3 Things to Consider Before Buying a Second Home

Buying a second home is a great way to lock in a great vacation spot and earn some extra rental income. However, there are also some financial realities that many homeowners aren’t aware of before they purchase their second home.

IRS Limitations

If you rent your second home more than fourteen days a year, the IRS qualifies that home as a rental/investment property. As such, the income you gain from your home is taxable. Your second home also won’t qualify for the same deductions as your primary home.

Risk & Liability

It’s easy to overlook problems like leaks and water damage in a home that goes unoccupied for long periods of time. Empty homes are also more likely targets for vandalism. Hiring a property management company to keep an eye on the home can help ensure you catch potential problems before they get out of hand.

Other Expenses

Expenses such as home insurance, security monitoring fees, and running utilities can add up in your second home. On top of these costs, you have annual maintenance costs and repairs that will inevitably pop up over the years.

Understanding the expenses involved with owning a second home is an important part of purchasing your next home! That way, you can make a plan. Vacation rental services like Airbnb make it easy to cover the costs of owning a second home or even profiting from it. You can also use remote monitoring technology, such as video doorbells, access control systems, and environmental monitoring to minimize the risk of missing important developments while away from your home.

Buying a second home is a great investment, but one that you need to be well informed about before you commit yourself. For more information about buying a second home or an investment property, give me a call!

28708 181st Ave SE, Kent, WA 98042

$439,950

3 bedrooms; 2.25 bathrooms; 1770 square feet

Live amongst mature trees in desirable Winterwood Estates! You’ll love your large, private lot with plenty of parking. Brand new carpet and gas water heater. Newer windows, deck and interior paint. Very light and bright with many windows, vaulted ceilings and skylights. Large and open living and dining rooms. Large master bedroom with double closets. Lots of storage with extra space in the garage and extra closets. Gas furnace and AC. Enjoy 2 neighborhood parks with play equipment, basketball court and horse arena. A must see!

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RE/MAX National Housing Report for January 2020

Last month’s home sales posted the highest year-over-year gain for January in 11 years, increasing an average of 10.5% in the 54 metro areas covered by the report. Meanwhile, the 15.6% year-over-year drop in inventory was the largest decline since May 2017 and marked the seventh consecutive month of year-over-year shrinkage in the number of U.S. homes for sale.

Despite very low inventory, January and December (+13.5%) marked the first back-to-back months with double-digit year-over-year growth in home sales since June and July of 2015.

January’s Median Sales Price of $256,000 – though 3.4% below December – was 8.9% higher than January 2019 and extended the string of year-over-year price increases to 13 months.

In the nearly 12-year history of the report, three January records were set or tied last month:

·         Fewest Months Supply of Inventory: 3.1

·         Fewest Days on Market: 59 (tied with January 2019)

·         Highest Median Sales Price: $256,000

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Washington REALTORS® 2020 Legislative Day Recap

Almost 500 REALTORS® and Affiliates showed up for the WR Legislative Day event on January 22-23rd in Olympia. The sheer number of REALTORS® who came from all over our state to represent members and property owners is a statement to our Legislators in itself!

REALTORS® met with Legislators throughout the afternoon to discuss Washington REALTOR® priorities, including the following:

  • EXPAND LOCAL HOUSING SUPPLY EFFORTS Last session, the Legislature passed HB 1923 that incentivized cities to adopt regulations and plans to increase housing supply and affordability. This bill was part of REALTORS® Unlock the Door housing supply campaign, and now over 50 cities are implementing the law. In 2020, will expand this program by extending the deadlines for local governments, including additional types of housing ordinances, and increase the number of cities that are eligible to participate. A range of aggressive and sustained action on housing supply is needed from addressing homelessness and low-income affordability, to stopping the alarming trend of decreased of homeownership.
  • EXTEND MULTI-FAMILY TAX EXEMPTION The state’s Multifamily Tax Exemption (MFTE) has been successful in helping create thousands of new units of privately-owned affordable housing. This program has been central to urban redevelopment and housing supply efforts in both small and large cities. These bills extend the authorization for the MFTE and provide additional flexibility so the use of the MFTE can be tailored to meet the variety of needs at the local level.
  • PROTECT REALTORS® INDEPENDENT CONTRACTOR & AGENCY LAW PROVISIONS Recently, the Legislature passed bills clarifying independent contractor status for real estate brokers and reaffirmed the state’s real estate agency laws; to include the statutory duties of brokers and dual agency requirements. Despite this, conflicting employment legislation has been proposed that would negatively impact the real estate industry by altering the status of real estate brokers as independent contractors and real estate agency laws. The unique structure of the real estate industry should be acknowledged and protected in future employment legislation.

Washington State NWMLS Market Snapshot for January 2020

Northwest MLS brokers added 6,517 new listings during January, a year-over-year decline of more than 8%. Pending sales (mutually accepted offers) topped new listing activity by 871 units. Brokers reported 7,388 pending sales last month, a 2.3% decline from the same month a year ago.

At the end of January, the MLS database totaled only 7,791 active listings of single family homes and condos, well-below the year-ago figure of 11,687 (down 33.3%). A check of records dating to 2005 shows the selection is at a new low level, shrinking below the previous low of 7,921 reported for February 2018. In fact, for the 15 year span from 2005-2019 (180 months), inventory has dipped below 10,000 listings during only eight of those months.

Measured by months of supply (the ratio of active listings to closed sales), there was 1.54 months of inventory system-wide at the end of January. The selection was even more meager around Puget Sound, ranging from 1.1 months in Pierce County to about 1.3 months in King County.

Northwest MLS members tallied 5,074 closed sales during January for a 4.3% increase from the year-ago total of 4,865. Median prices jumped 10.7% from a year ago. Last month’s sales of single family homes and condominiums area-wide had a median price of $422,750. That compares to a price of $381,900 for the same month a year ago.

King County, where January’s median selling price was $589,950, reported one of the more modest year-over-year gains at 4.4%. Other counties around Puget Sound reported double-digit increases, ranging from 11.8% in Kitsap County to 15.3% in Mason County.

Source: NWMLS 2/6/20

8420 204th St Ct E, Spanaway, WA 98387

$379,999

4 bedrooms + den; 2.5 bathrooms; 2204 square feet

Absolutely Stunning! All of the updates & beautiful custom touches make this home truly one of a kind! Fresh paint & stylish throughout w/ crown molding & new floors. Gorgeous new kitchen w/ 1st class stainless apps & elegant marble floor. Luxurious master bath w/ custom counter, shower & floor. This unforgettable home offers a variety of entertaining options, including a large patio w/ gazebo that stays, a fully fenced large lot & RV parking. It also features a new roof & water heater, and A/C.

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Sold 2/28/20 for $385,000

A Dozen Home and Design Ideas for 2020

Almost everyone enjoys making predictions for a new year—and certainly for a new decade. How about cooking appliances that tell you how to roast and broil to perfection? Or, better yet, new homes that come with a personal chef?

REALTOR® Magazine asked their favorite real estate trend watchers and influencers what to expect in 2020 and beyond. For starters, most agree that gray is on its way out, while deep hues are becoming the stars in interior paint. And more homeowners are following the craze of decluttering and tidying up popularized by Marie Kondo so they can focus on experiencing joy in their home.

While some fads are natural evolutions and others are more far-fetched, they’ve whittled it down to a dozen that are sure to inspire buyers and sellers alike. Plus, don’t miss five up-and-coming kitchen trends that are bound to spark interest and maybe a remodel.

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