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How would you like to give yourself a 10% pay raise annually? 20%? All while controlling a saleable asset that’s historically been proven to be recession proof, and a hedge against inflation? It may not be as hard as you think! Let me show you how this works!

Some quick definitions:

Cash Flow: Total Monthly Income – Total Debt Service. ($1000 per month rent – $600 mortgage and $200 Utilities = $200 per month Cash Flow. Multiply by 12 for Yearly Cash Flow.)

Cash-on-Cash Return: Yearly Cash Flow/Total Cash Investment. (Property Cash Flows $3500 for the year divided by the $10,000 cash you have invested = 35% Cash-on-Cash Return!)

Capitalization Rate (Cap Rate): The Rate at which an investment property earns money. It is calculated by taking your Net Operating Income (NOI) divided by the Purchase Price. Example: A Property is purchased for $100,000. This property brings in $1200 per month in rent ($14,400 for the year.) It costs $325 per month to maintain, or $3900 for the year. The NOI is $875 ($1200 – $325) per month, or $10,500 for the year. $10,500/$100,000 = 10.5% Cap Rate.

Let’s say you find a 3 Bedroom, 2 Bathroom Single Family Residential property (the absolute most desirable!) that you would like to buy, and rent out. You buy this property for $50,000 and it rents for $650 per month. If you pay cash for this property, you’re looking at a 15.6% Cash-on-Cash Return! Compare this to the 1-2% (maybe?) interest you’re getting in your savings account! Of course, you will realize a much higher Cash-on-Cash Return, but less Cash Flow if you finance the property – it all depends on your available cash and ability to obtain financing.

How about Cap Rate? Our example property is renting for $650 per month, and costs $200 per month to maintain. Our NOI is $450 per month x 12 months = $5400. $5400/$50,000 = 10.8% Cap Rate. Overall, this is an excellent investment.

Lastly, when crunching the numbers for an investment property, buy only for Cash Flow – Appreciation is a bonus. That’s not to say there won’t be Appreciation. From 2000-2010 (which includes the worst Real Estate Bubble this country has ever seen) the median prices have actually gone up! If you have any other questions, or would like to get a list of potential investment properties available in your area, drop me a line at Garrow215@yahoo.com!

In times of economic downturn and uncertainty, some sellers resort to selling their home FSBO - For Sale By Owner. While it may make sense to try to save the commission, here are 5 reasons why, in my humble opinion, going FSBO may be costing you more than you think:

As a Seller, you are required by law to provide certain documentation and disclosures, and failure to do so could end up in litigation, therefore costing you more money.  When you list your home with a professional Real Estate Agent, it is our duty to not only provide you with the proper paperwork, but to manage the transaction from contract to close!
Since a majority of people have 9:00-5:00 Monday through Friday jobs, that means you, as the Seller, will have to be available on evenings and weekends to show your property, and have to hope the Buyer has the proper financial qualifications.  Since your time off is so precious, why not leave the odd hours showings to a Realtor?  Not only will you stay in control of your own schedule, but part of our jobs as Real Estate Professionals is to make sure every Buyer that comes through your home has been pre-qualified by a reputable lender.
Real Estate Professionals create more exposure.  What are you going to do to get your home sold?  Put a sign in the front yard?  Maybe put it on CraigsList?  How many signs are you going to put in the front yard? One?  If my office has 50 listings, that means 50 “For Sale” signs.  Who has a better chance of getting the phone to ring?
It’s hard to see the picture from inside the frame.  What I mean by that, is part of our job as Real Estate Professionals, is to be a 3rd party negotiator on your behalf.  We’re able to analyze the entire deal, and help counsel you to make the best possible decision. Let’s pretend you’re a FSBO who is asking $299,900 for your home, and a buyer walks in with a suitcase containing $250,000 cash.  Things tend to get a little dicey as a FSBO with a quarter of a million dollars cash on the table.  That leads us to last, but not least…
Sellers who list their home with a Professional Realtor average 20% more money on the sale of their home than when they list FSBO.  Wow.  What that means to you, is that for every $100,000 of home you sell, you stand to lose up to $20,000 because of the disadvantage of being a FSBO.  All for trying to save on the commission.

I hope I haven’t scared anybody too much, but these are 5 very real scenarios in the FSBO world. For the sake of your sanity, and finances, it’s worth interviewing a Real Estate Professional to assist you in the sale of your home. For more information, feel free to contact me personally at (518) 353-2230, or reach out on Facebook at www.facebook.com/GarrowRE . You can also log on to www.lavalleyrealestate.com or give our office a call at (518) 483-4163.

I was asked to right a blog about farming in the North Country and I didn’t know where to begin.
I typed farming in the North Country into my search box and boy was I surprised!

Do you know how many different kinds of farming we have in the North Country? I didn’t! I thought the North Country was made up of cows with milk/cheese products. You hear a lot about the maple syrup industry too. What you don’t hear a lot about are the organics or the grape farms for wine. That’s only the beginning, as there is a small pig farm right down the road. How about fruits and vegetables? Most people have their own little gardens in their yards but there are larger farms that produce for the markets. Soy beans have become a good sized industry here. Then there are apples, strawberries, blueberries, sheep, corn, hay, herbs, garlic, greens, honey, turkeys, chickens, eggs, cattle for beef, bison, oats, horses and so much more. They even have fish hatcheries also considered to be farming. How about that! I can almost bet you never thought about it….I never did.

Many people only dream of owning waterfront property never actually thinking it can become a reality. But it can if you research and plan wisely. Often people limit their thoughts to large popular lakes or tourist destinations and thus think the affordability is not possible. That is just one more amazing factor to living in the Adirondacks. There is water everywhere. Think about the benefits to living along a river or large stream. You have all the same perks along with a few advantages. Living on the river offers a nice quiet place to step out your front door and instantly connect with nature. You have instant access to the Adirondack wildlife and seasonal activities such as boating, fishing, hiking, snowshoeing, and cross country skiing. It’s like being on vacation every weekend!

If you do your homework, purchasing riverfront property is much more cost effective than a lakefront home. Often times choosing to buy riverfront property can be less costly both in the initial cost and for property taxes. If you are really into nature there are many ways to utilize the natural resources around you to build your home and make it eco-friendly and energy efficient. Also because riverfront tends not to be as desirable as lakefront, it is usually more peaceful and tranquil.

Purchasing waterfront property is not only and investment in your future. It is an investment in your mental and physical well being!

http://cordwoodconstruction.org/

http://www.motherearthnews.com/

http://www.dec.ny.gov/outdoor/55789.html

http://www.adirondacks.com/frankadkroute1.html

At a recent meeting with a diverse group of business people, we asked them to present us with a list of questions about real estate that would be of interest. Below is a sample of some of those...

Chad Colbert (financial advisor): What about outside improvements? How much does a new porch or deck, paved driveway or even type of roof affect home value?

LRE: Curb appeal is very important. Many times you only get one shot at a sale, so you want to make the best of it. From simple things like painting, raking, trimming hedges, having flowers - to bigger items such as the roof, the driveway, a window - they all matter. Start simple and see where it leads. And of course, we are always available to help guide.

David Charleson (Commercial Press): Are there any up-front costs for dealing with LaValley Real Estate when purchasing or selling a house or property?

LRE: No. We do not get paid until the property sells and closes. Some folks don't realize this, and will try to get us to provide all types of information so that they can then sell on their own. Please know, that our time and advice is our stock in trade.

Brent Hughes (NCC Systems): Does having a security system in your home make it more desireable or help the home sell easier?

LRE: Although it may not add a certain dollar value, security systems provide buyer comfort, which helps the property sell faster.

Jennifer McCluskey (photographer): What improvements are most or least to raise the price of your house when you sell?

LRE: As far as raising the price, it's the simple things that really matter. Remove clutter, give things a fresh coat of paint, and do simple clean up. Larger items would be handled on a case by case basis. As far as least likely to raise the value - the first thing that comes to mind are swimming pools. They simply do not add any real value. And, before you do anything, ask us and we'll be glad to provide our thoughts.

Thanks to these folks and the other members of the Business and Marketing group for providing questions. We enjoy sharing our experience, and we hope it helps people understand a little more about how the real estate industry works.