Money Saving Tip for 2016: Pay Attention to the Little Things

By Micah Stovall | Published: January 13, 2016

In 2015 we saw the U.S. women win the World Cup, Letterman retire, and the Force awaken. Oh, and we spent too much on some things. Some of the ways it happened were small—others, not so much. However it occurs, it’s important to know where we collectively spend so we can make the tweaks to fix it. Here are a few big ways Americans spent money this year.

  1. Student loans. The college graduates of 2015 will pay back more than $35,000 each, according to The Wall Street Journal. Consider attending a university you can afford, apply for scholarships, and work throughout the year.
  2. Ziosk tablet activities. Ziosk tablets are the devices on restaurant tables that allow you to see the menu or pay your check. That’s good. You can also use them to shop or pay for games the kids can play. Not good!
  3. Gym memberships. Tons of people buy health club memberships in time for January 1—but by that month’s end, the treadmills are empty.
  4. Daily coffee trips. Back before coffee shops started popping up on every street corner, people brewed it themselves.
  5. Car wash upgrades. With all those “upgrades,” it’s like getting one wash for the price of three.
  6. Name-brand paper products. You only use paper towels, napkins and paper plates once before they hit the trash. So why would you pay name-brand prices for them?
  7. Timeshares. The average cost of a timeshare is around $16,000, according to Marketwatch. Between that price, the maintenance fees, and the fact that timeshares are dang near impossible to sell, the stress will suck the joy out of your getaway.
    There’s nothing wrong with buying stuff you can afford. The trouble comes when you spend too much because you aren’t paying attention. Keep an eye on your spending now and you’ll keep more of your money later.

Source: Realty Times, and The Stovall Team

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Real Estate Investing

By Micah Stovall | Published: January 10, 2016

The Chartered Financial Analyst (CFA) Institute categorizes real estate as an alternative investment that includes residential and commercial properties as well as mortgage-based securities and real estate investment trusts. For most real estate investors, these investments are characterized as income-generating properties that see revenue from rent earned and capital appreciation from the increase in market value. Since this investment vehicle depends on the net operating income (NOI), maximizing cash flow is key to a successful real estate investment.
To fully understand the importance of cash flow to real estate investment, it is necessary to know that the value of the property is directly linked to the NOI. Unlike residential homes that get their value from comparable sales, income-generating real estate value is calculated as the annual NOI multiplied by an industry standard rate of return, called the capitalization rate. For instance, if the property has an annual NOI of $100,000 and a 10 percent capitalization rate, then the property would be valued at one million dollars. Since NOI is calculated after expenses and both property value and return on investment are depended on NOI, it is important to maximize income and minimize expense. The Stovall Team is a knowledgeable Real Estate Team with expertise in this form of alternative investment. We are happy to makes it easier to identify opportunities for high returns.
As an alternative investment, real estate is historically poorly correlated to the stock market, making it a good investment to diversify a portfolio. During times of stock market loss, real estate continues to offer returns. Real estate is positively correlated to inflation, meaning that it generally increases in value as inflation increases. This makes real estate a good inflation hedge.

Sources: Realty Times, Stovall Team

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HOW THE FED’S MOVE WILL AFFECT THE REAL ESTATE MARKET

By Micah Stovall | Published: January 5, 2016

Interest rates are affected by the following three factors: the bond market, the Federal Reserve, and the health of the economy. On December 16, 2015 the Federal Reserve announced that it would be raising the federal funds rate by .25 percent. Here’s how this announcement will affect the real estate market.
What does this mean for the real estate market? Mortgage rates are determined by many factors, but the driving force is the yield on the 10-year Treasury note. Increased interest rates do not necessarily mean an increased yield for the note. Therefore, we should not expect a significant increase in mortgage rates. However even if the interest rate did positively affect the yield of the note, mortgage rates are still at historic lows. The average mortgage interest rate for the last 45 years has been 8%, raising as high as 18% in 1981. Buyers can expect to cash in on these benefit for at least another year. Besides, economist and lenders have predicted that the feds would raise the interest rates sometime this year. The economy saw it coming and has spent the last six months adjusting accordingly.
An Example So let’s run some numbers and see just how much the .25 percent increase will cost a buyer. The monthly payment on a loan of $300,000 at a fixed 30-year rate of 4.375 would be $1497.86. A 25 basis point increase would move your monthly cost up $45.46 to $1,543.32. Would $45 a month keep you from purchasing a home?
Conclusion: winners and losers The fed’s actions will produce both winners and losers. In general rising interest rates help savers and hurt borrowers, so those with money in interest bearing accounts can expect to benefit from higher yields in the future. Debtors and new borrowers will find it more expensive to carry loan balances. However, none of this will happen overnight. Rates will continue to rise over the next couple of years, so everyone will have time to adjust to these changes. The fed’s announcement shows that the decade of historically low interest rates is coming to an end, if you are on the fence about purchasing a new home, I advise you to take action now!

Source: Realty Times

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Ask the Experts: Best Return on Remodeling Investment

By Micah Stovall | Published: December 28, 2015

Stovall Team Micah Stovall Curb Appeal

With home prices up in Orange County, especially in Huntington Beach, Newport Beach, Fountain Valley, Westminster, Garden Grove and immediate surrounding areas, the return on remodeling investments at  resale is wonderful. Making little changes can have big  impacts when it comes to remodeling your home to sell.

Do you want to enjoy your updates for a few years? Or do you want to make your home more immediately appealing to homebuyers?  If you’re remodeling for your own household, updating a home has a legitimate purpose that is unquantifiable. When you add square footage, update systems and fixtures, or rearrange traffic flow, you improve the functionality of your home. Refreshing wall colors,   window coverings, and flooring adds to the beauty and enjoyment of your home. Many would consider that money better spent, and if you decide to sell in 2-3 years, you’ll be ahead of the game in terms of updates that will appeal to homebuyers.

Working with the Stovall Team ensures the plan is set long before you put your home on the market, if you are considering a move.  Start with what absolutely has to be done, whether you plan to stay in your home or not.  Otherwise, stick to smaller updates that can yield big impacts in terms of curb appeal, safety and building integrity.

The top five cost-to-value projects that netted the most return in 2015 were:

  • Replacing the front door with a 20-guage steel door – 102%
  • Manufactured stone veneer — 92. 2 %
  • Fiber-cement siding — 84.3 %
  • Garage door replacement — 82.5 %
  • Wood window replacement — 78 %

As you can see, the most lucrative projects for resale were all about curb appeal. Seal the deal with a new welcome mat, new sconces to complement the new steel door, and potted plants for color. Wow your buyers on the outside and they’ll be more likely to choose your home over the competition.

 

 

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Congratulations Micah Stovall!!!

By Tarah Stovall | Published: December 1, 2015

December 1, 2015 Orange Coast Magazine awarded Micah Stovall, Stovall Team as a Five Star Real Estate Agent.

If you know anyone  looking to buy or sell their home we’d love the referral.  Call Stovall Team if we can help you or your family                     714.343.9294    714.393.5377 stovallteam.com

Stovall Team Micah Stovall

Stovall Team Micah Stovall

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Home Improvements Trending Downward

By Tarah Stovall | Published: November 10, 2015

Why aren’t home office remodels as popular as they were 10 years ago? Probably because we’ve come to rely less on dedicated office space and more on mobile hardware that lets us conduct business from any room in the house. Cloud  storage puts documents a click away — not in a file  cabinet — and our smartphones keep us connected 24/7, not just when we’re in the office. That sensibility frees up spare rooms for other uses, especially bedrooms, bathrooms, and storage.

Another project, sunroom additions, appears to have gone the way of  sunken living rooms and parlors. They used to be fashionable, but today we know sunroom additions are difficult to heat and cool, and, at $300 to $400 per square foot, they’re expensive to construct. You’ll get almost the same benefits — and more fresh air — with a much cheaper to build deck or  patio.

The Bottom Line. It’s true: A rising tide lifts all boats. Over the past couple of years the stabilizing economy has helped produce better returns on most remodeling projects.  That’s good news for homeowners, who can be assured that their remodeling dollars are garnering better returns when it comes time to sell, and generating more enjoyment of their homes in the meantime.

 

Sources: Realty Times, Stovall Team

 

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