Build your Real Estate Portfolio this year, fro your friendly face in real estate, Natalie Harper

Build your real estate portfolio starting with your own house:

You can build your real estate portfolio starting with your own house

The new year is a great time to create your list of wants-and-needs for a new home.

While you are at it, also ask yourself a question: Should you rent out your existing house instead of selling?

Recent news shows that buying is cheaper than renting. When you turn that around it means rents are up for property owners. And you could be one.

A study by Trulia.com shows that, in 100 of the largest metropolitan areas, buying a home is cheaper than renting. Averaging all areas, buying a home is nearly 35 percent cheaper than renting.

In some areas, there is a dramatic difference. In New Orleans, buying is 52 percent cheaper than renting. 

The study took into consideration down payment, taxes, insurance, and utilities. It assumed that the buyer would live in the home for seven years.

That's good news for potential buyers. But it is also good news for property owners who want to lease their homes.

If you have a personal mortgage and have lived in your home, you can rent it out without getting another mortgage. This is important because investment mortgages have higher interest rates and down payments ranging up to 25 percent. Conclusion: If you want to build a real estate portfolio, it is less expensive to live in a home and then rent it out instead of buying a home as an investment property.

One potential stumbling block here is that you have to qualify for another mortgage. Lenders will consider your debt-to-income ratio and another mortgage could pose a problem. One possible way to overcome this is to establish a lease before you go to the lender. 

Lenders will want to see you have some property management experience before they count the lease as income.

You might want to consider a professional leasing service for your property to find qualified renters.

However, if you do qualify for a second mortgage, you will have some tax advantages related to depreciation and the deduction of maintenance expenses, and the deduction of your mortgage interest.

Beyond that, it is a matter of homework. Consider whether your home is rentable in your area. Larger homes might not be marketable.

Look into rental rates in the area.

Real Estate 2017 - more homes, drones, and stable interest rates, from your friendly face in real estate

The 2017 real estate market has some surprises in store as buying and selling might go high tech, and the mortgage market remains stable.

Here are some of the predictions by market experts for the new year.

Drones

Daniel Goldstein, writing for Market Watch,  expects real estate buying and selling to go high tech as drones become a feature of the selling process.

Drones aren't just for kids; they are for home buyers and sellers, too. It's a new way to inspect and show off a house for sale.

The Federal Aviation Administration has cleared the way for expanded use of drones by regular people who just want a view from the sky.

That means you could get a small drone and offer a sky view of your property or neighborhood. In fact, drone views are predicted to be the next thing in home selling.

Meanwhile, commercial drone pilots want to offer a view from the sky of expensive real estate, but FAA regulations have made much drone work illegal. Now, the FAA has lightened some requirement, especially one that required drone pilots to have a manned pilot license. New regulations allow commercial drone pilots to pass an unmanned  aircraft operator test.

According to MarketWatch, the use of drones in real estate now resides in the hands of homeowners and real estate agents who can legally offer sight-line aerial views of properties.

More homes to buy

For all of 2016, the real estate market favored sellers as low supply raised prices slightly.

During the next year, buyers should have more choices for homes.

An early indicator is an 8 percent rise in new homes completed and ready for sale in October 2016.

Most analysts see a brisk year for home building. This should make buyers happy since they will have more homes to choose from and prices should nudge down slightly.

Mortgage rates

One can't really say mortgage rates are inching up. That would be an overstatement. But rates are higher, as every analyst predicted. Even so, rates remain a fantastic deal and are historically low.

According to Bankrate, the 30-year fixed rate mortgage rose in December 2016 to 4.13 percent from 4.1 percent.

Bankrate's survey found: At the current 30-year fixed rate, you'll pay $484.94 for every $100,000 you borrow, up from $483.20 earlier in December 2016.