Utilize That Tax Refund to Benefit Your Future Self
While every tax refund is different, if you received a refund this year, it’s likely that it is larger than in years past. On April 15th CNET shared that:
“The average refund size is up by 4.6%, from $2,878 for 2023’s tax season through April 7, to $3,011 for this season through April 5.”
There is a good chance that your tax refund not only was larger, but it also may have hit your bank account by now. If you haven’t spent it already, keep reading for a couple ways you could leverage it with real estate.
First and foremost, purchasing real estate is like investing in yourself. Each payment you make towards your mortgage lowers your debt and increases your equity. Combine this increase of equity with the historical average home price increase of 5% per year, and it becomes clear that homeownership can be a powerful wealth-building strategy. Over time, not only do you build equity through mortgage payments, but your home also typically appreciates in value. Each payment further enhances your overall financial position. Can we agree that spending a little extra now on a mortgage of our own to pay out a greater return in the future could be worth it? If you are open to this idea of wealth building let’s discuss how you could utilize that tax refund to benefit your future self.
Saving for a Down Payment
One of the greatest obstacles for attaining home ownership is saving enough for a down payment. Your tax refund might just be the boost in income you needed to make homeownership a reality. Lucky for you the 20% down payment requirements of the past are long gone. However, there are benefits when you do put down 20% check them out here. Today, lenders have options as low as 3% down. If you are a military Veteran there are 0% down VA Loans. Learn more about them here. Check with your lender to see what you qualify for and if these loan types will benefit your home goals. If you are not currently working with a lender connect with us and we can help you locate a few.
Pay Closing Costs
Closing costs are the fees and expenses incurred when finalizing a real estate transaction. They typically range between 2% and 5% of the total purchase price of the home. These costs encompass various expenses, such as loan origination fees, appraisal fees, title insurance, and property taxes. Considering these expenses, directing your tax refund toward covering closing costs can help alleviate the financial burden at the time of closing.
Reduce Your Mortgage Rates by Purchasing Points
If rates today mean affordability is tight, consider talking to your lender about reducing your mortgage rates by purchasing points. You could use your tax refund to buy down your interest rate. Talk to your lender to see if you qualify and if this option is right for your homeownership goals.
Make Extra Payment Towards Your Mortgage and Reduce Overall Interest
Another alternative, if your loan allows for it, is to make additional payments towards your mortgage loan. Each additional payment reduces your total pay off amount. Your payment remains the same, it just means with each additional payment your mortgage will get paid off sooner. Check with your lender, but depending on your loan type, if you pay it off earlier your total interest paid is less than it would have been if you made regular payments.
Whether you are ready to buy now, or in the future, connecting with a trusted real estate professional that understands the process and your options to ensure that you are ready to buy is of the utmost importance. If you are not currently working with a Realtor, connect with us today. We can help you utilize that tax refund to benefit your future self.
A Different Approach to Developing Wealth
Mynd recently released their 2022 Consumer Insights Report that demonstrates how millennials and Gen Z’s have taken a different approach to developing wealth than previous generations.
For example, while 9% of Baby Boomers are contemplating the idea of investing in rental properties over 43% of Millennials and Gen Zs are choosing to remain in their current living environments and invest in rental properties elsewhere to build their wealth.
BUT IS IT WORKING?
This strategy is becoming increasingly popular. It allows the investor to remain living without disruption to their lifestyle in a place they may not be able to afford to purchase a home of their own. Instead of uprooting their lives and relocating elsewhere to attain the dream of homeownership the investor achieves homeownership by purchasing a home in a more affordable location with the intention of renting it out.
With no disruption to their life, they become a homeowner and investors at the same time. Their purchase not only creates monthly passive income for their pocketbooks but also builds equity over time – ultimately increasing their overall net worth.
They can later choose to continue to rent out the home, sell for an increased price, or move into the home if or when they want or need to.
READY TO EXPLORE THIS APPROACH?
If you would like to explore this idea further connect with us so we can help you build your wealth through real estate.
Staging a Home
Should You Stage Your Home?
Every home is changed by those who live in it even under the care of the most vigilant homeowners. Staging a home for sale is one tactic that may take the attention away from less than stellar paint, flooring, or kitchen cabinets and convince the buyer that they can make the property the home of their dreams.
If you are preparing to put your home on the market, staging provides the advantage of appealing to the buyer audience. It is no longer a nice idea, but one of the most important things you can do when selling your home.
What is a Staged Home?
Staging a home is one possible step in preparing a property for sale in the housing market. It is primarily focused on the appearance of the home and making the space feel a specific way. Depending on the type of pieces brought into the space the staging can make the home feel lighter, larger, or more modern.
Most staged homes include art, rugs, furniture, plants, and other decors.
Attract More Home Buyers
Properties headed to the market need to be presented in a way that is going to attract the most possible buyers. Staging a home allows buyers to picture themselves in that space. Inviting furnishings and decor, combined with subtle accessories distributed throughout the home pulls everything together to help produce higher-quality images of each space in the home.
It has also been proven that if the home is attractive in pictures buyers are much more likely to come and see it in person. The quality of online images directly affects a buyer’s interest in a home.
Buyers confirm that they were more willing to walk through a home they saw online (41 percent), and buyers’ agents identified that staging would positively impact the home value if the home was decorated to the buyer’s taste (39 percent).
Your first impression is your last impression, so make it count!
Tidbit:
A 2021 National Association of Realtors study on home staging reported that 82% of buyer’s agents said staging a home made it easier for a buyer to visualize the property as a future home.
Increase Home Sale Price
Ultimately the purpose of home staging is to set your listing apart from others on the market and yield higher offers.
According to the National Association of Realtors Profile of Home Staging 2021 when staging a home, 23 percent of sellers’ agents reported an increase of one to five percent of the dollar value offered by buyers, in comparison to similar homes.
Notably, none of the respondents in the above study reported that staging a home had a negative impact on the home’s dollar value.
It’s advantageous to keep in mind that home staging does put costs on the sellers’ agent or the seller depending on the scenario. The median dollar value spent when using a staging service was $1,500, compared to $300 when the sellers’ agent personally staged the home.
Tidbit:
The most common rooms that were staged included the living room (90 percent), kitchen (80 percent), master bedroom (78 percent), and dining room (69 percent).
In conclusion…
By creating space that buyers fall in love with, sellers can expect offers of higher quantity and quality. Get in touch with one of our agents today.
Back to School – Interview with Erik Mann
Back to School
Interview with Erik Mann
Here at Windermere Whidbey we are blessed to work with a wonderful agent and friend, Erik Mann. Erik is a vested community member, passionate about Oak Harbor and specifically education. He has served on the Oak Harbor school board for the last 2 years and possesses a wealth of knowledge that we are lucky to have in our brokerage.
The other day we sat down with Erik to ask about a few of the changes happening in the Oak Harbor schools this coming fall. His answers should be as helpful and informative for you as they were for us!
Hello Erik! So, we’ve heard there is going to be a big structure shift this year at the high school. Is this true? Can you tell us about it?
Yes! In recent history, Oak Harbor High School has operated on a semester schedule with six classes per day; allowing a total of six credits per year. The total number of credits available during four years of high school was 24. The Washington State Legislature requires a minimum of 24 credits to graduate. With ever-increasing restrictions on required course content, it meant that students had little flexibility to try new disciplines, arts, and advanced course work. A student’s failure of any class meant alternative pathways to credit retrieval were required, as there was no flexibility built into the schedule.
Beginning this year, the high school transitions to a trimester school year. Individual class times have been lengthened, so only five periods per day, but instead of only earning six credits per year, a student will earn seven and one-half credits per year, for a total of 30 credits over four years.
This allows far more flexibility for students to make up credits, explore new disciplines, do advanced coursework, explore vocational and art classes, etc. Because graduation requirements are fixed once you enter ninth grade, the classes of 2020-2022 are still bound to the graduation requirements in place at the time they entered high school. They will all still be required to earn 24 credits, while classes 2023 and beyond will need 28 credits to graduate but have more flexibility than previous classes.
That sounds like an amazing change for our high school students! What about the rest of our students? Any improvements that we should be keeping an eye out for?
Well, continued advocacy by the superintendent, school board, administrators and staff to our elected officials in Olympia and Washington DC, has led to an amazing opportunity to replace two of our aging elementary schools. Through the Department of Defense, the Office of Economic Adjustment has been tasked with replacing old, inadequate school facilities located on military installations and other government property.
With 160 schools evaluated nationwide, two of Oak Harbor’s schools currently rank in the top 11 schools in the nation in need of replacement due to age and capacity. This means we will be eligible to receive 80% of the funding to replace Crescent Harbor Elementary School (3) AND Clover Valley Home Connection and Early Learning Campus (11). The community will only have to fund 20% of construction costs!
There is also a possibility to move or update our aging transportation facility. Due to our interlocal agreement to provide service to the Coupeville School District’s busses, the district will qualify for a state funding match of 80% of the cost to replace/relocate the facility.
This will be an amazing opportunity for us to leverage our community’s investment in our schools with state and federal funding to replace our aging infrastructure at a fraction of the typical cost!
Whoa! That is incredible and so great it’s in partnership with the DOD, as they are such a large part of our community. I know student health has been a hot topic recently, what can we expect as far as changes there?
Over the past few years, the approach to our education system has seen a marked change in direction. I am pleased to see so much movement into the entire well-being of a child, not just focusing on academic success. It is my goal to see a continued expansion of social-emotional learning, an expansion of counseling and nursing staff, and a real focus on connections between students, adults, the community and resources available to them.
Through a partnership with NAS Whidbey Island, 5 new mental health counselors are being provided by the DOD through a contractor, who will work within Oak Harbor Public Schools. This will expand our already greater than average presence of counselors within schools but is what I hope to be just the beginning.
Whole-child initiatives also mean we need to be engaged in the health and wellness of our students. Beyond PE classes and activities available to students, education about food and healthy eating can make huge improvements in their overall well-being. Schools are all embracing outdoor student learning in interactive gardens and outdoor spaces. Students are learning lessons in the garden that extend beyond growing flowers and vegetables. They are learning science and math, but more importantly are learning to work together in a hands-on environment. They are exposed to produce they would never imagine trying, but because they took part in growing it, will enthusiastically try it and find out they like it. They are learning compassion and community service as their produce is used to supplement local food bank supplies.
Environmental stewardship goes beyond our gardens, however. As a district, we have taken great steps to be as forward thinking, efficient and conservative as possible. A large-scale effort to replace aging heating system boilers with state-of-the-art high efficiency boilers, replacing nearly all lighting with highly efficient LED lights, and transitioning to propane powered busses has propelled us to be one of the front runners in the nation. We’ve earned several state and national green ribbon awards this year. Oak Harbor Public Schools has become a model of environmental stewardship. We will continue to lead the way teaching our students to be healthy and environmentally conscious and make our systems as efficient as possible to protect our taxpayers’ investment.
This is all so great Erik! Thank you for keeping on top of this and informing our community. We know you take your role as a real estate professional as seriously as you take your role on the Oak Harbor School Board, but can you tell us how you see the two connecting?
One of the reasons I chose to work as a Windermere Broker was the focus and commitment to community through the Windermere Foundation, which collects a percentage of every transaction completed, and returns it to our community. It was rewarding to be instrumental in establishing a scholarship fund that has now awarded seven scholarships totaling $12,000 to local low-income graduates who attend vocational programs, community colleges and universities. The Windermere Foundation also provides funds to the opportunity council annually for programs that support Oak Harbor’s low-income students, providing warm clothes, backpacks and other necessities. Windermere is also a supporter of the Oak Harbor Education Foundation which provides applied learning grants for classroom projects within our district, allowing teachers to pursue hands on projects that fall outside the scope of normal funding and thereby enriching our students’ experience. Learn more about the scholarships here.
Windermere Realtors are often the first local resource a family connects with, and my connection with the district allows me to update other Realtors in my office with the most up to date and useful information to incoming families. As the second largest employer on the island, many of our Windermere clients, are employed as educators, administrators and classified staff within the district, or have children who attend Oak Harbor Public Schools. What a great benefit for them to be able to work with a Realtor who understands how the school district operates, and can provide timely, relevant information.
As I look forward to another school year, I can’t help but be excited for the possibilities.
Thank you for your time Erik! Keep up the good work!
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