Home Equity Still Trumps Facebook Equity

Now that facebook has gone public, it seems like everyone (and their mother) is scrambling for a piece of the pie.  However, we’re curious to see how facebook shares stack up against good ole’ home equity. Dona DeZube, writer for HouseLogic.com, seemed similarly cautious as she shared some interesting considerations about the two types of investments.

Her take:
“The fact is, more of us are getting rich by buying and paying off our homes than by picking the next Facebook.”

DeZube goes on to offer up some a few interesting statistics from the National Center for Real Estate Research:

• 6 in 10 of us have more home equity than stock equity.

• A fifth of Americans’ total net worth is home equity.

• Home owners accumulate, on average, $167,000 in their lifetimes, compared to $42,000 for renters.

• The median wealth for the poorest American home owners, those earning less than $20,000, is 81 times that of renters with similar income.

A recent study into the fluctuations in home prices found that, ”Buying was still more likely to generate wealth than renting, simply because renters are more inclined to spend instead of save and invest in stocks.”

The fact is that even though renting may feel like the cheaper route, the “forced savings” incurred via home ownership is far more likely to lead to wealth than renting.

“Many of us simply don’t have the willpower or motivation to save our discretionary income and invest it in stocks.So unless you’ve got the inside track on the next hot future IPO, keep making your mortgage payments.”

A Downtown for Playa Vista (FINALLY)

According to a Los Angeles Times report by Roger Vincent and Martha Groves published last week, Playa Vista builders were finally given the green light on a $260-million shopping shopping and apartment complex after facing legal roadblocks.

Legal troubles have kept L.A.’s newest coastal community from receiving a downtown area for more than a decade.  The 3,200 residences and 2,000,000 square feet of offices have gone without a city center.  That will soon be changing.

Fresh from their court victories, “Delopers have unveiled the design of a long-anticipated shopping and apartment complex they will begin building in June as the key element of the second and final phase of Playa Vista.”

The project, called Runway at Playa Vista, will be the become the commercial and social heart of the community.

“Runway will be next to Jefferson Boulevard and house a premium grocery store, 10-screen movie theater, ‘chef-driven’ restaurants and shops. Apartments and office spaces will rise above ground-floor retail shops and top out at four stories. The complex — about the size of four city blocks — will be mostly completed in about two years, but it is intended to look as if it evolved more slowly over time. Building materials similar to those used on well-known Los Angeles shopping streets such as Abbot Kinney Boulevard and Melrose Avenue will be incorporated, and full-grown native California trees will be brought in to add a sense of permanence.”

Designed by L.A. firm Johnson Fain, there will be canopies marking entry points, as well as small gathering areas marked by fountains and fire pits throughout the complex.

According to the Times, Lincoln Property Co., which is developing Runway, has already erected office buildings there and will be buying the 14-acre Runway site from Playa Capital, the master developer of Playa Vista.  The center will serve as a meeting place for residents as well as the nearby “burgeoning creative office district.”

TMZ, Facebook, Toms shoes, YouTube, Fox Interactive Media and ad agency Deutsch are all among the current or expected office tenants in Playa Vista.

Patti Sinclair, co-president of Playa Capital, tells us that the overall Phase 2 project will cover 111 acres, and include additional housing, office and other features, while construction is slated to last about 4 years. At the end of that, Playa Vista will span 460 acres, which is actually less than half of the original proposal for the city, due in large part to environmentalist opposition.

Since Playa Vista’s beginning, their have been questions and concerns about its future. In 2003, “the state approved $140 million to buy nearly 200 acres of the property west of Lincoln Boulevard to be restored and preserved as the Ballona Wetlands. Playa Vista agreed to donate or give up its right to develop an additional 415 acres.”

One of the project’s biggest and most successful opponents from the beginning, Rex Frankel, kept any work on Phase 2 from getting under way during the eight years he spent successfully challenging the validity of the initial environmental impact report.  However,  ”Last month, the California Supreme Court declined to take his case over the second and final phase.”

“The overall Phase 2 project, known as the Village at Playa Vista, is expected to contain 2,600 residential units plus 200 senior assisted living units, 50,000 square feet of office space, 200,000 square feet of retail, 40,000 square feet of community-serving amenities (including a community center to supplement the one in Phase 1). It will also have 11.5 acres of parks and 12 acres of open space in the riparian corridor and the bluff habitat area.”

Ten years after the first Playa Vista residents arrived in 2002, locals eagerly await the many retail, entertainment and dining amenities that Phase 2 will bring to the community.

Read “Playa Vista finally gets a downtown” by Roger Vincent and Martha Groves on the L.A. Times website. 

Happening This Weekend!

If you’re looking for something fun to do in the neighborhood this weekend then keep reading!

The Venice Meet

The Venice Meet will make its debut this Saturday in Venice on Abbot Kinney Boulevard.

The new monthly open-air market  will feature live music, food, and tons of local vendors.
More than 50 L.A.-based vendors will line Abbot Kinney Boulevard, which was recently dubbed the  “coolest block in America” by GQ Magazine.Musical guests will include The Dustbowl Revival, Leftover Cuties and Song Preservation Society.

According to their website:

The Venice Meet is being launched in an effort to bring together local craftspeople, independent musicians, and specialty food artisans and provide them with a neighborhood forum to exhibit their wares.   At its heart, The Venice Meet will be about building community and capturing the independent spirit of this one of a kind neighborhood!

The event runs from 10 a.m. to 5 p.m and will be held at 1010 Abbot Kinney Boulevard. The next scheduled dates for Venice Meet are May 12, June 9 and July 12.

Abbot Kinney First Fridays

This Friday is the first Friday of the month, which means First Fridays on Abbot Kinney.  This free event runs approximately 6-10/11pm, with many of the eclectic shops, galleries and restaurants offering special events or extended hours.  Grab something to eat at one of the amazing local restaurants, or try something delicious from one of the many food trucks that will be lining the street.

Stop by the Electric Lodge at 7pm for an audio/visual performace by Duo del Sol.  At 8pm, wander into Altered Space Gallery for Michele Mikesell’s latest circus-inspired exhibition entitled, “Hugo, Oklahoma.” According to their events blog, an art reception will be held after the performance at Electric Lodge, as well as a giclee print giveaway.

First Fridays are a great excuse to get out and explore Abbot Kinney for a truly unique VENICE experience!  LA…)

Spring Cleaning Your Finances

Winter’s over and spring is (finally) upon us! For many of us, the warmer weather also means spring cleaning.  This year, CNN Money offers consumers some helpful tips to help you spring clean your finances.

The CNN experts suggest: “Consolidate accounts to boost your odds of earning higher interest and lower your fees, and be sure to shred old financial documents you no longer need.”

This video is available on CNN Money’s website, as well as their Youtube channel.

Weighing In on Short Term & Vacation Rentals

Recently we have heard from a growing number of people who are interested in using their home or income property as a short-term rental.  With the growth of online vacation websites like homeaway.com, it may seem like a no-brainer to many who live in popular tourist destinations, like Venice and Marina Del Rey.

While vacation and short-term rentals are not a new idea, digital marketing has made these rental options exponentially more accessible to people around the globe.

For potential real estate investors, short-term rentals easily sound like an appealing option.  According to Ashley Halliganon RealtyTimes.com “…Bargain-seeking travelers and low-priced properties create an opportunity for an investment with a greater cash flow and larger investment return.”  In today’s market, short term and vacation rentals may seem like an attractive option to many investors and property managers.

But before you jump on the vacation rental bandwagon, you may want to consider this: In today’s wishy-washy market, how do the potential gains stack up against the various challenges and risks specific to shorter term leasing?

Costs and Expenses 

The costs that come with a short term rental can be hefty and often add up quickly, potentially offsetting any potential profits you stand to make.

Are there any taxes or fees owning and operating a vacation rental will make you subject to?  For example, is there an occupancy tax?  ”Occupancy tax rules typically come with annual costs — a license, a permit and, perhaps, inspections. Researching those fees in advance are key to decisions you’ll need to make about your investment,” says Ashley.

Common fees or regulations that a short term rental could end up costing you include:

• Zoning
• City permits
• Special taxes
• Licenses and licensing fees

Consider the necessary maintenance and expenses that occur in between tenants. Now consider that you could be faced with similar repairs and upkeep for each turnaround.
Expect to pay regularly for cleaning services, touch up painting, landscaping, furnishings, just to name a few.

According to Ashley, “Unlike a long-term rental, short-term rentals must be maintained more often to continue to attract a steady flow of renters from business travelers to tourists. An attractive property is your ticket to regular rental income. Chances are, properties more appealing than yours, will rent faster than yours.”

Marketing and advertising your short term or vacation rental will also cost you.

“Unlike long-term rentals, which often advertise only when they are empty, short-term rentals, by nature, need a perpetual promotions.”

There are a number of websites which allow landlords to advertise for free, in addition to sites such as Craigslist and westsiderentals.

However, a number of sites do charge per property listing. Magazine and newspaper ads also charge as well. And you should expect to pay for any photographs or printed marketing materials you create.

Competitive Edge

Many landlords who operate a short term or vacation rental offer bonus features or amenities to give their rental property an edge over the rest.

Reveals Ashley: “Some creative property owners and managers include locally relevant amenities – kayaks, bicycles and hot tubs. Others outfit the rental with simple, yet thoughtful desirables, including local pastries or hand-written guides to the city.  Added amenities mean added costs, but whatever your strategy, you have to pay the price to stand out from the competition.”

Effects on Property Value

Lastly, you may want to consider any negative impact short term leasing may have on your property’s value, as well as the value of neighboring properties.

There are some that adamantly oppose short term rentals as they feel there is risk involvedwith a high rate of transient tenants, escalated noise levels, increased traffic, parking limitations, and more. Many local homeowners associations have regulations pertaining to a minimum length of time for any leases or rentals.  The Marina City Club, for example, does not permit any leases under 6 months.

Before investing, you should be aware of any regulations affecting short term rentals that the property might be subject to.

Bottom Line

While you may be drawn to the profit potential of a short-term rental,  be mindful of any costs and/or restrictions which could reduce or erase any return you stand to make.

It would be to your benefit to thoroughly research and scrutinize all short-term rental issues.

Read “Risks Come With Ever-More-Popular Short-Term Rentals” by Ashley Halligan on RealtyTimes.com.

The Weekly Shortlist: Tuesday Edition

New Listings

6505 & 6507 Ocean Front Walk

Playa Del Rey, 90293

$2,150,000

5 bed / 4bath

2144 Sq. Ft.

Enjoy DIRECT OCEAN VIEWS from this ocean front duplex and direct access to sand and beach! Find out more…

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Sold Listings

4715 Ocean Front Walk #403

Marina Del Rey, 90292

$6,500 / month

2 bed + loft / 2.5 baths

1,528 Sq. Ft.

Everything you’ve ever wanted in a beachfront home; oceanfront master bedroom AND living room, designer kitchen with Viking stainless steel appliances including gas range, wood floors, fireplace, side by side parking, and more!  Get the details here…

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New Escrows

5318 Pacific

Marina Del Rey, 90292

$2,499,000

3 bed / 4 bath
4856 Sq Ft.

Incredible, canal front, beach compound like no other home on the Marina Peninsula with spectacular canal and ocean views! More info here…

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Open Houses

Tuesday, March 6, 2012 / 12:00 – 2:00pm

15 30th Avenue

Venice, 90291

$5,900,000

9 bed / 7 bath

4390 Sq Ft

Incredible opportunity to own a piece of history! A Venice landmark since 1911, the Venice Beach House is now recognized by the National Register of Historical Places.  Find out more…

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858 Nowita

Venice, 90291

$1,849,000

3 bed / 3 bath

2376 Sq. Ft.

Classic meets modern in this beautifully appointed Venice Beach Craftsman!  More info and photos after the jump…

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Sunday, March 11, 2012 / 2:00 – 5:00pm

858 Nowita

Venice, 90291

$1,849,000

3 bed / 3 bath

2376 Sq. Ft.

Classic meets modern in this beautifully appointed Venice Beach Craftsman!  More info and photos after the jump…

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750 N Kings Rd #314

Los Angeles, 90069

$250,000

1 bed / 1 bath

600 Sq. Ft.

Perfect penthouse condo for enjoying all that L.A. and Hollywood living has to offer! A quiet and sunny unit, just 1 block from Melrose! Get the details here…

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Real Estate News

30-Year Fixed Mortgage Rate Down Slightly (Zillow)

FHA to hike premiums on mortgages (CNN Money)

Pending sales of existing homes up to nearly 2 year high (LA Times)

Touring Glen Irani’s First Hover House on the Venice Canals (L.A. Curbed)

Rental Housing 2011: The State of L.A. Rentals (Economic Roundtable)

How Credit Affects Your Mortgage

[Image via Credit Sesame]

Short Sale vs. Foreclosure

Q: What is the difference between a short sale and a foreclosure?

A: A short sale involves the sale of an “under water” property, whereby the proceeds of the home sale will be LESS than the total mortgage balance and the owner cannot afford to pay the balance of the debts against the property. Purchasing such a property requires that the bank agree to accept less than the amount owed on the property, releasing the lien on the property. According to realtor.org, “ A short sale is a sales transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan”

Houselogic.com explains foreclosure as “The process whereby a lender, such as a bank, seeks to repossess a property where the owner has failed to comply with the terms of the mortgage or promissory note, such as not making a payment. Once the property has been foreclosed, the bank can then sell the house, using the money to pay its costs.”

AOL Real Estate offers an explanation to help distinguish one from the other, in that,  ”Short sales can also be referred to as ‘pre-foreclosure sales’ which, as the name implies, precedes the home being officially repossessed or foreclosed on by the lender. That is, the property is sold much earlier than the months it typically takes to reach foreclosure, allowing all parties to move on from the transaction sooner.”