Top Tips When Buying Investment Property in Snohomish

Top Tips When Buying Investment Property in Snohomish

Have you been thinking of buying real state in Snohomish, Washington? If so, that’s a great decision! Snohomish is an ideal investment destination.

As a landlord in Snohomish, there is opportunity for wealth as you will be receiving passive income every month. However, in order to be successful, you have to do it right!

Many real estate investors are considering investing in Snohomish for various reasons. Here are a few:

  • There are plenty of desirable neighborhoods in the area, including Arlington, Everett, Stanwood, Marysville, and Stevens.
  • The interest rates are comparatively low compared to past years. According to multiple studies, interest rates for both 15- and 30-year fixed-rate mortgages are just slightly over 3%.
  • Real estate inventory is low. Basically, buying a home now means that it may be able to appreciate significantly in value over the next couple of years.
  • In the last year, the average home prices increased by a whopping 15% in some parts of the city. Zillow, an online real estate marketplace company, predicts a strong property market this year. They are expecting at least a 10% growth in home prices in the coming years.

Now that you know why investing in Snohomish is a great idea, we will give you our top tips on how to do so successfully!

Top Tips for Real Estate Investments in Snohomish, WA

1. Choose the Right Location

A good real estate investment location has the following:

  • High population density
  • Developments
  • Good walkability
  • Access to shopping malls and restaurants
  • Access to public transportation
  • Family-friendly events and communities
  • Access to medical care
  • Access to parks and leisure destinations
  • Great schools
  • Low crime rate

A location with these factors tends to have high demand for housing.

homes-neighborhood-snohomish

2. Understand the Costs Involved

As a new investor, understanding your investment costs upfront is key. There are more costs involved than you may realize.

For instance, one of the costs you’ll have to deal with is maintenance and repairs, such as:

  • Controlling a pest infestation
  • Fixing an electrical problem
  • Repairing a cracked foundation

You also want to ensure that any repairs or upgrades are done professionally. It’s best to hire experts than to do things on your own. More often than not, DIY projects diminish the value of a home.

3. Avoid Buying Fixer-Uppers

If you’re just starting out, consider buying a rent-ready property. Generally, a rent-ready property is just that – ready to rent to a qualified tenant. As such, you may be able to rent it out as quickly as you’re done closing on it.

With a rent-ready property, you won’t have to think about contractors, permits, or refinancing. It’ll be stress-free and less time-consuming.

4. Arrange for Financing

After a prospective buyer makes an offer, a seller will normally require them to provide their financing details. So, before you begin throwing offers around, know how you’re going to finance the purchase.

There are various financing options, such as conventional loans and refinancing options.

To find which loan best suits your requirements, speak to a professional.

financing rental property

5. Think Through your Decisions

There is no denying it – buying a property is a big decision.

Many people, especially newbies, tend to get influenced by factors other than location, price, and resale value. And more often than not, this leads to potentially costly mistakes.

As a real estate investor, your decisions should be based on your goals, risk appetite and needs from a return perspective.

6. Understand the Landlord-Tenant Laws in Washington

This is a big one!

All states, including Washington, have landlord-tenant laws in place. The laws define each party’s rights and responsibilities.

As a landlord, for instance, you have a responsibility to ensure your property meets all the basic safety, health and building codes at all times.

You also have a responsibility to treat all tenants equally and fairly. For instance, according to the Washington state Fair Housing rules, it’s illegal to discriminate against a tenant based on race, color, national origin, marital status and familial status.

Other laws to keep in mind include:

  • Security deposit laws
  • Mutual covenant of quiet enjoyment
  • Fair Credit Reporting Act
  • The Lead Disclosure Rule
  • Eviction Rules and Procedures

7. Hire a Professional Property Manager

Self-managing a rental property can be stressful, time-consuming and overwhelming.

It requires knowledge on how to market your property effectively, rent to the best tenant, collect rent efficiently and maintain your units properly.

That’s why hiring a comprehensive property management company may be a good idea. A management company can help you with all aspects of property management. That said, be sure to hire a company that has your best interests at heart.

At T-Square Properties, we do our very best to ensure our clients have successful real estate investments.

property-management-house

In Sum: Real Estate Investing Tips in Snohomish

Snohomish is a good real estate investment destination for many reasons. That said, there are various things you need to consider in order to be successful.

As an overview, here are our top tips for success:

  • Choose the right location
  • Understand the costs involved
  • Avoid buying fixer-uppers
  • Arrange for financing
  • Keep your emotions in check
  • Understand the landlord-tenant laws in Washington
  • Hire a professional property manager

For expert help, contact T-Square Properties. We’ll be happy to help!

Everything You Need to Know About the 1031 Exchange

Everything You Need to Know About the 1031 Exchange

Looking to sell your investment property in Seattle, Washington? You should consider making use of a 1031 exchange.

One famous quote repeated time and time again timelessly holds true: “There are only two things certain in life—death and taxes.” As a property owner, you can relate to this statement, paying taxes and fees on a periodic basis.

Selling your Seattle investment property as a property owner will rack up a combination of several state and federal taxes. However, one option exists whereby you can avoid capital gain taxes on your Seattle property.

This window of opportunity was granted to investment property owners by Section 1031 of the Internal Revenue Code (IRC). It allows proprietors of this class of property to defer taxes, given that certain provisions have been met. 1031 exchanges are also known as like-kind exchanges or starker exchanges.

Provisions and Conditions by the IRS

The proceeds of selling of the investment property must be reinvested in a similar class of property. A common question among property owners and developers is whether flipped properties meet this threshold.

The answer is no. The rules under section 1031 clearly prohibit the inclusion of properties bought for the purposes of resale. For such a property, you will have to meet the full state and federal taxes.

As stated above, a 1031 exchange is also known as a like-kind exchange. The term though needs some deeper interpretation. The definition of investment property has been expanded to involve properties that are being used for trade or other business needs.

That said, you can exchange an office building for a farm. Using the interpretation above, you can see that both properties are used for trade purposes. The term “like-kind” allows for a number of interesting combinations.

like kind properties

The benefits of the exchange do not apply to buyers and sellers of personal homes. Vacation homes are also included herein, since they are used for personal use.

The use of a property might be unique and not be mentioned in the provisions given above. We recommend that you consult a reputable tax specialist who can advise you accordingly.

The Types of 1031 Exchange

Simultaneous 1031 Exchange

This is one that occurs on the same day. The investor relinquishes his property and closes on the replacement property concurrently. Prior research had to be done on possible replacements.

Delayed 1031 Exchange

As a property owner, you would want your new property to have similar amenities or provide similar utility to the previous one, if not better. Once sold, the investor searches studiously for the replacement. It is the most common type.

Reverse 1031 Exchange

For this one, a bank or financial institution is involved. The property will be bought first, and the monies repaid after the transfer goes through. Investment properties typically have higher risk than normal and as a result, most institutions won’t touch such an option.

The Timing of the Exchange

After you have sold off your investment real estate, Section 1031 of the IRC gives you 45 calendar days to identify three possible replacement properties. It goes without saying that the replacement properties must be like-kind. The 45 days is also inclusive of weekends and holidays.

Failure to stick within the prescribed time limit means that your exchange will be disqualified. Once disqualified, the tax benefits will be declared null and void. Corresponding taxes, therefore, have to be paid.

void tax benefits

Once you have narrowed it down, the exchange must be completed either within 180 calendar days or before the due date for the tax year in which the previous property was sold; whichever comes earlier. The count of the 180 days starts from the day you transfer your property to the buyer.

The Role of a Qualified Intermediary

The IRS Rules necessitate that a 1031 exchange must be carried out with the help of a Qualified Intermediary (QI). Section 1031 specifies that a family member cannot serve as your QI and neither can someone who qualifies as your ‘agent.’ This includes your real estate agent, broker or attorney.

The QI plays a critical role in the exchange. It is the QI’s duty to hold the proceedings for the sale, purchase the replacement property and transfer the title to you. There are a number of legal complexities to be handled.

It is recommended to choose a professional Qualified Intermediary. Errors and omissions, whether in regard to the deadlines or other provisions, will result in payment of taxes to both the state and the county.

Boot

During the transfer of the like-kind property, the buyer may receive money or other receivables that are not like-kind in nature. Such additions are recognized and allowed for in a 1031 exchange. The technical term is ‘boot.’ Other sources of boot also include mortgage reduction, property tax proration and the use of sale proceeds for invalid closing costs.

the boot

It is only the property that is considered tax-free. The boot will automatically be taxed. Therefore, it is always recommended for the investor to trade up. Trading down will automatically result in certain receivables, negating the tax-free nature of the 1031 exchange.

Reporting

The 1031 exchange should go through successfully and as a property investor, you will have experienced no gains or losses. The last item to go through is the reporting of the exchange. You will require a Form 8824 for this.

If there is a boot involved, it will also need to be reported. Depending on the type of the boot, you will need a Form 8949, Form 4797 or Schedule D (Form 1040).

Conclusion: Everything You Need to Know About the 1031 Exchange

A number of real estate investors are making use of the 1031 exchange. Throughout the years, it has proved to be a highly efficient tool for legally deferring taxes.

If you are selling an investment property in Seattle, you may want to consider the advantages of a 1031 exchange. You can reach out to us at T-Square Properties, as we are experienced real estate providers who can help. Our expertise and experience may prove crucial as you traverse the technical, but profitable conditions of the exchange.

Reasons to Invest in Snohomish County Real Estate

Reasons to Invest in Snohomish County Real Estate

Snohomish County, with a population of 822,083, ranks as the third most populous county in the state of Washington. Its largest city is Everett, which also happens to be the county seat. Snohomish is part of the Seattle-Tacoma-Belleview metropolitan area.

Moreover, the real estate market in Snohomish County is currently sought-after. Among other things, the interest rates are low, properties are quickly appreciating in value, and there is low inventory.

If you are looking to invest in Snohomish real estate, now is the time. In this article, we’ll give you 5 reasons why you should invest in Snohomish County real estate.

Reason #1: Data shows that Snohomish County is a great place in which to invest

The following is some data that shows why Snohomish County is a good place to invest in right now:

  • Home prices are on an upward trajectory. Albeit slowly, home prices are rising. The slow rate can be attributed to the current COVID-19 pandemic that has taken a toll on most economies in the country. That said, experts are all optimistic of a quick rebound sometime in the future.
  • Investing in Snohomish real estate can help you enjoy a myriad of tax benefits. Even with the recent changes to the tax laws, tax rates still tend to favor homeowners, and owning a home can be a good tax shelter.
  • Real estate inventory is still low. Currently, there aren’t many adequate homes to go around right now. This low supply means higher prices. So, if you are lucky to buy a home right now, it means that it may appreciate significantly in value over the next couple of years.

low property inventory

  • The interest rates are low compared to what they were a few years ago. According to various studies, interest rates are just slightly over 3 percent for both 15-year- and 30-year fixed-rate mortgages. So, again, this is a good time to invest in Snohomish County real estate.
  • There are plenty of desirable neighborhoods, especially if you are looking to buy a rental property. The neighborhoods include Arlington, Stanwood, Everett, Lake Stevens, and Marysville. Other areas worth considering include Redmond, Edmonds, Bellevue, and Sammamish.

According to data, if you are thinking about real estate investing in Washington State, you should start by checking out Snohomish County.

Reason #2: You may be able to diversify your income

What would you do if, for whatever reason, you lost your current job? For many, this would mean a heavy financial challenge. You may find yourself even struggling to pay your bills and meet basic needs.

That’s why income diversification is key. You’ll be able to continue living your life even when you lose an income stream.

Investing in real estate can allow you to earn passive income for many years to come. Not only will you be able to make more money, but you’ll also have peace of mind knowing that you have stable finances.

Reason #3: You may become exposed to new networking opportunities

You have probably heard it before – “it’s not what you know, it’s who you know.” This is true when it comes to the world of business.

real estate networking

When you become a landlord, you’ll be able to meet all kinds of people from bankers to tenants to real estate agents. These professional connections will benefit you.

Reason #4: You can become fully self-employed

Are you thinking of becoming a landlord so you can quit your day job? Self-employment gives one the freedom to become their own boss. Plus, owning a rental property can enable you to achieve just that.

When you become a landlord, you get to call the shots in every aspect of your rental investment. From the tenants you choose to the vendors and contractors you hire, you’ll be the one who makes all the decisions.

Reason #5: A rental property tends to be a stable investment

Even in a struggling economy, people will need a home. When times get tough, taking a mortgage to buy a home will be the last thing on their minds. So, they are still going to be those who rent.

That said, a rental investment is not a foolproof way to gain wealth. To succeed, you’ll need to understand the ins and outs of how the business works. Among other things, you’ll need to know:

How to quickly fill your vacant units

You see, a vacant unit is a money pit. Besides not expecting an income at the end of the month, you’ll need to look for money elsewhere to meet other expenses. Such expenses include property taxes and mortgage repayments.

How to screen prospective tenants

No two tenants are created the same. Some are every Snohomish County landlord’s dream while others are the exact opposite.

tenant screening

Having a proper screening process can help you avoid renting to potential problem tenants.

How to set the right rent amount

Yes, maximizing your income may be your ultimate goal. However, this doesn’t mean you should overcharge your tenants, as that may make your property less appealing to prospects. As a novice landlord, it’d be in your best interest to hire a professional who can properly decide on a rental rate.

How to respond to tenant maintenance requests

This is a big one; it can make or break your chances of succeeding in the Snohomish County real estate market. Making sure your tenants are always listened to, especially regarding requests for repair or maintenance, goes a long way.

If you don’t have experience doing any of these things, hiring a professional may be in your best interest. A professional property management company will help you in all management aspects. From finding desirable tenants to collecting rent to responding to tenant maintenance requests, you won’t have to worry about a thing.

Just make sure to hire the right property management company!

 

There you have it—5 solid reasons why you should invest in Snohomish County real estate. If you are a first-time investor, hiring a professional may be in your best interest. Our team at T-Square Properties, for example, will help you invest in the right property and avoid making potentially costly pitfalls.

Best Areas to Invest in Snohomish County

Best Areas to Invest in Snohomish County

Are you looking to invest in Snohomish County real estate?

Real estate investments carry tremendous potential in terms of sustainable wealth creation and monthly passive income. However, this can fall through if you don’t pick a great area to invest in.

Snohomish County is a high-potential area for property investments. Regardless if you are just starting to build your portfolio or you already have extensive experience, this part of the Pacific Northwest is worth consideration.

There are many great areas to invest in Snohomish County. In the following paragraphs, we here at T-Square Properties will list just some of these areas. Additionally, you’ll learn about why it’s a good idea to put your investment money in Everett and its surrounding areas.

Snohomish County Real Estate Market

Before going over the best areas for property investments, we’ll do a quick rundown of the main reasons for making investments in Snohomish County.

The industrial developments and economy of Snohomish County are financially healthy. For instance, the Boeing 787 Dreamliner, together with other models, is constructed in a gigantic aircraft factory in Everett. Thanks to its economic strength, Snohomish County home values have been going up significantly.

Everett, WA is the largest city in Snohomish County. The area has top-class educational opportunities, outdoor recreation trails, and over thirty city parks. Plus, you should consider its proximity to Seattle; it’s only 25 miles north of this huge metro area.

Sharing a border with King County means you can reap the benefits of being close to a major metro area: Seattle-Tacoma-Bellevue. The local job market is strong and the tech jobs attract talent from across the county.

 

snohomish county property data

Where to Invest in Snohomish County

Every county comes with good and bad areas for property investments. Since Snohomish County carries an overall strong potential, you should focus on what type of renters you’re trying to get.

After you have locked in your target group, it’s time to reflect on the unique conditions of the communities available to you. We are going to make this task easier by listing some of the top investor picks in the County.

Arlington

Arlington is a superb community in the Seattle Metro Area. It’s around 40 miles north of the City. Plenty of employment options exist for locals because the aviation industry generates a steady need for workers.

However, people living in Arlington aren’t necessarily working in the same town. For instance, some of the residents work in Seattle and use Arlington as their home base to beat Seattle’s astronomical rent prices.

The local housing market has shown a steady appreciation over the years. When you look at the county averages, Arlington offers comparatively lower-than-average home prices. That economic situation may offer a significant return on investment from an investment point of view.

Stanwood

The bedroom community of Stanwood is another popular option among people who work in Seattle but choose a cheaper city when it comes to housing. Compared to Seattle, the home prices are considerably low.

snohomish county home values

Similar to Arlington, the home values have mostly appreciated over the years. Commuting to Seattle takes more time, though; Stanwood is located around 50 miles north of the largest city in Washington State.

If you are looking to invest in a city that is on the smaller side, then Stanwood may be a good bet. The population is about 7,000 people. Amtrak’s Cascades service provides a rail link between Downtown Stanwood, Seattle, and Vancouver.

Everett

The largest city in the County is Everett, and it carries a huge property investment potential. Many of the Snohomish County residents regard Everett as the county’s main source of employment.

Everett has a wide variety of neighborhoods to choose from. Some of these communities are mainly residential, while others feature an attractive mix of commercial and residential estates. Here are some of the notable Everett, WA areas to invest in:

  • Northwest Everett: This neighborhood includes the Everett Community College Campus, making it a great pick for student-oriented rental property investments. The area covers a historic district as well.
  • Bayside: As one of the most important neighborhoods in Everett, this area covers spans most of the downtown. Both the Naval Station Everett and the Port of Everett are located at Bayside.
  • Riverside: An interesting area if you are looking to make a rental property investment in Everett. This particular neighborhood has mostly residential areas located close to downtown and features a historic district as well.

For these reasons, owning a rental property in Everett can be a great investment.

Lake Stevens

snohomish housing market

When you look at a map, it’s not hard to see why Lake Stevens attracts quite a lot of new residents. First of all, it has a great location with an 8-mile commute to Everett and a 35-mile drive to Seattle.

If someone is looking to enjoy the proximity to large cities while retaining a chance to enjoy the great outdoors, Lake Stevens is a perfect choice. There are many trails and parks in and around this city.

Similar to other Snohomish County areas, Lake Stevens has seen home appreciation rates growing over the years. As an investor, it’s a good idea to pay close attention to this city as it fits the bill in many important aspects.

Marysville

Designated as part of the Seattle Metro Area, Marysville is a superb location close to Everett and Seattle. The population of this city saw a five-fold growth between the 1980s and 2000s. The 2020s are bound to continue solid growth as more people realize the city’s potential.

The recreational opportunities in the City of Marysville are great. Its residents can enjoy 35 public parks, nature preserves, playgrounds, and other outdoor areas within city limits.

Other Great Areas To Consider

This list is not all inclusive and the best areas can change with time. For the best information, give us a call at 425-485-1800. Some other areas worth considering are Bellevue, Edmonds, Redmond, Sammamish, and more.

In a Nutshell: Best Cities to Invest in Snohomish County Real Estate

Snohomish County real estate holds solid investment potential for anyone looking to get outstanding long-term value from their initial purchase. This list covered just some of the great areas in Snohomish County for real estate investing, including Lake Stevens, Everett, and Arlington.

For tips on how to successfully invest in Snohomish County, read our post here!

Top 10 Amenities Renters in Snohomish County Love

Top 10 Amenities Renters in Snohomish County Love

As a property owner, you have many responsibilities, but one of your most important tasks is to keep your tenants happy by fulfilling all their rental property wants and needs.

To be a successful property owner, you must provide your tenants with accessible amenities. Not only will having amenities attract renters, but it’ll also ensure that these renters continue to renew their lease year after year. This means you’ll have consistent rental income!

In this article, we’ve compiled a list of the top amenities that tenants in Snohomish County appreciate! This will help your property stand out from the rest. So, let’s dive right in!

1. Flexible Pet Policies

Did you know that, according to the National Pet Owners Survey, 65% of people have a pet?
That’s why having a flexible pet policy can be very beneficial in creating a larger pool of
prospective renters.

Renters in Snohomish County appreciate property owners who allow pets in their unit because
pets act as emotional support for many people, and they alleviate stress and ease loneliness.
Although allowing pets in a unit may increase the chances of property damage, there are rules
you can put in place to mitigate those risks, such as placing limits on the types of breeds and
sizes allowed.

There are even pet screening companies who will verify the pet is up-to-date on all
shots, and does not have vicious tendencies.

pets in property

2. Outdoor Spaces

Although renters appreciate indoor amenities, like having access to a pool or a fitness room, many renters also enjoy having access to outdoor spaces. For examples, renters like:

  • a fenced-in yard
  • a patio
  • a deck
  • a balcony

Not only does having an outdoor space allow renters to get some fresh air, but it’s also great for families with children!

3. Walkability

Most tenants would agree that having a property in a location with a high Walk Score is a great location!

If you’re property is located near schools, parks, restaurants and shops, then it’s likely going to be appreciated by most renters in Snohomish County.

If your property’s Walk Score is between 50 and 100, it means that there are some amenities within walking distance. However, if your property scores between 0 and 50, your renters will likely need to own a vehicle or rely on public transportation.

4. Parking

Renters who own a car will absolutely appreciate having a place to park their vehicle. So, if you own a single-family home with a garage or driveway, you should definitely highlight that feature in your rental listing!

rental home driveway and garage

5. Extra Storage Space

Does your rental have walk-in closets or an extra storage room? If so, this will be very appealing to prospective renters! This is especially true if your target market is families.

If your property doesn’t have much storage, you can create some extra space by adding shelves and closets to various rooms, such as the kitchen, bathroom and bedrooms.

6. Washer/Dryer

As a landlord, you aren’t required to offer a washer and dryer. That said, having them in your unit makes your property that much more desirable.

Sometimes, renter may have their own washer and dryer. In that case, as long as you have a laundry room with a place to connect the washer and dryer that would be perfect!

7. Security

All tenants will prioritize safety. If you focus on ensuring your Snohomish County property is safe and secure, your tenants will definitely notice your efforts and appreciate it.

Here are some things you can do to your units to make them more secure:

  • Sensors: These will help deter criminals. It’s best to place these sensors in dimly-lit outdoor areas.
  • Security camera: By using a security camera, you will be able to see who is near or around the property and record their appearance.
  • Solid locks: Deadbolt locks and heavy-duty locks are effective ways to discourage burglars from entering the property.

8. A Well-Maintained Unit

As the rental owner, you must ensure that maintenance and repairs are taken care of. So, when you’re showing a unit to a prospective tenant, ensure that it looks habitable and clean.

habitable rental home

9. Offer a “Smart” Home

Having smart features in your rental home will be a bonus for many renters, especially millennial renters and those who enjoy technology.

Here are some example of how you can make your home a “smart” one:

  • Offer temperature controls – this means that before the tenant comes home, the house can be heated up for them
  • Offer a spot to plug in an electric car – if the renter has an electric car, this would be important
  • Install lights that are automatic – these lights will open when you enter the room

10. Air Conditioning / Heating

Snohomish County tenants will enjoy central air conditioning for the hot summer days, and may need a centralized heater for the potentially cold winter days.

Here are some benefits of providing a centralized air and heating:

  • The heat or cold air will circulate around the entire house more quickly
  • The system’s operations are quiet since they have built-in vents

Although offering this amenity can be initially costly, it will benefit you in the long-run because tenants will be very pleased with it.

amenities in rental units

Bottom Line

When you deliver amenities that your Snohomish County tenants love, filling vacancies will be quicker. Not to mention, once you attract those tenants, they’ll be likely to stay long-term.

If you have further questions or concerns, or would like to work with a property manager, contact T-Square Properties today.

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