Monthly Archives: January 2015

2121 Colina Del Arco Iris

Every week, I’m going to post a listing that I think deserves buyers’ attention. This week’s listing is in San Clemente (Address: 2121 Colina Del Arco Iris). Listing price: $915,000

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Here’s why I think this is a great buy:

  • It’s in an exclusive gated community (Reserve West)
  • No Mello Roos Tax
  • Located in a quiet cul-de-sac
  • Awesome curb appeal
  • Turn-key: You can move right in
  • 3,160 square feet with 5 bedrooms and 4 baths–that’s a lot of house for the price
  • You’re looking at about $290/square foot, which is very competitive for the area
  • Two homes across the street are priced over 1 million
  • Community amenities, including a “tot lot,” spa, sports courts, decompressed running track, and access to miles of trails
  • Just a short drive to the beach
  • Good schools: Shorecliffs Middle School and San Clemente High are both ranked 8 out of 10

Want to check it out? Contact me today.

Going solar

My wife and I are all about living green(er). We got a Chevy Volt this past summer and absolutely love it. It will save us thousands of dollars in gas every year (and the carpool lane sticker comes in very handy in Orange County freeway traffic). The only negative with the Volt is the cost of electricity to charge it. Our electricity bill has increased about $100/month. Of course, we save way more in gas than that, so it’s not a big deal for us, but we still wondered how we could reduce the cost and live even greener. That goes us talking about solar panels.

If you walk around the neighborhoods in Dana Point and Capistrano Beach, you’ll see that solar panels are no longer limited to just a few ahead-of-their-time (or “kooky,” as my grandma would say) home owners. They’re becoming more and more mainstream. Installing solar panels isn’t cheap though so, as a realtor, the big question for me is this: Will you get your money back on solar panels when you sell your home? 

Well, according to a new report funded by the U.S. Department of Energy, you just might. According to that report, homebuyers have consistently been willing to pay more for a property with owned solar photovoltaic (PV) systems.

Read the full report here.

Read the full report here.

Check out the fact sheet here.

Check out the fact sheet here.

The study analyzed data across 8 states, including California. The conclusion? Both new and existing home markets seem to value the addition of a PV system, with premiums averaging $3.58/watt for new homes and $4.51/watt for existing homes. California premiums, however, average $1.10/watt more than other states.

Interestingly, the study also found evidence of a “green cachet,” or situation in which buyers may be willing to pay a certain amount for having any size PV system.

So, from my perspective, solar is making more and more sense (and cents). Aside from renewable energy benefits, those who own their home’s PV system will receive about $1.26/watt in tax credits. And, when you sell your house, this report suggests you can up your price.

What’s the future look like? The Department of Energy estimates a total of 108 gigawatts of residential rooftop solar paneling by 2050, with 30 million homes nationwide. As of last year, more than half a million homes in the U.S. are outfitted with PV systems.  That means lots of growth in the next several years–and lots of opportunity.

The pros and cons of investment property

One thing I didn’t know about Capistrano Beach until I moved into the neighborhood is that it has a ton of rentals. Almost every street has multi-unit dwellings–duplexes, triplexes, quads. Plus, many people who move out of Capo Beach keep their single family homes as rentals because of the market demand. Let’s face it–people will pay a premium to have the ocean nearby.

In many cases, rent paid can cover the mortgage (and, ideally, property taxes and some other expenses related to the property, like gardening, pool service, etc). But, even if you break even, owning a rental property can still be a great option. After all, there are tax benefits. In the eyes of the IRS, that property is its own little business. Yes, you have to declare the income, obviously, but you can also write off expenses you have on the property. Plus, consider that the property has a good chance of appreciating in value over time. While the market has plateaued a bit, the big picture shows gains. Even if are in the red a bit on a rental property, the long-term appreciation may make it worth hanging onto.

This is a vacation rental available in Capo Beach. Check it out here: www.homeaway.com/vacation-rental/p189857

This is a vacation rental available in Capo Beach. Check it out here.

Of course, like most investments, there can be downsides to income properties, too. They are considered “concentrated investments,” meaning you’ve got a lot of eggs in one basket. And they are “illiquid,” meaning you can’t get your money out quickly. On paper, you have this 400K asset, for example, but you can’t access that as real money overnight. And, by owning an income property, you find yourself in a new role–landlord. Dealing with tenants can be a really great experience, or a really tumultuous one. My in-laws always tell the story of the couple who refused to pay rent and, when finally evicted, they squeezed honey all around the borders of the house to draw in ants. It worked. There were lots of ants.

If you’re hesitant about being a landlord, there are property management companies that will oversee your property for you at a cost of about 8% to 10% of the monthly rent. They’ll collect rent checks and field calls about backed up toilets so you don’t have to. Property managers are not only convenient but essential if you live far away from your rental property.

Keep in mind, your property may make a great vacation rental. There are companies that specialize just in vacation rentals and they will be able to tell you how much your home would go for per night (it usually varies depending on season). They will collect a percentage fee to market your home and manage the tenants. Sometimes, you can collect the same cash in one week as you would in a month from a tenant on an annual lease. But, you also run the risk of not having renters for weeks or months at a time, depending on demand in your area.

If you’re considering adding a rental property to your portfolio, these would be my questions for you:

  • Are you okay with tying up your money in that property, possibly for several years, until it appreciates to a certain level?
  • Have you done the math on how much you spend on the property per year (mortgage, property taxes, property insurance, repairs and maintenance) versus how much you can bring in per month?
  • Are you ready for tenants?
  • Do you have an emergency fund when things like water heaters and air conditioners break?
  • Do you want a property manager?
  • Are there vacation rentals in your area, and would that be an option for your home?

Feel free to contact me if you want to discuss rental property opportunities near you!

 

 

 

Spotlight on: Pines Park

Right in the heart of Capistrano Beach, there’s this gem of a park called Pines Park.

pines park 1

True to its name, the park is dotted with pine trees–so many that you might forget you’re near the beach. In fact, you’re right next to the beach. This park has some of the best views in Capo Beach, which explains the high price tag on homes near it. My wife and I have come here to watch many a sunset.

pines park 3

Amenities include a playground–great for kids–as well as BBQs, picnic tables, and benches. If it’s a holiday weekend (like 4th of July), be sure to snag a table early. Speaking of 4th of July, this is a great spot for watching fireworks. You can see from San Clemente to the Dana Point Harbor. Most people leave their beach chairs there in the morning to save a spot.

pines park 4

Every time we visit this park, there are rose petals, remnants of a recent wedding ceremony (yes, the park allows weddings. Learn more here). We see lots of people doing prom pictures here, too. Clearly, I’m not the only one who thinks this park is something special.

One note: This is in a residential neighborhood, so there is no parking lot. You just park on the street. Oh, and don’t just trust what I have to say about this park. It’s got 5 stars on Yelp and Trip Advisor. Enjoy!