Kansas City North Real Estate Blog

Questions for your Realtor - What do you know about online marketing?

Several years ago, before I'd ever thought about working in Kansas City real estate, I had the wonderful opportunity to work for a highly respected and very well known website development firm here in Kansas City by the name of Look and Feel New Media. Our clients included companies like Lee Jeans, Jockey International, Duncan Toys, and Kodak.

I didn't actually work there for very long, just about a year, but little did I know that the information I was learning would be invaluable to me in the wonderful world of real estate. I'm now absolutely convinced that's why God had me working there.

Today I realize that I have knowledge that most other Realtors will NEVER have, or at best, will take them countless hours of research to acquire. I know and understand terms like Search Engine Optimization, Meta-tags, Keywords, Title Pages, Widgets, Social Marketing, Blogging, Tagging, Inbound and Outbound Linking, Pages Views, Click-Thru's, etc.

What difference does all this information make? Well, if 90% of the potential home buyers are beginning their new home search on the web, you need to realize that it's absolutely critical that your Realtor knows how to market your home online.

I have literally hundreds of things I do to market myself and my clients homes on the Web. Online Banner Ads, BLOGS, Email Advertising, Search Engine Marketing (sometimes called "pay-per-click" advertising), Viral Marketing, and not to mention the thousands of websites I have agreements with - www.realtor.com  www.kw.com  www.trulia.com  www.craigslist.com  www.zillow.com  www.homes.com www.therealestatebook.com + many, many more!

And you just thought you wanted a real estate agent to sell your home?  In todays world, planting a sign in the yard and posting it on the MLS just won't get it done. When interviewing a Realtor to sell your home, you'd better be asking this question, "What do you know about online marketing?"

Questions for your Realtor - How do you Network?

Last night my wife and I were getting ready to go to a Christmas party and she said to me, "Do we really have to go to this party tonight?" Apparently she was a little concerned about all the snow and ice we had that day.  I assured her we could make it there just fine and then her response surprised me, "I suppose we should go because this party will be a great opportunity for you to network".

You know, I honestly was just going because I like the people that invited us and thought they might have some great friends. I know they have a beautiful home over by Staley Farms Communities here in the Kansas City North and I enjoy these types of parties, but when my own wife made that "networking" statement, I realized something. I am a professional networker for my business.

Oh sure, I go to these things to enjoy myself, but my wife also realizes that while I'm enjoying myself, the conversation sometimes works it's way around to real estate. At a first introduction, most people will ask the standard question, "So what do you do, Ron?" After they find out I'm in real estate, they will typically ask questions about real estate in general and how the market is doing, what price ranges of homes are selling, etc. I find it ironic that people are always interested in this subject.  Most are current home owners and they're usually concerned about their biggest investment (their home). That's certainly fine with me because it's a subject I know very well and enjoy talking about.

Many times I've met someone at a party, networking event, chamber event, grand opening, etc and ended up getting the opportunity to "talk up" one of my listings. Sometimes I even find a potential buyer at an event. You just never know, but if I didn't spend time at these potential networking opportunities, I wouldn't have met some of my current clients and had the chance to meet some fantastic people.

Should Your First House Be A Duplex?

THOUGHT THIS WAS AN EXCELLENT ARTICLE SO I'M REPOSTING IT HERE! CERTAINLY WORTH CONSIDERING.

by Ki Gray

There is a lot of talk about getting your first house. It is part of the American Dream to get a house and maybe get a dog named Rover. But maybe that first home should instead be a duplex. Why would I propose such a thing? Is it possible I am a secret Russian spy that hates American pie? No, there are simply too many advantages to buying a duplex first.

Buying a duplex has a number of financial advantages over buying a house. A lot of people assume duplexes would sell for about twice of what a house sells for in the same neighborhood. This is rarely the case. Duplexes are more frequently about 1.5 times the price of a house in a given area. So to pick an easy number if a house is selling for $100,000 then a duplex should be selling for $150,000.

So let's compare buying a house to a duplex. To keep things the same let's assume we have $20,000 to put down and we are looking in the Austin real estate market so that the taxes are 2.5 percent of the purchase price and insurance is 0.4 percent of the purchase price.

1. Lower Monthly Payment
To start off with let's look at the house. For the house we are going to have a 6.5 percent interest rate. We can use this mortgage calculation:

$100,000 house price
$20,000 down payment

Monthly Payment = $747.32

Moving on to the duplex. Because duplexes usually have higher interest rates we are going to assume a 7 percent interest rate. We are also going to assume that the other side of the duplex is being rented for $650.

$150,000 duplex price
$20,000 down payment

Monthly Payment = $1,184.18
Rent Payment minus 5 percent vacancy = $617.50
Monthly Payment minus rent = $566.68

The monthly payment on the duplex comes out to be 31.8 percent less than on a house. You might get different numbers based on your area. In most areas, a duplex leads to a lower monthly payment but there are a few real estate markets where the opposite is true, so always run the numbers.

2. Increasing Your Future Real Estate Purchasing Power
Besides the advantages of a lower mortgage payment, buying a duplex first allows you to make additional purchases while buying a house first can negate your ability to buy additional properties.

To understand why this is the case, we need to understand a few rules about how banks determine whether or not to provide loans. When you are purchasing your first investment property, banks will usually not count the rent as income unless you have owned investment properties for more than two years.

So, if a buyer first buys a house and then wants to buy a fully rented duplex, they will need to be able to qualify for the full price of the house and the duplex combined. This can be difficult for someone in the beginning stages of their career. If a buyer purchases a duplex first, in two years when they are looking for a house, they can count the rent from the duplex as income—which can help them qualify for the bigger house purchase.

3. Faster Pay off
Here is another interesting way to look at it. If instead of simply spending the saving you incurred by owning a duplex, you could pay off your mortgage faster. If you applied $747.32 to your house it would take 30 years to pay off. But, if you paid your duplex of $566.68 and then took the additional $180.64 and applied it to your mortgage you could pay off your duplex in 18.5 years. So in 18.5 years you would have a $150,000 duplex paid off instead of a $100,000 house partially paid off.

4. Greater Benefits of Mortgage Pay Off
Not only will you pay off your duplex faster, but once you have paid if off you will be in a better position. Once you pay off your house, you are living mortgage free—but not payment free. Based on the original assumptions (Austin Texas 2.5 percent tax rate and 0.4 percent insurance rate) you are still making a payment of 241.66 a month for taxes and insurance. In contrast once the duplex is paid off you are not only living in your duplex for free you are actually getting a profit of $255 a month.

Buying a duplex is not for everyone. Some people do not want the hassle of managing a property. And this article is not proposing that everyone should buy a duplex. But there are financial benefits to buying a duplex, so take it into consideration.