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A Military Relocation Guide to the Sault Ste. Marie Housing Market

Has your family just received PCS orders to Sault Ste. Marie, Michigan? Or do you live here already, and are struggling to find a place to live? Perhaps you have a home and are looking to sell it before you PCS. Regardless of your situation, a growing home shortage has made it increasingly difficult to navigate the housing market in Sault Ste. Marie. This article highlights key aspects of the housing market to help you identify your options to rent, buy, or sell your home.

CG Housing

A family’s housing eligibility is determined by several factors, according to the CG Housing Manual. They include number of dependents, their gender, and age. For more information, email CS1 Rice at Ronald.D.Rice@uscg.mil or contact CG Housing directly at 906-635-3206. Securing a home in CG housing can be difficult if you arrive when few units are readily available. Even if units are available, a majority of the homes are small, which can be especially challenging for larger families who need more space. One alternative is the rental market, which in Sault Ste. Marie, is extremely scarce, in both quality and number. Therefore, I highly recommend using a professional to guide you through the process of finding a reliable home. To see what is currently available, email or call Woodside Rentals at 906-495-5166, 2woodsiderenatals@gmail.com for further guidance. Another option is to purchase a home, but that takes thoughtful consideration of the current housing market, especially because it’s likely you will resell it in 3-4 years’ time. Understanding how the local market works can increase that chances that you will profit from the sale.

Your Home as an Investment

Like rentals, housing inventory for home sales is also low, but buyers are aplenty. This and other factors have driven up the cost of housing, albeit the average price of a home is still affordable, around $117,000. Although a majority of homes sold in 2019 ranged between $120,000-140,000, a growing percentage of homes are being purchased at the $90,000-100,000 mark. Why does that matter? Knowing what a majority of buyers can afford may determine how quickly your home sells, and when you’re preparing to uproot your family yet again, it’s a huge relief to know that the only mortgage you have to worry about is the one you’ll acquire at your next station. Later, I’ll talk about what you can do if you choose to rent out your home instead of sell it. Although the housing market is scarce, it can still become diluted if the supply of homes at one price point goes up considerably, which tends to occur in the warmer months. This is also the time when Coast Guard families are transferring to new stations, so ensuring that your home is competitive as well as affordable can impact how quickly it sells. One way to do this is to make cost-effective upgrades to areas of the home that matter most to buyers, such as the kitchen and bathroom. Not only will they attract more buyers, but making upgrades can potentially raise the value of the property. To increase your chances of making a profit, purchase a home between $90,000-140,000, the lower you buy on that spectrum the better. Then make key upgrades to the areas mentioned previously, and force some appreciation to the home’s value. Annual appreciation will only take you so far because you won’t be here long enough to reap the benefits, and in the Sault, that rate is about 1-2%, but those percentages go up considerably through forced appreciation.

Renting out Your Home

Perhaps you have every intention of renting out your home once you leave Sault Ste. Marie. If so, there is no shortage of tenants – from LSSU students to military families to temporary workers, many will be seeking rental homes. And that demographic is speculated to expand as labor opportunities are scheduled to get underway for the Soo Locks Project. When or if that occurs, an influx of workers could cause an even greater demand for rental properties. That being said, housing tenants can be a costly venture to up-keep. I highly recommend utilizing a property manager, especially if you can’t physically be here to care for the property yourself. Depending on the state, property managers usually charge a fee that is around 10% of the rent. Again, reach out to Woodside Rentals for more information: 906-495-5166 or 2woodsiderenatals@gmail.com.

Choose a Trusted Realtor

Whatever decision you make, I highly suggest choosing a property manager or Realtor
who acts on your behalf to accomplish your goals. Wanting the best for my family pushed me to study and understand real estate at a deep level. I realized the right strategies gave us more than a safe and secure home… it gave us an asset with a solid plan for our future. I want other Coast Guard families to benefit from my unique perspective as well. That is why I always provide clients with a look at the big picture. That way, you can identify all your options and together, we create a plan that works for you. For more information, please visit my group Your Home Is Here! on Facebook or contact me by email or phone, laurela@remax.net
915-491-6910

4 Must-haves of a Great Realtor

The internet has given home buyers so many options to find a real estate agent, but without knowing what qualities to look for, it can be difficult to ride the wave of information overload. And if you’ve just received orders and are set to PCS, it’s likely that finding a home is only one of many things on your to-do list.This article highlights 4 qualities to help you quickly identify the right Realtor who stands out from all the rest. Find an agent who represents you, has the heart of a teacher, devises a unique strategy designed to meet your goals, and if possible, is a fellow Coastie.

I wrote this article before social distancing guidelines were put in place, but the tips discussed are still important, now more than ever. It’s especially crucial to find a Realtor who can fulfill the roles laid out below. It will take a creative Realtor to guide you through the challenges we currently face as a nation. 

  1. Representative 

Navigating the ins and outs of a new community is a unique challenge that most Coasties are familiar with. But to be truly successful, especially in a novel housing market, it’s crucial to partner with a Realtor who represents you fully. Choose an agent who is accessible and attentive to answer your questions and address your concerns. An agent can’t truly understand your needs unless they take the time to listen. For many Coasties, purchasing sight-unseen is the only option. A representative Realtor is your eyes and ear who utilizes not just pictures, but virtual walkthroughs to give you a more realistic layout and condition of the home (digital marketing is quickly evolving and differs from city to city, so ask your agent what virtual showing options are available). If you have family and friends in the area, a representative Realtor could encourage them to come along and offer further feedback during video tours. What if you’re moving to a community with no connections? Reach out to your unit’s Housing Office for guidance. In several of my showings, I’ve invited the Local Housing Representative to virtual tours, and buyers were highly satisfied with his input. Once you’ve found the right home, your representative Realtor should attend inspections and re-inspections alongside you or on your behalf if you can’t physically be there. A representative Realtor makes every effort with every resource to give you every bit of confidence, because you need to be assured that you’re making a wise decision. 

  1. Teacher 

The road to closing takes many twists and turns before getting there, so it’s little wonder why buying a home can be stressful. Find a Realtor with a heart of a teacher who breaks down the process into clear and manageable steps, so you feel confident about your purchase. As excellent problem solvers, teacher-oriented agents help you address military-specific challenges: they keep you informed of VA home loan policy changes, connect you with local VA loan specialists, and team with the Local Housing Representative to help you weigh the pros and cons of buying in that market, just to name a few. The Coast Guard moves us often, so it’s likely you’ll buy several homes while you and/or your spouse is in the military. Therefore, it’s essential to find an agent who ensures you can apply a deep understanding about the home-buying process to future purchases. 

  1. Strategic 

Studies have shown that owning a home is a top priority for a majority of military families. It’s necessary to find a Realtor who will help you find the right home that meets your goals. Your home is more than a place to hang your coat – it’s an asset designed to meet long term goals like paying for your child’s college or killing debt. For most of us Coasties, the main goal is to resell our home in 3-4 years time when we PCS to a new station. So find a Realtor who will help you devise a plan that increases your ability to resell at a profit. Although this will be unique to you, a strategic Realtor tries to negotiate up to 10 % off a home’s list price, even during a seller’s market. How that’s accomplished will vary according to the agent, but here are a few things to ask: 

  • Does their market analysis consider when the home was purchased, and for how much? 
  • How much were buyers willing to pay for homes that compare to yours in the last 6-8 months? 
  • What is the home’s assessed value? 

A compilation of these data will determine an appropriate starting point for negotiations within 10% of list price. Negotiating the price is key because buying under market value forces equity from day one. Additional appreciation will come from what buyers and sellers are doing in the housing market, both locally and nationwide. Furthermore, you can force appreciation if you make modest upgrades in the right areas of your home. In the end, it literally pays to find a strategic Realtor from the start.

  1. Fellow Coastie 

The right Realtor is the one who faces the same frustrations, fears, and challenges that you do. Coastie Realtors must weather the storm of change and uproot their family every few years to seek housing in another community. We fully empathize with what you’re going through and are able to combine the expertise with experience to bring you home. When it’s time to PCS, connect with other Coast Guard families on social media groups to find a Coastie Realtor in your new community; satisfied buyers can provide referrals to start your search. For Coast Guard families, the meaning of home isn’t just a place, it’s a plan for the future, and we follow the same plan.

VA Funding Fee – Pay it Wisely

If you plan to purchase a home with a VA loan, you won’t have to make a down payment, but you will be required to pay a funding fee. The funding fee may be waived if you meet certain qualifications, including but not limited to having a 10% or more service-related disability. Many purchasers choose to roll the funding fee into their loan. But is that the best option? It might make more sense to pay the fee up front at closing. How much you pay for a home, it’s appreciation rate, and how long you intend to own the home can help you determine

Sales Price

Depending on how the local housing market is performing in your area, you may be able to purchase a home at below market value. It’s common knowledge that if you buy a home at a discount, you have in-built equity at the time of purchase. The greater the gap between what you pay for a home and what the market says it’s worth, the more room you have in which to roll the funding fee into your loan without exceeding the home’s market value. For example, if you pay list price for a home costing $100,000, but then roll into your loan a funding fee at a rate of 3.6% or $3600, its cost will have surpassed the market value, which will make it difficult for you to resell it at a profit in 3-4 years’ time. But were you to pay for that same home at 10% below market or retail price, your overall loan could total only $93,600, even after you rolled the funding fee into its cost. You now have equity at the start with $3600 on hand to force even more appreciation through upgrades. Even if you sold it tomorrow, given those factors, you could still turn a profit.

*Keep in mind, your funding fee will vary, depending on whether you’ve utilized a VA loan in the past or are a first-time home buyer, as well as if you intend to put money down. For more information about the specific fee you would be charged, refer to the table at the end of this article.

Appreciation

Regardless of how the housing market is doing where you live, if you can buy your home below market value and make upgrades, your chances are higher that you can turn a profit when you sell it. This is called forced appreciation. It’s especially helpful to utilize as a military member, because your time at any given station is so limited, so leverage every bit of it effectively. Unless you plan to buy and hold your home for many years, which in that case depends on a home’s appreciation over time, you’re almost fully reliant on forced appreciation to maximize profits at the time of sale.

Time

Upgrading your home is the easiest way to increase its value because you don’t have to wait years for the home to naturally appreciate. You can make modest upgrades to your property which can force appreciation almost immediately. Upgrade the areas of the home that most buyers expect, for example like the kitchen and bathroom, and increase your ability to recoup around 80% of the cost when you go to sell it.  As a result, you can further strengthen your ability to resell at a profit in a short amount of time. And should the local housing market boom, you will gain a profit windfall from both forced and annual appreciation.

The VA loan is arguably one of the greatest benefits afforded military members and their families, and when used effectively can have profound impacts on financial future. The funding fee might be considered a roadblock to building your asset unless you know how to pay it wisely. By considering how to make use of price, appreciation, and time, you greatly increase the likelihood that your home will be more than a home; it will truly be an investment. With the right strategy the old adage, buy low sell high, can apply even to us in the military.

For more information about VA loans and military real estate visit our Facebook Page
YOUR HOME IS HERE