Five Reasons to Invest in Rental Properties on Whidbey Island

A few years ago, investing in rental properties was a no brainer. With a mere 10% down, one could expect the rent received to match the mortgage payment, sometimes even with some positive cash flow. With starter homes now almost never under $250,000 on Whidbey can it still be a good idea? With Island County estimating we are short 3000 rental units for our current population needing affordable housing, it is definitely something to look into.

Of course, as with all investments, it depends! Here I just want to bring up a few benefits to consider.

  1. So my number one reason to invest in Rental Properties is that people need them. If you get the most affordable and versatile homes and make them available, they will be occupied. To me, this is doing good work in the world, providing shelter for the neighbors in our community.
  2. Return on Investment is my number two reason. In today’s market you may have to invest 20% or more to get an even or positive cash flow, but there are long term benefits. With appreciation over the long haul, you can expect a good return on that 20% down payment; we call that Leverage. To get 5% return in the stock market on $50,000, you have to invest $50,000. To get 5% return on $250,000 in real estate you need only invest $50,000- give or take.
  3. Ability to build Equity- You are able to build equity in Real Estate in at least 3 ways. First, through appreciation over time; though there are occasional dips and corrections, over the long haul, one can expect steady appreciation in value if the property is maintained and the area stays healthy. Second, the renters are paying your mortgage down so you can build equity just by owing less on it. Third you can build (sweat) equity by making lasting, strategic improvements on the property, for example adding a more energy efficient heat system, a lifetime metal roof, opening up a view or just opening up for more sun and sky, creating better landscaping, parking, storage, etc.
  4. Investing in Something Real- We are all encouraged to DIVERSIFY our investments, and I do. But the money I have in retirement mutual funds, I confess, are so nebulous and uncertain to me. Even though I have asked our financial planner to divest us from the “Evil Empire”, I fear some of those funds may secretly still be doing evil things in the world like polluting the planet or what have you; whereas a home with a people living in it is REAL. I can drive by and see it, paint it and plant around it. I can insure it and plan my future around that asset bringing me monthly income or a lump sum when we don’t feel like maintaining it anymore.
  5. Building Relationships in your community is an often unforeseen advantage to Real Estate investing. If you have a rental home in your community, create a MIL unit in your daylight basement or have acreage and build a guest home on it to provide housing for a neighbor of your choosing; the relationships that can build over time can be a real blessing. I speak from experience, often a trip to town brings me in contact with a former tenant and current friend.

Is investing in Rental Properties for everyone? Not by a long shot! There are set backs and frustrations, they can take time, energy and money right when you don’t have those to spare, they require an ability to get a loan, home maintenance skills or ability to delegate is helpful.

I am happy to help you weigh these pros and cons and you consider diversifying your portfolio with an eye to the future.

Posted on May 3, 2018 at 11:53 am
Shellie Moore | Posted in Uncategorized | Tagged , ,

Explore our Gorgeous Beach Access on Whidbey Island

By Shellie Moore, CRS, EcoBroker with Windermere Real Estate, Langley, WA

Let’s Go to the Beach!
Of course one of the best things about living on an island is that you are surrounded by beaches all around you. There isn’t much better than a day by the sea, with the salty expanse in front of your eyes and the sound of the waves and gulls in your ears.

“For whatever we lose (like a you or a me), It’s always our self we find in the sea.”—E. E. Cummings

Whidbey Island being 32 miles long from Possession Beach to Deception Pass Bridge, there are well over 100 miles of shorelines with over 50 public beaches and dozens of private community beach accesses that homeowners in certain neighborhoods share.

Wherever you access the water’s edge, you can walk the beach between the high tide mark and the low tide mark on all the publicly owned tidelands to your heart’s content, which is about half the shorelines in Island County. If the upland (land above the high tide mark) is owned by private citizens, their privacy should be respected, so passing over the tidelands is fine, but camping out in front of their home on public tidelands is not cool.  On privately owned tidelands, though some passing over may be permissible, stopping to dig clams, start a bonfire, build a driftwood fort or having a picnic in front of their home is not permissible. Not to worry though, there are many beautiful stretches of beach to enjoy here. Where do you find them?

For starters, here is a link to an online map put up by the non-profit organization Island Beach Access:  “Island Beach Access is an expanding network of people who are dedicated to identifying, mapping, signing, and preserving access to the public shorelines of Island County for the legal and rightful use of its citizens, for future generations.” They have monthly meetings and are doing good work.

Another great resource is the book called Getting to the Water’s Edge; a Field Guide to Island County Beaches. Island County Marine Resource Committee and Washington State University Shore Stewards partnered in publishing this 176 page, full color guide to shore access and local trail systems. It is awesome, describing all the public beach access spots on Whidbey and Camano Island, including if they have a boat launch, parking, hiking trails, camping sites, etc. You can pick this up at any of the local Island County bookstores.

I have begun a video series called Getting to the Water’s Edge, Live on YouTube to let you see footage of the major beaches you can visit in our area. Below is a link to installment #1 filmed right at the Clinton Ferry Dock; check it out. Whidbey Awaits!

Posted on January 23, 2015 at 2:35 pm
Shellie Moore | Posted in Uncategorized | Tagged , , , , , , , , ,

Are You Ready to Sell Your Home on Whidbey Island?

By Shellie Moore, EcoBroker, CRS, Realtor Windermere Real Estate South Whidbey

I often have discussions with home owners who are getting ready to sell their home and are trying to figure out the perfect timing for a listing date.  I have heard it said the only hard and fast rule for the best time to sell is when you are ready.  What does ready mean?

Ready physically- Is the home as ready as you will be able to get it- de-cluttered, clean, landscaping tidy, curb appeal dialed in, deferred maintenance caught up, septic inspected, repaired and pumped, etc.   If realistically you will not be able to accomplish this time wise, but you need to sell now, you can always list it AS IS, but know that the buyers will discount the value because of condition and perceived work needed and you may have to renegotiate for repairs after inspection.  Hiring help will usually pay for itself in the long run, as you will get back in sales price what you paid out for work done.

Ready also refers to an emotional state- often one comes into a home for sale that is overpriced and unstaged with walls and shelves and cupboards and closets and garage stuffed with a thousand disorganized, personal items that need to be sorted and packed. It causes one to think, “Maybe they are not really ready to sell or more importantly- to move.”

Ready may also have to do with legalities and logistics.  If there are legal issues to deal with, like a cloud on the title, x’s that need to be dealt with, liens that will complicate the sale, encroachments on your side or the neighbors, permit problems that will need to be disclosed and resolved- it is always best to get these straightened out before listing your property.  They will likely delay closing, and worse yet, may scare off a good buyer or kill a deal.

That being said-what if you are ready in December, but the garden isn’t in bloom? What if the home is ready in October but you are concerned that families don’t want to move in the middle of a school year?  What if you are ready in April, but there are 5 other homes on your block that just came on the market this week?  Not to worry; people move and buy homes all year long with different motivations.  There are advantages for going on the market in November when the inventory is low and competition not as steep.  If you have lovely gardens, the late spring may really make you property shine above the rest.  I just looked up statistics from South Whidbey Sales for a past year. We only had 1 home go pending from June 1- July 1 at any price or description.  However, from December 1- January 1 we had 9!  Go Figure??? Could it be family members visiting relatives here for the holidays deciding they can’t live so far from grandkids?  Could it be climate refugees from the Southwest, not wanting to face another hot dry summer? Or perhaps was it a newly hired Boeing Executive wanting to find an area with a good quality of life for her family.  Or a drop in interest rates got buyers off the fence. Like I said, there are lots of reasons for buyers to buy a home in any season.

The main thing is, for your home to sell in a timely way, it needs to be the best dressed and best priced in its category. You need to outshine the competition and show your readiness to sell with price and condition. And you need a local real estate broker that will help communicate that to the Buyers out there through professional photography, marketing, and exposure.

When you are READY to sell, I am happy to be at your service and on your side.

Posted on January 19, 2015 at 5:35 pm
Shellie Moore | Posted in Uncategorized | Tagged , , , , , , ,

To Buy or To Build; That is the Question

Our Straw Bale Cottage

To Buy or Build; That is the Question

by Shellie Moore, EcoBroker, CRS with Windermere Real Estate South Whidbey

I often have clients who start looking for a special kind of home, and when they don’t find what they are looking for, start considering the option of buying vacant land and building. Another scenario is a skilled, energetic  person or couple who wants to build some sweat equity by building their own home.  Both are good options for some people but I thought I’d outline a few pros and cons (as Jimmy Fallon would say).

On a personal note, my husband and I have designed and built two homes from scratch and have benefitted from the process in many ways. On the other hand, there were some drawbacks we have to admit to when honestly looking at it. If I hadn’t have been so hell bent on DIY (do it yourself) I might have ended up with some standard features most designs have like adequate storage and room to slide a washer and dryer in without having to remove the trim from the hall way.  Building unique homes ( a log home and a Straw bale home) was cool and fits us well, however, we realize if we ever have to sell we will have some hurdles because of our owner builder style.  We were however able to build with very little debt and a lot of fulfillment. 

Let’s look at some general Pros: Building from scratch does allow you to perhaps get closer to what you want as far as style and floor plan, if you can afford your taste.  When we were building it was nigh impossible to find a 4 bedroom floor plan within 1500 sq ft, but designing and building our own home, we were able to get the rooms we wanted without going over budget.  Other considerations that may be hard to find already built are layouts that allow for graceful aging in place, with Masters on the Main, ADD friendly and wheel chair accessible. This hit home for me this fall when I was wheel chair bound for 3 months with a broken leg and found myself unable to access a bathroom or my bedroom.

Finding the green features one wants in an affordable ready built home can be difficult as well. In our area, though we have some builders that are very conscientious, not many jump through the hoops to build a Built Green Home.  The Highlands is a major exception;  thank you Langley Builders. Building can allow you to choose finishes and ventilation to improve Indoor Air Quality (especially important for the chemically sensitive and those with allergies.) Features like solar orientation, sustainable building materials, and energy efficiency are often neglected even by today’s builders, let alone those in the 70’s. If environmental concerns are paramount for you, DIY may be your way to go.

If one has skills, they can save some money by doing some of the work themselves. For some, this is a creative process they really love- even a rite of passage. For my husband, I always equate building our log home for him with having natural childbirth for me- a very challenging but satisfying experience.  Some couples thrive through the give and take of hearing each other’s ideas and working out a mutually acceptable plan.  Working together on a common goal- especially one so close to our hearts as a home- can be relationship strengthening.  Watching each other’s gifts bloom can build mutual respect and watching your own can build self-esteem and satisfaction.

Sometimes building is the best option when you have found an ideal location, like on a lakefront property or a place with an awesome view- but there are no homes for sale in that area.  If the cost of the vacant land pencils out when you add the cost of development and building to fit your budget for a finished product, you have found the sweet spot. 

Let me move on to the Cons now. Remember that thing before about relationship strengthening? Not so much for all couples. I don’t know the statistics for divorce in the building process, but I imagine it takes a toll on many. A few years after my husband and I built our second home we were simultaneously telling the story to a friend; suddenly I realized we were telling two separate stories. His about what a nightmare it had been, me about what fun it had been working together as a family.  Oh well, at least we made it through.  Remember that thing about the Creative process?  For some, nit-picking their way through a thousand decisions about everything from central to zonal heating, crawl space to slab to basement, solid core or hollow doors, a dozen countertops materials and after that a hundred colors or patterns, etc. is just plain exhausting and aggravating for some people.  Now one can delegate a ton of that to an architect, contractor and a designer, but you do have to give some input which requires time, energy, money calculating, communication and likely compromise, not to mention added cost.

One issue many folks encounter who would like to build is that the money needed upfront is more than may be needed to finance a home.  On Whidbey Island, and other rural areas, many folks can get a zero down USDA loan.  To get a loan to purchase the land and build the home, one will need 20% down payment reflecting the value of the vacant land and the finished home.  Owner builders that are going to get a construction loan still need to get bids from contractors for all the line items for the project, even if they will be doing the work themselves.

Another financial consideration is that one can nearly always get a ready built home for a lower cost per square foot than to have a similar one built.  To hire a contractor one could expect to pay somewhere between $100 to $200 a sq ft and up from there for a luxury home.  There are often bargain priced homes on the market due to the Seller’s circumstances and other factors that are hard to beat if dollars is the deciding factor.  Things like wonderful mature landscaping that would take years and thousands of dollars to achieve on a blank slate piece of land can be just “thrown in” with an older home, as appraisers can’t assign much value for them. 

A home that has stood the test of time can eliminate certain surprises (like a wet crawl space) if you are lucky. On the other hand, you may inherit certain long standing issues like mold in the heating ducts if you aren’t lucky or thorough in your due diligence and inspections.

One final consideration is TIME.  It could take a year to purchase land, put in a road, clear a site, drill a well, bring in utilities, get a permit and install a septic system, find an architect or a design, get bids, hire a contractor or sub-contractors if you will be the general, and then to actually build and landscape.  And where will you live in the meantime.  All workable, but this will not meet everyone’s timetable.

Well, this is just an intro to get you started in the decision making process.  If you are thinking about building (or buying) please contact me.  I can help you find your land, get a construction loan, connect you with contractors, resources and referrals.  I am happy to be at your service and on your side with all things concerning South Whidbey Island Real Estate.

Posted on January 14, 2015 at 6:28 pm
Shellie Moore | Posted in Uncategorized | Tagged , , , , , , , , , , , , , , ,