House Hacking Pros and Cons for Home Buyers
Determined first-time buyers coping with high property prices have implemented a variety of money-saving strategies. Taking in a renter, or "house hacking", is becoming popular, with almost 40% of new Gen Z and millennial homeowners describing it as an important source of additional income.
Renting out one or more bedrooms also helps new homeowners cope with the shortage of smaller starter homes. This has caused some first-time buyers to end up with a larger, more expensive home than they had planned to buy.
If you're currently working with first-time buyers who have shared their house-hacking plans with you, here's some advice you may want to share with them.
They may find it difficult to qualify for financing if they need rental income to qualify. Most lenders will require a level of income that shows that they can afford monthly payments without rental income.
Finding the right property may be tricky, especially if it's a new build. An increasing number of single-family homes, including those in new subdivisions, may be subject to ordinances or homeowners' association (HOA) regulations that prohibit homeowners from renting part of their property.
Remember, I'm always available to discuss home financing with all your buyers, so feel free to share my contact information with them.1
Max Out Tax Deductions Before 2024 Arrives
While tax planning is a year-round task, you still have a month to find strategies to lower your tax bill. The four below may help you keep more of your money while you improve your services.
Look for more business deductions. It's easy to overlook purchases like office equipment, marketing costs, accounting and insurance costs. Go through your receipts and check for new tax guidelines. They're online here, together with other information: Publication 535, Business Expenses.
Working at home? Claim the home office deduction, even if you're in a rented property. Things like flooring, furniture, window treatments, and a dedicated phone line are deductible. So is rent, mortgage interest, property taxes, insurance and utilities. Refer to Publication 587, Business Use of Your Home to make sure you don't miss anything.
Buy business equipment. If you need a new laptop, printer or vehicle, consider doing it before the year ends. In some cases, you may be able to deduct the entire cost instead of depreciating it over several years. You'll also get a mental boost for 2024 as you start the year with a faster laptop or that new car smell.
Get smart with recording mileage. If you're using your personal ride for business, you'll need to keep records of business versus personal mileage. However, if you have a vehicle only for business, you may be able to deduct all its costs. Check out Publication 463 to make sure you calculate mileage deductions correctly.
The ultimate strategy for a smaller tax bill? Working with a certified tax professional. Their advice can pay off in the long run, especially if you need help with tracking and claiming expenses.2
Grinch-Free Marketing Ideas
As home sales tend to be slower in December, this could give you time to build relationships by celebrating the season with established clients, prospects and vendors. These ideas can help you begin 2024 on a positive note.
Send hand-written holiday cards. Few people still send cards, which means that yours will stand out. Envelopes with hand-written addresses are always opened first, and when a buyer, prospect or referral source receives your card, you'll make an impression that lasts well into the new year.
Create a map of the best-decorated homes. These are ideal for newcomers to your territory, including prospects who plan to buy next year. Telling others where they'll see two-story Santas and lifelike Nativity scenes proves how well you know these neighborhoods, which will be reassuring to prospects. Promote your map within social media and offer it as a free download (this also helps you build your prospect email database).
Create a mini-tour of listings decorated for the season. This is a terrific way to promote three homes within a neighborhood. Think of how inviting these homes will appear at dusk, and how potential buyers will be thinking "This could be mine next year...". It's also a chance to network with another agent if you don't have three suitable listings.
Send video greetings. Create your own holiday greeting with a warm, personal message. You can send it within an email to your network and post it as an Instagram Reel. If you're sponsoring a local holiday event, be sure to mention it within your script.3
New FHFA Conforming Loan Limits for 2024
Earlier this week, the Federal Housing Finance Agency (FHFA) announced the new conforming loan limits for 2024. While $766,550 is the new base amount for a one-unit property, many counties are considered high-cost areas and have higher conforming loan limits.
For example, one-unit homes in California's Los Angeles County have a $1,149,825 conforming limit. Loan limits for 2- to 4-unit properties are also available.
Click here to see the new FHFA conforming limits for each state, or to download as a PDF if you prefer.4
Feeling Burned Out? How To Turn Down the Heat.
If you're having trouble sleeping or concentrating, if your productivity is slipping, or if you're feeling overwhelmed, it's time to find your cure for burnout. Check out any employee wellness programs available to you. If you're on your own, you may want to research ways to wind down after hours. Signing up for a yoga class or learning basic meditation can be effective; so can spending more time with family and friends. Short-term therapy can be helpful as well.
Some agents are feeling the burn because it's difficult to turn down additional work, even if it cuts into your family or "me" time. This is a time to discuss workloads with others within your office.
While the solutions may appear simple, careers in real estate often have higher risks, not just potentially higher rewards. Don't hesitate to ask for help when you need it.5
Sources: 1cnbc.com, 2housingwire.com, 3theclose.com, 4mortgagenewsdaily.com, 5theamericangenius.com
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