Is Value Added When You Install a Pool or a Solar System…?

It All Depends… of course…!

If you have pondered adding a Solar electric system to your home or a pool, then take a minute and read here.

There was an interesting discussion started today on a Facebook Real Estate Group page that I and other Brokers/Agents belong to  regarding the costs/savings of installing a solar system.   Ryan Lundquist a local appraiser and Real Estate Blogger pointed out some interesting numbers.

I’ve cut and pasted his question to the group here:

A solar salesman told an owner the system would add $6,000 in value for each kilowatt of power. Since this system was 6kw, it would supposedly add 36K. Keep in mind this home is located in a 350K neighborhood. On a practical level would we expect to see a home without solar sell for $350K and one with solar sell for $386K? Here’s the thing. Buyers don’t pay the full cost of a solar system in the resale market. Moreover, even if it did add $36,000 in value, borrowing that much money for 30 years would cost a Borrower $170 per month (and $61,000 over 30 years). Of course the system is probably only going to last for 20 years though. At the least the first question a buyer should ask if there is at least $170 savings every single month. Thoughts?

After reading the above, I asked him “if a pool costs $50,000 to install, I know you’re not going to get that back,  but is there some kind of a rule of thumb you look at..?”

He had a very interesting response that hadn’t occurred to me, even though I’ve been selling real estate over 30 years.

Ryan Lundquist Good question Ed.

It would be nice if there was one adjustment that fit every situation, but the truth is that 50K pool in Granite Bay is probably worth way more there than it would be in a 200K neighborhood because the market expects a pool like that in the neighborhood.  Thus the adjustment is about where the pool is located and what buyers expect and pay for in that area.

We’d like to think there is one adjustment to apply everywhere, but that just wouldn’t work. On a practical level, we can consider the cost because it probably says something about the quality, but at the end of the day let’s start comparing homes with and without pools to see if we can come up with a reasonable and supported adjustment (or a reasonable range of what buyers having been willing to pay).

It’s okay if there are no recent sales too because we can look through years worth of data as well as competitive neighborhoods. I actually wrote a post about the percentage of pool sales in different areas of town.

When the market expects a pool, it can be a big hit to value when there is not one, but when the market doesn’t expect a pool, it might not be that big of a deal for value to have one.  http://sacramentoappraisalblog.com/…/what-does-the…/

What do you think….?   My thoughts are that what ever you decide to do as an improvement I don’t think you should expect to get it all back.  I would rather look at the test of whether or not the improvement I added would make my life a little more enjoyable when I’m home.

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR, CDPE     916-203-1260 favinger@rwnetwork.com

 

The New Water Conservation Rules – Folsom

Pretty Much The Same…With Some Changes

 

shutterstock - california drought

 

I thought I’d pass on the City of F0lsom’s Website posting regarding the new water use reduction rules because of the ongoing drought.

 

CLICK HERE FOR THE UPDATE

 

Have you started saving water yet…?  Have you put the bucket in the shower to save for your plants…?

 

They also have a great App that you can track your water usage in Folsom called Dropcountr.

 

Take a peek at that app and let me know what you think.

 

In the Mean Time..?

 

Make it a Great Day…!

 

Ed Favinger, Broker, CRS, GRI, SFR, CDPE      916-203-1260     favinger@rwnetwork.com

 

 

 

 

Is This a Good Sign That Real Estate is Back in Sacramento….?

I think so… especially when you see this kind of news.

 

HOME DEPOT SET TO HIRE 1500 IN THE SACRAMENTO REGION

You have to agree if these large big box corporations like Home Depot are on the hiring binge, they must have a lot of confidence they are going to need this many people to accommodate their customers.

I noticed here in Folsom, that you can go to the local Home Depot, Lowes and Orchard Supply and you’re going to find a lot of people in there doing some shopping.

This is the spillover effect of a good real estate market for Home Buyers and Sellers along with residential investors.

What do you think…?

 

In the Mean Time…?

Make it a Great Day…!

 

Ed Favinger, Broker, CRS, GRI, SFR, CDPE       916-203-1260     favinger@rwnetwork.com

 

 

If You Are a Landlord – Some Good News For You

Rents in this area are up

 

However, if you have been a regular visitor to this blog site, you already know this.   When ever we get a vacant rental, it’s very rare that our 3d House (XXL)Property Management Company will re-rent it at the same rate when it was given back to us at move out.

In addition, when renters elect to “re-up” a lease at the end of their term, we generally raise the rent some because the market will allow us to.

Along with the increase in the amount of rents landlords can charge, we’re also seeing some of the other costs associated with running a unit being transferred to the tenant.    Most notably some of the city and county utility charges, such as Water, Sewer and Garbage fees.

This is especially true for owners of Single Family Homes/Condos and Duplex units in this area.   It’s rare that we have much,  if any,  objection when we have included theses charges in a new tenant’s lease.   On occasion instead of raising the rent on some units at lease renewal, we’ve adjusted the new lease to include some or all of those utilities.

Here’s a HousingWire.com article with a survey of rental rate increases in the largest markets Zillow covers in the US.    While I’m writing this I’m listening to a morning radio talk show out of the Bay Area and guess what the topic is…?  Yes high rents and how people are driving long distances to get to work.

In conclusion it’s better to be on the Landlord side right now and if you have been thinking of getting your first rental, trust me you’ll have no problem finding a good tenant these days.

 

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR, CDPE      916-203-1260     favinger@rwnetwork.com

 

 

A HomeSteps Bank Owned Duplex in the Rosemont Area – Just On the Market.

Priced Well Below Some Recent Sales Just Around The Corner

While lately there hasn’t been much in the way of Duplex inventory come on the market, when they do, I get out there as soon as possible to see what kind of condition it’s in.

target=”_blank”>click on the picture to see the video

This one located at 9647-9649 Arlisson Drive, Sacramento, 95827 sits among other Duplex properties and has a great location near some shopping and Hwy 50 access.   It has a 3bed/2ba/2car and a 2bed/2ba/1car configuration.

This one is perfect for an “owner occupied” situation where the owner lives in one side and rents the other.  I think if you were a young person starting out,  it would be real smart to rent out the 3 bedroom side and live in the 2 bedroom side of this Duplex.   However the figures I have below fit the scenario that the 2 bedroom side would be rented and the 3 bedroom side would be occupied by the owner.

Click Here to see how cheap you could live in this Duplex for such a small down payment using an FHA loan

If you are an Investor, you’ll have to wait about 15 days til approximately January 17th before you’ll be able to make a run at it,  because they are offering this property to “owner occupied” folks first.   After that… then the investors get a shot if it’s not sold by then to a Buyer that wants to live there.

Click Here to see the “pro-forma” cash flow analysis if you were to purchase this as an Investment Rental.

By the way… Click on the picture to get a Walk Through Video I did today around 11:30 or so today

In the mean time…?

Make it a Great Day…!

Ed Favinger, Broker CRS, GRI, SFR, CDPE       916-203-1260     favinger@rwnetwork.com

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