The Northwest MLS publishes a video snapshot each month highlighting buying and selling statistics in Washington State. Watch the video to get a quick look at median sales prices, total sales, current inventory and how these statistics compare to last year.
What's Up With Our Housing?
WHAT’S UP WITH OUR HOUSING?
THE CONTEXT
Bellingham, Washington is in a housing crisis and affordable homes keep getting further and further out of reach. Washington State is working to combat this and promote condo development. The Association of Washington Cities has the details on what sort of action the state is taking in supporting these housing types.
THE STORY
For the past 10 years, very few condos have been built in Whatcom County. Condos are a great product to build that targets the new home buyer, and works well in a community that needs diversity in housing styles.
SO WHAT?
If you are looking for affordable housing, you may be in luck! More affordable inventory will be hitting the market soon. If you own rentals, we don’t anticipate this impacting the core rental market and here’s why: most of the multi-family zoning and growth is in North Bellingham in the Cordata and Bakerview communities. The majority of the multi-family projects permitted in 2018 and 2019 are multi-family buildings for lease.
So, there will be a shift from lease to condo projects. While more people will have opportunities to purchase affordable housing, fewer rental units will be built.
NEW STR REGULATIONS
THE CONTEXT
STRs (Short Term Rentals) are a popular hospitality type in Bellingham as our community’s reputation continues to establish itself as a hub for adventure. Platforms such as Airbnb and VRBO have created opportunities for property owners to host guests for under 30 days in a manner that many prefer over the classic hotel experience.
THE STORY
The City of Bellingham has produced a new series of regulations around STRs for two purposes: balancing economic opportunities with our lack of housing, and rights and safety of guests and neighbors. The cliff notes are this; you must live in your residence at least 270 out of the year, and cannot rent it out for more than 95 days out of the year. However, there is an exception – if you live in an Urban Village or Commercial area, the new regulations do not apply.
SO WHAT?
In many cities, entrepreneurs have acquired properties purely for the sake of renting them out to traveling guests. While this provides a unique economic opportunity and experience for the guests, it does have an impact on housing supply. We’d be curious to hear what you think about the new regulations on Short Term Rentals in Bellingham. Do these regulations impact your investments? Click the link below to let us know.
From your friends –
Didn't Win the Powerball?
Author: Erika Buse
The chances of winning the $759 million Powerball were approximately one in 290 million. you're more likely to get struck by lightning, attacked by a shark, and hit a hole-in-one all on the same day. So if you played and lost, it's probably not a huge surprise. If you're looking for more reliable ways to build wealth, consider investing in real estate and generating some passive income. The Bellingham rental market over the past two decades has been robust, with residential rents increasing 9 % since last year. (According to Zillow).
Larry Simpkins, who has been rental owner for over 30 years says, “Being a rental owner has been a profitable endeavor for us over the years. Using the rental income to pay for the mortgages can be a smart business plan. Owning rentals is not a get rich quick thing but for the right individuals it is a slow and steady way of building financial security”.
Owning rentals is not as cumbersome as some people may think; as you can hire a property management company for less than 6 percent of the yearly income. Not only are you generating monthly cash flow, but Uncle Sam allows you to take advantage of depreciation which has a significant positive impact on your Internal Rate of Return. Similar to owning stocks, investing in rentals involves a certain level of risk. Understanding the expenses and factoring in potential vacancies is critical to protecting your downside. Not into spreadsheets and calculating deprecation or the IRR? No problem, call us for a sample of our rental income worksheets. These worksheets help us identify good potential buys.
Rentals can also be a good option for folks who are willing to owner occupy. On both conventional Fannie Mae loans and loans backed by the Federal Housing Administration, a portion of the anticipated rental income can be added onto the borrower’s income at application, which helps people qualify for more house than they normally would. The loans are available for owner-occupied properties with 4 units or less.
Investing in income producing real estate is a great way to generate passive income and diversify your investment portfolio. Bonus point: When you invest in real estate, you are buying physical land or property, there is a certain level of security when you can physically see your investment in the ground. Feel free to call us to chat about entering the rental market. *If you are comfortable relying on Powerball to come through for retirement please disregard the above article.