Credit Scores Remain Central to Delaware Real Estate Dealings
If you’re a typical Delaware consumer, like most Delaware residents, it wasn’t too long ago that you were being constantly bombarded by offers to let you in on a secret: your credit score. The “free credit score” ads got a lot of responses, but lately, they’ve grown scarcer. I think I know why.
It used to be that thrift-minded people shied away from plastic because it made overspending too easy. Today, ubiquitous credit card bonus points and associated discounts and freebies make the opposite true. After all, taking a vacation without using at least some of your credit card airline “miles” or hotel “points” seems more careless than thrifty.
And the fact is, you don’t have to use the credit part of credit card purchases: if you’re careful, you can pay off the balances before interest starts to accrue. And there’s a major additional benefit to conscientious attention to of all your credit accounts— that is, the credit score dimension.
For many years, credit scores seemed a sort of hush-hush affair. That was before initiatives by the Consumer Financial Protection Bureau and the Fair Isaac Corp (FICO) changed the rules of the game, making it mandatory to allow free access to your credit scores. Even so, it was still a bit of a hassle to get to see them—and the “free” access was limited to once a year.
But that’s been changing. Today, many credit card accounts include free access to the FICO credit scores associated with them. If you use the card issuers’ online account systems, you’re usually just a mouse click away from your most recent score. Apparently, the banks behind the cards know it’s a good way to make online bill paying more attractive than snail mail—which is a profit saver for them. At last count, by April of last year more than 150 million accounts included the instant credit score feature.
What that means to Delaware real estate transactions is a solid positive. When Delaware consumers can keep a steady watch on their credit scores, they are much more likely to notice FICO mistakes or any of their own inadvertent slip-ups. The scores affect the interest rates associated with their credit card accounts—but they also heavily influence the offers they can expect from the mortgage underwriters.
- Written by Russell Stucki
Prudent Choices Underlie Delaware Rental Properties
Striving to become a prudent person is a laudable goal—one usually only achieved after impetuous youthful misadventures have taught the wisdom of prudence. Caution—particularly in financial matters—may seem to be synonymous with prudence—but they aren’t always the same thing. Especially when there are magicians at work.
An example of that can be found in the way most people think about Delaware rental properties. There’s no sleight-of-hand from the landlord’s point of view: few would argue with the proposition that rental properties are a prudent form of investment.
The now-you-see-it, now-you-don’t sorcery happens when the audience (in this case, renters) view the same proposition: buying a home instead of renting. From that perspective, the exact same prudent investment can seem to be transformed into a fearfully huge risk. Taking the plunge—buying a home—has become a dangerously formidable commitment. It would seem to be a more prudent course to put off that kind of years-long gamble. After all, who knows for sure what the future will bring? Signing on the dotted line for a 15- or 30-year Delaware home loan seems like a humongous step into the unknown.
This apparently prudent risk assessment is actually a conclusion that fails to see what’s happening behind the distracting illusion. At its root is a basic truth behind the rent or buy decision:
Unless you’re living with your parents, you’ll be paying off a mortgage—either way.
The choice comes down to paying for a landlord’s loan or paying for your own. If you take the mortgage yourself, you have to make the payments. If you rent from the landlord, you also have to make the payments—with the landlord acting as middleman.
As soon as you’ve peeked behind the curtain to acknowledge that fact, a couple of other notable backstage realities are likely to come into focus:
First, if you buy a home via a fixed-rate mortgage, you can plan on what your payments will cost—now and 15 or 30 years from now. It’s written in stone. On the other hand, if you rent, you won’t know what your rent payments will be a few years from now. The first choice is the one that creates predictability and stability: i.e., prudence.
Second, if you buy, eventually the loan payments will equal zero. If you rent—well, having seen behind the curtain, you know what happens eventually: i.e., more payments.
At least in the world of Delaware rental properties, there is a distinct difference between prudence and caution. In the rent-vs-buy calculus, it’s pretty clear which is which.
Once you have peeked behind the curtain, you may also conclude that it’s an even more prudent idea to become a landlord yourself. And right now, there are some excellent Delaware rental properties that could make that possible.
- Written by Russell Stucki
Delaware Rental Homes: To Pet or Not To Pet...
Last week’s 141st Westminster Dog Show TV ratings may not have gone through the woof—but for “Rumor,” the winning German Shepard, it was a wag-tastic finale. It brought to mind one of the foremost issues facing today’s Delaware rental homes landlords: Fido or No; Kitty or not. It can be something of a brow-wrinkler.
For sure, no matter what the ultimate decision, the owners of Delaware’s rental homes will remain on the upside in the tenant-landlord relationship. As landlords, they are in the happy position of receiving rents from their well-behaved tenants—even as they build equity in their rental properties. But one of the decisions that goes into that picture-perfect arrangement is the one about allowing or restricting pets.
A primary rule for Delaware rental home success is keeping the property rented. Vacancies cause divots in Delaware rental homes’ balance sheets—the antithesis of what rental homes ideally produce. And for each turnover, advertising, cleaning, and reconditioning expenses create new expense items. That’s where the pets/no pets decision weighs in.
The American Pet Products Association told us in 2012 that 39% of U.S. households owned at least one dog and that 33% owned at least one cat (there’s ample evidence that it’s the cats who actually own the households, but that’s another issue). But now comes evidence that those percentages may be severely underestimated.
In their “Animal House 2017” study dealing with remodeling, the National Association of Realtors® found that 81% of respondents say that animal-related considerations play a role when “deciding on their next living situation.”
Eighty-one percent!!! That’s 4 out of 5! If Delaware rental homes even come close to fitting that kind of profile, it means that landlords who choose a “no pets” strategy to protect their properties from all clawing digging, scratching and chewing might be severely limiting their potential renter pool—with bottom line repercussions. Since 89% of respondents with pets say they wouldn’t consider giving up their animals due to housing restrictions, that conclusion could be accurate.
Along those lines, the pro-animal sector is ready, willing and able to produce studies and statistics aimed at publicizing the financial benefits for owners of pets-allowed rental homes. Petfinder is one such site: when it tallies rent surcharges and shortened vacancy periods and subtracts average damage and insurance increases, it calculates a net benefit of more than $2,700 per year as a conservative estimate. I don’t know how conservative that figure truly is (most of the net is due to pet surcharges), but it could well be true that tenants in pet-friendly digs did remain in place more than twice as long (Petfinder’s calculation). Interestingly, it’s also noted that extended tenancy did not occur for tenants who kept pets illegally.
- Written by Russell Stucki
Delaware Packing and Moving: This, Too, Shall Pass
When you first contemplate packing and moving to or from Delaware, it’s advisable to take a deep breath first, then close your eyes and mentally recall the best, most positive moments from past moves.
Okay, if there aren’t any of those, try thinking of some bracing truism like “This, too, shall pass” or “The night is darkest just before the dawn.” Realistically, the packing and moving will be over before you know it. Those visions of jackknifed moving vans and your good china strewn across the Interstate…they’re NOT going to happen!
Not only that, but you can do some painless preparation for the move, whether or not you decide to go with one of Delaware’s professional movers. Here are some reminder do’s and don’ts. Let’s take the don’ts first:
- Don’t procrastinate if there is any possibility that you will be using professional movers. The best movers can be booked up months in advance, especially if you think you’ll be moving near the end of the month. Get on-site written estimates, of course.
- Don’t water plants for a couple of days before the move.
- Don’t buy just one black marker. You WILL set it down somewhere and lose it as soon as the packing gets ferocious (which is when you most need to mark the cartons with where they’re going).
…and my favorite:
- Don’t move boxes you haven’t opened since your last move!
- Take out the measuring tape and determine the dimensions of the destination areas meant to house your furniture. You can avoid going to the trouble and expense of moving furniture that’s too large to fit…(think of it as garage sale fodder).
- Start collecting cardboard boxes early. All sizes come in handy. There can’t be too many of the small boxes for fragile items: well bubble-wrapped, they’ll fit inside the larger ones.
- Leave folded clothing inside dresser drawers. You can move the drawers separately if they make the whole thing too heavy (professionals will just pick up the whole thing).
- Take your time when it comes to unpacking. This can actually be quite fun to do: to arrange things exactly as you want them to be in your new place! Remember these moments, so the next time, you’ll be able to close your eyes and mentally recall the best, most positive, etc.
- Written by Russell Stucki