Market News December 13, 2019

Eastside 2020 Growth Forecast

So, how is the Eastside poised to begin a new decade? Will this growth continue? To find out, 425 Business ditched the crystal ball and talked to Eastside movers and shakers across myriad industries to find out what they believe the year ahead holds.

Residential Real Estate

The Eastside residential real estate market is going to experience significant growth in the next few years. Amazon, Google, Facebook, and other tech giants are rapidly expanding their footprint to the Eastside. Thousands of tech workers relocating to this area, along with new hires for supporting businesses (such as retail and restaurants), will greatly increase the demand for housing. This year, almost half of the buyers who walked through my open houses were relatively new in town. 

Condos under $750,000 and single-family homes under $1.5 million will sell very quickly if they are in good condition and priced right. Also, homes with easy access to public transit and future light rail stations will become more and more desirable. Areas in and near downtown Bellevue and downtown Kirkland will still be the hottest submarkets because they are job centers with superb amenities.

– Mei Yang, global real estate adviser and broker at Realogics Sotheby’s International Reality

Commercial Real Estate

(The current) cycle exhibits some significantly different conditions from those that precipitated the “thrift crisis” of the ’80s; the dot-com bust of the ’90s; or, certainly, the “Great Recession” of the last decade. Interest rates are lower, equity is plentiful, and expectations for return on equity across all asset classes are significantly less expensive. 

Federal taxes and punitive regulations are generally lower (unfortunately, we can’t say that about state and local), and corporate earnings are remarkably strong (yes, with a few notable exceptions) despite tariffs and turmoil. Perhaps most important is the fact that employers across all sectors are scrambling to attract workers and have tens of thousands more openings to be filled. 

My belief is that real estate economics is pretty simple — it’s all about employment. If you have healthy job creation, everything works. It attracts more residents who need housing, businesses that need more lawyers and accountants, kiddos who need teachers, demand for groceries, and so on. Conversely, if employment flattens or falls, the economy constricts. 

Bottom line: If you can tell me when Eastside employers are going to quit hiring or start laying off, I’ll tell you when commercial real estate on the Eastside is going to suffer. Until then, land prices and rents on existing buildings will continue to rise, and developers will race to provide the office, apartment, and retail space to support the growth. 

– Robert Wallace, CEO of Wallace Properties

Transportation

Bellevue has a ton of local transportation improvements on tap for 2020 that will make travel safer and easier for thousands of residents. But we’re also excited about the work we’re doing with our regional partners. It has the potential to benefit hundreds of thousands of people in the coming years and will be a big boon for transportation options on the Eastside. 

Bellevue and Kirkland are working with King County Metro on a new RapidRide K Line that will connect the Eastgate Park & Ride in Bellevue to the Totem Lake Transit Center in Kirkland starting in 2025. And King County Parks is working with several Eastside cities on Eastrail, a regional pedestrian and bicycle path. 

On the roads side, the state Department of Transportation will break ground in 2020 on the I-405 Renton to Bellevue Widening and Express Toll Lanes project. It will add capacity, boost transit options, and improve safety on one of the most congested stretches of highway in the state.

– Andrew Singelakis, transportation director for the City of Bellevue

Healthcare

Next year, I see healthcare in general (and EvergreenHealth) placing an increased emphasis on access — both in the traditional sense and through innovative alternatives. The ever-permeating digital age provides care for patients through new approaches with even greater creativity and efficiency. We also will have the increased benefit of effective solutions, possible through new sources of data analysis and other breakthroughs. 

As always, we’ll collectively prepare for the needs of an expanding senior population, offering valuable services to help them sustain their well-being and healthy, active lifestyles. 

Finally, we are committed to collaborating with our schools and others, supporting care for students with behavioral health issues.

– Jeffrey J. Tomlin, CEO of EvergreenHealth

Tourism

Bellevue and the Eastside’s tourism and hospitality industry is positioned for continued growth. Demand is projected to increase due to the growing corporate presence on the Eastside, a strong consumer economy, healthy airline capacity, and popularity in the Pacific Northwest as a destination. In recent years, the Puget Sound region has seen significant hotel supply increases, which have caused property rates and occupancy to level out, but we are hopeful that this additional demand will offset the recent inventory surge. 

As a whole, travel growth in large technology markets like San Francisco, San Jose, Seattle, and Vancouver have recently slowed, compared with previous years. With that said, many business travelers now book rooms and visitor experiences outside of the large city centers — which positions areas like Bellevue and the Eastside well for 2020 and beyond.

– Brad Jones, executive director of Visit Bellevue Washington

Technology

(Next year) is the year that cybersecurity will turn inside-out. Malware, ransomware, and phishing attacks are all significantly on the rise, and (historically) 61 percent of data breach victims have been small businesses. These businesses can no longer rely on legacy tools like antivirus and networks that only protect them at the office. 

Security must go mobile and leave traditional technologies behind. It’s also time to eliminate SMS-based authentication in favor of hardware keys that support Universal Two Factor authentication.

– Riley Eller, chief technology officer at Rubica

Legal

We expect the rapid growth of technology companies of all sizes based on the Eastside or expanding their operations to the Eastside to continue, many of which will be focused on intelligent connectivity, including 5G, AI, IoT, and Quantum computing. With that, we expect to see more regulatory attention on consumer privacy and data usage. 

This regulatory attention will increase the demand for legal service providers, especially those who have a stake in the Eastside community and a desire for more personal interaction with their clients.

– Barry Stulberg, counsel, and Carly Chan, associate, Davis Wright Tremaine’s Bellevue Office

Finance

Eastside residents and business owners should have a plan in place for when times are good and when times are bad, regardless of the Federal Reserve’s actions. The Fed cut rates by 25 basis points, to 1.5 percent (from) 1.75 percent. This means that the Fed is helping prolong the economic expansion. The Fed is not expected to reduce rates further in the coming year, barring a recession. However, consumer confidence fell for a third straight month (as of Nov. 1), and consumers have not shown signs of slowing down. 

Fed rate cuts to prop up an otherwise-slowing global economy generally mean that they are prolonging the inevitable — a recession. However, the bigger effect is to Americans saving for later. Because of low interest rates, American consumers are forced to take on more risk than necessary to make their money work for them. It would be prudent to include in one’s portfolio insurance and real estate to complement their investment portfolio.

Because of the technology industry and the various Silicon Valley companies coming into the Seattle-Eastside area, our economy will not be as affected as other economies when we experience a recession.

Clients at local technology companies have indicated that hiring has slowed down, and jobs that were eliminated aren’t being replaced with new workers. This can mean they are bracing for a possible recession or slowdown in the economy.

Consumer confidence is still not at a level where they are pulling back from spending; this explains why housing is still strong in the area and consumers are stretching their budget to buy into a hot real estate market.

Restaurants in the area are feeling the effects of a low interest rate environment, which generally follows inflation of raw materials and commodities. It is evident in the exorbitant prices we are experiencing when we go out to eat.

– Tony Sablan, wealth manager at Eagle Strategies LLC

This article was originally posted on 425 Business.

Homeowner November 29, 2019

Remodel for the Most Resale Value

Image Source: karamysh on Shutterstock

What’s the best remodeling project for your home? The answer, in part, depends on where you live. Every year, Remodeling Magazine evaluates which projects bring the most return at resale in different markets around the country in their “Cost vs. Value” report.  For the purposes of this blog, we are focusing on the Pacific states (WA, OR, CA, AL) and the Mountain states (MT, ID, UT, CO, NV).

According to Remodeling Magazine, these are the six top projects in those two regions that currently have the best return on your investment when it comes time to sell.

Garage Door Replacement

The project with the most return from Washington State to Nevada? A new garage door.

In the Pacific States, replacing your garage door will cost an average $3,785, but will increase your resale value by $4,686, recouping 123.8 percent of what you paid for it. Homes in the Mountain States will also benefit from a garage door replacement, recouping 98.6 percent of their costs.

Due to its size, a garage door can have a big impact on a home’s curb appeal.  But adding to your home’s aesthetic is only one advantage; the warranty that comes with the new garage door is also a selling point for potential buyers who can trust that they likely won’t have to deal with any maintenance issues in the near term.

Manufactured Stone Veneer

As long as the new stone veneer is consistent with your neighborhood’s overall look, this siding is the second-best project across the Pacific and Mountain states.

Stone veneer can replace your home’s existing siding, adding a fresh, modern look that conjures a cozy vibe all the way from the street, before buyers ever step foot inside. Along the West Coast, it can recoup 110.4 percent of the cost when you sell, and Mountain states will recoup 96.5 percent of the cost.

Wood Deck Addition

While building a deck might seem like a big undertaking, it’s actually a pretty cost-effective way to positively impact your home’s resale value. Pacific states can expect to pay around $15,000 and Mountain states just above $13,000, but they’ll see 87.8 percent and 74.3 percent recouped respectively when they sell.

Adding a deck extends the living space of your home and provides even more area for entertaining, relaxing, and enjoying the outdoors.  Whether you choose a natural wood deck or a low-maintenance composite deck, you can pick from a variety of styles based on the lay of your land and the areas of your backyard you wish to highlight.

Minor Kitchen Remodel

No need to move walls or appliances around, a minor kitchen remodel will do the trick to recoup 87.1 percent of the cost in the Pacific states, and 80.3 percent in the Mountain states.

An outdated kitchen can go from drab to fab and become a focal point with a fresh palette. Replace the cabinet doors with new shaker-style wood panels and metal or metal-looking hardware. Switch out the old counter tops with laminate that matches the new look. Think about adding a resilient flooring option, then finish the project with a fresh coat of paint to the walls, trim, and ceiling.

Grand Entrance

Looking to improve your curb appeal and create an entrance that guests and homebuyers won’t soon forget? Add a fiberglass grand entrance. This project involves replacing a standard-sized front door with a larger opening with dual sidelights (glass panels). Typically costing around $8,000, Pacific states will see 85.1 percent of that recouped in the sale, and Mountain states will see 71 percent.

Siding Replacement

Depending on the size of your home, replacing the siding can be an expensive undertaking. However, it’s a project that comes with high returns. For Mountain states, sellers can expect 75.4 percent of the costs recouped, and Pacific sellers will see 84.3 percent.

Not only is siding one of the first things a buyer sees, but it also serves as an indicator of the overall health of the home. Broken or damaged siding could mean that there are other problems with the home, such as pests and rot. Replacing old siding is a cost-effective way to boost your home’s curb appeal and ensure buyers are going to walk through your front door.

Windermere Community November 18, 2019

Windermere’s Winter Drive Collects Nearly 6,000 Items for Mary’s Place

It’s another fall season and the fourth year of Windermere’s #TackleHomelessness campaign with the Seattle Seahawks. As a part of this campaign, Windermere hosts an annual “We’ve Got You Covered” winter drive. This year, 33 Windermere offices in in the greater Seattle area* participated in the drive, collecting new hats, scarves, gloves/mittens, socks, and other warm winter items for Mary’s Place.

Mary’s Place is a non-profit that provides safe, inclusive shelter and services to support women, children and families on their journey out of homelessness. Since 1999, Mary’s Place has helped hundreds of women and families move out of homelessness into more stable situations. But shelter capacity is limited and there are still hundreds of families sleeping outside in cars and tents each night, so Windermere collected items to help them stay warm this winter.

 

During the four-week drive, our offices collected donations from agents, staff, and the community, which included over 630 hats, 680 pairs of gloves, over 200 scarves, over 2,000 pairs of socks, and an assortment of coats, jackets, sweaters, blankets, toiletries and other items, bringing our grand total to nearly 6,000 items collected for Mary’s Place.

One office made the drive extra special by partnering with a local knitting group. The Windermere Mercer Island office partnered once again with the Mercer Island Tuesday Knitters, to make cozy hats and scarves. This year the knitting group contributed 67 hand-knitted hats and scarves to the winter drive.

The staff at the Mary’s Place donation center in South Seattle were grateful to receive the bins full of donated items that were delivered by Gentle Giant Moving Company. “We are so incredibly grateful to our Windermere family for all that they do for our families!” said Marty Hartman, Mary’s Place Executive Director. “These gifts of warm winter gear will keep our kids and families warm and loved this winter!”

Windermere is also grateful to partner with Gentle Giant Moving Company on our winter drive. For the past four years, they have generously given their time, muscle, and trucks to pick up and deliver all of the donations.

And this drive would not be possible each year without the support of the Seattle Seahawks, our offices, and all those who donated. From all of us at Windermere, thank you for making our fourth annual winter drive a success and for supporting families experiencing homelessness in the greater Seattle area!

*Participating Windermere offices:

Bellevue, Bellevue Commons, Bellevue West, Federal Way, Federal Way-West Campus, Kent, Kirkland, Kirkland Yarrow Bay, Lynnwood, Mercer Island, Mill Creek, Property Management – Bellevue, Property Management – Edmonds, Property Management-Everett, Property Management – Seattle North, Property Management – South, Redmond, Seattle-Eastlake, Seattle-Green Lake, Seattle-Greenwood, Seattle-Lakeview, Seattle-Madison Park, Seattle-Mount Baker, Seattle-Northgate, Seattle-Northwest, Seattle-Pike/Pine, Seattle-Queen Anne, Seattle-Sand Point, Seattle-Wall Street, Seattle-West Seattle, Services Company, Shoreline, Snohomish

Investing November 11, 2019

So you bought an investment property, now what?

Image Source: Christopher Harris on Unspash

Investing in a home is a great way to build passive income but earning from your investment will take a little groundwork to become a well-oiled machine. This is your beginner’s guide to owning an investment property so you can set up that foundation properly to avoid future headaches.

Make sure it’s livable

It’s important to start with your home inspection before you start making plans. Use the inspection report to prioritize the maintenance issues.

Before a tenant moves in, make sure the home is livable. Handle the important items that affect the livability of the property, either now or in the near future. If the inspector noticed a leak in the roof or holes that could lead to infestation, take care of those first. Other maintenance issues to prioritize are the fuel and the hot water source.

If your city has inspection and registration requirements, be sure to cross check those inspection checklists with your current property. If the property wouldn’t pass now, make sure it will pass by the time the city sees it.

Upgrade the space

Once your property is in livable condition, it’s time to upgrade. If you have any left-over budget after the necessities are handled, consider adding a bedroom or a bathroom where you can find the space. These rooms heavily impact the rental price, and the more you have the higher the price. If there’s no space for another bed or bath, think about finishing the basement or upgrading some of the appliances to make the property more attractive to potential tenants.

Use similar properties in your neighborhood as your inspiration. These units are your competition, think about what you can add, or even take away, that would help you compete. Ask yourself what about your home is unique and in what ways does that affect your rentability? If every unit in your area has hardwoods, how can you make your carpeted home appealing? Maybe new carpet? Or is switching to hardwoods, or vinyl laminate that looks like wood, worth it?

Market it to future tenants

You need two things in your listing: 1) Great Photos 2) An Amazing Description

After you’ve perfected the property, it’s time to tell potential tenants that it’s available. Creating the listing is essential in drawing eyes on the unit so you can show it to as many people as possible.

Renters looking to move are quick to make their first impression of a property with thumbnail photos on a map. So, take lots of great, bright, photos of the entire place to showcase the amenities and show potential tenants what it looks like, then choose the best photo to be the first in the lineup. Remember to get the lighting is just right to show every corner of the listing. Dark photos scare tenants away, making them think the unit is dingy and dirty. Light and bright photos show a clean home that’s move-in ready. They can imagine themselves living there a lot easier than in dark and cramped looking units.

Next, they’ll read the description. This is again where other listings in your area can help you.

Read other listings to structure your description and to draw inspiration on what tenants might think is important. Find the selling points and emphasize those above the unique features, especially if those unique features are obvious in the photos.

Gardner ReportMarket News October 25, 2019

Western Washington Real Estate Market Update Q3

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist, Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

 

ECONOMIC OVERVIEW

Washington State employment has softened slightly to an annual growth rate of 2%, which is still a respectable number compared to other West Coast states and the country as a whole. In all, I expect that Washington will continue to add jobs at a reasonable rate though it is clear that businesses are starting to feel the effects of the trade war with China and this is impacting hiring practices. The state unemployment rate was 4.6%, marginally higher than the 4.4% level of a year ago. My most recent economic forecast suggests that statewide job growth in 2019 will rise by 2.2%, with a total of 88,400 new jobs created.

 

HOME SALES

  • There were 22,685 home sales during the third quarter of 2019, representing a slight increase of 0.8% from the same period in 2018 and essentially at the same level as in the second quarter.
  • Listing activity — which rose substantially from the middle of last year — appears to have settled down. This is likely to slow sales as there is less choice in the market.
  • Compared to the third quarter of 2018, sales rose in five counties, remained static in one, and dropped in nine. The greatest growth was in Skagit and Clallam counties. Jefferson, Kitsap, and Cowlitz counties experienced significant declines.
  • The average number of homes for sale rose 11% between the second and third quarters. However, inventory is 14% lower than in the same quarter of 2018. In fact, no county contained in this report had more homes for sale in the third quarter than a year ago.

 

 

 

HOME PRICES

  • Home price growth in Western Washington notched a little higher in the third quarter, with average prices 4.2% higher than a year ago. The average sales price in Western Washington was $523,016. It is worth noting, though, that prices were down 3.3% compared to the second quarter of this year.
  • Home prices were higher in every county except Island, though the decline there was very small.
  • When compared to the same period a year ago, price growth was strongest in Grays Harbor County, where home prices were up 22%. San Juan, Jefferson, and Cowlitz counties also saw double-digit price increases.
  • Affordability issues are driving buyers further out which is resulting in above-average price growth in outlying markets. I expect home prices to continue appreciating as we move through 2020, but the pace of growth will continue to slow.

 

 

 

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home dropped one day when compared to the third quarter of 2018.
  • Thurston County was the tightest market in Western Washington, with homes taking an average of only 20 days to sell. There were six counties where the length of time it took to sell a home dropped compared to the same period a year ago. Market time rose in six counties, while two counties were unchanged.
  • Across the entire region, it took an average of 38 days to sell a home in the third quarter. This was down 3 days compared to the second quarter of this year.
  • Market time remains below the long-term average across the region and this trend is likely to continue until more inventory comes to market, which I do not expect will happen until next spring.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am leaving the needle in the same position as the first and second quarters, as demand appears to still be strong.

The market continues to benefit from low mortgage rates. The average 30-year fixed rates is currently around 3.6% and is unlikely to rise significantly anytime soon. Even as borrowing costs remain very competitive, it’s clear buyers are not necessarily jumping at any home that comes on the market. Although it’s still a sellers’ market, buyers have become increasingly price-conscious which is reflected in slowing home price growth.

 

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

Homeowner October 15, 2019

5 Deal Breakers That Can Blindside Home Buyers

Purchasing a home can be a complex endeavor for even the most well-prepared home buyer.  You’ve diligently saved for your down payment, followed the market, researched agents and now you are ready to make an offer on your dream home.  Don’t let these 5 “Deal Breakers” come between you and your new home.

    1. Big Purchases on Credit. It is tempting to buy the furniture for your new home or a new car for the garage before the sale closes. Take care if you are making these purchases on credit. Large purchases on credit can have a major impact on your credit profile which effects your mortgage application. It’s a better plan to wait until after closing or pay cash for these transactions or you may be putting that furniture in a different living room than you originally picked them out for.
    1. Overpaying. Before your bank will approve your mortgage they will appraise the home you are purchasing.  If they feel you are overpaying they are likely to decline your mortgage application. If you find yourself in this situation consult with your agent on renegotiating your offer to be more in line with the bank’s appraised value.
    1. Purchasing too close to Foreclosure. If you are making an offer on a house that is facing foreclosure be sure to have a closing date set before the foreclosure date. Have your agent work with the lender to structure closing before the house goes back to the bank and into foreclosure.
    1. IRS liens. You’ve heard the old saying “Death and Taxes”.  Back taxes and liens can derail your attempts to get financing for a mortgage so be sure to have your books in order before filing your loan application.
    1. Comprehensive Loss Underwriting Exchange (CLUE). CLUE is a database of insurance claims for both people and property.  Your home insurance rates are determined by the information about you and the property you plan to purchase which is contained in this report. Past claims for water damage, falling trees and even dog bites from present and past owners can multiply your insurance rates. Consult your agent about the CLUE report for your future home as soon as possible once your home purchase offer is accepted.

When purchasing a home there will be challenges which you can plan for and the unexpected hurdles.  By educating yourself as a consumer and choosing a well trained real estate agent like myself, you can avoid many of the pitfalls of 21st-century home ownership.

HomeownerLiving October 10, 2019

Prepare Your Home for Winter

As the days shorten, you can mitigate many mid-winter headaches with some preemptive prep. Proper weatherizing can help protect your home from preventable damage, save money on energy costs, and, most importantly, keep you and your loved ones safe and warm throughout the winter season.

Here is a useful checklist to manage your weatherization project. Setting aside some time on a couple of weekend days should be more than enough to knock this out:

Cracks & Leaks

Examine your entire house for any cracks and leaks, from your roof to your baseboards, to your basement and foundation. With unpredictable winter weather, these cracks and leaks are how the outside gets in, causing cold drafts and water damage.

Luckily, most cracks don’t require a professional to handle it. Depending on your house type and age, it’s likely you’ll be able to do it yourself with supplies from your local hardware store.

Windows & Doors:

Gaps and breaks in windows and doors is another way to let the winter in your home, and they can let heat escape, raising your heat bill throughout the season.

Make sure seals are tight and no leaks exist. If you have storm windows, make sure you put them on before the cold season begins. Additionally, add weather-strips and or a door sweep to prevent drafts and keep the heat in.

Rain Gutters: 

Clean your rain gutters of any debris. In colder climates, the buildup will cause gutters to freeze with ice, crack and then leak.

Once you have removed the residue from the drains, test them by running hose water to make sure cracks and leaks have not already formed. Even in warmer locales, the buildup can put undue stress on your roof and home.

Pipes: 

Protecting your pipes from freezing should be your number one priority this winter. A burst pipe can quickly become a disaster in any home.

Remember to turn off your exterior water source and take in your hose. Internally, wrapping your pipes is a recommended precaution to take.

Heating System:

Annual checks are vital in avoiding dangers such as house fires. Replace filters if you use a furnace and clear out any vents and ducts that carry heat through them. If you have baseboard heat, wipe them of dust and remove any debris that might catch fire.

 

Fireplace & Wood Burning Stoves:

Make sure to have chimneys and air vents cleaned early in the season if you are planning on warming your home with a wood-burning source. When your fireplace is not in use make sure to close the damper, some resources estimate an open damper can increase energy consumption by as much as 30%, increasing your bill about $200.

Outside: 

Bring your patio furniture inside or cover it for the winter. Don’t forget other, smaller items such as your tools, including the hose and planting pots. Clear out any piles around the side of your house, checking for cracks and holes in your home and foundation as you go so to avoid providing shelter for unwelcome guests over the cold season.

If your property has large trees check for loose branches and call someone to trim back any limbs that may fall in your yard, on your roof or even damage a window.

Emergency Kit: 

Lastly, make sure your emergency kit is up to date with provisions, batteries, fresh water, food for animals, entertainment for kids – especially if you live in an area prone to power outages.

HomeownerInvesting September 26, 2019

Benefits, Risks and Things to Consider Before You Add an Accessory Dwelling Unit to Your Home

Have you ever rented the unit in someone’s basement? Maybe your spouse’s mother moved into your “Mother-In-Law Unit” above your garage? Or have you ever travelled and stayed in a pool house for your stay? Commonly referred to as “Mother-In-Law” units, homeowners use these as a way to fill the space in their home and gain residual income, either from vacationers or long-term tenants.

The official terms for these units are Additional Dwelling Units (ADU) or Detached Additional Dwelling Units (DADU’s), and are defined as extra spaces in homes and on properties where someone can live completely independent of the main house.

These units can be almost anywhere on the property, but they are usually located in the basement, in the backyard, or above the garage. They have their own bathroom and kitchen facilities, and sometimes they share laundry with the main house.

Thinking of adding a unit to your home? Here are some benefits and risks, as well as important aspects to consider before you build:

Benefits

Homeowners can maximize their investment by renting out the extra space to long-term tenants for short-term vacationers. These tenants can help pay off debt or create an extra stream of income to pay for other needs or wants.

Depending on several factors, including the size of the unit, the market in the area, and other factors, each homeowner should decide which option they are more comfortable with. These decisions should be made before they list the unit for rent to best market to the right audience.

Risks

An obvious risk is that when you open your space to a stranger, there’s a possibility that things might end poorly. Either the tenants could turn out to be untrustworthy, or unreliable, leading to a financial burden.

To minimize the risks, it’s a good idea to use an application process to check backgrounds and employment history as a tool to get to know the potential tenant. Make sure to adhere to the National Fair Housing Laws and your local regulations.

Things to Consider:

  • What are the shared spaces?
    • Would you be comfortable sharing those spaces, and potentially appliances, with a new person each weekend, or would you rather get to know the long-term tenant who would use those on a consistent basis?
    • Rooms like the kitchen can be great for those who want to get more interaction from their vacation renters. However, sharing one bathroom between the homeowners and the visitors can be uncomfortable and risky.
    • Would you be okay with a long-term renter using your laundry facilities? What kind of access would they need to the house in order to use those machines?
  • What is the size of the ADU/DADU?
    • Is it truly a space where someone could live, or would it be too tight to fit all the necessary appliances?
    • Does the unit adhere to your local housing codes as a livable space?
  • How close are the units and what noise level are you comfortable with?
    • As a long-term landlord, tenants have the right to quiet enjoyment without the landlord barging into their space or controlling their activities. If the unit is in the basement and the tenant has friends or family over, that noise could permeate into your unit in the late hours of the night. A way to prevent this is to be sure to layout quiet hours and expectations before they sign the lease or make an agreement so that you and the tenant are on the same page.
    • The same goes for the rules in the vacation rental listing. Managing expectations is the first way to create a relationship with the tenants, even those there for the weekend.
  • What improvements are required to make the unit livable?
    • Do you need to add a kitchen or a bathroom? What are the costs associated with those improvements and would the market-rate rental prices make up for those improvements? You might not get your money back within the year, but if you’re dedicated to making the space worth it to rent it out over the next few years, these improvements, and financial obligations are necessary.
    • If these initial investments aren’t viable for your situation, it might be a good idea to look at other options to earn rent from your home, including adding roommates with whom you’re willing to share all the common spaces.

Whatever you decide, it’s important to be familiar with the rental market and regulations in both your local region and your neighborhood.

Windermere Community September 5, 2019

Windermere Teams Up with the Seahawks to #TackleHomelessness

Windermere is proud to partner with the Seattle Seahawks for the fourth season to help #TackleHomelessness. For every Seahawks home game defensive tackle, Windermere will donate $100 to Mary’s Place, whose mission is to help families on their journey out of homelessness. To date we’ve raised nearly $100,000 through our #TackleHomelessness campaign and we’re looking forward to raising even more for our friends at Mary’s Place!