I tried to find an apartment rental in Portland. Here's what I learned:

It’s expensive.

This one might seem obvious. According to News Center Maine, the Maine rental market is one of the least affordable in the US. The average rent in Portland is $1,463(RentCafe.com). In 2018, CBS News reported that the average rent in the United States was $1,405. Those numbers don’t seem all that different, but we have to consider how much of one’s paycheck is going towards that $1,400-ish rent payment.

“The report found that the typical renter household in Maine makes $11.82 per hour -- $8.09 less than the hourly wage needed to afford a modest, two-bedroom rental home”(News Center Maine). This means that annually, renters in Maine are making $23,640 per year. According to WalletHacks.com and the Social Security Administration, the average wage income in the U.S is $48,251. So considering these two incomes, rent in Portland is going to take about twice as much of a renter’s monthly income than elsewhere in the United States.

They go fast, even the “bad” ones.

If you are house hunting, your buyer’s agent will likely advise you to get pre-approved for a mortgage loan before you start searching so you know exactly what you can afford. Plus, when you find “the one” you are ready to make an offer!

It is similar for rentals. Most rentals go fast because people need places to live. Because of this, you need to be prepared. This means you will likely have to fill out an application on the same day you see the rental in order to be considered. If you haven’t done the proper research and budgeting, you may miss out on the rental to someone else. And don’t assume that just because an apartment wasn’t in the best condition that it will be available.

You need to know what to ask and look out for

You have to remember that landlords are renting these properties as an investment. Their main purpose is to make money. It’s your job as a renter to ask questions like:

• "What’s included in the rent?”

• “May I see the lead paint disclosure and radon air tests?”

• “Who is responsible for lawn and snow maintenance?”

• “How do you handle maintenance requests?”

• “Are there designated parking spots?”

These are questions to ask before your lease is signed, not after. If utilities aren’t included in the rent, you need to know beforehand so you can budget accordingly. Knowing whether or not you have a designated parking spot is important if the unit is on a busy street or you work late and don’t want to be driving around and walking a long distance to get home.

You may be wondering why people hire buyer’s agents to purchase a home but not to rent? They are both significant financial decisions. At Gray Fox Real Estate, we provide services for renters. If you are overwhelmed by the process, contact us to help you find properties, ask the right questions, and protect you in the process.

Just Sold in Woolwich, Maine!

484 Mountain Road, Woolwich $205,000

Soak in light-filled, window-lined-living in this efficient, passive solar, contemporary home on 1.5 acre private setting in Woolwich. Enjoy the ease of entertaining in the open kitchen, dining and living with woodstove. Upstairs, two spacious bedrooms with cathedral ceilings await. Savor morning coffee or evening drinks from the southerly-facing front deck. Outside, garden shed and quintessential Maine hosta gardens await. Just 7 minutes to downtown Wiscasset, 12 minutes to downtown Bath, 25 minutes to Maine Street Brunswick and 50 minutes to Portland.

Ways To Buy A Home With No Down Payment

For first time home buyers, getting a mortgage loan and saving for a down payment can be daunting. Many struggle to get approved, feel like they will never reach their savings goal, or cannot afford to pay off the loan they get approved for. There are many options like low or zero down loans, as well as more unique options like crowdfunding or cash back savings while shopping. All of these options have pros and cons to be considered before pursuing one.

Zero Down

The obvious pros to a low or zero down payment loan are that you can get the loan sooner and the savings can be spent on other things like improvements and expenses(NerdWallet). However, there are cons. With a low down payment, you may get a higher interest rate because you are seen as a higher risk. In a lender’s eyes, you are more likely to not be able to make a payment than someone who could afford to make a larger down payment. Low or no down payments also mean lower equity in your home. With low equity, a drop in the real estate market could mean that if you want to sell, your profit may not pay off or break even with what you still owe on the mortgage(NerdWallet).

Crowdfunding

A unique alternative to saving is HomeFundIt, which has both a Cash Back Program and a Crowdfunding Program to help newlyweds, young families, or anyone who might need a little help saving for their home! The Cash Back Program gives users up to 20% back on purchases at select retailers, and stores it in a secure savings account. Their other program allows users to set up a Crowdfund where friends and family can donate to help meet their savings goal. They can choose to make their donation conditional, so if the goal isn’t met, the money is returned to them, or non-conditional, where the user keeps the money either way.

Rent-To-Own

This is typically seen as a low risk way to buy a home but in fact, it is very risky. To sign a lease with a landlord that is both your landlord and a seller is too complicated. If you have low credit or are looking to build equity in order to eventually get a mortgage, renting-to-own is a slow way to do so since you don’t gain equity while renting(TheBalance). You also risk losing all of the down payment monies that you have already given to your landlord/seller. The benefit is that you get to try the house out before you own it. If you are interested in renting-to-own, you should consult a real estate lawyer because they will be able to advise you on the risks and benefits of your specific transaction.

Just Sold in Cumberland, Maine!

29 Shady Run Lane, Cumberland $460,000

This charming Colonial in the Westridge Subdivision features an open concept kitchen with Quartz countertops and stainless steel appliances, a master bedroom with an en suite, and a spacious backyard and deck perfect for entertaining or relaxing. Enjoy the privacy of this home in this quiet, wooded, and convenient neighborhood within walking distance to Cumberland Center, schools and local restaurants. Yarmouth and I-295 are also only a short drive away.

Will The 2008 Crash Repeat Itself?

Since 2014, the real estate market has been identified as a Seller’s Market. This means that there are more buyers seeking homes than sellers willing to sell. In a Seller’s Market, sellers are able to price and sell their homes higher because the demand for homes is higher than the number of homes available. This often results in a multiple offer situation and drives up the price of homes. At this point in time, home prices have been driven up to a point where they are so incongruent with average incomes that the cost of living ratios are insufficient to sustain buyer activity. Simply put, people are not being paid wages high enough to purchase a home.

Many consumers are worried that the rising real estate prices have constituted a “bubble” and will lead to a market crash like the one in 2008. While the real estate market will likely change due to the increasing prices and a decrease in sales, predictions show that a crash as profound as the one in 2008 is unlikely because “that crash was caused by forces that are no longer present”(TheBalance).

Experts do not predict a repeat of the 2008 crash for the following reasons:

Mortgage brokers have become more strict about to whom they give loans. According to InvestFourMore.com, subprime loans, loans given to those with poor credit scores, were at a high point totaling $620 billion in 2005. Now, subprime loans make up only about 5% of mortgage loans (InvestFourMore).

When adjusted for inflation, home prices are not any higher than they were in the 2006 peak, and are actually more similar to prices in 2004. “Between 2012 and 2017, home prices rose 6.5% a year on average. Between 2002 and 2006, they rose 7.5% annually. In 2005, they skyrocketed 16%”(TheBalance). While prices have risen, they have not increased as dramatically as they did in 2005.

However, despite the predictions, unexpected factors may contribute to a crash. Factors like rising sea levels, high interest rates, and Trump’s tax reform plan could all have destabilizing effects on the real estate market(TheBalance).

Overall, a crash is not likely. The market may come to a standstill for a while due to rising home prices and stagnant wages, but that will just force sellers to lower their prices.

Just Sold in Biddeford, Maine!

122 South Street, Biddeford, $226,000

This wonderful Split Entry home is in the heart of Biddeford, within walking distance to shopping and the downtown area, and parks. The yard is completely fenced-in. It has a two-car garage with entry into the basement or home. The home has a combination of hardwood, tile, and laminate flooring throughout with lots of natural lighting.

Featured Area Professional: Dave Andrukaitis, Andrukaitis-Mosher Builders

Name: Dave Andrukaitis

Company: Andrukaitis-Mosher Builders, Gray ME

Dave Andrukaitis and Tim Mosher both had their start in the high-end residential building trades. Together, they have worked on many multi-million dollar projects all over the country. They started out their company in 2009 with a simple goal to provide their clients the best quality, even if it meant taking a loss.  

They feel that all clients, both well-to-do and those who live more meagerly, deserve to have the best quality work performed when they hire a general contractor. Integrity is everything and in such a small geographic area such as Southern Maine, it’s critical to maintain the best reputation one can! This ideal and subsequent reputation has allowed them to not only make it through a very difficult recession, but also grow their firm exponentially over the recent years.   

“ All clients, both well-to-do and those who live more meagerly, deserve to have the best quality work performed when they hire a general contractor.”

— Dave Andrukaitis, Andrukaitis-Mosher Builders

We asked Dave…

What makes you different from other professionals in your area?

Maine is a state where there is currently no General Contractor/Builder Licensing or official criteria to meet to demonstrate professional/essential knowledge to prospective clients. In essence, this self-governing environment allows many contractors to set their own rules, quality control, etc. as long as it fits into general code requirements and accepted building techniques. Unfortunately, this system is often taken advantage of and the result is that the consumer is often the one paying the costs of inferior work.

Andrukaitis-Mosher Builders has prided itself for striving to provide our clients a level of service and quality that is above reproach. Since our competition has the luxury of operating in a wide interpretation of what is acceptable, we feel our best marketing technique is to be the best builder and general contractor that we can be, regardless of how others operate. We have partnered alongside many of Maine's largest and top rated builders and have built a reputation of providing the same quality products at a competitive pricing. Our strategy is simple: provide the best results and experience and keep overhead low. This allows us to cast a wider net and provide top quality results to consumers who may otherwise assume that their budgets are too small for an established and reputable General Contractor/Builder. 

Do you have any tips for home buyers/builders?

ALWAYS acquire the services of an experienced and independent home inspector or builder, review and question property disclosures, and NEVER simply take for face value what is said. It’s one of the largest purchases of a lifetime. Ask questions, do your due diligence, and don’t be afraid to “offend” anyone. Also, it’s most times always more expensive to build/renovate then it is to find an existing suitable home. With less and less individuals/couples purchasing homes, my advice for the first time purchasers is to find a quality home that will work for your needs for a minimum of 5 years. 

What are some common mistakes or mishaps that homeowners could avoid by utilizing Andrukaitis-Mosher Builders?

Reputation is everything. Any builder can muster up resources to create flashy commercials, decal trucks/trailers, etc. My advice: ask for references from clients that had similar projects. Ask for bank and lumber yard references. Andrukaitis-Mosher Builders has never had the need to advertise. All of our work is by word of mouth. I can say all the right things to convince you to use our contracting firm, however, I would much rather have my clients convince you. 

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Contact Dave
Andrukaitis-Mosher Builders
207-939-9410
dave@ammaine,com

At Gray Fox Real Estate, we know that providing high-quality real estate services is only possible with the help and expertise of industry professionals that we trust.

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