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Should I Turn My Home Into a Rental? 0
by Barbara • Barbara's Blog on September 4, 2017
What You Need to Know About Owning Rental Property
Owning rental property (also referred to as investment property) can provide some fantastic benefits, but it’s not for everyone. This post will walk you through some of the most important things you need to consider before undertaking the responsibility of becoming a property investor and landlord.
Why would I want to turn my home into an investment property?
- You’re ready to move to a new home, but your old one hasn’t sold. You can rent it out until you’re ready to put it on the market again—or maintain it as a long-term investment property.1
- You’re looking to increase your income without taking on another job. Of course, being a landlord takes work, but you’re not beholden to an employer for this income.
- You’ve inherited a home or you have a vacation home you no longer use. You may prefer to use this “extra” house to generate income rather than sell it. Or you may decide to move into that additional home, turning your primary residence into a rental property.
What financial and legal issues do I need to address?2
- Your existing home may have a low interest rate. Generally, mortgage rates for a primary residence are lower than for a rental property, which is why some aspiring property investors turn their current home into a rental unit and buy a new primary residence at a favorable interest rate.
- Check your original mortgage documents to determine what the residency requirements are. Certain loans require that you maintain the home as your primary residence for a specified number of years before you can turn it into an investment property. Failure to meet this requirement may be considered mortgage fraud.
- Discuss income requirements with a mortgage professional. You want to be sure your finances can support two home loan payments. Depending on the situation, rent from your investment property may not qualify as income.
- Consult a tax advisor about deductible expenses so you can maximize your financial return. Typically, you can only deduct mortgage interest and property taxes paid on your primary residence, but you may be able to deduct additional items for your rental home such as repairs to the property, homeowner association fees and depreciation.
- Evaluate and adjust your homeowners’ insurance for both properties. Although you will no longer need to provide coverage for the rental home’s contents (since your personal belongings will not be there), you may need to increase your liability insurance to cover potential calamities related to your tenants.
- Look into permits and local regulations. Some neighborhoods don’t allow rental properties within their community and require that homes be owner-occupied. Ask the Homeowners Association for its guidelines. In addition, most cities require a permit for a home to serve as a rental unit. The permit usually has a low fee and is issued after a government inspector evaluates the building for health and safety hazards such as electrical, HVAC and exit paths.
What else do I need to know?
- Calculate how much you need to charge to make a profit on your fixed and variable expenses. Include ongoing repairs and maintenance in your estimation. After doing that, compare your proposed monthly rental amount to similar properties in your area and adjust if needed. If comparable rates are lower, then you may want to re-think your plan to rent out the home or decide how to justify your higher asking amount.
- Determine what work needs to be done to get the property renter-ready—and decide if you have the willingness to make these updates. This could include something as simple as adding a fresh coat of paint to issues as complex as rewiring the house to meet city codes.
- Work out the nitty gritty details of a rental contract (also called a lease agreement). Either use an online source like LegalZoom or consult an attorney for guidance. This is a critical step to increase the odds of this being a successful venture.
- Decide if you want to be a hands-on landlord. Depending on your schedule and lifestyle, you may prefer to hire a management company to handle lease agreements, rent collection, repair needs, tenant complaints, problem renters and potential evictions. Typically, a property management company will handle these issues for you at a rate of approximately 10% of the monthly rent.
Before jumping in, take some time to do your research and consult professionals to determine if this is the right opportunity for you. According to the U.S. Census Bureau, the rental vacancy rate in the second quarter 2017 was a reasonable 7.3 percent and rent rates continue to increase.
Turning your home into rental property can be an exciting, overwhelming and rewarding experience. Being an educated investor is necessary to steer it toward a positive endeavor.
1 Each homeowner’s situation is unique. Contact one of our mortgage professionals discuss your circumstances and goals before making a decision.
2 This blog post is being provided for the purpose of general education, but should not be construed as legal, financial or tax advice. Please consult the appropriate advisor(s) for information that fits your individual needs.
– By Lauren Howey,
A Look at 92807 For July 0
by Barbara • Barbara's Blog on August 21, 2017
Lack of inventory is once again at the forefront of real estate for July with new listings down 25% over this time last year and months supply of inventory is also down from 3.4 to 2.9 months for single family residences. Pended sales are down a walloping 61.5% from 39 in 2016 to a mere 15 last month. Closings for July were in almost a dead heat from this time last year, 29 up to 31. Days on market until sale further highlight the fact that there were fewer homes for sale in that it only took 27 days to sell a property this year versus 59 in 2016.
The median sale price was down 16.2% from 2016 as was the average sales price which was down 11.1%. These decreases could be reflective of a slow down in the area of the sale of high end properties. Percentage of original sales price received was fairly consistent, up from 96.9% to 98.6% further illustrating the tight market.
Since this is has not been your typical summer for real estate, it will be interesting to see how the fall and winter months unfold.
Real Estate News
Consumer watchdog becomes alphabet soup of controversy Comments Off on Consumer watchdog becomes alphabet soup of controversy
by THE ASSOCIATED PRESS • Real Estate News • Tags: The OC Register, Top Stories Breeze, top stories ivdb, Top Stories LADN, Top Stories LBPT, Top Stories OCR, Top Stories PE, Top Stories PSN, top stories rdf, Top Stories SGVT, top stories sun, Top Stories WDN, Uncategorized on April 25, 2018
The Consumer Financial Protection Bureau is dead. Long live the Bureau of Consumer Financial Protection.
That’s the message the Trump administration is pushing, at least, in what on the surface seems like a minor tweak to the name of the federal consumer watchdog agency created after the Great Recession to protect consumers against banks, credit card companies, debt collectors and other financial companies.
But critics see it as a not-so-subtle effort to telegraph the abrupt ideological turn the bureau has taken since Trump-appointee Mick Mulvaney became acting director last year. Under Mulvaney, the bureau has proposed revisiting or rolling back the rules, regulations and policies that the Obama administration put into place when it controlled the agency. The bureau has dramatically cut back on enforcement actions as well. On Tuesday, Mulvaney hinted he would like to end public access to consumer complaints sent to the agency about inaccurate debt collections, illegal fees, improper overdraft charges, mistakes on loans and other problems.
The Dodd-Frank Act created a “Bureau of Consumer Financial Protection” in 2010. But, except for the occasional court filing, the bureau was consistently referred to as the Consumer Financial Protection Bureau, or CFPB.
Mulvaney took over the bureau as acting director in late November, when Obama appointee Richard Cordray resigned. Since then, the bureau has increasingly referred to itself as the Bureau of Consumer Financial Protection, or by the acronym BCFP.
During testimony last week on Capitol Hill, Mulvaney said, “The Consumer Financial Protection Bureau does not exist.”
But swapping “bureau” from back to front is not a simple word shuffle, said Lisa Donner, executive director for the advocacy group Americans for Financial Reform.
“Doing that signals you want to take the emphasis away from serving consumers — which unfortunately is what Mulvaney’s been doing in many ways — and put it on ‘this is a bureaucracy’,” Donner said.
Republican lawmakers, who have long had issues with the bureau, have been happy to go along with the name change. Jeb Hensarling, chairman of the House Financial Services Committee, said in a statement “I commend Acting Director Mulvaney’s efforts to follow the law as written.”
“I’ve looked at the statute, and I don’t see ‘CFPB’ in the statute anywhere,” said Rep. Barry Loudermilk, R-Georgia, at last week’s hearing.
The bureau has quietly rolled out a new logo as well. Since early in its existence, the CFPB used a green, lowercase text logo using the bureau’s initials. The new logo is a more traditional government seal, with an eagle in the middle, and the name Bureau of Consumer Financial Protection on the perimeter. The seal is similar to other seals used by agencies overseeing the financial industry, including the Federal Reserve and Treasury Department.
The logo got its first use last week when the bureau announced its $1 billion fine against Wells Fargo.
A logo is often the most visible part of any company or organization, and branding experts say the change is quite stark.
“You couldn’t find a better example of contrasting messaging here. One says ‘we are here to help’ while the other says ‘we are the mighty and here to protect,’” said Kit Yarrow, a professor of psychology and an expert on corporate branding at Golden Gate University.
The push to change the bureau’s name is still in the early stages. The bureau’s website still uses the old logo, and the bureau still refers to itself as the CFPB across its webpage. Email addresses to the bureau still end in @cfpb.gov.
But the CFPB — or BCFP — has requested that The Associated Press change its entry in the AP Stylebook to refer to the agency as the Bureau of Consumer Financial Protection.
“We are in the process of updating our own materials to reflect our legal name and would appreciate your (Stylebook) being similarly updated,” bureau spokesman David Mayorga said in its request.
The AP’s Stylebook, published since 1953 and periodically updated, is a road map of rules on spelling, language and journalistic style for the company’s journalists. It is also widely used as a blueprint throughout the news industry.
“The Associated Press routinely reviews suggestions for Stylebook entries and considers whether those suggestions will help to make our report clear, fair, accurate, consistent, and easy for audiences to use and understand,” said John Daniszewski, the AP’s vice president for standards. “In this case, we note that the Consumer Financial Protection Bureau website continues to use the initials CFPB.”
Investing in regional rail can erase prescription for gridlock Comments Off on Investing in regional rail can erase prescription for gridlock
by Art Leahy • Real Estate News • Tags: Guest Commentary, Opinion, The OC Register on April 25, 2018
For nearly half a century I have enjoyed a unique perspective on Southern California traffic. I started my career as a bus operator driving on crowded streets and then rose through the ranks to head major public transportation agencies such as OCTA, Metro and Metrolink that sought various ways to ease congestion.
I have dealt with all aspects of traffic from highways to buses, passenger rail and freight. Here’s what I learned: we have too many cars and trucks and not enough road to keep pace with our growing population and economy. And it’s going to get worse unless we seek regional solutions because we face increased long-distance travel demand with a fixed-capacity freeway network.
But the era of freeway building in urban areas is ending. And this is happening at a time when more commuters are driving longer distances from the Inland Empire and Northern Los Angeles County where homes are affordable to jobs in Central Los Angeles and Orange County.
Add to the mix Southern California’s powerhouse economy – driven by the nation’s two busiest seaports – is at risk if people and goods can’t move freely.
Against that backdrop, Metrolink, Southern California’s regional rail system, is partnering with freight and intercity rail operators in seeking $10 billion in local, state and federal funds to transform Southern California passenger rail service over the next decade in time for the 2028 Olympics.
It’s called the Southern California Optimized Rail Expansion plan and will relieve our freeways, which rank among the world’s most congested, while improving air quality and ensuring goods can move safely and efficiently.
Track additions, new signals and switches, station upgrades, grade crossings and maintenance facility enhancements will bolster safety, speed, and reliability and nearly double Metrolink’s capacity allowing for a significant expansion including express service.
Getting more long-distance commuters out of their cars and onto Metrolink, which parallels major freeways, would act as a relief valve for the freeway system. Even if you don’t take advantage of this alternative way of commuting, you still benefit because traffic will be reduced.
SCORE also would result in the majority of the Metrolink system being upgraded to Quiet Zone standards so train horns are not routinely blown at crossings once cities achieve Quiet Zone compliance.
Imagine just going to the train station without looking at the schedule because you know trains depart at least every 30 minutes in peak hours, in both directions, all day across the region not just to Los Angeles but also between suburban counties connecting Orange County to Riverside, San Bernardino and San Diego counties. SCORE would make that possible.
Travelers on Amtrak’s Pacific Surfliner also would have more choices. There would be a near doubling of service with hourly departures between Los Angeles and San Diego counties.
SCORE would make commuting by rail a real option for the majority of Southland residents who today have no choice but to slog through worsening traffic.
Metrolink is uniquely poised to lead this regional rail transformation. Its 538 route miles connect six Southern California counties including many disadvantaged communities. However, service is basically limited to rush hours because Metrolink is nearing operational capacity.
While 44 percent of Metrolink’s costs are covered by fares and other sources – highest of any public transit agency in Southern California – current funding only covers operations, maintenance and most rehabilitation costs. Without major new funding, we can’t expand Metrolink to attract new riders.
SCORE will benefit all who live and work in Southern California. The ink on the prescription for gridlock hasn’t dried. It can still be erased. With community and government support, a new mobility drawn by expanded rail service beckons.
Art Leahy is CEO of Metrolink.
LA County’s homeless need more than housing to stay off the streets, report says Comments Off on LA County’s homeless need more than housing to stay off the streets, report says
by Elizabeth Chou • Real Estate News • Tags: homeless, housing, local news, Politics, The OC Register, Top Stories Breeze, Top Stories LADN, Top Stories LBPT, Top Stories OCR, Top Stories PSN, Top Stories SGVT, Top Stories WDN on April 25, 2018

Housing alone will not solve Los Angeles County’s homelessness problem, and a more strategic effort at early intervention is needed to prevent people from becoming homeless or staying homeless, according to an analysis done by the Economic Roundtable.
The Roundtable released a report that looks at 26 sets of data to better understand the characteristics of the homeless population and their needs, with the goal of finding the best way to help people out of homelessness and prevent them from becoming chronically homeless.
Researchers found that alongside housing programs, job-training and employment programs geared to those who recently fell into homelessness or are on the cusp are also needed to help reduce the homeless population.
The report states that nearly half, or 48 percent of homeless individuals, are homeless for a month or less, so efforts should be focused on this group of people to make a bigger dent on the number of people who later become chronically homeless.
PHOTO ESSAY: Homeless but not hopeless
Out of those who become homeless, about 2,600 to 5,600 people per year are estimated to become chronically homeless.
The county defines a chronically homeless individual as as someone who has been homeless for a year or more, or has had at least four episodes of homelessness over the last three years that add up to one or more years. And that person also must also have a “disabling condition.”
“Los Angeles County’s current population of chronically homeless individuals is the cumulative outcome of many years of slow attrition into persistent homelessness,” the report said.
“There’s a strong motivation early on to get a job and enter the labor force,” said Economic Roundtable President Dan Flaming. “There is still a strong sense of being productive, a strong sense of self-worth and a connection with a mainstream identity.”

RELATED STORY: More of LA County’s homeless are dying. Here’s why
Flaming said it is easier to “stabilize” individuals before they develop health, mental health and substance abuse problems.
“Our focus is early intervention with higher risk individuals, particularly through employment interventions,” he said.
Flaming said that another striking finding in the report is that there are an estimated 600,000 people in Los Angeles County who are living in poverty and are paying 90 percent of their paycheck toward rent.
“That’s the seatbed of homelessness,” he said.
RELATED STORY: Amid homeless ‘emergency,’ LA seeks to shelter every person on street by end of the year
While 90 percent of this group is able to avoid homelessness, the remaining people are unable to hold onto their housing. Helping 1 percent of those who are likely to fall through the cracks and become homeless can potentially “reduce the amount of people who are homeless by about 10 percent,” Flaming said.
The data referenced in the report indicates that 40 percent of individuals who are homeless said it was because of a lack of employment. That is a higher percentage than for other reasons, such as the 19 percent who said it was due to conflicts with family and housemates, the 17 percent who pointed to drug and alcohol abuse and the 13 percent with mental health issues.
The report also found that more than 25 percent of people became homeless when they were between 18 and 24 years old. Young people, including those with children, expressed a high interest in becoming employed.
RELATED STORY: A few months in, here’s how much money LA County’s Measure H has generated to help the homeless
Half of unsheltered children live in vehicles, the report said.
The report’s authors made a dozen recommendations, including designing a screening process aimed at immediately providing services to people who are at risk of becoming chronically homeless, and people who are at risk of being homeless.

Other recommendations include helping homeless individuals hold onto their cars through programs that give people locations to park legally, access to hygiene facilities and financial assistance for vehicle registration and maintenance.
The report also recommends assisting homeless families with programs focusing on jobs and health care to prevent homelessness from becoming a multi-generational problem.
RELATED STORY: LA sanitation crews can’t keep up with rising homeless camp cleanups, seek to double their ranks
Another recommendation is to avoid arresting or jailing homeless individuals and instead diverting them to treatment and housing, since being arrested, navigating the court system and spending time behind bars can further lead someone into chronic homelessness.
And finally, the recommendations call for better access to job training and educational opportunities, as well as targeting jobs-related programs to people who are newly homeless, especially young adults and parents. Such programs could include job placement, housing, child care and practical forms of help such as providing cell phones, bus passes and clothing appropriate for job interviews.
A Look at 92807 For September 0
by Barbara • Barbara's Blog, Uncategorized on October 13, 2017
Our Fall housing market got off to a less than stellar start with lack of inventory once again being the culprit. Only 30 new listings for single family residences in 92807 for September 2017 compared to 49 in 2016 which represents at 38.8% decrease. Pending sales were down over 54% from 37 in 2016 to 17 this
year which may be the reason leading many to believe the market is starting to stall. Interestingly, closed sales were fairly close with 32 this year vs. 35 last year. With so few properties, days on the market until sale was cut in half from 61 days in 2016 to only 31 days this year. Median price continues to climb. Up 5% to $739,950 with the average sales price also slightly up to $787,911. Percent of original list price received is up even more to 97.8% of the list price received in 2017 over the 96.6% that received in 2016. And that elusive lack of inventory? Only 68 homes single family homes for in September of this year as opposed to the 110 homes for sale in September of last year. Months of inventory was down to 2.3 from 3.5 last year. For comparison purposes, inventory in a “normal market” is anywhere from 4 to 6 months reinforcing that we still are in a seller’s market.