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How to Sell Commercial Property

Sat, 20 Jan 2024 23:00:00 GMT

Are you ready to sell your commercial property ? It may be the right time to sell your commercial property. Perhaps your business is moving to a new location, you're ready to cash in on your investment, or your personal or financial situation has changed. Whatever the reason, you must understand that selling a commercial property is very different from selling a residential property.

Doing some research and working with an experienced Commercial Real Estate broker like Pete Heim can make the difference between a successful sale and a complete flop.

What is Commercial Real Estate?

Commercial real estate includes any property where individuals, businesses, or corporations do business and large multi-family properties.

There are basically five types of commercial real estate :

Office – The most common type of commercial real estate, office buildings can range from a single office to a skyscraper with hundreds of offices.
Retail – Retail properties can include stores, banks, restaurants, etc., ranging from small structures to an entire strip mall.
Industrial – Industrial properties include warehouses and manufacturing facilities.
Multi-family – Although people live in multi-family properties, large apartment complexes are considered commercial properties.
Special purpose – Special purpose commercial real estate includes schools, student housing, hospitality, sports stadiums, government, self-storage facilities, and religious properties.

Mixed-use properties include both commercial and residential. For example, a building with a restaurant on the first floor and an apartment on the second floor is considered a mixed-use property.

7 Steps to Selling Commercial Real Estate

Step 1: Get Your Financial Ducks in a Row

Typically, commercial real estate is an investment, so you need to consider your reasons for selling your commercial property, your needs, and what you hope to get from the sale. For example, are you going through a divorce and need to sell the property quickly? Do you need to sell the property for a certain amount to make a profit? What are the tax implications of the sale?

Step 2: Prepare Your Property for Sale

If you want to sell your property more quickly and for the highest price, you need to ensure that your property looks its best. Most buyers will be turned off by a dirty or poorly maintained building, so you may need to take some time and money to fix the property up a bit before putting it on the market.

Step 3: Gather Your Paperwork

You'll also want to get your paperwork in order before putting your property on the market. Being prepared will show potential buyers that you are organized and easy to work with, and it can speed up the entire selling process. Need paperwork includes the following:

Your title report
Ownership papers
Profit and loss statements (if appropriate)
Permits, certifications, etc.
Service history – a record of building maintenance and upgrades and a list of leading service vendors, such as plumbers, electricians, etc.

Step 4: Price Your Commercial Property

Determining a listing price for a commercial property can be challenging but is crucial for investors and lenders. With a commercial property, there are several factors to consider when determining the value of the property and the appropriate selling price, such as the appraisal amount, location and condition of the property, current state of the real estate market, etc.

There are several commercial real estate valuation methods - the cost approach, the sales comparison approach, the income approach, the value per gross rent multiplier, the value per door, and the cost per rentable square foot. An experienced real estate agent like Pete Heim can help you determine the right selling price for your commercial property.

Step 5: Market Your Property

It would be best to look at several approaches to market your commercial property. Your real estate agent can use their commercial real estate network to search for potential buyers and get your property on one or more commercial property multiple listing services (MLS), such as LoopNet, CoStar, CREXi, Brevitas, etc.

Step 6: Negotiate the Sale

The first offer you receive may not be the full asking price, but that doesn't mean you need to refuse the offer. Instead, you can negotiate the sale by providing a counteroffer. Understanding your goals and the actual value of your property can make this process easier.

Step 7: Close the Sale

Once you and the buyer have come to an agreement, you need to close the sale. An experienced real estate agent like Pete Heim can guide you through the process, from going through escrow to signing and processing the title and closing documents.

Get More For Your Commercial Property!

Pete Heim will treat you with the professional and courteous service you deserve. You can trust Pete and his team to help you sell your commercial property as quickly as possible and at the highest price possible.

Call Pete and his team today at 610-745-3378 or 610-898-1441 , or connect with him online .

Are You Thinking About Buying a Multi-Generational Home?

Sat, 13 Jan 2024 23:00:00 GMT

If you are having trouble affording a home on your own or are concerned about the health and safety of an aging loved one, you may be thinking about buying a multi-generational home . You are not alone.

“The number of households with two or more adult generations has quadrupled over the past five decades,” CNBC reports. It is estimated that 18% of U.S. households are multi-generational.

“When asked why they share their home with relatives, Americans often give practical reasons related to finances or family caregiving. But the experience also has an emotional component,” according to Pew Research Center . Approximately a quarter of adults living in a multi-generational home say that it is stressful some or most of the time; however, more than twice that number say it is mostly or always rewarding.

Types of Multi-generational Households

A multi-generational home is defined as “a home that has two or more adult generations living together. This can include siblings, parents, and even grandparents.” Multi-generational households can look different, but here are the most common types:

A Three-Generation Household consists of three generations of a family, such as one or more working-aged adults, one or more of their adult children, and their grandchildren.
A Two Adult Generation Households consist of either young adults living with their parents or older parents living with their adult children.
Grandfamilies include grandparents living with their grandchildren.
Four-generation Households are less common but consist of four or five generations in one household – parents, grandparents, great-grandparents, adult children, and their younger children.

Benefits of a Multi-generational Household

Generations United reports the following benefits of living in a multi-generational house:

Enhanced bonds or relationships among family members (79%)
Improved finances for at least one family member (76%)
Positive impacts on personal mental and/or physical health (76%)
Making it possible for at least one family member to continue school or enroll in job training (71%)

Additional benefits, especially for older adults living with their adult children, include the following:

The ability to share financial and other responsibilities, lightening the load for everyone. Multiple people can pitch in for groceries, utilities, etc., and chores, such as grocery shopping, cleaning, etc., can be shared. Minimize loneliness, especially for aging adults. PBS reports, “Surveys reveal that around 60 percent of people in the U.S. right now report feeling lonely on a pretty regular basis.” According to the National Institute on Aging (NIA), “Research has linked social isolation and loneliness to higher risks for a variety of physical and mental conditions: high blood pressure, heart disease, obesity, a weakened immune system, anxiety, depression, cognitive decline, Alzheimer’s disease, and even death.”
Emergency assistance – “About 36 million falls are reported among older adults each year—resulting in more than 32,000 deaths. Each year, about 3 million older adults are treated in emergency departments for a fall injury,” according to the Centers for Disease Control and Prevention (CDC). “One out of every five falls causes an injury, such as broken bones or a head injury.” If someone living alone falls and can’t get up, they can lay there for days. That is less likely to happen in a multi-generational home.
Manage health conditions. “Approximately 85% of older adults have at least one chronic health condition, and 60% have at least two chronic conditions,” according to the NIA . “The incidence of medication errors was 69% among older patients,” according to the Journal of Nursing and Midwifery Sciences . If an older adult lives with a family member, they can help manage those health conditions and concerns.

Buy a Multi-generational Home

Are you among the growing number of Americans who have decided to buy a multi-generational home? Look no further! Pete Heim has over 25 years of experience helping customers like you buy a home. With his knowledge and connections, he’ll help you find a multi-generational home to suit everyone’s needs.

Call him today at 610-745-3378 or 610-898-1441 , or connect with him online .

10 Tips for Commercial Property Owners/Managers

Sat, 06 Jan 2024 23:00:00 GMT

Purchasing and owning a commercial property can be a lucrative investment. However, managing a commercial property comes with many responsibilities.

10 Tips to Maximize Your Earnings, Minimize Risks, and Save Yourself a Ton of Headaches

Understand the needs of potential tenants:
When marketing your commercial property, include a list of requirements to clarify rental criteria and save yourself and potential tenants time. Run a thorough background check and litigation search on potential tenants and meet with them in person when possible.

Communicate With Your Tenants:
Communication is key to any relationship – including the property manager/tenant relationship. If you want to build a relationship with and retain better tenants, keep in touch with them. Let them know if you're doing any maintenance, encourage them to let you know if they notice any potential issues, and check in with them regularly to ensure everything is good.

Be Familiar and Up-to-Date With Relevant Laws:
You must understand and keep up-to-date with local zoning laws, ADA compliance, tenant rights etc. , or risk lawsuits, fines, etc.

Organize and Manage Documentation and Records:
Experts recommend that property managers keep the following records:

Tenant Files – rental applications, security deposit records, notices for rent increases, etc.
Owner Files – owner-management agreements, management fee payment records, emails, correspondence, etc.
Property Maintenance and Management-Related Files – work orders, insurance policies, vendor invoices and receipts, etc.
Financial records – bank statements, copies of checks, tax statements, etc.

Draft a Comprehensive Commercial Lease Agreement:
Protect yourself and avoid misunderstandings in the future by drafting a comprehensive commercial lease agreement, going over the agreement with the tenant, and having them sign the agreement. The lease agreement should include the identities of all parties in the lease, a description of the property, limitations on the use of a property, the term of tenancy, rental payments, security deposit, remodeling conditions, maintenance duties, etc.

Conduct Routine Maintenance:
Regular maintenance includes changing the HVAC air filters, testing fire alarms, maintaining the landscaping, etc. Properly maintaining your commercial property helps attract and retain better tenants, get higher rent, preserve and increase your property's value, minimize the risk of litigation, prevent more costly repairs, and adhere to tenant laws, guidelines, and regulations.

Do Regular Inspections:
Schedule regular (monthly or quarterly) inspections to ensure the tenant isn't abusing your property, keep the property up-to-date and looking good, minimize the risk of litigation, and catch needed minor repairs before they become expensive.

Have a List of Preferred Vendors:
Having a list of preferred vendors – plumbers, electricians, etc. – will help when an emergency arises and can help when you're ready to sell the property.

Invest in Building Security:
Security measures, such as secure window and door locks, cameras, automatic lighting, alarm equipment, etc., help protect your investment and may even lower your insurance costs.

Consider Hiring a Property Manager:
Managing a property takes a lot of time. A property manager can make your life much easier. A property manager oversees a rental property's administrative, maintenance, and managerial tasks. Typical property manager responsibilities include advertising the rental, screening tenants, collecting rent, handling maintenance and repairs, and responding to tenant complaints and evictions. The average cost of a property manager is between 5 and 20% of the property's monthly rental income.

Ready to Buy a Commercial Property?

Are you ready to purchase a commercial property and start reaping the financial rewards? Pete Heim has all the experience you need to find the right property for your needs at the right price. Call Pete today at 610-745-3378 or 610-898-1441 , or connect with him online .

10 Benefits of Homeownership

Sat, 23 Dec 2023 19:00:29 GMT

In today's current housing market, you may be putting off buying your first home even if you're emotionally and financially ready. However, waiting may not make sense when considering the benefits of homeownership – both financial and non-financial.

10 Homeownership Benefits

1. Better Physical and Mental Health
We'll start with a less conspicuous or often-overlooked benefit of homeownership – the physical and mental health benefits. The National Library of Medicine states, "We find that home ownership improves physical and psychological health." Furthermore, studies have found that homeownership has led to an increase in children's good health and a decrease in children's behavioral problems and asthma. Who knew?!

2. Better Education Outcomes
Habitat for Humanity reports, "The graduation rate for children of homeowners is 19 percent higher than for renters, and they are twice as likely to acquire some postsecondary education, according to a study in a journal published by the Federal Reserve Bank of New York."

3. Create a Source of Money
Over time, you build equity in your home that you can use to access money for anything from home improvements to consolidating debts or from buying a new boat to funding a new business. While it is possible to lose equity if the value of your home drops, statistically, home prices have increased by 4.3% annually since 1991.

4. Build Net Worth
"One of the best ways to build your family's financial future is through homeownership," according to financial experts . "The Federal Reserve reports the net worth of a homeowner is actually over 40 times greater than that of a renter." Home equity and appreciation (increase in the value of your home) help build your net worth.

5. Tax Benefits
Home mortgage interest, mortgage insurance costs, and property taxes may be tax deductible, reducing the federal taxes you owe.

6. Build Credit
"Millennial homeowners have stronger credit profiles than millennial renters, with a median credit score of 693 compared with 601 for renters," according to Lending Tree . There are many reasons why. For example, homeowners have a median of nine accounts, compared to renters with six accounts. While homeowners typically borrow more money than renters, they borrow less relative to their credit limit.

7. Control Your Monthly Housing Payments
The monthly payments on a fixed-rate mortgage will remain the same, so you don't have to worry about rent increases. Furthermore, if mortgage rates drop, you may be able to refinance to lower your monthly payments. The only costs that may increase are taxes and insurance.

8. Sense of Community
Statistically, homeowners stay in their homes longer than renters, which gives them more time to build meaningful relationships with their community and helps them feel more connected. Homeowners also tend to be more involved in their communities than renters.

9. Able to Make Your Home Your Own
As a renter, what you can do to your home is probably limited. You may not be able to make any changes, need permission from your landlord, or change things back before you leave. If you own your own home, you can customize and make it your own. Paint your front door bright purple if you want to. Customize the kitchen cabinets to fit your specific needs. The only restriction homeowners may face is if they are a part of an HOA.

10. Comfort and Privacy
Homeownership lets you enjoy features that enhance your lifestyle and usually provide more privacy than renting.

Are You Ready to Enjoy Homeownership and Its Many Benefits?

If you think the benefits outweigh any reasons not to buy your first home, Pete Heim can help you get the most for your money in any real estate climate. He knows Berks County real estate like nobody else, and he's ready to get to work to help you find your dream home!

Call Pete today at 610-745-3378 or 610-898-1441 , or connect with him online .

How to Improve Your Commercial Property's Curb Appeal

Sat, 16 Dec 2023 23:15:00 GMT

If you own a commercial property, good curb appeal is crucial, whether you are trying to attract tenants or buyers or conduct your own business within the property. Good curb appeal helps create a great first impression and a safe and welcoming environment for potential tenants, buyers, customers, employees, etc.

How to Improve Your Commercial Property's Curb Appeal

Paint

A dull, dirty, or worn façade makes a property look neglected and unwelcoming. On the other hand, a fresh coat of paint can significantly improve your property's curb appeal. It will make your property look fresh, clean, welcoming, updated, and well cared for to attract buyers, tenants, customers, etc. Choose a color scheme that blends with the environment, makes your building stand out, or goes with your business logo and color scheme.

Outdoor Lighting

Good lighting is often overlooked, but it can make a commercial property look more inviting and add a layer of security. The right lighting can make your property as appealing (or sometimes more appealing) at night as it is during the day. Showcase any interesting elements of your building with lighting. Also, light up parking lots, entrances, and walkways for employee and customer safety and to deter thieves, vandals, etc.

It's simple: most criminals avoid areas that shine a spotlight on their illegal activities. Therefore, outdoor lighting can reduce vandalism, break-ins, theft, etc. One study found that outdoor lighting can cut crime by 39%.

Professional Landscaping

A professionally landscaped property – office, apartments, retail space, etc. - is more aesthetically appealing and inviting to tenants, buyers, customers, etc. Landscaping also adds natural elements to a typically sterile environment and helps soften the harsh lines of buildings and parking lots. Check out these six commercial landscaping ideas !

Signage

If you do business out of your commercial property, your signage should reflect your business. If it looks old or outdated, replacing your signage will help improve your property's curb appeal and people's impression of your business and attract more customers. Don't underestimate the importance of signage that reflects well on your business.

Decorative Elements

Adding decorative elements like benches and water features can draw positive attention to your commercial property and make it more inviting. Comfortable seating can also enhance your customer's experience with your business if they need to wait for any reason, such as waiting for an available table in your restaurant or car service to pick them up.

Clean and Well-Maintained

A cluttered, dirty, or dilapidating exterior is the best way to damage your property's curb appeal and make it less attractive and inviting to visitors. Keep your pavements, sidewalks, driveways, and parking lots free of clutter and debris buildup to enhance the appeal of your property and create a safer environment. Regularly mow and fertilize your lawn. Maintain your building and landscaping, making repairs as needed. A clean and properly maintained property provides a more professional appearance.

So, good curb appeal is key to attracting buyers, tenants, customers, or employees to your commercial property. Good curb appeal is essential if you want to improve your business's reputation. And finally, good curb appeal is vital if you want to increase your property's value or safety.

Are You Ready to Sell Your Commercial Property?

With over thirty-five years of real estate experience and more than two hundred 5-star independent customer ratings, Pete Heim can provide additional guidance and help sell your right commercial property faster and at a better price. A lifelong Berks County resident, Pete knows Berks County real estate like nobody else!

Call him today at 610-745-3378 or 610-898-1441 , or connect with him online .

6 Tips for Making an Offer on a House

Sat, 09 Dec 2023 23:00:00 GMT

You've found the house you want to purchase . Now what? Now, it's time to make an offer on the house, which isn't as simple as it may sound. You don't want to make an offer so low the seller flat-out refuses your offer. But then again, you don't want to pay more than you need to.

There are also considerations beyond price, such as whether you have to sell your existing home first, whether you want an inspection, etc. And remember…once signed, your offer becomes a legally binding agreement.

6 Tips to Make an Offer on a House

Hire an experienced real estate professional
An experienced real estate professional understands the current housing market, local and national trends, what's worked (and not worked) for other buyers, what many sellers are looking for, house-buying legalese, and more. Therefore, they can guide you, make the process – including the offer and any counteroffers - proceed more smoothly, and help you avoid house-buying pitfalls.
Get Pre-Approved for a Loan
Unless you are paying cash for your home, you should get pre-approved for a loan from at least one lender before you search for a house to know what you can afford. When it comes time to make an offer, being pre-approved for a loan shows the seller you're serious and that you are financially responsible, and it may give you a competitive edge if there are multiple offers.
Determine a fair offer price
An experienced real estate professional can help you determine a fair offer price. The price should be based on several factors, such as your budget, how much homes are selling for in the area, how long the house has been on the market, the home's condition, if there are other offers, etc.
Decide how much earnest money you want to offer
"Earnest money is a deposit made to a seller that represents a buyer's good faith to make a purchase such as the acquisition of a new home. The money gives the buyer extra time to get financing and conduct the title search, property appraisal, and inspections before closing," Investopedia explains. "In many ways, earnest money can be considered a deposit on a home, an escrow deposit, or good faith money."

The buyer and seller negotiate the earnest money deposit. It is typically one to two percent of the home's purchase price but can be higher in a hot sellers' market. The earnest money deposit can sometimes be a fixed amount rather than a percentage of the purchase price.
Decide on contingencies
Contingencies are clauses in the purchase agreement that give specific circumstances under which you can walk away from the deal without losing your earnest money. Typical contingencies include a home inspection, an appraisal, final loan approval, or selling your existing home.
Write a purchase agreement
Typically, your real estate professional will write up the purchase agreement to comply with all state and local laws. It lists the offer price, earnest money amount, offer expiration date, seller disclosures, closing costs, contingencies, etc.

What Comes Next?

The seller has three options: accept your offer, make a counteroffer, or refuse the offer. If your offer is accepted, the seller and buyer sign the purchase agreement, and you begin the process of obtaining the mortgage, scheduling inspections, etc.

In a counteroffer, the buyer may change the purchase price, earnest money deposit, closing date, contingencies, etc. If this happens, you need to review the changes and accept, refuse, or make a counteroffer.

If your offer is refused with no counteroffer, you can ask your real estate professional to follow up with the seller's agent regarding why the offer was rejected and inquire about a counteroffer. Or you can walk away from the deal and look for another house.

Find Your Dream Home

Pete Heim is a proven negotiator who will help you find your dream home, make an offer, and get a better deal on your new home! Call him today at 610-745-3378 or 610-898-1441 , or connect with him online .

Why Isn't Your House Selling?

Sat, 02 Dec 2023 23:00:00 GMT

You've decided to sell your house . Maybe you're downsizing, buying a bigger house, or moving to another area. Regardless of why you're selling your home, most sellers want to sell quickly, at the highest price, with the least hassle.

Many variables can affect how quickly your home sells, but as of March 2023, it took an average of 54 days to sell a home, according to Rocket Mortgage . Many factors – the state of the housing market, the home's age, and condition, the neighborhood, etc. – can affect how much your home will sell for, but in the second quarter of 2023, the median house price in the U.S. was $416,100, according to Rocket Homes .

But what if your house has been on the market for a while and isn't selling? As mortgage rates continue to rise and experts predict we may be moving toward a buyers' market, you may be tempted to assume the state of the housing market is the primary reason your home isn't selling.

However, you may be surprised to know that "the typical home spent 50 days on the market this October, which is one day shorter than the same time last year and more than two weeks (16 days) less on the market this past month than they did in the average October from 2017 to 2019," according to the National Association of REALTORS® (NAR).

The bottom line is that the state of the housing market (which you have no control over) can affect how quickly your house sells, but there are other reasons it may not be selling that you can control.

3 Likely Reasons Your Home Isn't Selling

The home is priced too high.
Pricing your home is one of the most crucial factors when selling a home, which is where an experienced real estate professional can make all the difference. Every seller wants to get as much as possible for their home, but If you price your home too high, potential buyers may completely overlook your home.

Also, remember the appraisal value directly affects the amount of the mortgage a buyer will be able to procure. If your home is appraised below the asking price, they may not be able to get the mortgage they need to buy the house.

Realtors remove the emotional element of selling a home. They will look at how much comparable properties have recently been sold for, what local buyers are looking for in a home, the condition of your home and any updates, and the current housing market, and help you determine an appropriate price point.
There is limited access to your home.
You can post the best photos and descriptions in your online listing, but most people want to see a house in person before buying it. They want to see for themselves if the kitchen is as functional as the description says it is or if the house is as well-maintained as it looks in the photos. If you limit access to your home, you will eliminate many potential buyers. Potential buyers from out of town are often the most motivated but have limited time to look at houses. Therefore, you need to make your home accessible to potential buyers as much as possible.
You didn't prepare your home before putting it on the market.
If you want your home to sell quickly and for the highest price, you must prepare (often called staging) your house for sale. Cleaning, decluttering, de-personalizing, and neutralizing the space can make your home more appealing and allow buyers to see themselves living in it. You may also want to consider a few minor upgrades or repairs.

According to NAR , "…staging helps sell homes three to 30 times faster than the nonstaged competition. Further, staging can help increase the sale price by up to 20% on average." If your home isn't selling, take a look around. Are you helping your home put its best foot forward to potential buyers?

We'll Help Sell Your Home Faster!

If you want to sell your home faster and for more, put a top real estate agent on your side! With 35+ years of experience and 200+ 5-star ratings, you can't do better than Pete Heim! Call him today at 610-745-3378 or 610-898-1441 , or connect with him online .

Commercial Real Estate Loans

Mon, 27 Nov 2023 22:42:34 GMT

Investing in commercial real estate – as opposed to residential real estate – offers many benefits – tax benefits, higher ROI, etc. However, it also presents several challenges, such as a higher purchase price and more difficult and expensive financing than residential real estate. So, if you’re taking the plunge into commercial real estate and require financing to purchase, build, or renovate the property, you must understand commercial real estate (CRE) loans.

What is a Commercial Real Estate Loan?

Commercial real estate is an income-producing property used for business purposes, such as retail, office space, large apartment buildings, etc. A CRE loan is a mortgage for an investor or investors (corporations, developers, partnerships, etc.) for a commercial property. These loans may come from banks, independent lenders, insurance companies, pension funds, and other sources such as the Small Business Administration (SBA).

The Differences Between Residential and Commercial Real Estate Loans

Buyers

Residential mortgages are usually given to individual borrowers, whereas CRE loans are often granted to business entities.

Financing

Many financing sources for residential real estate, such as FHA loans, loans backed by Fannie Mae and Freddie Mac, VA loans, etc., are unavailable for commercial real estate. Therefore, funding commercial real estate can be more difficult and expensive than financing residential real estate.

Interest Rates and Fees

Commercial loans typically come with higher interest rates and additional fees, such as loan application, loan origination, and survey fees. Sometimes, these additional fees are paid upfront, and sometimes, they are incorporated into the regular payments.

Repayment

Residential mortgages are paid in regular installments over a period of time (typically 15, 25, or 30 years). The payment amount is based on an amortization schedule ; therefore, the payment amount stays the same (excluding taxes and insurance). Over time, the amount of the payment going toward the principal increases, and the amount of the payment going toward the interest decreases. Residential loans can be refinanced and can be paid off early.

On the other hand, CRE loans are usually paid over five (or less) to twenty years, with regular payments (amortized over a longer term than a residential mortgage) followed by a final balloon payment of the remaining loan balance. Unlike most residential mortgages, the lender will likely incur prepayment penalties if a commercial loan is paid off early.

Loan-to-Value Ratios (LTV)

In both residential and commercial mortgages and loans, the LTV determines how much risk the lender faces if they grant the mortgage or loan to the borrower. The LTV is determined by dividing the loan amount by the property value. Typically, the lower the LTV, the better the financing rates because the borrower has more equity in the property.

Some residential loans, such as VA loans, allow higher LTVs (up to 100%). Commercial loans typically require a 65-80% LTV.

Debt-Service Coverage Ratio (DSCR)

Commercial lenders will also examine the DSCR. “DSCR is used by lenders to determine whether a property will produce enough income to cover the monthly debt payments,” LoanBase explains. “This allows businesses with less-than-stellar credit ratings or insufficient collateral to secure financing.” A DSCR of 1 shows the investor has exactly enough income to pay the debt. Many commercial lenders set a minimum DSCR between 1.2 and 1.25. People financing residential properties don’t have a DSCR.

Ready to Invest in a Commercial Property?

With over thirty-five years of real estate experience and more than two hundred 5-star independent customer ratings, Pete Heim and his team can help you find the right commercial property at the right price in Berks County and beyond.

Call today at 610-745-3378 or 610-898-1441 , or connect with him online .

Should You Allow Pets in Your Rental Property?

Thu, 16 Nov 2023 15:00:01 GMT

“Pet ownership in the U.S. has jumped significantly over the past three decades,” according to Forbes . “As of 2023, 66% of U.S. households (86.9 million homes) own a pet.” If you own a rental property (or you are considering buying one ), refusing to accept pets could eliminate more than half of potential tenants. On the other hand, pets can create additional risks – damage, noise, liability issues, etc.

So, should you allow pets in your rental property, or shouldn’t you? There is no one-size-fits-all answer to that question. You need to understand the pros and cons of both, and if you decide to accept pets, take steps to mitigate the additional risks they create.

Pros of Allowing Pets in Your Rental Property

Higher Income
In some states, including Pennsylvania, you can charge higher rent, pet fees, or a pet deposit for tenants with pets (except service animals). For someone with a pet, that additional cost may be worth it.
Bigger Potential Tenant Pool
“Nearly ninety percent of renters are pet owners,” according to the American Apartment Owners Association . “Millions of renters from around the country are in need of pet-friendly apartments. In 2008, more than 11 million searches for apartments that allow cats and dogs were conducted on Apartments.com.”
Lower Turnover
The more your rental property feels like home to your tenant, the more likely they are to stay longer, and for many, a house is not a home without a pet.
Healthier and Happier Tenants
Healthier and happier tenants tend to be better tenants. “Interacting with animals has been shown to decrease levels of cortisol (a stress-related hormone) and lower blood pressure,” according to the National Institutes of Health . “Other studies have found that animals can reduce loneliness, increase feelings of social support, and boost your mood.”
Decreased Chance of Unacceptable Pets
If you allow pets, tenants are more likely to be upfront about whether or not they have a pet rather than trying to sneak it onto the property.

Cons of Allowing Pets in Your Rental Property

Damage
Pets can cause damage to your rental property by peeing on carpets, scratching doors, chewing on baseboards, etc.
Noise
Excessive barking can disturb neighbors.
Odor
Litter boxes must be kept clean, or they begin stinking. Peeing on the carpet can leave a permanent odor. Improperly groomed pets can also cause odors.
Injuries
Dogs can bite, and cats can scratch, causing injuries to neighbors and yourself.
Allergy Issues
Pet allergies may be an issue if you have a multi-unit rental. “Allergies to cats and dogs affect 10 to 20% of the world’s population,” according to the Asthma and Allergy Foundation of America .

Steps to Mitigate the Risks Pets Create

Screen Tenants
Whether a potential tenant has pets or not, you should always thoroughly screen them to ensure they are a good fit. This screening becomes even more critical if they have a pet. Primary screening, such as checking credit, criminal, and eviction histories and talking to references, can help determine if a potential tenant is a responsible pet owner. You should also meet the animal to see if it is well-behaved and well-groomed and ask questions such as “How long will the pet be left alone?” and “Is the pet spayed or neutered?”
Create a Pet Policy for Renters
Provide and go over a written pet policy with potential renters (even those without pets, as they may get a pet later). That policy should include types of pets allowed, number of pets, tenant and landlord rules and responsibilities, etc.
Charge a Pet Deposit
A pet deposit collected when a tenant first moves in can be used to repair damages caused by the pet when the tenant moves out. Check with local state and housing laws to ensure that pet deposits are permitted.
Understand Insurance and HOA Pet Restrictions
Insurance companies or HOAs sometimes restrict certain breeds or larger dogs. Check on those restrictions before agreeing to accept pets.
Require Renters Insurance
Ensure that your insurance covers injuries caused by animals and require your renters to have renters’ insurance that covers dog bites and other injuries caused by pets.
Create a More Pet Friendly Property
There are steps you can take to make your rental property more pet friendly, such as installing vinyl, linoleum, or tile floors rather than wall-to-wall carpeting, using high-gloss, semi-gloss or satin paints, and more.

Looking for a Rental Property?

Pete Heim has over thirty-five years of real estate experience and more than two hundred 5-star independent customer ratings! If you’re looking to buy a rental property, Pete is a great choice!

Call him today at 610-745-3378 or 610-898-1441 or connect with him online .

Inflation and Home Prices

Thu, 09 Nov 2023 15:00:01 GMT

There are many reasons to buy or sell your home – downsizing, relocating for a job, etc. However, the economy and home values (sellers’ vs buyers’ market) can also impact your decision. Therefore, if you’re thinking about buying or selling your home, you may want to take some time to understand the correlation between inflation and home prices to determine if now is a good time to take that step.

We don’t pretend this is a comprehensive tutorial on inflation and the very complicated U.S. economy, but even a basic understanding can help you make more informed decisions.

What is the Consumer Price Index (CPI)?

The U.S. Bureau of Labor Statistics (BLS) explains, “The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.” The CPI is one of the most popular measures used to calculate the inflation rate.

What is Shelter Inflation?

While the overall inflation rate measures the cost of everyday items, shelter inflation is the measure of inflation specific to housing. It represents approximately “30% of the value of the basket of goods that the Bureau of Labor Statistics evaluates to put together the Consumer Price Index,” CNN Business explains. “For renters, shelter inflation includes rent and utility payments. For homeowners, the BLS looks at what it would cost to rent a similar house.”

What is Inflation?

Investopedia defines inflation as “a rise in prices, which can be translated as the decline of purchasing power [how many goods or services one unit of money can buy] over time. The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time. The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods.” Typically, the lower the inflation rate, the more buying power consumers have.

In September 2023, the inflation rate in the United States was 3.7%.

What is the Federal Funds Rate?

“The federal funds rate, or Fed rate, is the interest rate that U.S. banks pay one another to borrow or loan money overnight,” Nerd Wallet explains. “It also affects interest rates on everyday consumer products, such as credit cards or mortgages.” The Federal Open Market Committee (FOMC), part of the Federal Reserve System, sets this rate to keep inflation under control.

When inflation rises, the Fed typically responds by raising the Federal Funds Rate in an attempt to reach its target of a 2% inflation rate. This is precisely what happened in 2022 when the Fed began a cycle of interest rate hikes, raising rates from nearly zero to 5.5% as of this writing.

How Does All This Impact Home Buyers and Sellers?

We have recently been in a sellers’ market with record-low interest rates, high home prices, and low inventory. “As of July 2023, the median sale price for an existing home in the U.S. was a steep $406,700, the highest July price the National Association of Realtors (NAR) has ever recorded and just $7,000 short of the all-time record,” Bankrate reports. “And as of late August, the average 30-year mortgage rate had hit 7.36 percent — higher than it’s been in more than 20 years.”

Since mortgage rates have increased (and may continue to do so), will we see a shift from a sellers’ to a buyers’ market? Maybe. The interest rate alone does not determine the housing market.

Factors that determine the type of housing market (sellers’ vs buyers’) we’re in:

Interest rates – Lower interest rates generally result in more buyers
Housing inventory – the lower the inventory, the more demand for the houses available
The economy – Typically, if the economy is sluggish, so is the real estate market
Legislation – Tax credits, deductions, and subsidies can increase demand for real estate
Investment growth in the area – An area with a growing population, higher employment, etc., may increase demand for homes

“The combination of high mortgage rates, steep home prices and low inventory levels are lining up to make the 2024 housing market a challenging one for both buyers and sellers,” one expert predicts. “But if rates cool in 2024, as some experts predict, then market activity should heat up in response.”

Ready to Buy or Sell Your Home?

Now, more than ever, it’s a good idea to rely on the guidance of an experienced local real estate agent if you’re thinking about buying or selling your home. Pete Heim can help you determine if now is the right time for you to buy or sell your home, and if it is, help you buy or sell faster and for a better price.

Contact him today at 610-745-3378 or 610-898-1441 or connect with him online.

What You Need to Know About Home Equity

Thu, 02 Nov 2023 14:00:03 GMT

If you own a home and are thinking about buying a new one , doing home renovations, or looking for cash for another goal – your kid's tuition, consolidating debt, etc. - you may be able to leverage equity in your home. In fact, building equity is one of the most significant financial benefits of home ownership.

What is Home Equity?

Home equity is the difference between the value of your home and how much you still owe on your mortgage. There are two ways equity can increase –payments on your mortgage and/or an increase in the value of your home.

For example, let's say you purchased a home for $200,000 a few years ago, which is still valued at $200,000. You paid a down payment when you bought the house and made monthly mortgage payments for several years, so you currently owe $150,000 on your mortgage. That means you have $50,000 in equity in your home ($200,000 – $150,000).

Another example, let's say you purchased that same home for $200,00 a few years ago, but the value of your home has increased to $225,000. You've paid the down payment and monthly mortgage payments and currently owe $150,000 on your home. In this scenario, you have $75,000 in equity in your home ($225,000 - $150,000).

Unfortunately, you can also lose equity in your home. Let's use the scenario above. After the down payment and monthly mortgage payments, you owe $150,000 on your home, but the home's value dropped from $200,000 to $150,000. In this scenario, you have no equity in your home despite the money you've put out.

The good news is that home prices have increased by 4.3% annually since 1991.

What Can You Do With the Equity in Your Home?

Buy Another Home
If you have $50,000 equity in the home you're selling, you have $50,000 that you can use for a down payment, plus any money you've saved and earmarked for a down payment. This may allow you to buy a bigger or nicer home and immediately give you more equity in your new home.
Home Equity Line of Credit (HELOC)
"A home equity line of credit, also known as a HELOC, is a line of credit secured by your home that gives you a revolving credit line to use for large expenses or to consolidate higher-interest rate debt on other loans such as credit cards," Bank of America explains. "A HELOC often has a lower interest rate than some other common types of loans, and the interest may be tax deductible."
Cash-Out Refinance
"A cash-out refinance is a mortgage refinancing option that lets you convert home equity into cash," Investopedia explains. "A new mortgage is taken out for more than your previous mortgage balance, and the difference is paid to you in cash."
Home Equity Loan
"A home equity loan is a second loan that's separate from your mortgage and allows you to borrow against the equity in your home," Rocket Mortgage explains. "Unlike a cash-out refinance, a home equity loan doesn't replace the mortgage you currently have. Instead, it's a second mortgage with a separate payment."

How Can You Build Equity in Your Home More Quickly?

Pay More Than the Minimum Mortgage Payment
You can make bi-weekly payments instead of monthly payments, add an extra $100 a month to your mortgage payment, or apply your tax refund (or other cash windfall) to your mortgage payment. Any of these actions will increase the equity in your home more quickly.
Make a Big Down Payment
The bigger the down payment, the more equity you build in your home. For example, if you make a $5,000 down payment, you immediately have $5,000 in equity. If you make a $10,000 down payment, you immediately have $10,000 in equity.
Stay in Your Home Longer
Usually, the longer you stay in your home and pay down your mortgage, the more equity you build. Furthermore, "Homes generally increase in value over time," according to Rocket Homes . "The longer a person owns their home, the more appreciation they'll typically experience…"
Make Improvements That Increase Your Home's Value
If you make improvements to your home, you may increase the value of your home, thereby increasing your equity. According to Renofi , home renovations provide an average of 70% return on investment.

Ready to Use Your Home's Equity to Purchase a New Home?

Pete Heim is a lifelong Berks County resident and a leading Pennsylvania Realtor®. Pete knows Berks County real estate like nobody else, and he and his team are ready to get to work to help you find your dream home!

Give him a call today at 610-745-3378 or 610-898-1441 , or connect with him online .

How to Buy Commercial Property

Mon, 23 Oct 2023 21:26:09 GMT

There are both pros and cons to investing in commercial property . Commercial properties typically provide more financial rewards (steady cash flow, tax benefits, etc.) than single-family investment properties but are also more complicated and require more from the investor. Therefore, proper planning and due diligence are essential to your success as a commercial property investor.

What is Commercial Property?

“Commercial property is real estate that is used for business activities. Commercial property usually refers to buildings that house businesses, but can also refer to land used to generate a profit, as well as large residential rental properties,” Investopedia explains. “The designation of a property as a commercial property has implications for how it is financed, how it is taxed, and how the laws are applied to it.”

Commercial vs Residential Real Estate

Whereas residential real estate includes properties where individuals live (single-family homes, condos, townhomes), commercial real estate includes properties where businesses or corporations do business (offices, retail spaces, manufacturing properties). Larger apartment buildings are also considered commercial.

Here are some differences to consider when investing in commercial property:

Purchase Price - Commercial real estate tends to cost more to purchase than residential real estate.
Financing - Financing commercial real estate can be more difficult and expensive than financing residential real estate.
Taxes - You must pay taxes on both commercial and residential real estate; however, they are taxed differently.
Lease Terms - Most commercial real estate leases are two years or more, whereas residential ones are usually one year.
Property Management - Typically, commercial real estate management is more complicated, requires more personnel, and is more expensive than residential real estate management.
Selling Time - With a smaller buying pool, commercial real estate typically takes longer to sell than residential real estate.
Tenants - Commercial tenants are usually businesses or corporations and are more likely to follow your rules and respect your property.
Property Value - The value of a commercial property is based on the revenue the property can generate; therefore, the right tenant can quickly increase the value of a commercial property.
ROI - ROI can vary, but typically, commercial real estate yields a higher cash flow and ROI.

How to Buy Commercial Property

Educate Yourself

You can’t beat experience when it comes to investing in commercial property, but if you’re starting out, educating yourself is the next best thing. Read commercial real estate books, listen to podcasts, watch YouTube videos, talk to other investors, and join real estate investing groups to learn as much as you can about the ins and outs of commercial real estate.

Build a Team of Experts

It’s impossible to be an expert in everything, so you must build a team of experts who can provide guidance, answer your questions, and help you as you proceed. Experts to have in your corner may include the following:

A Commercial real estate agent
A commercial real estate attorney
A contractor that specializes in commercial real estate
A commercial management company
A commercial lender

Determine Your Investment Strategy

First, determine what you want to accomplish and then find an investment strategy to help you achieve your goal. Here are some investment strategies to consider:

Land Banking – Buying large tracts of land to be developed in the future.
Commercial BRRR (Aka Value-Add) – BRRR stands for Buy Rehab Rent Refinance Repeat. FinanceLobby explains, “With this approach, investors purchase and renovate a foreclosed property, rent it out, complete a cash-out refinance, and then repeat the process by purchasing a different rental property with the proceeds.”
Development – Buying land and constructing a commercial property on it.
Buy and Hold – A long-term investment property wherein the investor purchases a commercial property and rents it out.
Fix and Flip – Buying a commercial property, fixing it up, and reselling it at a higher price.
Owner-Occupied – Buying a commercial property to run your business in.

Decide What Type of Property

There are basically five types of commercial real estate:

Office – The most common type of commercial real estate, office buildings can range from a single office to a skyscraper with hundreds of offices.
Retail – Retail properties can include stores, banks, restaurants, etc., ranging from a small structure to an entire strip mall.
Industrial – Industrial properties include warehouses and manufacturing facilities.
Multi-family – Although people live in multi-family properties, large apartment complexes are considered commercial properties.
Special purpose – Special purpose commercial real estate includes schools, student housing, hospitality, sports stadiums, government, self-storage facilities, and religious properties.

Mixed-use properties include both commercial and residential. For example, a building with a restaurant on the first floor and one or more apartments on the second floor is considered a mixed-use property.

Secure Financing

Secure financing before you start looking for a property so you’ll know what you can afford and can expedite the deal once you find the property you want to purchase. You can utilize multiple funding sources, such as a traditional bank loan, Fannie Mae/Freddie Mac loan, CMBS loans, crowdfunding, private equity, etc.

Search for Property

Once you’ve done your research, determined your goals, etc., it’s time to work with an experienced real estate agent to help you find the right property to help you accomplish your goals.

Make an Offer

Once you have found a property that meets your criteria and will help you accomplish your goals, you must submit an offer. An experienced real estate agent can help you determine a fair price.

How to Find the Right Commercial Property

Pete Heim can help you find the right commercial property in Berks County and beyond. He has over thirty-five years of real estate experience and more than two hundred 5-star independent customer ratings!

Contact Pete and his team today at 610-745-3378 or 610-898-1441 or connect with him online .

5 Tips to Sell Your Home Quickly

Tue, 17 Oct 2023 14:00:03 GMT

There are many reasons why you may want to sell your home as quickly as possible – a job transfer to another city, a divorce, financial reasons, etc. Or it may be as simple as the desire to get through the potentially stressful house-selling process as quickly as possible.

How Long Does it Take to Sell a House?

You may wonder what is considered a quick sale. Remember, there are several stages of selling a house – listing the property, accepting an offer, appraisal and inspection, final negotiations, and closing. How long all those stages take can vary, but according to Rocket Mortgage , in March 2023, it took an average of 54 days (up from 38 days in March 2022) to sell a home. So, there’s your benchmark.

5 Tips to Sell Your Home Quickly

Hire an Experienced Real Estate Agent.
One of the best ways to speed up the sale of your home is to hire an experienced real estate agent. They have worked with other sellers looking for a quick sale, have connections that could help you find a buyer, and will know the local housing market. They can walk you through the entire process –setting the right price, listing your home, scheduling showings, negotiating, etc.
Set the Right Price.
Setting the right price can be tricky. You don’t want to price it too low and leave money on the table. But then again, you don’t want to set it too high – especially if selling quickly is a priority – and find yourself sitting on a property that doesn’t sell. You may also spend more time negotiating if you set the price too high.

To determine the right price, consider the current housing market and look at comparable homes that recently sold. If selling your home quickly is your top priority, consider setting the price slightly lower to generate more interest.

Another psychological strategy to consider is “ charm pricing ,” which claims that setting the price of a product (in this case, a house) ending in an odd number will sell better. An experienced real estate agent is invaluable when it comes to pricing your home to achieve your goals.
Make Your Home More Appealing to Buyers
If you want your home to sell quickly (and at the best price), you need to spend some time making it more appealing to buyers. At the very least, you should clean and declutter your home. Potential buyers need to be able to picture themselves living in your home.

Here are additional tips to make your home more appealing to buyers:
- Make a good first impression
- Keep it neutral
- Remove pets
- Go through your closets and cabinets
- Light up your home
- De-personalize
- Focus on the kitchen
- Boost your curb appeal
- Take care of quick repairs
Keep your home in show-ready condition 24/7
B e prepared to allow potential buyers to tour your home when they’re ready – even with less than 24-hour notice – if you want to find the right buyer more quickly.
Offer Incentives
Another way to incentivize potential buyers and sell your home more quickly is to offer incentives, such as covering closing costs, agreeing to inspections, offering a transferable home warranty, and working with their move-in dates. This may be enough for a buyer to choose your house over another.

Go With a Top Realtor in Berks County

Pete Heim has been serving Berks County buyers and sellers for over 35 years. Put his extensive Berks County experience to work for you!

Contact Pete and his team today at 610-745-3378 or 610-898-1441 or connect with him online .

7 Signs It May Be Time to Sell Your Rental Property

Tue, 03 Oct 2023 14:00:01 GMT

Owning rental property is a great way to build wealth, but – as they say – the only constant in life is change. Your personal circumstances, the economy, world events, etc., are constantly changing, and any one of these changes may have you thinking it might be time to sell your commercial property .

Signs It May Be Time to Sell Your Rental Property

You don’t want to be a landlord anymore. Managing a property takes time and can be frustrating at times. You need to advertise the rental, screen applicants, collect rent, maintain the building, make repairs as required, respond to tenant complaints, and sometimes evict tenants. After multiple phone calls in the middle of the night from tenants or tenants who are chronically late with their rent payments, you may decide you don’t want to be a landlord anymore, and it may be time to sell your rental property.
The value of your property increased. Maybe you were lucky or smart enough to purchase a rental property in an up-and-coming neighborhood, and the property values have shot through the rough. Or perhaps you just got a great deal when you bought the property or made a few improvements, and now the value of your property has significantly increased. If the profit you would receive from selling it outweighs the profit from rent payments, it may be time to sell your rental property.
Your profit is declining. If you discover ongoing maintenance issues, falling rent prices, or extended vacancy in your property, you may see your profit declining. If your profit doesn’t meet your goals, it may be time to sell your rental property.
Your property needs too much maintenance. Every property needs some maintenance and occasional updates. However, if you discover you’ve purchased a money pit that is bleeding you dry in maintenance costs or a building you’ve owned for years is getting older and needs more repairs and possibly a face-lift, it may be time to sell your rental property.
Your life has changed. If you experience any life changes – a marriage, a divorce, an injury, a move, etc. – you may have less patience, time, resources, etc. to manage a rental property. If you find a life change is making managing a rental property a burden on you – emotionally, physically, financially, etc. - or simply something you no longer want to do, it may be time to sell.
Property taxes have drastically increased. Anyone who owns property in Pennsylvania is required to pay property taxes, and unfortunately, PA property tax rates are higher than the national average. In Berks County, the property tax rate is determined yearly, and you have little control over whether that rate goes up, down, or stays the same. In July 2023, the Reading Eagle reported, “10 Berks School Districts Raise Property Taxes.” If property taxes drastically increase, eating into your profit, it may be time to sell your rental property.
Your investment goals have changed. Investing in real estate offers many benefits – tax benefits, leverage, and a hedge against inflation, but it is also a non-liquid, long-term investment. If your investment goals change, investing in mutual funds, money markets, CDs, treasury bills, etc., may better suit your new goals, making it a good time to sell your rental property.

Are You Ready to Sell Your Rental Property?

If you’ve concluded it’s time to sell your rental property, you can’t do any better than real estate agent Pete Heim. His 25+ successful years of selling real estate in Berks County will help ensure your property sells quickly and at a great price.

Contact Pete and his team today at 610-745-3378 or 610-898-1441 or connect with them online .

Is it Time to Sell Your Home?

Tue, 26 Sep 2023 14:00:01 GMT

A home means different things to different people and even changes as we proceed through this thing called life. Your current home may be a stepping stone to something bigger or smaller or in another location, or it may be the home you plan to live in forever.

With homes selling at record-high prices in the last few years, the thought of selling your house may have crossed your mind. According to the National Association of REALTORS® (NAR), "The median sale price for an existing home in June [2023] was $410,200, the second-highest recorded in the last 24 years." You hear these stories about bidding wars and buyers skipping inspections, and it may be hard to resist the urge to sell your home. The housing market is definitely something to consider when buying or selling a house, but that alone may not mean it's the right time for you to sell your home.

According to the NAR , most sellers lived in their home for ten years before selling, and "the most commonly cited reason for selling their home was the desire to move closer to friends and family (21%), moving due to retirement (11%), or the neighborhood has become less desirable (11%)." Notice "a robust sellers' market" isn't on that list?

Before you take that leap and list your home for sale, you need to look at the big picture – your current needs, your financial situation, and the current housing market - and determine if it is the right time to sell your home.

Signs it May Be Time to Sell Your Home

You've outgrown your current home.

As your family grows, your need for more space may also increase. If you find your family of five fighting over the use of one bathroom every morning, it may be time to consider buying a larger home. Or, you may have purchased a smaller house because that's all you could afford at the time, but now you're more financially secure and want something bigger.

Your current home Is too big for your needs.

As children grow up and move out, you may find your 5-bedroom house is more than you and your spouse need. Furthermore, you're spending money heating, cooling, and maintaining a big house, along with time cleaning space you don't use anymore. It may be time to move into a smaller home.

You no longer can or want to maintain your home.

Maybe finances are tighter, and maintaining your older or larger home is becoming a challenge. Perhaps you're getting to a point where you can't (or shouldn't) do some of the maintenance you used to do on your house. Or maybe you just want to spend time doing something other than maintenance on your home. A condo or a community that maintains the grounds and exterior of your home may be a better fit for your current needs.

Mortgage interest rates are low.

If you sell your home, you'll need another place to live. If you decide to purchase another home with a mortgage, a lower interest rate can save you a lot of money over time. For example, if you buy a $300,000 home with a 30-year mortgage at a 5% interest rate, the total cost of your loan will be approximately $579,767 in principal and interest. At an 8% interest rate, that same loan would be roughly $792,466.

It's a sellers' market.

This is pretty much where we started this conversation. We are currently still in a sellers' market , where the demand for homes is higher than the available inventory of homes. In a sellers' market, homes typically sell more quickly and at a higher price. It's typically better to sell during a sellers' market than during a buyers' market, but as we said before, this alone isn't always enough of a reason to sell your home.

You have equity in your home.

Freddie Mac explains, "Your home's equity is the difference between how much your home is worth and how much you owe on your mortgage." Most experts suggest that you have at least enough equity in your home to cover closing costs and the down payment on your new home. If you have less equity than that, it would probably be financially wise to wait to sell your home.

Your Finances are Healthy.

Selling your home, moving, buying a new home, or renting a home costs money, so you should be financially healthy before selling your home. Do you have enough liquid cash to cover repairs, moving expenses, down payments, security deposit, etc.? If you're buying another house, will your debt-to-income ratio allow you to get a mortgage at a decent interest rate?

Are You Ready to Sell Your Home?

If you've concluded that it's the right time to sell your home, Pete Heim can help! He's been serving Berks County buyers and sellers with pride for over 35 years and is consistently ranked among the best real estate agents in Berks County. Put his experience to work for you!

Contact him today at 610-745-3378 or 610-898-1441 or connect with him online .

5 Types of Industrial Real Estate to Consider

Mon, 18 Sep 2023 14:27:58 GMT

Are you ready to invest in commercial real estate ? Or perhaps you’re ready to expand your commercial real estate portfolio. Investing in real estate – commercial or residential - offers many benefits, but it isn’t for everyone. Therefore, you must do your research.

When most people think of commercial real estate, they think about buildings they regularly utilize – offices and retail spaces. Another type of commercial real estate is industrial – properties, where goods are made, stored, and shipped.

“The U.S. industrial market continued to post strong fundamentals in 2022 and closed the year with positive gains in occupancy, rental rates, and construction activity. Core markets across the country have thrived during this time, building and absorbing millions of square feet of industrial real estate,” according to Colliers . “2023 looks to be another healthy year, despite concerns of moderated industrial activity. While a cooling-off period is expected, significant opportunities remain for both investors and occupiers of industrial space.”

Typically, industrial properties must be customized for different types of businesses and products.

Types of Industrial Real Estate

Manufacturing:
Manufacturing properties are where goods are… well… manufactured. There are heavy manufacturing and light assembly. Generally, these properties include an area for equipment used to manufacture and assemble products, a small office space, and loading docks. Heavy manufacturing usually requires huge buildings to house big, heavy manufacturing equipment. Typically, they also need a suitable power source and ceilings at least ten feet high. Facilities for light assembly typically require less space because products are usually assembled from smaller parts.
Warehouses:
Once products are manufactured, they need to be moved to end users, which is where warehouses come in. There are three common types of warehouses. Distribution warehouses are where products are distributed. The size of these facilities can vary but are generally 50,000 square feet or bigger, and they typically need to be located near a major highway or airport to ensure quick delivery to end users. General-purpose warehouses are where goods are stored; therefore, location is less crucial. Truck terminals require much less space because they are used to move goods from one truck to another, not as storage.
Research and Development:
Research and development facilities are where companies develop new products or improve upon existing products. The ideal size and location for these facilities can vary greatly.
Data Centers:
Data centers are where companies keep equipment, such as computer servers and telecom switching equipment, to hold their data, keep their internet running, and make cloud storage possible. They average about 100,000 square feet but can be much bigger.
Showrooms:
Businesses use showrooms to display and sell their products. Think car dealerships. These buildings are typically a combination of offices, warehousing, and showrooms. Again, the size can vary depending on the product they are displaying.

This is not a comprehensive list, but an excellent place to start if you’re considering investing in industrial real estate.

Are You Ready to Invest in Commercial Real Estate?

If you’re ready to purchase commercial real estate – whether it’s an office building, retail space, or industrial property, you can’t do any better than Peter Heim. Put his experience to work for you!

Contact Pete and his team today at 610-745-3378 or 610-898-1441 or connect with him online .

5 Tips for Commercial Real Estate Investing

Thu, 14 Sep 2023 14:30:00 GMT

Historically, real estate investments – both commercial and residential - have provided one of the best investment opportunities for building wealth. According to Allied Market Research , the global real estate investment market was valued at $11444.7 billion in 2021 and is projected to reach $30575.5 billion by 2031.

What is Commercial Real Estate Investing?

Whereas residential real estate includes properties where individuals live, commercial real estate involves properties where individuals, businesses, or corporations do business.

There are basically five types of commercial real estate:

Office – The most common type of commercial real estate, office buildings can range from a single office to a skyscraper with hundreds of offices.
Retail – Retail properties can include stores, banks, restaurants, etc., ranging from a small structure to an entire strip mall.
Industrial – Industrial properties include warehouses and manufacturing facilities.
Multi-family – Although people live in multi-family properties, large apartment complexes are considered commercial properties.
Special purpose – Special purpose commercial real estate includes schools, student housing, hospitality, sports stadiums, government, self-storage facilities, and religious properties.

Pros and Cons of Commercial Real Estate Investing

Investing in any real estate offers both pros and cons. On the plus side, real estate investments – both commercial and residential - can provide a steady cash flow, tax benefits, and a hedge against inflation. On the minus side, real estate investments are long-term, non-liquid investments that require ongoing management.

Whether you are new to real estate investing and trying to decide whether to invest in commercial or residential or have been investing in residential real estate and are thinking about jumping into commercial real estate investing, it’s essential to understand the different legal, financial, and practical characteristics of each .

For example, commercial real estate typically requires more money upfront and has fewer financing options than residential real estate. On the other hand, commercial real estate often attracts more reliable tenants and provides a higher cash flow and return on investment.

5 Helpful Tips for Commercial Real Estate Investing

Understand what you are getting into.
Do your research. Understand the difference between commercial and residential – both the pros and cons.
Recognize different types of commercial real estate loans.
As we mentioned earlier, commercial real estate tends to require more money upfront and has fewer financing options than residential real estate. Therefore, understanding the types of commercial real estate loans available – conventional, Small Business Administration, Certified Development Company, etc.- is key to purchasing your commercial investment.
Consider real estate success metrics.
Renting out a property is a business, and you need to consider how you will measure success. Some real estate metrics include net operating income (how much you’ll make from an investment after operating costs), cap rate (estimate of future profits), and Cash on Cash (the return on out-of-pocket money invested relative to the amount financed).
Ensure you have a cash reserve.
Things happen - the building needs a new roof, a tenant doesn’t pay, etc. Setting aside a reserve of money to help cover these unexpected expenses can mean the difference between success and failure.
Work with an experienced realtor.
A professional agent will provide superior negotiation skills and local real estate market expertise. Plus, they have access to all commercial listings, assist with the real estate buying process, and more, which can save you time and money and help you avoid making costly mistakes.

Ready to Invest in Commercial Real Estate?

Go with the best; go with Pete Heim, who is consistently ranked among the best real estate agents in Berks County. Contact him today at 610-745-3378 or 610-898-1441 or connect with him online .

Smart Ways to Get Higher Offers for Your Home

Thu, 07 Sep 2023 14:30:00 GMT

Even in a seller’s market, there are some strategies you can use to ensure that you receive the highest offers for your home .

Find an Experienced realtor

According to the National Association of Realtors , “FSBOs [For-Sale-by-Owner] typically sell for less than the selling price of other homes; FSBO homes sold at a median of $225,000 last year, significantly lower than the median of agent-assisted homes at $345,000.”

So, hiring a realtor already puts you at an advantage. Hiring an experienced real estate agent who understands the local housing market and the selling process gives you even more of an advantage when it comes to a higher selling price.

Use high-quality photos

Good photos highlighting your home’s features have become more crucial than ever. After all, for many, online photos are their first impression of your home. According to the National Association of REALTORS® Research Group , 84% of buyers frequently use the Internet to search for homes. Furthermore, 87% of buyers cited photos as a value of website features.

Invest in value-adding upgrades

If you are considering making any improvements to your home with the sole purpose of selling your home for more, consult with a real estate agent. Some upgrades will typically bring a significant return on investment, while others won’t.

According to Forbes, these home improvement projects will yield the highest ROI:

Updated kitchens and bathrooms (and it doesn’t always need to be a major renovation)
Paint
Refinish hardwood floors (70-80% ROI)
Update mirrors
New hardware
Updating your outside entrance (great first impressions are crucial)
Upgrade your outdoor living
Create functional spaces
Finish your attic or basement

Stage your home

Staging can increase your home’s perceived value and help buyers visualize themselves living in your home (especially vacant homes). “Staging is an investment that helps maximize the rate of return on the sale of the property—and usually costs less than the first price reduction,” according to the National Association of REALTORS®. “With an average investment of 1% of the sale price into staging, about 75% of sellers saw an ROI of 5% to 15% over asking price, according to data from the Real Estate Staging Association (RESA).”

Staging can help buyers connect emotionally, increase your home’s perceived value, and help buyers visualize themselves living in your home (especially vacant homes).

Determine the right asking price

This is perhaps one of the most valuable contributions an experienced real estate agent brings to the table – determining the right asking price. Set the asking price too high, and fewer people will look at your home. Price it too low, and you may miss out on a higher selling price. To determine the right price, consider the current housing market and look at comparable homes that recently sold.

Another strategy that sometimes works is using the right price point. “The more precisely a seller priced a home (say $497,500), the more quickly it sold,” according to Business.com . “Also, initial offers for this charm-priced home were higher than for homes with prices like $500,000. Home buyers who see a charm price assume the price has already come down a bit, and the owners are looking to sell quickly.”

Follow your head, not your heart

When selling a home you have lived in, built memories in, and loved for many years, this can be a challenge. But if you want to get the highest selling price, you need to understand the true value of your home and follow your head, not your heart. Remind yourself that this is a business transaction.

Ready to Sell Your Home?

Pete Heim specializes in buying and selling homes faster and for a better price, and he has over 200 amazing five-star independent ratings to prove it! Contact Pete at 610-745-3378 or 610-898-1441 or connect with him online .

8 Apartment Maintenance Tips for Landlords and Property Managers

Thu, 31 Aug 2023 14:15:00 GMT

If you are an apartment landlord – whether there's one unit or 500 units in your rental property - it is your moral and legal responsibility to ensure a safe environment for your tenants. Investing time and resources in regular building maintenance is crucial to fulfilling this responsibility and provides many additional benefits.

Benefits of Apartment Maintenance

The good news is that properly maintaining your rental property provides you, as the landlord, with many benefits:

Attracting and retaining better tenants
Getting higher rent
Preserving and increasing the value of your property
Minimizing the risk of litigation
Preventing more costly repairs
Adhering to tenant laws, guidelines, and regulations

8 Apartment Maintenance Tips

Change air filters in the HVAC system.
"Air filters trap pet hair, dust, and other irritating particles so that your air conditioning system delivers fresh, clean air back into your home," according to This Old House . "Eventually, the filter traps so much dust and debris that air can't properly filter or travel to the HVAC unit…" This can lead to high energy bills, health concerns, and system failure. The general rule is to replace the filter every three months, but it's best to regularly (about once a month) check your air filters and replace them when they're dirty.
Flush the water heater.
Flushing your water heater at least once a year removes sediment that can accumulate in the bottom of your water heater, which can reduce the efficiency of the heater and lead to damage.
Inspect and refresh shower caulk.
Caulk prevents water from going where it shouldn't. Damaged, cracked, or insufficient caulk can cause water damage, mold, and mildew. Regularly inspect caulk and refresh as needed.
Inspect for water leaks/damage.
Water, where it doesn't belong, is a common issue that can cause a lot of damage over time. Therefore, you should regularly check all water sources to ensure there are no leaks and watch for water in places where it doesn't belong and signs of water damage.
Inspect the roof and clean the gutters.
It's easier and less expensive to replace a few damaged shingles than repair or replace a damaged roof. Gutters are designed to direct water runoff, but clogged gutters can cause damage. Checking your gutters at least twice a year can prevent water damage, reduce the risk of a cracked foundation, ward off pests, protect your roof, and more.
Check Smoke and Carbon Monoxide Detectors
Smoke and carbon monoxide detectors save lives; it's that simple. So, test your detectors regularly. The National Fire Protection Association (NFPA) recommends changing batteries "when turning back clocks in the fall and ahead in the spring."
Control Pests
Preventing pests should be your first line of defense. Fix leaky plumbing, don't let water accumulate anywhere, close off places where pests can enter and hide, etc. If you know pests can be an issue on your property, advise tenants to store food in sealed containers, minimize clutter, and not leave food on the counter. If you do discover a pest problem, address it immediately.
Pay attention
As you walk around your property, look for any issues, such as burnt-out light bulbs, drywall damage, landscaping that blocks an entrance, etc., and make repairs before those small issues become bigger, more expensive problems.

How to Buy an Apartment Building or Other Investment Property

Pete Heim is a lifelong Berks County resident and a leading Pennsylvania Realtor®. Pete knows Berks County real estate like nobody else, and he's ready to work to help you find an apartment building or other investment property. Contact Pete Heim at 610-745-3378 or 610-898-1441 or connect with him online .

5 Tips for Buying and Selling a Home at the Same Time

Wed, 23 Aug 2023 13:57:13 GMT

The home buying and selling process can be complex and stressful. Buying and selling a home simultaneously only adds to the complexity and stress. While you can't control every step in the process, some planning will make the process goes much smoother.

Here are 5 Tips for Buying and Selling a Home at the Same Time

Find an Experienced Agent
An experienced agent can help you navigate the complex process of buying and selling a house simultaneously. They've done it many times before and understand the issues you may encounter and solutions to them. They can use their experience and local market expertise to answer your questions, help you determine the market value of your home, help you negotiate the price, provide tips to get your home ready for sale, and discuss timing, strategies, etc. An experienced agent can offer options you may not be aware of, such as sale or settlement contingencies, extended closing, financing options, etc.
Understand the Housing Market
Understanding the housing markets where your current and future homes are located can help you make some crucial decisions about pricing, timing, and more. If you're in a buyer's market…There is a high inventory of homes for saleHomes sell for less than the original listing priceSellers offer buyers incentives, such as paying for closing costs or credit for new appliancesHomes are on the market longer If you're in a seller's market…There are few homes available for sale for buyers to choose fromHomes sell more quicklyBuyers need to make quick decisions or risk losing a home to another buyerSellers receive multiple competing offersSellers don't need to make as many (if any) concessionsHomes sell for more money, often over the asking price.
Understand Your Finances
Check your credit score. Talk to your financial planner and mortgage lender to determine how much liquid cash you have available, how much equity you have in your current home, and what loans you may qualify for. "Home equity is the amount of your home that you actually own," Rocket Mortgage explains. "Specifically, equity is the difference between what your home is worth and what you owe your lender." There are five different types of mortgages availableConventional loan – Best for borrowers with a good credit scoreJumbo loan – Best for borrowers with excellent credit looking to buy an expensive homeGovernment-insured loan – Best for borrowers who have lower credit scores d-rate mortgage – Best for borrowers who'd prefer a predictable, set monthly payment for the duration of the loanAdjustable-rate mortgage – Best for borrowers who aren't planning to stay in the home for an extended period, would prefer lower payments in the short-term and are comfortable with possibly having to pay more in the future.
Prepare Your Home
Preparing your home for sale can help it sell more quickly and at a higher price. Preparation may include cleaning, decluttering, de-personalizing, painting, repairing, and/or updating. You never know how long this process may take, so it's good to start it earlier rather than later.
Decide if You're Going to Buy or Sell Your House First
Now that you understand your finances and the housing market, it's time to decide if you should put your home on the market and delay your search for a new home until it's sold, wait to put your existing home on the market until you find a new home, or put your existing home on the market while searching for your new home. Each has pros and cons , and – at the risk of sounding like a broken record – an experienced real estate agent can help you make that decision.

Are You Ready to Buy or Sell a Home?

Are you looking for an experienced real estate agent? Contact Pete Heim today at 610-745-3378 or 610-898-1441 or connect with him online . He's been serving Berks County buyers and sellers with pride for over 35 years. Put Pete's experience to work for you!

Investment Properties Pros and Cons

Sat, 05 Aug 2023 22:00:00 GMT

If you want to diversify your investment portfolio, you may be considering purchasing an investment property . Investment properties provide many benefits and historically have been one of the best investment options for building wealth.

There are passive ways to invest in real estate (such as real estate investment trusts) and active ways to invest in real estate. An active real estate investor may purchase a commercial or residential property for regular cash flow (rent) or to make a profit by buying it for less than they sell it for.

According to Allied Market Research , the global real estate investment market was valued at $11444.7 billion in 2021 and is projected to reach $30575.5 billion by 2031. But investment properties aren’t for everyone. Before deciding to purchase commercial or residential real estate as an investment, you must consider the pros and cons.

Investment Properties Pros

Steady Cash Flow – Collecting rent and other fees from tenants provides a monthly income or cash flow, which is mostly passive income.
Appreciation – If you buy the right property at the right time, it should appreciate over time and typically at a rate that outpaces inflation. Plus, real estate is a tangible asset that always has some value, whereas a stock can go down to zero. According to Rocket Mortgage , the average home appreciation rate in the U.S. is 2% month over month and 14.5% year over year.
Tax Benefits – Investment properties allow for tax deductions, such as maintenance and repairs, mortgage interest, and other expenses. Also, you don’t pay income tax on a property’s value increase until you sell it, and you can roll the gain over into another real estate investment to defer paying the tax even further into the future. Residential rental properties can be depreciated over 27.5 years, reducing the amount of your taxable income.
Leverage - Leverage uses “borrowed capital or debt to increase the potential return of an investment.” For example, you can invest $30,000 as a down payment on a property and, with a mortgage, receive the benefits of owning an asset worth $100,000.
Equity – Equity is the difference between what your property is currently worth and how much you owe on the mortgage. You build equity as you pay down on your mortgage and if the value of your property increases.
Active Investment Control – If you buy stocks or bonds, you have little control over that asset. You don’t make the decisions that influence the value of that stock; a board typically makes those decisions. With real estate, you have more control. As an active real estate investor, you can find the best deals, control costs, etc., to influence your profits.
Hedge Against Inflation – Inflation is a rise in the price of goods and services, which results in a decline in purchasing power. Inflation decreases the value of many investments. However, historically, real estate outpaces inflation. While the price of bread, rent, property values, etc., increases with inflation, your monthly mortgage payment stays the same, which can mean higher profits.

Investment Properties Cons

Need Money to Start – You know the old adage, “You need to spend money to make money.” To get started in real estate investing, you’ll need a down payment, closing costs, and possibly money to repair or update the property. Once you own the property, you’ll have ongoing expenses, such as property taxes, insurance, maintenance, etc.
Required Management and Maintenance –There are many things to know about buying, owning, and operating a rental property, and they need to be managed and maintained. Some real estate investors hire one or more people – building managers, maintenance workers, etc., thereby reducing their profit, while others do the work themselves, which requires their time and effort.
Long-Term Investment - Typically, investment properties are not “get rich quick” schemes but long-term investments. It usually takes time to see a profit from a rental property.
Not Liquid – If you need money quickly, you can sell stock and receive your money in approximately two business days. But it takes thirty days or more to list, sell, and close on a house sale.
Time and Sometimes Headaches – It takes time to find and buy the right property and then manage and maintain it. You may get calls in the middle of the night because a pipe burst or the heater stopped working. And not all tenants are ideal. You may have a tenant who refuses to pay rent or trashes your property.
Unique Risks – Someone injured on your property can sue you, you may buy a money pit or have trouble finding good tenants.

Ready to Purchase an Investment Property?

If you determine that the pros outweigh the cons of investing in a property, contact Pete Heim at 610-745-3378 or 610-898-1441 or connect with him online . Pete and his team will treat you with the professional and courteous service you deserve!

Should I Hire a Property Manager?

staff@powermarketinginternational.com (Staff Blogger) — Sat, 29 Jul 2023 22:00:00 GMT

Are you among the 10.6 million Americans earning an income from rental properties, or perhaps want to become one? As a rental property owner , one of the most important decisions you need to make is whether you want to hire a property manager to handle the day-to-day operations of your property or handle them yourself. Nearly half (45%) of all landlords manage their properties.

What is a Property Manager?

A property manager can be an individual or an entity that oversees a rental property's administrative, maintenance, and managerial tasks. Typical property manager responsibilities include the following:

Advertising the rental
Screening and selecting tenants
Collecting rent and other fees
Handling maintenance and repair issues
Responding to tenant complaints
Evictions

A property manager can make your life easier, but it comes at a cost. The cost of a property manager can vary but averages between 5 and 20% of the property's monthly rental income.

Pros of a Property Manager

The following advantages are based on the assumption that you hire an experienced and competent property manager.

Avoid Costly Lawsuits and Liabilities – An experienced property manager understands fair housing and local laws. One property management service offers these examples. "You might deny a tenant with a service animal because you don't allow pets, and that will land you in trouble with both the Fair Housing Act and the Americans with Disabilities Act. Maybe you'll deny one tenant's application because you're looking for a higher income level, but then after your property is vacant for a month, you approve another applicant with the same income. That's discrimination."
Better Tenants – You will lose money if your units are vacant. And if you have a high tenant turnover rate or a difficult tenant (never pays rent on time, damages your property, etc.), you're wasting a lot of time and resources. An experienced property manager will know how to screen applicants to attract better tenants, and those tenants are more likely to stay if someone can quickly respond to their needs.
Increased Efficiency and Savings – An experienced property manager knows the ins and outs of managing a property and its tenants. They've dealt with tenant disputes, evictions, and more. And they will have streamlined systems and a network of reliable and efficient vendors to work with. Some would argue that the experience and knowledge of a property manager can maximize your profits.
Saves You Time – If you decide to manage your rental property on your own, you are on call 24/7. You will spend time finding and screening tenants, maintaining the property, collecting rent, and dealing with tenant issues. A property manager will typically handle all of that, thereby saving you time.
Ability to Invest in More Properties – You can't be in two places at once, so if you manage your own property, you may not have the time or resources to manage another property.
Peace of Mind – If you hire an experienced and reliable property manager you trust, you can hand over most of the responsibilities while enjoying the benefits of owning a rental property without all the stress and headaches.

Cons of a Property Manager

Lower Bottom Line – Property managers cost money and will bite into your profits. In addition to the monthly fee, you may also have to pay leasing, renewal maintenance, or other miscellaneous fees.
Lack of Involvement – Typically, property owners are more invested (financially, emotionally, etc.) in a property than a property manager. Furthermore, some property owners prefer being hands-on. They want to make the decisions and keep a close eye on their property and their tenants, which may make it difficult to hand the reins over to a property manager.

Should You Hire a Property Manager?

It may look as if the pros/cons list is unbalanced, with significantly more pros than cons, but the cost of a property manager may be enough reason not to hire a property manager. Only you can decide if a property manager is right for you, but in addition to weighing the pros and cons, you may also want to ask yourself the following questions:

Do you live close to your rental property?
Do you have more than one rental property?
Do you have the time to deal with the day-to-day operations of a rental property?
Do you want to be hands-on?
Can you afford the cost of a property manager?
Is your property part of an affordable housing program, which can complicate the rental process?
Are you familiar with or willing to learn landlord-tenant laws and regulations?

Ready to Buy or Sell an Investment Property?

Contact Pete Heim at 610-745-3378 or 610-898-1441 or connect with him online . Whether buying or selling a commercial or residential investment property, Pete and his team will treat you with the professional and courteous service you deserve!

10 Tips to Make Your Home More Appealing to Buyers

Wed, 19 Jul 2023 23:05:37 GMT

Yes, we are currently in a sellers’ market, but that doesn’t mean there aren’t things you can do to get your home sold faster and for more money . Or maybe you aren’t quite ready to sell your home but are considering some updates. Some updates will appeal to buyers, and some won’t. Some will provide a hefty return on investment, and some won’t. It’s always best to consult your realtor before making significant changes.

10 Tips to Make Your Home More Appealing to Buyers

Make a Good First Impression – First impressions are everything! Make sure potential buyers’ first impression of your home is good because you won’t get a second chance. Potential buyers are looking for a safe, warm, and inviting home. Try to look objectively at the front of your home. Consider cleaning up your landscaping if it’s gotten out of control, adding a nice light if the front of your home is dark, adding a pretty planter or bench to make your front porch more inviting, or painting your front door if it’s looking a little dingy.
Keep it Neutral – Potential buyers need to be able to visualize themselves living in your home. Bright colors, bold wallpaper, or eclectic decor aren’t everyone’s liking. Creating a space with neutral colors and decor will appeal to more buyers.
Remove Pets – We love pets as much as the next person, but not everyone feels the same way. Some potential buyers may have a fear of dogs, be allergic to cats, or (gasp!) simply not want a pet. Therefore, it’s best to remove your pets and any evidence of them (food bowls, toys, beds, etc.) during showings.
Go Through Your Closets and Cabinets – One survey found that a lack of storage is one of the top home-related annoyances. Most buyers will open closets and cabinet doors to determine how much storage your home has. If they see a closet stuffed to the gills with clothing or have to dodge a storage container that falls out of a kitchen cabinet, it gives the appearance that your home lacks storage. Now is an excellent time to go through your closets and cabinets and either get rid of stuff you no longer need or pack up the stuff you aren’t currently using.
Light Up Your Home – Most people would rather live in a bright, cheery home than a dark, dingy one. Furthermore, proper lighting can enhance a home’s features, make it seem bigger, and create a more inviting space. Installing energy-efficient lighting can also appeal to eco-conscious buyers or those looking to save on utility costs. Consider the three layers of light - ambient, task, and accent – when staging your home, and don’t forget about natural lighting.
De-Personalize – De-personalizing allows potential buyers to visualize themselves living in your home. Remove personal items such as family photos, collections, and personal keepsakes when showing a home. And this will be very difficult for some sellers to hear, but not everyone is an Eagles fan and may even be…gasp… Dallas fans. We know…. It’s hard to believe, but it’s true. So, if you have a man cave filled with Eagles memorabilia, consider removing most of the memorabilia and make it a room that would appeal to more potential buyers.
Focus on the Kitchen – Research shows the kitchen is the most important room to most buyers, so make sure your kitchen is inviting. At the very least, ensure that it is clean and clutter-free. Consider repairing/updating or replacing anything outdated or broken. You may even want to consider taking it further with new flooring or an energy-efficient appliance. Research shows that a “minor” kitchen remodel provides the highest return on investment (85.7%).
Don’t Forget the Outside – You’ve probably heard the importance of curb appeal when selling a home, which relates to making a good first impression. But don’t forget the back and side yards. Ensure the grounds are landscaped, well-maintained, and devoid of toys and debris. A nice deck or patio with a few chairs or a table and chairs, along with a few colorful potted plants, can extend a home’s living space.
Create Retreats – A retreat can be anywhere – the living room, outside, etc. -but you may want to start with the bathrooms and the master bedroom. Remove personal items from the sink and counters and keep them clean. Consider adding fluffy towels, an area rug, or a basket with spa items. Keep your bedroom clutter-free and your bed made with well-made bedding, pillows, etc. If you have room, create a little reading nook with a table and a comfortable chair.
Be Ready to Show – Always keep your home show-ready – cleaned, decluttered, etc. While it may be inconvenient, it will get your home sold more quickly.

Sell Your Home Faster and for a Better Price

Pete Heim, a lifelong Berks County resident, knows Berks County real estate like nobody else! He specializes in buying and selling homes faster and for a better price. Contact Pete and his dedicated team today at 610-745-3378 or 610-898-1441 or connect with him online .

What is a Real Estate Sellers' Market?

Wed, 19 Jul 2023 22:25:30 GMT

You've probably heard the terms sellers' and buyers' markets, but you may wonder 1) what the difference is, 2) which type of market we are currently in, and 3) what that means for you as a homeowner. We're here to help answer all of your real estate questions.

What's the Difference Between a Sellers' and a Buyers' Market?

A sellers' market occurs when there is a higher demand for homes than there are homes available – demand exceeds supply. A buyers' market occurs when fewer people are looking to purchase a home and a higher inventory of homes is available for sale – supply exceeds demand.

Factors that affect the type of housing market include the following:

The time of year – typically, more homes are available for sale in the summer than in the winter
Investment growth in the area – An area with a growing population, higher employment, etc., may increase demand for homes
Interest rates – Lower interest rates generally result in more buyers
The economy – Typically, if the economy is sluggish, so is the real estate market
Legislation – Tax credits, deductions, and subsidies can increase demand for real estate

Are We Currently in a Buyers' or Sellers' Market?

We have been in a sellers' market for a few years; however, that may be shifting. In the past few years, we experienced record-low interest rates, significant home price increases, and low inventory. However, rising mortgage rates, higher monthly payments, and a loss of buying power may be causing a slight shift.

According to the Pennsylvania Association of Realtors May 2023 report , there were 36,146 homes listed in PA in May, slightly up from the previous month but 23.4% down year over year. There were 10,967 sales in PA, which again was slightly up from the previous month but 17.4% down year over year. The good news is that the median sales price in May was $219,811, up 4.2% year over year.

While no one has a crystal ball to see into the future housing market, one expert predicts the following:

Mortgage interest rates will continue to rise in 2023
Home prices will witness an increase (but not as high as in 2022) in a market that is "family-friendly."
Housing inventory will become weaker across the country

The bottom line: We are still in a sellers' market, and with the continued high demand and low home inventory, experts expect us to remain in a sellers' market for a little while.

What Does That Mean for Me as a Homeowner?

Typically, a sellers' market is an excellent time to sell your home because you – as the seller - are at an advantage:

There are few homes available for sale for buyers to choose from
Homes sell more quickly
Buyers need to make quick decisions or risk losing a home to another buyer
Sellers receive multiple competing offers
Sellers don't need to make as many concessions
Homes sell for more money, often over the asking price

Typically, a buyers' market is a better time to buy a home because the buyer is at an advantage:

There is a high inventory of homes for sale
Homes sell for less than the original listing price
Sellers offer buyers incentives, such as paying for closing costs or credit for new appliances
Homes are on the market longer

Are You Ready to Take Advantage of the Current Sellers' Market?

Pete Heim, a lifelong Berks County resident, knows Berks County real estate like nobody else! Pete and his team can help sell your home faster and for a better price. Contact Pete today at 610-745-3378 or 610-898-1441 or connect with him online .

Commercial vs. Residential Real Estate Investing

staff@powermarketinginternational.com (Staff Blogger) — Thu, 13 Jul 2023 17:23:05 GMT

Are you considering investing in real estate as a revenue generator but wondering if you should invest in residential or commercial properties? Each offers both pros and cons. Before taking the leap, you need to understand the differences to determine the best option for you.

Commercial vs. Residential Real Estate

Residential real estate includes properties where individuals live, such as single-family homes, condos, townhomes, duplexes, and mobile homes. Commercial real estate includes properties where businesses or corporations do business, such as offices, retail or manufacturing spaces, or warehouses. Larger apartment buildings are also considered commercial.

Properties can be considered both commercial and residential. For example, a building can have retail or office space on the main floor, considered commercial, and one or two apartments above that are considered residential. Special use commercial real estate includes student housing, hospitality, sports stadiums, government, and religious properties.

Commercial vs. Residential Real Estate Investing

Commercial and residential real estate investing have different legal, financial, and practical characteristics.

Here are some differences to consider when investing in real estate.

Purchase Price - Commercial real estate tends to cost more to purchase than residential real estate.
Financing - Financing commercial real estate can be more difficult and expensive than financing residential real estate. There are many financing sources for residential real estate, such as FHA loans, loans backed by Fannie Mae and Freddie Mac, VA loans, etc. Larger commercial properties may also require additional insurance, a higher mortgage down payment, and personal guarantees.
Taxes - You will have to pay taxes on both commercial and residential real estate; however, they are taxed differently. Commercial properties are taxed at a higher rate and have different depreciation rules.
Lease Terms - Most commercial real estate leases are two years or more, whereas residential real estate leases are usually one year. And typically, the length of time you can renew a lease on a residential property is shorter than with a commercial property. Long-term leases mean fewer turnover costs and lower vacancy rates. On the other hand, shorter leases allow landlords to adjust rent rates more frequently.
Property Management - Someone has to manage your property. Typically, commercial real estate management is more complicated, requires more personnel, and is more expensive than residential real estate management.
Selling Time - Everyone needs a place to live, so there is typically a larger pool of potential buyers for residential real estate, regardless of the economy. A residential real estate buyer could be someone looking for a primary residence or another investor. With a smaller buying pool, commercial real estate typically takes longer to sell than residential real estate.
Tenants - Commercial tenants are usually businesses or corporations, and they are more likely to follow your rules and respect your property. Residential tenants are more likely to be late with rent payments, break the lease, or damage your property. Furthermore, there are typically more laws protecting residential tenants that landlords need to contend with.
Property Value - A residential property's value is determined by other properties in the neighborhood and characteristics of the home, such as the number of bedrooms. The value of a commercial property is based on the revenue the property can generate; therefore, the right tenant can quickly increase the value of a commercial property.
ROI - Return on investment (ROI) is a metric that can help determine how profitable an investment is. ROI can vary, but typically, commercial real estate yields a higher cash flow and ROI. However, it's best to calculate the ROI on any investment real estate you're considering purchasing.

How to Find the Right Commercial Property

Once you've determined the type of real estate investment you're looking for, Pete Heim can help you find the right commercial property in Berks County and beyond. He has over thirty-five years of real estate experience and more than two hundred 5-star independent customer ratings! Contact Pete at 610-745-3378 or 610-898-1441 or connect with him online .

5 Commercial Real Estate Selling Tips

Thu, 13 Jul 2023 17:13:26 GMT

Are you ready to sell your commercial property – apartment building, warehouse, etc.? According to J.P. Morgan , “The 2023 commercial real estate outlook indicates there may be challenges ahead . Retail is at a crossroads, and the future of office space is unclear. Plus, supply chain issues persist, and inflation is near 40-year highs, prompting the Fed to steadily increase interest rates.” The good news is that J.P. Morgan also reports that multifamily and industrial properties continue to perform well.

Regardless of the market, any commercial real estate seller’s goal is to sell their property quickly and at the best price possible. Just like selling a home, there are steps you can take to make your commercial property more appealing to buyers, resulting in a quicker sale and a larger profit.

First, you want to think like a buyer and consider what the various commercial property buyers will be looking for. For example, someone buying an apartment building will be more concerned with the inside appearance than someone buying a warehouse.

5 Commercial Real Estate Selling Tips You Can Use

#1. Order Your Title Report
As soon as you’ve decided to sell your commercial property, order your title report, which can take up to ten days.

#2. Gather Your Paperwork
Show buyers that you are organized and easy to work with by having all of your paperwork – ownership papers, profit and loss statements (if appropriate), permits, certifications, etc. – in hand before you put your property on the market. If you have tenants in your property, prepare a rent roll – a report that provides detailed info about the property, tenants, and rent.

#3. Create a Service History List
Show buyers that you are organized with a list of your leading service vendors, such as plumbers, electricians, window cleaners, etc. Show buyers you are diligent about maintaining your property with service history records.

#4. Prepare Your Property for Sale
Just like you can clean up, declutter, and stage a residential property for sale, you can do the same for a commercial property. Most buyers will be turned off by a dirty or poorly maintained building, so taking some time and money to fix the property up a bit can make the property sell more quickly and at a higher profit.

Here are a few ideas to consider:

Fix anything that is broken – windows, doors, etc.
Ensure the landscaping looks good – mowed lawn, no weeds, and trimmed bushes.
Clean and declutter the interior
Highlight your signage
Check the roof for needed repairs
Clean the windows
Install energy-saving options, such as climate control. LED lighting, low-flow showerheads, etc. According to the EPA , on average, commercial buildings waste about 30% of their energy. A more energy-efficient building will help new owners save money.
Spruce up the parking lot by resealing, repairing potholes, and repainting lines.
Stage the property to allow your buyers to visualize the property’s potential. For example, a fresh coat of neutral paint, appealing furniture, and potted plants in the lobby.
Consider adding or upgrading washers, dryers, and vending machines in an apartment building

#5. Determine the Fair Market Value of Your Property
Commercial real estate valuation is more complicated than residential real estate valuation, but determining the value is crucial for both investors and lenders. There are several methods used to determine commercial property value:

Cost Approach
Sales Comparison Approach
Income Capitalization Approach
Value Per Gross Rent Multiplier
Value Per Door
Cost Per Rentable Square Foot

The best way to determine a fair market value for your property is to work with an experienced commercial real estate agent.

Get More for Your Commercial Property and Sell it Faster!

With over 25 highly successful years selling commercial properties in Berks County and beyond, Pete Heim has the knowledge, experience, and connections to move your commercial property FAST and for a higher price. If you’re considering selling your commercial property, call Pete today at 610-745-3378 or 610-898-1441 or connect with him online .

What Sellers Need to Know About Home Inspections

Thu, 13 Jul 2023 17:02:30 GMT

During the pandemic and housing frenzy of 2020-21, many home buyers waived home inspections to be more competitive with their offers; however , in 2022 and 2023, home inspections are once again becoming the norm. According to the National Association of Realtors ®, 95% of sellers in August 2022 requested a home inspection. Furthermore, more buyers are asking for repairs, and more sellers are making repairs before listing than during the pandemic.

What is a Home Inspection?

According to the American Society of Home Inspectors (ASHI), “A home inspection objectively examines a house’s physical structure and systems, from the roof to the foundation.” Typically, a professional inspector inspects the home and provides a report revealing any defects in the house.

A home inspection is the last opportunity a buyer has to discover any problems with the house before purchasing it and an opportunity for the seller to address any issues and negotiate the price with the buyer.

The inspector will look at both the inside and outside of your home, looking for any and all maintenance or repair issues, defects, etc. Here are some of the things an inspector will typically inspect:

HVAC
Plumbing
Roof
Electrical system
Windows
Doors
Foundation
Pest infestations
Visible insulation
Structural components

Home inspection FAQs answered:

An inspection typically takes two to four hours, depending on the size of the home, the number of defects, how thorough the inspector is, and how helpful the homeowner is.
The buyer usually requests and pays for the inspection at no cost to the seller; however, they can negotiate that the seller pays for it.
Usually, the inspector, buyer, and buyer’s agent are at the inspection. The seller is not.
The inspector’s report will be given to the buyer. They don’t have to share the report with the seller, but most will provide an amended version, specifying any issues the buyer feels need to be addressed.
Buyers may want additional inspections that look for radon, asbestos, lead paint, mold, water damage, etc.

If there is an inspection contingency clause in the purchase agreement, the buyer may – based on the inspection report - request certain repairs, a reduction in the purchase price, or a cash credit at closing to make the repair. Buyers can also use the inspection contingency to completely back out of the agreement; however, if they’ve gone this far, they are pretty serious about buying your home and probably won’t back out of the deal unless they feel they have to.

Even if you believe your home is in good condition, an inspection can be nerve-wracking. No home – especially an older home – is perfect, and an inspector will always find something, and often the list of defects is long (sometimes more than 100 items). A seller doesn’t need to be too concerned with the number of minor defects.

How Can Sellers Prepare for a Home Inspection?

Some sellers get their own home inspection before putting their home on the market. This can give them an opportunity to repair issues and reassure potential buyers. However, often, a buyer won’t accept a report provided by the seller.

Inspectors should be objective, but they are people too. If they walk into a clean home, they’ll assume the homeowner cares about (and takes care of) their property. Plus, an inspector may find more faults if he has to deal with all kinds of obstacles to perform his inspection.

Therefore, it’s in the seller’s best interest to make the inspection easy for the inspector. Here are nine tips to get a better home inspection report.

Gather paperwork, such as receipts for big-ticket items, like new HVAC, roof repair, recent services performed, etc.
Leave keys for outside doors, electrical panel, etc.
Eliminate clutter in your home to make it easier for the inspector to move around.
Trim trees that touch the roof to avoid concerns about roof damage.
Ensure drains are clear, and all faucets run.
Ensure the pilot light in the fireplace, furnace, etc., and utilities are on.
Remove any pets.
Ensure the inspector can easily access your HVAC unit, water heater, etc.
You may want to consider replacing or fixing anything broken, such as windows and doorknobs.

Get More for Your Home and Sell it Faster!

If you’re ready to sell your home, Pete Heim can help you navigate the process, get more for your home, and sell it faster! Contact Pete today at 610-745-3378 or 610-898-1441 or connect with him online .

Is it Time to Downsize?

Thu, 13 Jul 2023 16:49:29 GMT

When most people think of downsizing ( moving to a smaller home ), they think about people later in life retiring, becoming empty nesters, or becoming widows. This is no surprise because, according to the National Association of Realtors (NAR), “…buyers 57 and older were more likely to downsize in both size and price.”

However, there are many reasons to downsize – both age and non-age related - so how do you know if it’s the right time for you to downsize?

7 Signs It May Be Time to Downsize

Lives change constantly. We graduate, get married, get divorced, get a new job, retire, and the list goes on. Some of these life changes may change your circumstances so that a smaller home makes sense. For example, all the children have moved out, and you no longer need the space, or you lose your high-paying job and can’t afford the mortgage and utility bills on a larger home. Here are seven signs that it may be time to downsize.

Unused Space - Do you have a guestroom that never gets used, a dining room that has become a dumping ground for junk, or a two-car garage with only one car in it? If you have more space than you need, it may be time to downsize.
Maintenance Overload - Do you feel overwhelmed by all the maintenance your home requires? Does your home need constant attention outside your ability to care for or demand more money than you want to spend? Perhaps you’re just tired of mowing a large lawn or cleaning a big house. This may be a sign that it’s time to downsize.
Desire to Lower Monthly Expenses - Larger homes tend to cost more than smaller homes. They usually cost more to purchase, creating higher mortgage payments. Utility bills, such as heating, electricity, etc., also tend to be higher. And, often, maintenance costs are higher in a larger house. Maybe it’s getting hard to pay those bills each month, or perhaps you’d prefer to use that money to travel. Whatever the reason, if you’re looking for ways to lower your monthly expenses, it might be time to downsize.
Frequently Away from Home - Are you frequently away from home? Maybe you travel a lot for business or pleasure, work long hours, or perhaps you’re just a really active person who spends most of your time away from home. Why should you pay a high mortgage and utility costs for something you rarely enjoy? Downsizing may be a wise choice.
Concerns About Aging in Place - Sometimes as we age, our needs change. The stairs might become hard to climb. Keeping a big house clean might become a challenge. High utility bills may become harder to pay on a fixed income. If you are concerned about aging in place , moving from a large multi-story home to a smaller, one-level home, an over 55 community, or a senior living facility may make sense.
Emotional Discomfort - Your home should be a place of refuge. Unfortunately, sometimes a house no longer feels like a home. Perhaps you’ve become an empty nester, widow, or divorced. If your big home causes you more emotional discomfort than joy, it may be time to move and possibly downsize.
Desire to Simplify Your Life - Maybe you’re just tired of all the complications in your life – tripping over all the stuff around your house, working long hours so you can pay the bills, stressing over paying your bills each month, keeping your home clean, trying to keep up with the Joneses, etc. Downsizing may be the solution to simplifying your life.

Ready to Downsize?

If you’ve decided it’s time to downsize, Pete Heim can help you sell your existing home and find your new dream home. Contact Pete today at 610-745-3378 or 610-898-1441 or connect with him online .