting and nerve-wracking. Give yourself the best chance of success by considering the factors listed above before you sign any purchase contracts.

how much does a real estate agent make

How much does a real estate agent make?

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Much like real estate itself, the answer to how much a real estate agent makes in annual pay is largely based on location, location, location. Commission splits, brokerage fees, and average sales price all affect commission and vary by location. 

Where You Work Determines How Much You Make

The real estate industry is a much different career path than many other jobs. Real estate agents are typically considered private contractors meaning that they technically own their own business and can make their own rules. This is mostly true, but doesn’t tell the whole story. According to laws in every US state, real estate agents are required to work under a real estate broker unless they become a licensed broker themselves. 

Brokers provide agents with the experience needed to make good decisions in tricky situations, something that happens quite often in real estate. They also often provide some benefits to agents in the form of listing/closing departments, usable office space, and errors & omissions insurance. 

The fees brokerage charge agents, often referred to as “splits”,  vary by franchise and broker. Splits of 60/40 (agent gets 60% of their commission, broker gets 40%) aren’t unheard of, but there are also brokerages that offer 0 split arrangements. Many companies choose a hybrid model where the broker gets a part of the agent’s commission until the agent sells a certain volume of property, reaches a particular income threshold, or has worked for a certain amount of time. 

This is largely why the hiring process in real estate also seems completely backwards to non-industry folks. Typically a company hires a contractor, but in real estate, agents typically interview brokerages instead to choose where is the best fit for them. While brokerages can accept or reject agents as they choose, more agents typically means more money to the broker from commission splits so they’ll often accept or even recruit new agents. 

how much does a real estate agent make in your city

Geographic Area Affects Earning Potential

The majority of US real estate agents work on a commission structure meaning that what they make on any given transaction is based largely on the sale price of the property. Like the average cost of a property, the exact percent of the commission can vary by area or property. 

In the US, real estate commission fees vary from place to place, but average about 6 percent. This fee is then divided between the listing agent and selling agent, with the split often being fairly equal, although it’s not uncommon for the listing agent to receive a higher percentage. Both the listing and selling agents will then split their portion of the commission with their respective brokers. 
While commission splits are known from the get-go, the selling price is what really determines how much money an agent makes. At the end of 2019, the average US home was estimated to be valued at $241,000. If a real estate agent sold a house like that at a 3% commission,they would make $7230. However, if an agent sold a property in San Mateo County, California where the average estimated home value was $1,182,300, the agent would make $35,469. Now compare this to Desha County, Arkansas where the average home value was an estimated $65,526. An agent selling a home here could expect a payday of just $1965.78 before broker splits, desk fees, and property marketing.

Real Estate Opens Many Doors

Selling properties isn’t the only way that real estate agents make money. While many practicing agents work with buyers and sellers, others work as property managers, property flippers or landlords. A career in real estate comes with many benefits. Learn more by checking out our article how to become a real estate agent.

What House to Buy, Based On Your Zodiac Sign

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Having trouble deciding what house to buy? Sometimes it’s best to let the cosmos take over. While astrology is incredibly complex and your sun sign (the sign based on the day you were born) is only one part of what makes you, you, it’s still fun to see what the stars have to say. Look at which house you should buy based on your zodiac sign! 

Aries: A ranch house with a nice yard.

Aries are passionate, competitive beings who *just* so happen to be named after the Greek god of war. We’re not saying they need lots of space for a battleground or anything… but Aries just need space to spread and expand. A ranch house offers just that, while a nice yard means plenty of potential for outdoor games to fuel that competitive nature.

But it doesn’t just have to end there — as we said, you rams are passionate beings! A nice yard provides space to dive into your passion projects, be it a garden or space for a shed/workroom. Even a deck or patio means more opportunities to entertain their loved ones (and yes, pets absolutely count). After all, relationships are where Aries tend to show their fire and love the most.

Taurus: A cabin that’s away from it all.

The homebodies, the nesters, the ones who are more than fine staying in or getting home early. Our bull brethren deserve the coziest of cabins, nestled in the woods, near a bubbling brook. Of course, it shouldn’t be too far from a town or city — Tauruses aren’t social hermits, they just want to come and go as they please!

Taurus, a nice cabin gives you the serenity and comforts of home you desire. You can stock it with warm blankets, your favorite scented candles, and hopefully, the largest claw-footed tub known to humankind. And of course, don’t forget about the gorgeous kitchen where you can cook sumptuous meals for their loved ones — the lucky ones allowed into their sanctuary.

Gemini: A modern split-level.

The twins of the zodiac, Gemini, sometimes get a bad rap for being “two-faced.” And their personality duality can look completely different in different social circumstances. But they’re witty, hilarious and often considered by some to be the most fun of the zodiac. That duality is best expressed in a split-level home, particularly in a modern or mid-century modern style. 

Gems, you’ll appreciate entertaining in different parts of the house (or just being able to scroll through social media in different locations — no shame, we all do it) and a house whose look can be restyled with relative ease. After all, you might find a new print at a flea market and then need to change their entire aesthetic — a modern split-level affords versatility.

Cancer: A house in the country.

OK now just to be clear — “a house in the country” and “a house that’s something right out of a country song” are two very different things (it needs to be said because Cancers are sometimes a bit finicky). Leave it to you lovely crabs to make your house in the country something with character, like an adorable bungalow or converting a 19th-century schoolhouse into a modern home.

Cancers have that magic to turn practically any space into a home (and one with the most on-brand aesthetic ever — Cancers 10000% know their brand). A house in the country gives you the space to fully flesh out you vision. Have no doubt that your home will make everyone feel welcome, while also showing up in architectural publications and inspired Insta pages.

Leo: A luxurious manor.

They’re royalty, lovers of the limelight and absolute showstoppers. They may occasionally burst into song for no reason, to the (valid) confusion of non-Leos. Our zodiac lions want glamor! Decadence! Incredible natural lighting! Gorgeous, massive windows! Luxury looks different for every Leo but make no mistake — they all want some version of it.

Leos, your dream house might come later in life because let’s be real — the manor or estate you really want is probably not your starter home (but congrats if it is). And that’s perfectly OK! You want lots of rooms, bathrooms fit for a king and queen, space for entertaining, heck, maybe even a pool + cabana combo. Essentially, a manor that makes your loved ones gush over (and don’t worry, you secretly relishing in their envy is on brand for your sign).

Virgo: Build, don’t buy.

Virgos, we have a lot of love for you. Without you, who would tell us our flaws, give us direction or set us up with a gorgeous online spreadsheet?

There could easily be a house out there for every Virgo to buy, but these taskmasters crave control. Whereas some signs might crack under the pressure of decision-making when building a house (cough cough LIBRAS ahem), Virgos thrive. Well, they’ll still be stressed out and take way too much on and it’ll be the only topic they bring up for the next year and a half, but for Virgos, that’s the thinking they’re thriving!

Libra: A standard two-story.

Standard two stories are balanced by nature and perfect for our Libra scales. Libras, you might get heat for your indecisiveness and occasional flightiness, but you’re some fierce aesthetic queens so it’s time to play to your strengths. Setting you up with a standard two-story gives you plenty of opportunity to make your house a home.

A house that’s too niche won’t fit as well with your balanced nature. Your focus is on having good times with loved ones and strangers alike, and a standard two-story, decked out to your liking, does just that.

Scorpio: A Victorian house.

Other signs see the old house down the street as creepy, Scorpio wants to go inside out of sheer curiosity. Not every Scorpio has an affinity for the macabre (but it’s close). Still, if someone in the zodiac would delight in the stories, secrets, history, and occasional mysterious creaks of a Victorian house, it’s Scorpio. 

Scorps are deeply passionate — when your love and trust is well-received and requited, the bonds you have are unbreakable. That bond applies exceptionally to an old Victorian house full of classic beauty and unmatched character. Your intrinsic curiosity will keep deepening the connection to our abode, giving us a whole house to pore over and tend to. Those mysterious creaks won’t scare us off — they’ll have you wanting to learn more. And maybe putting out an altar for whatever spirits reside there, but that’s another story.

Sagittarius: A vacation home.

Sag, you all are on the move and may or may not have some fears about being confined to one location. That’s why your home of choice should be a vacation destination! Instead of sticking with a traditional home in the burbs that you’re not ready for, find a vacation home (or at the very least, a house that makes you feel like you’re on vacation).

The huge advantage of a vacation home is that you can rent it out while you’re away. Plus, the limits for what makes something a vacation home don’t exist. Renovate an Airstream! Invest in a tiny home with some gorgeous mountain views! Finally, get that beach cabana! If you want to make it your actual home, by all means, keeping it as an escape (and maybe even investment property) is cool too.

Capricorn: A middle-of-the-action apartment or condo.

Caps are the grinders and hustlers of the zodiac. They know what they want and work tirelessly (do they even get tired??) to get it. But Capricorns want to enjoy the fruits of their labor, or at least, in theory, have that as an option because, tbh, you guys might overbook yourselves. 

A gorgeous apartment or condo that’s close to everything can give you goats the access you love with the luxury you worked for. Close to concerts, bars, public transport, events, gyms, trails and, most importantly (for you), work —  that’s the stuff of dreams for you. Pick out the apartment of your dreams, go for the penthouse if you desire because if anyone’s going to crush their goals, it’s you.

Aquarius: An eclectic or unusual home.

Oh Aquarius, our favorite aliens of the zodiac. You could make a barn, a yurt, or even a UFO your home; we love that for you. No matter what type of home you go for, it has to have some unique elements at the very least and be the most out-of-place house on the block at most. 

You love characters in homes (similar to Scorpios) and need a place with quirks that tell a story. Tiny homes, berm homes, shipping container houses, glasshouses in the middle of the desert — the sky (galaxy?) is the limit. Look for something as interesting and curious as you and you’ll never grow bored — but remember that if you move from it, selling a too-unique house can be tough.

Pisces: A house by the water.

Sweet, sensitive Pisces, it might seem generic to put you fishies by the water but you know you’d love it. A babbling brook, a lake, a beach — anything will do! No one would be surprised if you started calling the animals nearby your neighbors (and/or talking to them like a Disney character).

Water recharges you and gives you a sense of peace. When the outside world is overwhelming and you want to escape, it’s best to have that right at home. Hold out for a home near some water, but remember that dreaming about it alone won’t make it happen. For as much intuition and compassion and faith as you have in others, give yourself the same attention to make a house near the water a reality.

7 Common Electrical Problems Found in Home Inspections

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When buying a house, one of the steps is to have a home inspection performed so key issues are noticed and can be addressed. During home inspections, electrical problems are usually detected, and this is important because a house’s electrical system plays a major role in keeping it safe by preventing fire risks, arcing, and electrical shocks. After having a home inspection performed, it is essential to make the necessary electrical fixes that the inspector addressed because you want your family’s house to be as safe as possible.

1- Exposed Wiring

During home inspections, one of the most common electrical problems found is exposed wiring, and this is a crucial problem to have repaired because exposed wiring is a major fire risk. Because of the high risk involved, exposed wiring is one of the repairs that should always be repaired by a professional electrician instead of DIY. Exposed wiring is not a complicated repair, but it is essential that wiring is properly covered to prevent the risk of fires or arcing.

electrical problems

2- Buried Wires Not Protected

Having buried wires is acceptable, but when buried wires are installed without a covering or protection, it becomes an issue. A covering or protection is crucial because it safeguards the wiring against natural elements, debris, and rodents. When a buried wire is compromised, it poses a safety risk to the house and stops functioning at peak efficiency.

3- Receptacles Not Properly Grounded

Especially in older or historic homes, ungrounded receptacles are a common electrical problem found during home inspections. Ungrounded outlets are outlets with only two holes for the plug and no hole for the ground wire, and without the ground wire, there is a risk of fires or arcing because electricity can travel until it finds a suitable conductor source. Similar to exposed wiring, ungrounded receptacles are not a complicated repair, but they should be fixed relatively soon because of the safety risk they pose to the house.

4- Lack of Outlets

In many homes, homeowners will find a lack of outlets because many homes were built before homes experienced a surge in the number of electronic devices per household. People need to charge their phones and tablets but also plug in their televisions and lamps, and running extension cords from room to room isn’t the answer. Homes need to have enough outlets in each room so everyone can function without a fire risk.

5- Openings in Electrical Panels

For electrical panels, one of their common problems found during home inspections is openings in the panel. No gaps should be visible in the electrical panel because it would allow debris or rodents the ability to get inside which would create a shock or fire. Openings in the electrical panel can easily be fixed by installing filler plates to place over the openings so nothing can get inside.

6- Faulty GFCI Outlets

In rooms where moisture is present (kitchen, bathroom, laundry room, etc.), GFCI outlets must be installed and properly functioning. A GFCI (Ground Fault Circuit Interrupter) outlet is an outlet that has a protective covering to prevent electric shocks, and it correlates the inflow current on the hot side to the outflow current on the neutral side. During the home inspection, the inspector will test the GFCI outlets to ensure they are working properly and if any adjustments need to be made. In areas where there is the chance of water or moisture, having GFCI outlets is necessary because of the danger that could ensure if water seeps into an outlet while it is in use.

7- Overused Circuit Breakers

Another common electrical problem found during home inspections is overused circuit breakers. Circuit breakers are intended to only have one wire connected to one circuit breaker in the electrical panel, and when two or more wires are plugged into the circuit breaker, it poses an immense safety risk. When multiple wires are connected to the same circuit breaker, it allows connections to become looser which leads to an increase in arcing and fires. Overused circuit breakers are easy to spot, and this common electrical problem can be solved by simply upgrading the electrical panel to allow for an increase in the number of circuit breakers.

From exposed wiring to not having the proper number of outlets, many electrical problems can be found during a home inspection. The most important thing is to choose professional services for both the home inspection and electrical repairs. It might save you money to try and repair the problems yourself instead of using a professional electrical company, but in the end, it is better to have the problems repaired by a professional so you are ensured of their quality and safety. Because electrical standards and codes are changing with new improvements and procedures, it is common to find electrical issues during home inspections, and no matter what the electrical problem is, the most important part is to have it fixed promptly by a licensed electrical company.

6 Misunderstood Things About Buying & Selling Houses

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Surprises are fun for birthday parties, scratch-offs, and finding an extra mint Milano at the bottom of a Pepperidge Farms bag. They’re quite the opposite when it comes to buying or selling a house. We’ve compiled the weird, the bizarre, and the generally misunderstood real estate facts to hopefully reduce any surprises the next time you’re on the market.

#1 “Selling” vs. “listing” agent terminology is misleading.

In layman’s terms, it’s a mess. Full disclosure, this writer has written for RealtyHive for more than a year and still struggles to keep the two separate (but thankfully has a real estate grandmaster for an editor).

The listing agent works with the person who posts the listing (in other words, the seller). The selling agent works with the buyer — this role is also sometimes referred to as the buyer’s agent. Ideally, that jargon would just make a permanent switch.

Oh, and did we mention that sometimes the listing and selling/buyer’s agent are sometimes the same person? This is called dual agency.

#2 You can’t fire your Realtor just because they haven’t sold your house.

You can work to fire a Realtor who is unethical or irresponsible but minor issues (or even the lack of a house sale) is usually not grounds to terminate your contract. Even if you stop working with your Realtor, there’s a chance that they could still take commission on your property.

If issues come up with your Realtor, talk to them first, then follow up with their broker if you don’t feel like things are working. 

#3 Houses that have spent a long time on the market are often overpriced.

If you spot a house that seems overpriced and you can’t figure out why, chances are it’s been on the market for a while. This can serve as a good bargaining tool if you decide to make an offer — you can try going lower than the listing price. 

Otherwise, keep an eye on listings consistently, specifically for ones that stay up for several weeks. Even if the price doesn’t change, you could still leverage a lower offer.

#4 Hope for a low assessed value.

While you want a high appraisal value (because that tells how much your home is worth and helps for selling), you want a low assessed value because that determines your property taxes.

#5 When you’re looking to buy a house, never call the listing number. 

The “For Sale” sign might look enticing, but don’t call the phone number. That number belongs to the listing agent who, like we discussed earlier, works on behalf of the seller. Contact a selling/buyer’s agent when you see a property you like (and consider working through Cashifyd since you could get cashback at closing!).

#6 Real estate trusts and wills are different.

Wills are usually for smaller assets, trusts are typically for larger ones. Real estate trusts are also private and can eliminate court time while wills can lead to lengthy court stints to divvy things up.

Real estate is one of those areas in life where the more you learn, the less you know. Or at least, it can feel like that. But by researching, learning and staying up-to-date on real estate blogs, you’re actively closing the gap on any unintended surprises — and becoming a well-versed buyer or seller in the process.

5 Things to Know About 401K Real Estate Investing

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“You need to save for retirement!” Most adults have heard this sentiment at least once. We know the importance of saving for retirement (and starting early). What a lot of people don’t know is that you can actually use a 401K retirement fund as a way to invest in real estate. 

Wondering if you should take your retirement fund in a new direction? Here are 5 things to know about 401K real estate investing.

#1: 401K real estate investing itself is illegal.

We say “401K real estate investing” but you can’t actually use your 401K by itself to invest in a property. However, you can open a self-directed IRA and move the funds from your 401K to that IRA, tax-free. By this method, you’re taking existing 401K funds and still using them for real estate investing, just not from the 401K itself.

#2: 401K real estate investing can massively grow your retirement funds.

One of the biggest reasons people move forward with 401K real estate investing is, quite simply, to grow their retirement funds at a faster rate. Consider this:

In a regular 401K…

  • Your max. contribution is $19,500 per year (as of 2020).

If you use a 401K to invest in a rental property…

  • A property that generates $1,000 per month in rental income will lead you to an additional $12,000 per year that can go towards retirement.

Over time, investing with your 401K/self-directed IRA can substantially help you grow your retirement portfolio in ways that the max. contribution alone cannot. One thing to note: the income you generate from a rental property has to go back into your IRA. But hey, that leaves you with more funds for even more rental properties!

#3: When done correctly, you’ll pay little to no taxes.

Another huge advantage to 401K real estate investing is that it’s extremely tax-friendly. You’ll need to find a self-directed IRA that allows real estate investing first, then you can move your 401K directly into that IRA without having to pay any taxes. 

#4: You can borrow money based on how much is in your IRA.

As SFGate mentions, “While you cannot borrow against an IRA, you can usually borrow half of the value of your 401(k) account, up to $50,000. However, if you purchase real estate with funds outside of your 401(k), you no longer have any tax advantages attached to your purchases.”

Often, the specific type of loan used for these transactions is called a non-recourse loan. These loans have special rules (for example, you generally can’t use a non-recourse loan to flip a property, and you can’t use it for a property that’s a primary residence) so study up on them carefully.

#5: You can’t manage the rental property yourself.

The only way you’ll get the full tax advantages of 401K real estate investing is by hiring a property management company. You can’t be the one managing your rental property when it’s purchased using your 401K/self-directed IRA. This differs from traditional rental property investing, though you can still purchase a vacation rental property (it doesn’t just have to be for long-term tenants).

Similarly, you cannot live in a 401K/IRA property. You can’t vacation in it, and you also can’t pay for renovations or other sweat-equity. Again, do some thorough research on the rules beforehand (or hire a tax advisor) because you could otherwise miss out on tax breaks.

*Bonus* #6 You can find your next investment property here at RealtyHive.

RealtyHive connects highly motivated sellers and buyers through our time-limited events with properties for sale worldwide! Whether you’re looking for a gorgeous condo to turn into an Airbnb in Thailand or want to rent apartments or houses for families, you can find real estate potential here. Look through our listings today!

The Key Players in Real Estate

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The game’s about to begin, a real estate transaction is about to take place, and the starting lineup has just arrived. While the real estate agent might seem like the quarterback or point guard, there are plenty of other positions that play a vital role. These are the key players to know about — they help house sales go through and one day, will help your transaction as well.

Mortgage Lender

A mortgage lender is a financial institution (usually a bank) that provides financing (a loan) for a real estate transaction. Before buyers even start looking at houses, they need preapproval from a bank to show they’re serious — sellers often reject offers that don’t have preapproval.

Mortgage lenders also work with appraisers to ensure they approve the correct amount for a loan. If the value of the property doesn’t match the loan amount, this can make it more difficult to get a mortgage.

Home Inspector

People putting an offer in on a house often include a contingency for home inspections. In other words, if a home inspector finds some major problems and the offer is based on the results of an inspection, the potential buyers are protected from having to go through with the sale.

One thing to note is that not everyone opts for an inspection. Investors looking for flips or rental properties often put in offers that don’t require an offer so they can get the property faster and for a lower price. But if you’re looking for a home to live in, working with a home inspector is a really good idea.

Appraiser

Appraisals are different from home inspections because they assess the value of the home, not the condition. As mentioned, appraisers are usually sent out by banks to double check the value of the property.

Agents

There are two crucial agent roles you need to know:

  • Listing agent: Works with the seller (the one who’s posting the listing). Whenever you see a “For Sale” sign with a phone number on it, that’s the listing agent.
  • Selling/buyer’s agent: Works with the buyer (the one looking to buy the home).

To make matters more confusing, sometimes the listing agent and the selling/buyer’s agent can be the same person! Learn more about dual agency in our 5 Things Real Estate Agents Don’t Want You to Know blog.

Brokers

Brokers are legally responsible for the agents who work for them. They carry Errors & Omissions insurance, and if issues come up for (or with) a real estate agent, the broker is the one who can step in.

The listing broker is the listing agent’s boss and the selling or buyer’s broker is the boss of the buyer’s agent. It’s not often that either brokers interact with the buyers or sellers (unless there’s a problem with the agent).

Title Company Representative

Title company representatives do the actual closing of a property and serve as a neutral third party. These reps release funds from both sides and ensure that everyone has fulfilled their obligation.

Real Estate Lawyer

With all the documents that need signing in a real estate transaction, it’s no surprise that some people hire real estate lawyers to help them work through the paperwork. Sometimes people opt for a real estate lawyer to take the place of an agent and/or broker.

Transaction Coordinator

Transaction coordinators are the playmakers from behind the scenes. They iron out deadlines and details, communicate to all parties involved, enter listings into the MLS and check over closing documents, to name a few things. Essentially, they do everything except show houses! Not every brokerage or agent has a TC but many do.

You

Yes, you! As the buyer or seller, you are one of the biggest players in a real estate transaction. You are the reason every other role exists and why they’re coming together in the first place. But if looking at this list has you feeling about as overwhelmed as a soccer coach for 3-year-olds, fret not. 

You can work with RealtyHive, a one-stop-shop that makes the buying and selling process easier than ever. Find agents (and potentially get cashback at closing), list your property, or bid on your new home in one of our time-limited events, all in one place. In other words, play ball!

Garage Expansion & Makeovers: Is It Worth It?

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Welcome back to our “Is It Worth It” series! We’ve analyzed if it’s worth it to buy a house with lots of land, add a home security system, upgrade your backyard, and finish a basement. This article is covering garage expansion and/or renovation. If you’ve considered giving your garage a makeover, this is the blog for you.

Garage Expansion

What it is: Making your existing garage bigger.

A lot of older homes come with one garage stall, which is pretty inconvenient if you live with someone who also owns a car. Tiny garages sometimes feel extremely cramped and the space just ends up as another form of storage.

A garage expansion provides an add-on to your existing garage, creating more space. Expect to pay anywhere between $80 to $200 per square foot for a home addition.

Is a garage expansion worth it?

It could depend on where you live but when done right, the cost to expand your garage is worth it. Especially if you have the smallest garage in the neighborhood, your listing price will bear the brunt of an outdated, old-fashioned garage. In this instance, your home’s value will increase with a garage expansion.

Garage Makeover

What it is: Upgrading or renovating your current garage.

There are literally infinite ways that you could upgrade your garage, but here are a couple ideas:

  • Epoxy floors
  • Drywall
  • Paint 
  • Built-in storage cabinets
  • Built-in bar
  • Workout area
  • Crafting or other project-creating space
  • Painting or art studio
  • Play room

Is garage renovation worth it?

If you look up pictures of garage renovation and see what people are doing to modernize and improve an otherwise overlooked space, you’ll get your answer. Prepare to be in awe and inspired to tackle your own garage — you can absolutely see a positive ROI from a garage makeover.

Detached Garage

What it is: Building a garage that’s not connected to your home.

A detached garage has a lot of perks, primarily because it can be renovated into a rental space or ADU. But even if you don’t plan on renting it out, detached garages provide extra space — perfect for workshops or storage.

The biggest downside to a detached garage is if you live in a place with some intense weather. Walking out to your car in the middle of a snowstorm or downpour isn’t fun.

Is the cost to build an attached garage worth it?

You’ll likely receive more ROI for a detached than attached garage. If you decide to turn it into a rental, you could easily make all of the costs back and then some. That’s not even counting the fact that an ADU or rental unit will add immense value to your property.

The Final Verdict

Garage expansion, renovation, or even building a detached garage are all worth it. If you’re ready to take on the project, we wish you the best of luck! However, if you want a better garage space but don’t it’s feasible in your current home, look through our property listings to find some stellar homes and garages!

How to Sell Your House Fast

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Life’s not a race, but it can sometimes feel like that when you put your house up for sale. Especially if you’re crunched for time, you need to know how to sell your house fast — plus, your house can lose value the longer it sits on the market. Get a good start out the gate by emulating some of the world’s fastest animals. On your mark, get set, GO!

Make your property visible.

Fast animal to emulate: Cheetah

Cheetahs and their iconic spots stand out on the savannah. You need your property to be just as visible with good marketing and lots of exposure.

A few strategies:

Make your home more appealing to the general public.

Fast animal to emulate: Octopus

Octopus aren’t the fastest animals in terms of distance traveled, but they are some of the fastest animals when it comes to camouflage. They can change their entire appearance in the same time it takes for you to blink your eye!

The octopus is a great inspiration if you’re trying to sell your home fast because they remind us of the importance of blending in. A super-custom home will often turn buyers away. It’s not always the worst idea to paint over that blood orange wall with a simple eggshell white, or to take down anything that others might find tacky or gaudy. 

And remember — a clean house with no visible clutter is a necessity for becoming more appealing to the general public. While you want your property to stand out like a cheetah, it can stand out in a bad way if things aren’t tidy. Try to blend in by giving off a “blank slate” feel for potential homebuyers.

Research to get the right price.

Fast animal to emulate: Dolphin

Did you know dolphins swim up to almost 40 miles per hour? They’re not just fast, they’re known as one of the smartest animals on the planet. Use their smarts as your inspiration by finding the best price for your house. 

A real estate agent will help you do this, but if selling FSBO, pull comps to see neighboring house sale prices. Take renovations and flaws into account when determining your price. If your listing price is lower than your home’s value your house will probably sell fast, but at your expense.

If you’re struggling to come up with an accurate price, sell with a time-limited event from RealtyHive. You still get to put in your final say as to whether you want to sell your house or not (and you could potentially make more money than in a traditional house sale).

Work with the right people.

Fast animal to emulate: Pronghorn

Pronghorn are not antelope (but usually are mistaken for them), but they are the fastest land animal in North America. They don’t really have predators because of their speed (they can run up to 60 miles per hour) but the other reason is because they migrate in packs.

When you’re looking for an agent or title company to sell your house fast, it’s important to find someone who can work on your timeline. Make your expectations clear from the start and look around for other options if the partners you’re looking at can’t deliver. 

What to do if you’re extremely crunched for time:

The easiest answer to sell your house fast is to take a lower offer and/or go for a cash closing. This is not ideal, but it might be necessary if time is true of the essence. Be wary of “we buy houses for cash” companies because it guarantees you’ll get ripped off.

Reference: Tips on Selling your House Fast

The other alternative is to list with RealtyHive. Our time-limited events mean your house can go quick (and sometimes you might receive offers even before the day of the auction), sometimes at a price that’s more than what you expected. Look into the benefits of selling with RH!