Del Coronado Realty Blog

 

Sept. 19, 2017

San Diego Luxury Rent vs. Buy Report

By Jennifer Riner, Trulia

 

The question of whether to buy or rent your next home is a convoluted one. Clearly there are hurdles to homeownership, notably saving up for a down payment and getting your credit in order. However, the benefits are usually well worth the time and effort. Aside from building equity, the average homeowner in the U.S. spends less per month compared to renters in the same area. Part of the financial advantage of homeownership comes from low interest rates, but also stems from high rent prices. Even in popular markets like Coronado and greater San Diego, homeowners realize considerable monthly savings.
Although home values and interest rates are steadily rising, Trulia’s recent rent vs. buy report revealed that buying still beats renting in most U.S. metros areas. This past spring, the median rent price in San Diego was $2,500 per month while the median home value was $528,318, allowing buyers to save 25.8 percent over renters.

To get a better idea of how much you could potentially save by buying, see how the rent vs. buy calculations play out in various part of the San Diego metropolitan market, including Point Loma, Coronado and Imperial Beach. All percentages are calculated using recent home prices, rent rates and a 30-year fixed mortgage interest rate of 4.35 percent.

Point Loma
With a median rent price of $5,125 per month, renting in Point Loma is costly. However, if you were to purchase a median-priced home for sale in Point Loma for $1 million, you could theoretically save 31 percent in total monthly housing costs. When averaged out over time, the costs of renting in Point Loma are less than $5,000 per month, which includes fees such as the rent, insurance and refundable security deposit. Meanwhile, the total costs of owning a home in Point Loma come to $3,422 per month when the purchase price, closing costs, taxes and deductions average out over time.


Coronado
Coronado homebuyers save around eight percent compared to renters. The current median monthly rent is $5,500 per month, which averages out to $5,295 per month – all costs above considered. Meanwhile, the median home price is $1,430,000, which costs $4,854 each month when averaged out over time. Keep in mind, this assumes you live in the home for at least seven years and have an income tax rate of 25 percent. It is even cheaper to buy than rent for individuals in a higher tax bracket. Homebuyers with a 35 percent tax rate experience a 16 percent savings.

Imperial Beach
Even homes in Imperial Beach at a median list price of $555,000 save buyers substantially. With that price point in mind, buying in Imperial Beach is 20 percent less expensive compared to renting a mid-range apartment at a rate of $2,500 per month. When totaled and averaged, the long-term costs of renting an apartment in Imperial Beach equal $2,118 each month while the costs of homeownership are an affordable $1,524 per month.

Owning versus renting is the best choice even in some of San Diego’s most luxurious areas. If you are in the process of buying a home stay abreast of interest rates and how they affect your
budget with a mortgage rate calculator. If you are thinking about selling, see how much your home could fetch under current market conditions with our free San Diego property value report.

Posted in Buying, Investments, Selling
July 2, 2017

A Guide to Life Planning for New Parents

 

 

 

One thing they don’t tell you when you become a parent for the first time is the anxiety you suddenly will feel about your financial future. Until now, you knew that you and your partner could fend for yourselves – adding a tiny human to the mix complicates matters and makes you feel as though you are completely unprepared and ignorant about retirement plans, college tuition savings plans, life insurance policies, and on and on. Rather than stress and cry more than your newborn, you need to create a life plan so you can create your life goals and start working to achieve them.

 

Understand What a Life Plan is All About

 

A life plan goes beyond a traditional retirement savings account or meetings with a financial advisor. When you create a life plan, you take stock of your current situation, give yourself an honest evaluation of your financial, emotional, and physical health, and then describe your ideal life. This reflection time will give you a handle on where you are now and where you want to be so that when you do meet with a financial advisor, you can articulate your financial situation and future goals. Your financial advisor will then be able to help you create short-term goals that will put you on the path to meeting your life goals.

 

Whether or not you meet with a financial advisor, you should take this time to reflect on what changes you may need to make in the near or distant future. Adding a child to the mix is a life-changing decision, but in doing so you may have to make some big financial decisions too. What is the best budget-friendly child care in your area? Will a car seat fit safely in your small car? What about location? Your current one-bedroom starter home may be situated near all the best amenities, but it might not be the ideal situation for expanding your family. Meet with a realtor to check out home prices in your area to avoid a cramped and stressful situation when your new family member arrives. Save for these expenses ahead of time to avoid an “oh no” moment.

 

As a new parent, you may feel overwhelmed thinking about your ultimate life goals. Allow yourself to imagine your ideal life and where you picture yourself, the people you are with, and where you are. You may picture your future grandchildren or your brand new child’s college graduation. The objective is to know where you want to end up so you can start making and sticking to a plan to get you there.

 

Take Steps to Secure the Future for Your Family

 

With a newborn in the house, the last thing you want to think about is your untimely death. But, now that you are a parent, you have a responsibility to your family to secure their future should tragedy strike. One of the first steps you should take is writing a will. You need to designate a guardian for your child and an executor of your will who can ensure your wishes are carried out when you die. This is the time to determine what happens to your assets and your property and to set up a trust fund or other financial plan for your child.

 

Another step that will secure the future of your family is purchasing life insurance. Your financial advisor may be able to assist you in this step, as many financial advisors also sell life insurance. No matter whom you work with, you should consider purchasing enough coverage for 8-12 times your income to ensure the financial security of your family. Remember, your life insurance policy should cover more than your final expenses; you need to consider the amount needed to pay off your mortgage, provide for child care, and help your family maintain their standard of living after you are gone. Consider building a savings nest egg for child-related expenses to be used in preparation for the new child, or to be used as a safety net in case of your untimely demise. You or a guardian may have to purchase a new vehicle or pay for the cost of moving to a new home. A new family member undoubtedly brings new and often unexpected expenses.

 

Even though your child is a newborn, you need to begin thinking about his or her future. Of course, most parents plan for their children to attend college, and you will need to choose a college savings plan that fits your budget and gives your child a good financial foothold when entering an institute of higher learning. There are several options for new parents who want to start saving for their child’s college education including 529 plans, savings accounts, Roth IRAs, Coverdell Education Savings Accounts (CESAs), CDs and savings bonds, and trusts. Again, a financial advisor will be a helpful resource when you are trying to decide which college tuition savings option is best.

 

New parents have a great deal on their plate, but life planning should take priority so you can secure your future and that of your new child. Evaluate your current status, determine your life goals, and start working with a financial advisor to help you get there.

 

 

 

Posted in Island Life
Feb. 15, 2017

Turning Your Vacation Home into a School Year Rental

Coronado schools are among the best in California. Four schools in the Coronado Unified
 School District have been named California Distinguished Schools, two have been named National Blue Ribbon Schools, and one is recognized as a demonstration site for the state.

 

Many parents move here just so their kids can have access to a world-class education in a safe, welcoming, and walkable community. And, many families who don’t officially become Coronado residents will rent just for the school year, meaning your Coronado vacation home is a hot commodity even in the middle of winter.

 

International Influx

Coronado has always been extremely popular for summer rentals, but we’re starting to see substantial growth in the demand for school year rentals. Many families—particularly those from other countries—will rent in Coronado through the year and then spend the summer back home.

 

For example, a father will secure a job in San Diego and move the family to Coronado. The entire family is together for most of the year while the kids get an award-winning education. Come summertime, the whole family might fly home, or the father might stay for work and rent a small studio across the bay in Downtown San Diego. When summer is over, the family will return and rent again.

 

What This Means for Vacation Homeowners

Traditionally, renting out a vacation home during the off-season can be rather difficult. The same goes for finding a 9-months renter.

 

However, the Coronado market is unique. Our schools have become so coveted that school year rentals are now almost as popular as summer rentals. The year-round demand means you can:

 

·      Rent your property to a family for 9 months.

·      Enjoy your vacation home in summer.

·      Or, rent out the home in summer, too.

 

In the majority of markets across the country, you might estimate you’ll be able to viably rent out your vacation home for 6 to 8 months of the year. In Coronado, it is possible and common to earn rental income from your vacation home for 9 months or more—perhaps even year-round if you wish!

 

Finding the Right Vacation Home

School year rentals are most popular in the center of town, called the Village. However, the Shores and the Cays also offer a world of options. To take the first step toward owning a vacation home in Coronado, contact Del Coronado Realty at 619-437-1888.

Posted in Island Life
Feb. 15, 2017

Through The Years – Coronado Real Estate Then & Now

Having spent decades living and working in Coronado, we at Del Coronado Realty enjoy an all-access pass to the island’s evolution from remote enclave to mainstream destination. Just how far has Coronado come over the years? Let’s take a glance.

 

Coronado Then

Prior to the construction of the San Diego–Coronado Bridge in 1967, Coronado’s real estate market was rather limited. In order to travel to and from Coronado, you had to take the ferry—a scenic ride, but not necessarily a desirable mode of everyday transit. The majority of Coronado’s population consisted of military families stationed at North Island. Wealthy families were still buying vacation homes in Coronado, but many people saw the lack of accessibility as a deal breaker.

 

Fast forward to the 1970s and ‘80s, and the newly constructed bridge proves to be an expressway to growth. Coronado’s population grew from 18,039 in 1960 to 26,540 by 1990. The ease of access became apparent, and the real estate market expanded accordingly. People began visiting and moving from across the bay, country, and even from overseas.

 

Coronado Now

Today, Coronado is one of the most sought-after living, vacation, and investment destinations in the U.S. Whether you prefer a quaint home in The Village, a boater’s paradise in The Cays, or a luxurious vacation condo in Beach Village at The Hotel Del Coronado, our island offers something for everyone. Coronado is beloved for its:

 

·      Year-round mild weather

·      World-famous beaches

·      World-class school system

·      Low crime rate

·      Walkability

·      Endless entertainment and outdoor activities

·      Gorgeous properties

 

Looking Ahead

With a total land area of 32.7 square miles, room for new development on the island is limited. We are seeing plenty of redevelopment, remodeling, and multi-unit development, but Coronado isn’t sprawling like other cities. What that means for Coronado homeowners and investors is that property values will continue to climb. There will always be a strong demand for homes, vacation properties, and rentals.

 

Are you looking to buy or sell property in Coronado? Del Coronado Realty can help! Call us at 619-437-1888, or visit us in The Shops @ The Hotel del Coronado at 1500 Orange Avenue. For ongoing information about real estate in Coronado, visit our blog at www.delcoronadorealty.com/blog.

Posted in Buying, Island Life, Selling
Feb. 15, 2017

What Military Families Need to Know About VA Home Loans

Veterans and active military personnel receive well-deserved financial benefits for their service. While most are aware of their Veterans Affairs (VA) benefits, many do not take full advantage of VA mortgages, commonly known as VA home loans. Having helped countless military families find beautiful homes here in Coronado, Del Coronado Realty is fully attuned to VA home loans. Here are a few bits of insight we’d like to share.

 

1. Your VA Benefits Give You Buying Power in Coronado

One of the most common misconceptions about Coronado is that it’s reserved for the ultra-wealthy. While the island certainly has its fair share of multi-million-dollar properties, there are also plenty of options at more manageable price points, particularly for those with VA benefits. These benefits include:

 

  • No down payment
  • No mortgage insurance needed
  • Lower fees

 

2. The Loan Limit isn’t Actually the Limit

With what’s called a “jumbo home loan,” VA borrowers can access a loan amount exceeding the regulatory “conforming limit” set by Fannie Mae and other lenders. In San Diego County, you can pair your VA benefits with a jumbo loan for 100% financing (meaning zero down payment) on a home purchase up to $580,750.

 

For homes exceeding $580,750, there is no maximum loan amount for buyers with VA benefits, as long as the minimum down payment is met. In addition to down payments that are dramatically lower than those of home buyers without VA benefits, veterans can even use their TSP (Thrift Savings Plan) as their payment.

 

3. The Money Still Comes from a Private Lender

A VA home loan does not come from the Department of Veterans Affairs. The loan is still made by a private lender—The VA simply guarantees a portion of it. When you work with Del Coronado Realty, we can refer you to an experienced lender specializing in VA home loans.

 

4. You Can Purchase a Multi-Family Property with Your VA Home Loan

Looking to invest? Your VA home loan can also be used to purchase a multi-family property. With this type of investment, you can live in one of the units, and rent out the others to help pay off the mortgage.

 

5. VA Home Loans Can Help You Build a Real Estate Portfolio

Speaking of investing, perhaps the most important thing to know is that your VA benefits can be used over and over again, enabling you to build a nationwide portfolio of properties as you move from place to place.

 

“If you’re seeking long-term financial success, you can consider purchasing your VA loan entitlement in the city you are stationed in,” says Ruth Ann Fisher, team leader of Del Coronado Real Estate. “You can then rent out your previous home(s) so that your tenants are essentially paying your mortgage(s).”

 

As a military wife, Fisher employed this strategy moving 17 times in 22 years, before permanently landing in Coronado. She adds that buying with VA home loans can also help to ease the anxiety of knowing that a home is temporary.

 

For more information about VA home loans and Coronado real estate, you can speak to Fisher and her team by calling 619-437-1888 or visiting Del Coronado Realty’s office in The Hotel del Coronado.

Posted in Buying
Feb. 14, 2017

The Tax Benefits of Owning a Coronado Vacation Home

A Coronado vacation home is more than an island getaway. Sure, it’s first and foremost an investment in your happiness, but it’s an equally appealing investment from a financial standpoint as well. A vacation home—particularly one in Coronado, where home values continue to rise—comes with various tax benefits. These benefits include: 

 

Interest Deduction

Just like with your first home, the interest you pay on the mortgage for your second home is deductible when you itemize your return. Realtor.com explains:

 

“In fact, you can write off as much as 100% of the interest you pay on up to $1 million of debt, which includes total debt taken on to pay for both homes, as well as money spent on improving the properties. (That’s not up to $1 million for each property—just up to $1 million in total.)”

 

Rental Property Depreciation

When you own a rental property, you depreciate its value each year, both to deduct the costs of improving the property, and to account for wear and tear. The amount you can deduct each year is dependent on the basis (or cost) of the building (not the land). You can depreciate a property using the Modified Accelerated Cost Recovery System (MACRS) over the course of 27.5 years, which the IRS considers to be the life expectancy or “useful life” of a rental property.

 

1031 Exchange

While depreciation allows you to reduce your taxes during the time you own a rental property, a 1031 exchange allows you to avoid the tax obligations when selling the property. With a 1031 exchange, you can mitigate capital gains and apply them to your next property purchase so that you do not have to pay taxes on the value you have depreciated over the years. When you reinvest or “exchange” the gains into a similar property, they become tax-deferred. The process for a 1031 exchange is as follows:

 

·      Hire a 1031 exchange accommodator to handle the funds associated with your sale.

·      Hire a realtor to advise you on both the purchase of your new property and the 1031 exchange process. Be sure to let them know that you wish to do a 1031 exchange.

·      Disclose to potential buyers that you are doing a 1031 exchange. (There will be no cost to them, but you still need to make them aware.)

·      Upon closing, the accommodator will hold on to the funds until you find your next property.

·      Identify three properties within 45 days of closing.

·      Choose one of the three properties and close within the exchange period of 180 days from the closing date of your current property.

·      At closing, the accommodator will utilize the funds from the sale of your previous property.

 

Tax-Free Profit on Sale

An IRS exclusion allows a married couple to take up to $500k in profit from the sale of their primary residence, tax-free. This entails living in the second home for two of the last five years. Investopedia sheds more light on the strategy:

 

“This primary-home sale exclusion does not apply if you sell your second home: If you sell a house that is not your primary residence, you may have to pay the usual capital gains tax. If you make the second home your primary residence for at least two years before you sell it, however, you may be able to reap some tax benefits, but it's not as easy as it used to be.”

 

Are you considering purchasing a vacation home in Coronado? Del Coronado Realty can assist you with not only finding your dream vacation home, but also understanding the tax implications of becoming a vacation homeowner. To learn more, call us at 619-437-1888.

Posted in Investments
Feb. 7, 2017

Mortgage Rates Are Up – What Coronado Buyers and Sellers Need to Know

With mortgage rates rising since the election, homebuyers and sellers are asking what the rate hike means for them. Del Coronado Realty, a
boutique real estate brokerage in Coronado, Calif., sat down with a local Mortgage Banker and Branch Manager from CMG Mortgage in Coronado for a brief Q&A session on current interest rates and the outlook for the foreseeable future.

How Much Have Mortgage Rates Risen?

In December 2016, shortly after the election, the Federal Reserve hiked rates for the first time since December 2015. The 0.25 percentage point increase, coupled with the surprise election result, pushed mortgage rates over 4 percent. They have since come down slightly, and currently appear to be relatively stabilized between the mid 3s and low 4s, depending on transaction specifics such as loan program, down payment amount, etc.

 

Why Did the Rates Rise? Will the Trend Continue?

With the stock market performing well since the election and the Dow breaking 20,000 for the first time ever, mortgage bonds have dropped in price. Mortgage rates are priced based on the performance of mortgage bonds. Bonds typically lose when stocks win, and the stock market has had some big wins over the past few months. The general consensus is that the rates will continue to increase, but probably not at an astronomical pace.

 

Will This Make it More Difficult to Sell My Home?

No. In fact, the situation is quite the opposite. Buyers are very active right now because they want to lock in a mortgage while the rates are still relatively low. If you have been considering putting your home on the market, now is a good time to take action. Not only do you have a larger pool of buyers, but those buyers are also feeling a hint of anxiety and moving swiftly when they see something they like.

 

Should I Wait for the Rates to Drop Before Buying a Home?

No. Consider where mortgage rates have been in the past. In 2000, they were in the mid 8 percent range, and in 2008, a 30-year fixed rate mortgage was going for about 6.5 percent. While rates don’t appear to be going up tremendously, they don’t appear to be coming down anytime soon, either. Plus, you’re still getting a historically low rate if you lock in today. Those who bought homes in the 1980s will remember paying up to 13 percent! Locking in at the current rate may not get you the very lowest rate in history, but it will be a historically low rate, nevertheless.

 

Get Expert Real Estate Advice

Del Coronado Realty is here to help you navigate the Coronado and coastal San Diego real estate market in any economic condition. For more information about mortgage interest rates and buying or selling in Coronado, contact us at 619-437-1888.

Posted in Buying, Selling
Jan. 31, 2017

Why Buyers Shouldn't Wait Til Spring to Get Serious

NerdWallet: January, February prime months to purchase a home

Research using realtor.com data indicates that buyers would be wise to find a deal now

  • Ready to become a homeowner? Nerdwallet and Realtor.com Chief Economist Jonathan Smoke say January and February are the best months to purchase a home.
  • The median home sold in January sold for $7,003 less than the listing price, and home sales drop by 47 percent.
  • Smoke says another reason buyers should act now is an upcoming hike in mortgage rates, which are expected to reach nearly 5 percent.

Read the full article here>

Posted in Buying
Nov. 21, 2016

Beach Village at The Del: Luxurious in Every Way, Even While You're Away

Beach Village at The Del offers unparalleled luxury not only as a place to soak up the San Diego sunshine, but as an investment property that virtually rents out itself. If you have the opportunity to purchase a Beach Village vacation home, do not let it pass you by. Your investment will treat you wonderfully both while you are vacationing in Coronado and while you are back home. 

 

When You’re There: Endless Amenities

Beach Village at The Del is connected to Hotel del Coronado, one of America’s most beloved beachfront resorts. Those staying at Beach Village are treated like hotel guests, with access to all The Del has to offer, including:

– Secluded pools

– 24-hour fitness center

– Luxury spa and salon

– Private chef

– 24-hour room service

– Fine dining and cocktails

– Lounge chairs, umbrellas, cabanas, and beach beds

– Recreational sports and activities

– Personal concierge

– Laundry and dry cleaning

– Business center

– Shopping

– Housekeeping

 

Beach Village owners can spend up to 90 days in their unit during the year and up to 25 out of 50 consecutive days. These may sound like tight restrictions, but most owners find them to be non-factors. The 90-day limit is part of the California Coastal Commission’s efforts to preserve California’s beautiful shoreline and nature. The 25-day limit allows The Del to maintain its rental program, which works in your favor.


While You’re Gone: Turnkey Renting

Every bit as desirable as the amenities is the fact that a Beach Village condo fills itself when you are not using it. Hotel del Coronado manages all aspects of renting out your cottage or villa while you’re not there—from marketing and reservations to accommodations, maintenance and repairs—and splits the revenue with you. All you have to do is provide the hotel with which days you plan on staying, and they will put the unit on the market for the vacant days.

 

Beach Village is also the only rental property in Coronado exempt from a city ordinance prohibiting short-term rentals under 26 days. That means you are among just a handful of owners on the island who can accommodate the many weekend, weeklong, and holiday visitors Coronado attracts year-round—you don’t even have to communicate with them! The Del makes the arrangements on your behalf.

 

The Ultimate Vacation Home

Your Beach Village vacation home is spotless when you arrive, opulent while you stay, and effortless when you leave. Vacation homes simply don’t get any better than this. Looking for more information about Beach Village at The Del? Contact Del Coronado Realty at 619-437-1888, or visit us in Hotel del Coronado at 1500 Orange Avenue.

Nov. 7, 2016

Del Coronado Realty's Ruth Ann Fisher Shares Why Coronado is Her Home

When Ruth Ann Fisher first moved to Coronado in the early ‘80s, the island was another stop in the up-and-move life of a military spouse. She and her husband, Mike, spent only nine months here before moving on to their next destination.

 

In 1999, nearly two decades and roughly a dozen moves later, the Fishers–now with two kids–found themselves back in Coronado. This time, they expected to stay 18 months.

 

After falling in love with everything the island offers, the Fishers extended their stay in Coronado another three years while Mike worked with the Naval Special Warfare Center at Naval Amphibious Base Coronado. Mike was then faced with a two-year deployment that would have caused him to miss their son’s junior and senior years of high school, to which he retired from the Navy and secured a position that would allow the Fisher family to make Coronado their permanent home. Ruth Ann established Del Coronado Realty shortly after and has been happily helping others find their “forever home” in Coronado ever since.

 

Why Coronado?

Small Town Atmosphere

Even during her temporary stint in Coronado, Ruth Ann felt the island’s small town charm.

 

“It’s a tight-knit community, right across the bridge from a big city,” Ruth Ann says. “You have instant accessibility to the endless attractions in San Diego, with a warm, welcoming, and laid-back neighborhood to come home to.”

 

Quality of Life

Do you prefer mountains or beaches? Surfing or snowboarding? Biking or boating?

 

All of the above are within reach, from the pristine shoreline right in our backyard to the adventures that await just a two-and-a-half-hour drive away in Big Bear Lake.

 

“And the outdoors aren’t just seasonal,” Ruth Ann adds. “You can get outside and be active year-round.”

 

Safety & Schools

“When you’re a parent, education is everything,” Ruth Ann says. “The Coronado Unified School District is truly extraordinary, and the island is extremely safe for kids going to and from school.”

 

The combination of award-winning schools and low crime was pivotal in the Fishers’ decision to stay and settle down in Coronado. Both of their children attended school here from a young age through high school graduation.

 

Why Del Coronado Realty?

For those who find themselves drawn to the many allures of Coronado, there is no better place to begin exploring the real estate market here on the island than with Del Coronado Realty. Led by Ruth Ann’s decades of local market knowledge and genuine passion for the local community, our team is here to help you not only find a home, but create the life you envision in Coronado.

 

“True to the Coronado spirit, we take pride in keeping strong ties,” Ruth Ann says. “Our clients are not transactions. They are our neighbors.”

Posted in Island Life