Don't reduce your property insurance coverage to reflect lower home values. Because it costs more to rebuild than it does to start from scratch, the market value of a house is not a reliable indicator of the amount of insurance you need.
It may cost as much as 30% more to rebuild a house as opposed to building a new one. Market value is often influenced by factors that have nothing to do with the cost to rebuild--the quality of nearby schools, for example. Value is affected by the cost of the land on which the house sits. Typically, the building lot accounts for 25% of a home's value. Read your tax bill which usually separates the value of the land from the value of the house. You want to make sure, in the event of a fire, you will have enough coverage to REBUILD your house.
Make Dollars (and sense)
Investing in a Downturn!
5 or 10 years from now when housing prices are up smartly once more, we will look in the rear view mirror and realize that we have missed a golden age for real estate investments. If we are sitting on our down payment savings accounts for too long, we will kick ourselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime!
Meanwhile, first time buyers have the same advantages they have always had, which is that they do not have to sell their old place before buying a new one! The basics are back like spending no more than 28 percent of your pre tax income on mortgage payments, taxes, and insurance. You must hold yourself to this figure. Also don't wait til after November 30 or you will miss the $7500 federal tax credit for income-eligible first time buyers that acts like an interest free loan.
Real estate is a long term investment for us, and it truly is the best investment we have in our portfolio right now.
Call or email for additional information regarding these properties or selling your property. I am an expert on exhanges, investments, probates, bank owned, commercial, multi-family units, and land. 388 South Lake Avenue, Pasadena, CA 91101 Call: 626 8275151
