VISIT MY NEW BLOG!
3/19/2008
Visit my new blog! www.lakecountyfinehomes.comIf you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
SPEED SALES: PRELISTING HOME INSPECTIONS DO THE TRICK
3/17/2008
Speed Sales: Prelisting Home Inspections Do the Trick
by Dan Steward, President, Pillar To Post
Not so long ago, home sellers were being bombarded with multiple offers. They didn't have to worry much about the condition of a home in order to ensure a smooth and quick sales transaction. In today's market, realtors are creating new strategies and are working even more closely with home sellers to sell homes quickly for top dollar. The biggest development in this area is realtors advising sellers to schedule a home inspection prior to putting their homes on the market.
A prelisting home inspection—one that is paid for by the seller before a house is put on the market—plays a large part in a buyer's decision to buy. It signals openness about the shape of the house and omits the possibility of unpleasant surprises that could potentially slow the sales transactions and bring the price down. In addition, realtors who require or recommend prelisting home inspections give their client's homes a marketing edge.
These inspections also give the discriminating buyer upfront information on the condition of the home, and in some cases, a preemptive seller's inspection means that repairs, such as a dripping faucet or roof leaks, will likely be fixed. The report also signifies to buyers that the sellers made all efforts to sell the house and cared about selling to somebody who was going to be satisfied with the condition of the home and the repairs made to it. With their own report, sellers can choose, for example, to spend a few hundred dollars fixing a faulty electrical problem that might otherwise result in a claim for thousands off the home price.
Some of the multiple benefits of recommending that a seller conduct a prelisting home inspection include the financial advantage for home sellers to make important repairs. Should a buyer request a specific repair as part of the sale agreement, the seller could easily be placed in the position of having that repair done at the last minute at a higher cost. Alternatively, if that buyer opted to negotiate the price downward due to a repair left undone, they may face typical decreases such as for every $1 of identified repairs, buyers ask at least double or triple that in a price reduction.
Savvy home sellers who, for example, learn through home inspection that portions of the roof need repair may opt to repair that section immediately. Paying $5,000 for the repair is far more enticing than reducing the asking price by $10,000 or more. Buyers typically expect a $2 to $3 price discount for every $1 worth of defects turned up by their inspector.
Most buyers think that buying a home is going to be a lengthy, complicated, and stressful process potentially lasting for months. The prelisting home inspection reduces the stress inherent in such a major transaction as all parties quickly gain a thorough knowledge of the home through a full written home inspection report.
It also reduces time spent on the negotiation process, as all information on the home is given upfront to the buyer. This limits the potential of any surprises and tells to the buyer that problems may have been found and were repaired so the house is in the best condition possible.
Prelisting home inspections are no longer a rarity; instead, they're becoming a valuable part of any seller's marketing. It's estimated that the number of homeowners choosing to conduct a Prelisting home inspection has increased to 85% in the last one to two years.
Sellers or realtors who pay for a prelisting home inspection know it's a small price to pay—average cost is $425—for a checklist covering over 1,500 items in a home. The result is that they're more prepared to sell the home quickly for the highest valuation and that home buyers are more receptive to enter into a sale because they feel comfortable with all the information on the home's condition being disclosed upfront.If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
2008 MARKET OUTLOOK
3/12/2008
2008 Market Outlook
Brought to you by CALIFORNIA ASSOCIATION OF REALTORS® 2008 HOUSING MARKET OUTLOOK California experienced another year of weak home sales in 2007. Sales of existing detached single-family homes, which declined 23.6 percent for the year 2006, were projected to decrease another 26.0 percent to 353,200 homes for the year 2007. Sales fell steeply in the last quarter of the year as the liquidity crunch severely constrained availability of funds for mortgage loans. Monthly sales fell below 300,000 units on a seasonally adjusted and annualized basis, levels that had not been seen in over 20 years. Despite the decline in sales, the statewide median home price set a new record of $597,640 in April and remained near record levels for much of the year. This was partly due to the downward stickiness in prices in a slowing market, but also had to do with the mix of sales in 2007 compared with prior years. While low- to moderately-priced markets suffered throughout the year, the high end of the market was somewhat more resilient and propped up the statewide median price. However, with the onset of the liquidity crunch later in the year, that market segment saw weakness both in sales and prices and forced the statewide median price below $500,000 in October and November for the first time since early 2005. In general, lower-priced markets experienced large sales declines and weaker home prices as compared to higher-priced markets in 2007. Sales through August for homes valued below $500,000 declined 24.6 percent year-to-date, and sales of homes between $500,000 and $999,999 fell 24.2 percent when compared to 2006. By comparison, sales of homes priced $1 million and above declined only 0.5 percent from the same period of last year. However, the liquidity crunch choked off sales beginning in September, with the $500,000 to $999,999 market experiencing year-to-year sales declines in the range of 50 percent through the end of the year, and the market over $1 million market showing year-to-year declines of roughly 25 percent. The housing market is unlikely to see significant recovery in 2008. A further six percent decline in sales is expected for the year 2008. Peak to trough, annual sales are expected to decline 47 percent from peak levels of approximately 625,000 homes in 2004 and 2005 to 332,000 homes in 2008. Meanwhile, the statewide median price will show its first decline since 1996, with a projected 5.5 percent annual decline in 2008 to $536,500. As the economy remains in the late stages of expansion with many mixed signals, economic growth for 2008 is expected to be positive, but will be below the potential GDP growth rate of 3 to 4 percent. The California economy should grow on a par with the national economy, with non-farm job growth increasing 0.9 percent, and unemployment rate approaching 6 percent in 2008. Current market problems, however, have their roots in financing, not in weakening economic conditions. As such, this is not like the situation in the 1990s. Market weakness will continue to be driven in part by the ongoing problems in the subprime arena. Subprime mortgage payment resets are expected to peak in late 2007 and early 2008, so defaults and foreclosures should crest later in the year before easing as the year draws to a close. This will continue to put downward pressure on home prices, particularly in parts of the state that had a lot of new home building. Improvement in market conditions is more likely in the latter part of the year, as mortgage problems begin to subside and as buyers and sellers sense that home prices may have stabilized.
Wednesday, January 02, 2008
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
UNDERSTANDING CAPITAL GAINS TAX
3/3/2008
For those of you selling you primary residence after living in it for 2 of the last 5 years, understanding your capital gains exemption is crucial. Please read the following article for a great formula and explanation on what makes you "exempt from taxation"
http://www.realtor.org/rmotoolkits.nsf/pages/consumerC05
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PRESIDENT SIGNS ECONOMIC STIMULUS BILL
2/26/2008
President Bush today signed off on the $168 billion stimulus packaged approved by Congress last week, which, in addition to tax rebates for millions of working Americans and business owners, includes a vital, but temporary increase in the conforming loan limit. The economic stimulus package will allow the Federal Housing Administration, as well as Fannie Mae and Freddie Mac to offer mortgages above the current conforming loan limit of $417,000 to as much as $729,750 in high-cost areas for loans originated between July 1, 2007 and Dec. 31, 2008.
Raising the conforming loan limits to more accurately reflect the cost of housing in California and other high-costs areas of the nation has long been a top C.A.R. objective. Currently, Californians are forced into more expensive non-conforming jumbo loans, decreasing homeownership opportunities for many and forcing others into more costly – and often riskier – loan products.
“The actions of Congress and our president represent a significant victory for homeowners across the state and nationwide,” said C.A.R. President William E. Brown. “C.A.R. has long fought for increases to the conforming loan limit in order to close the gap for would-be home buyers in high-cost areas, such as California, and, with the spotlight now fully shining on this important issue, will continue those efforts and push for permanent changes beyond Dec. 31.”
The increases call for raising the conforming loan limits to 125 percent of an area’s median home price capped at $729,750. U.S. Housing and Urban Development Secretary Alphonso Jackson will have up to 30 days to determine exactly what the loan limits for high-cost areas will be and, once those amounts have been made public, C.A.R. members will be notified.
The stimulus package also will deliver tax rebates of $600 to $1,200 to taxpayers, and $300 checks to disabled veterans, the elderly, and other low-income people.
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
APPRAISING REAL ESTATE APPRAISERS
2/21/2008
Throughout my career I don't think there's been a single transaction where I haven't given thanks to the appraiser and simultaneously been grateful that I'm not one. They have an unbelievable amount of pressure on them from every side and during the quiet times, when refinances are the only transactions paying their bills, they rely heavily on referrals. Who's going to refer people to them? Banks and RE Agents who have been satisfied with their work...so, literally, how can they make it if they're not pleasing people?
This article offers some great insight into an appraiser's constant dilemma:
http://rismedia.com/wp/2008-02-15/your-rights-appraising-real-estate-appraisers-and-appraisals/
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
TAX BENEFITS & SECOND HOMES
2/15/2008
To Rent or Not to Rent?
This is an excellent article to help you decide what's best for you...
http://www.escapehomes.com/main.aspx?tabid=45&itemid=63
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
I'M BACK WITH GREAT INFO!
2/3/2008
I've just returned from Hawaii and it was beautiful! Hawaii was the place of choice this year for the annual CRS convention. It was such an amazing time with plenty of seminars, classes and customer service sessions on how to serve my clients better. Sitting in a seminar with the best of the best in the real estate world (there were about 35 realtors there from Spain alone!) was quite an honor. Actually, with only about 5% of the realtors in the US attaining the CRS designation (Certified Residential Specialist) it is an honor to simply be one of them. One of my favorite sessions, "Technology that pays for itself" was unbeatable. Although my current methods do the trick, this session showed me how to kick it up a notch. You will be seeing a lot of changes to my site, tech efficiency and overall smoothness. As we complete successful transactions together, please let me know what you think!
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
OUT OF TOWN 1/22/08-1/31/08
1/22/2008
Hello! I will be out of town for a Certified Residential Specialist Conference and Trade Show during the week of January 22-January 31. I will resume my blog once I return. Have a wonderful week!If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
5 TIPS TO TURNING A RESOLUTION INTO A REALITY
1/21/2008
Do you know that 90% of Americans break their New Years Resolutions by January 31st? How can you prevent this from being you?
Tip 1: Be Clear and Specific
A few guidlines:
My ideal clients to work with are ______? What characteristics do you want themt o have?
I will make no less then $_____ by June, and no less then $_____by December.
I will be promoted to ______ by _______.
I will take ___ vacations totaling ___ days of.
I will attend ____ sports games for my son/daughter.
Now you have a more clear idea of what it means to "be successful." Every person's definition of success is different. All you have to do is be crystal clear about your own personal definition of success.
Tip 2: Know your Blocks and Obstacles
Do you feel stuck? People often report feeling like, "I have one foot on the gas and one foot on the brake." That's a pretty good indication of self limiting beliefs or self sabotaging strategies.
Be truthful with yourself in order to find the self limiing beliefs that have been stopping you.
"I procrastinate with every project"
"I avoid certain challenges that come way"
"I don't like confrontation"
"I sleep in when I should be making phone calls to clients"
Tip 3: What Areas do you need to Develop?
How confident do you feel when you ____(fill in your job responsibilities here)?
Tip 4: Have a Timeline and a Plan
Do you feel stuck? People often report feeling like, "I have one foot on the gas and one foot on the brake." That's a pretty good indication of self limiting beliefs or self sabotaging strategies.
And don't forget the key word, "Accountability"
Tip 5: Visualize the End Result
Even top athletes mentally rehearse, so why shouldn't you. Picture yourself in a year:
How much money will you have, how relaxed will you be, how happy is your family?
Visualize yourself being appreciated and feel the positive feelings that this gives to you. Do you feel calm, confident, and empowered? What other feelings arise?
Follow these 5 Tips and you are guaranteed to turn your Resolutions into a Reality.
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
FAST FACTS ON CA REAL ESTATE
1/18/2008
| Calif. median home price - November 07: $488,640(Source: C.A.R.) | ||
| Calif. highest median home price by C.A.R. region November 07: Santa Barbara So. Coast $1,075,000 (Source: C.A.R.) | ||
| Calif. lowest median home price by C.A.R. region November 07: High Desert $262,650 (Source: C.A.R.) | ||
| Calif. First-time Buyer Affordability Index - Third Quarter 07: 24 percent (Source: C.A.R.) | ||
| Mortgage rates - week ending 01/10: 30-yr. fixed: 5.87%; Fees/points: 0.4% 15-yr. fixed: 5.43%; Fees/points: 0.4% 1-yr. adjustable: 5.37%; Fees/points: 0.4% (Source: Freddie Mac) | ||
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
EXECUTIVES DO NOT ANTICIPATE RECESSION, STUDY SHOWS
1/17/2008
Senior financial executives in Orange County do not anticipate a national recession this year, but are projecting slower job growth in the area, according to a recent study by the local Financial Executives International (FEI) chapter, and Chapman University. According to the study, executives polled remain concerned about the high cost of housing, and, as was the case in 2007, do not currently have plans to expand their companies internationally.
http://www1.chapman.edu/argyros/acer/FEI%20Survey%20Press%20Release%20Jan%2014,%2008.pdf
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WHAT ARE BUYERS LOOKING FOR IN FLOORPLAN?
1/16/2008
What are buyer's looking for in 2008 when they walk through a home? Open space, big bedrooms, large kitchen and expansive and open living area. To some of us, those of us with these same desires, it's no surprise that formal living spaces are not on the list. What does the future hold for these formal spaces?
According to a recent National Association of Home builders (NAHB) survey of architects, designers, and other home experts on what they thought homes would look like eight years from now, 55% said that in average homes -- approx 2,300sf -- living rooms will have vanished. In upscale homes --those averaging 4,000sf -- 67% of the experts said that by 2015, living rooms would instead be functioning as a parlor, library or music room.
But what do we do as buyers and sellers when so many of our homes have these formal spaces? Design and personalize.
Some people love to read, why not turn a formal dining room into a library? Love to work out? How babout a home gym? None of these hitting home? Perhaps a home office, sewing room, music room, media center, theater, yoga studio, children's playroom or add some doors and call it a bedroom. With everyone's individual needs, an extra room, if it's already there, doesn't have to be a bad thing.
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
BUYING A NEW CONSTRUCTION?
1/15/2008
When buying a new construction the state makes a builder's warranty mandatory. Be sure you have the seller sign the "New Construction Addendum" along with the standard Residential Purchase Agreement, to confirm, in writing that the seller agrees to the warranty. What does the warranty cover?
http://www.aroundthecapitol.com/code/getcode.html?file=./civ/00001-01000/896-897
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AVOID BECOMING A VICTIM OF IDENTITY THEFT
1/12/2008
NEW STRATEGIES TO HELP YOU AVOID BECOMING A VICTIM
Compliments of Linda Ferrari
President, Credit Resource Corp.
- Identity theft is now the fastest-growing crime in America.
- Per the Federal Trade Commission and Consumer Federation of America, approximately 9-10 million consumers become victims of identity theft every year.
- This crime is costing consumers approximately $5 billion a year and banks and institutions $48 billion a year to cover the total amounts stolen.
- Online transactions are the least-used method by ID thieves, but the method that consumers fear the most.
- It used to be that consumers were only responsible for paying $50.00 towards fraudulent charges made to their credit cards, but creditors have changed their contracts. In many cases, if you do not notify your creditors within a 60 day period that the charges do not belong to you, you could be personally responsible for some of those charges in full. This is why it is so important to check your statements and credit reports as often as possible.
First they steal personal information by:
- Stealing personal information from a wallet or purse. Lost or stolen wallets and purses are still and have always been the number-one method of identity theft.
- Going through mail or trash looking for items like bank statements, credit card statements and pre-approved credit card offers.
- Redirecting mail by submitting a Change of Address form to the post office.
- Acquiring credit reports by pretending to be a potential landlord, or employer.
- Pretending to be one a creditor calling on the phone to update account information.
- Getting information from employment records.
- Phishing scams on the Internet (posing as one a creditor or bank asking to update personal information in their files.)
- Open new credit card accounts in someone else’s name.
- Open a bank account and write bad checks.
- Counterfeit ATM cards or checks and get access to others’ account.
- Purchase new cars in someone else’s name.
- Open utility and cell phone accounts in someone else’s name.
- And some even go so far as filing for bankruptcy to avoid paying for the debt they have incurred in another’s name.
These are some steps you can encourage your clients to take to ward off ID theft.
- Opt Out of receiving Pre-Approved Credit Card Offers in the mail. Here's the phone number (888)5-OPT OUT, (888)567-8688.
- Check credit reports regularly to make sure the information that is being reported is accurate.
- Get a cross-cut paper shredder and shred every document a person could use to steal an identity, including credit card solicitations, bank solicitations, bank statements, etc.
- NEVER give out credit card numbers, Social Security Number or other personal information to someone over the phone or in an e-mail requesting that type of information. If someone calls or emails a consumer asking to verify information, the consumer should hang up the phone and call their creditor back at the telephone number on their statement to verify the request.
- Check bank statements every month and make sure they are correct.
- Sign up for a credit watch program that will sends an alert whenever there is activity on the credit report. CRC refers our clients to www.privacyguard.com for these services.
- Tell them to make a copy of everything in their wallet and keep it somewhere safe so that they have immediate access to telephone numbers should they become a victim.
- Only process online credit card transactions if the site has a secured icon on it which is usually a lock, or if the URL address changes from HTTP to HTTPS. The S is for secured.
- Find out if your state has instituted Security Freeze law to protect people who consider themselves at risk for any reason. (This includes vulnerability for those filing for divorce!)
Here are some guidelines directly from The Federal Trade Commission of what your client’s should do if they become a victim of Identity Theft:
- Place a fraud alert on your credit reports, and review your credit reports.
Experian: 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9532, Allen, TX 75013
TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790
- Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
- For charges and debits on existing accounts, ask the representative to send you the company's fraud dispute forms. If the company doesn't have special forms, use the sample letter to dispute the fraudulent charges or debits. In either case, write to the company at the address given for "billing inquiries," NOT the address for sending your payments.
- For new unauthorized accounts, ask if the company accepts the ID Theft Affidavit (PDF, 56 KB). If not, ask the representative to send you the company's fraud dispute forms. If the company already has reported these accounts or debts on your credit report, dispute this fraudulent information.
- File a complaint with the Federal Trade Commission.
- File a report with your local police or the police in the community where the identity theft took place.
Undoing the damage to their credit score and their lives can be frustrating, long and unsettling for your clients, not to mention the horrifying feeling they have when someone has been posing as them. Reassure your clients that the best defense against identity theft is to reduce their vulnerability and to be proactive when it comes to their personal information. Tell them the value of their personal identity, and that if it is stolen, it can impair their chances of obtaining a loan or other types of credit. Helping them be a smarter, more alert consumer will ultimately help you as your clients come to understand the importance of protecting their identity and their borrowing potential!
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
BUYING RENTAL PROPERTY 101
1/11/2008
Many people and investors alike are taking advantage of the current interest rates and "buyer's market". One favorite strategy among both groups is the purchase of single family units, or multi family properties, with the intention to rent and realize rental income. I have known many people that have escalated up the income scale by taking advantage of this method; but, before jumping on the train there are several factors to take into consideration in order to guarantee the best chance of successfully finding a tenant and making money from your investment.
ASSESSING YOUR GOALS BEFORE BUYING
Before you buy real estate with the intent of renting it out, you need to determine what your goals will be. For example, do you want to create a steady source of income for many years to come or are you looking to sell the real estate for a profit later? If you are looking for a property that you can sell for a profit later, you will want to purchase something that is inexpensive that you can fix up and sell later.
DETERMINING IF YOUR REAL ESTATE WILL BE YOUR HOME AS WELL
When you get into the rental business, you will also need to decide whether or not you will live in the apartment building or housing unit that you purchase. If you do decide to live on that piece of real estate, you will probably be able to get your entire mortgage paid off by your tenants. As such, you will basically be living in your home for free. At the same time, you might prefer to distance yourself from your tenants. In this case, living in the same apartment building or housing unit may not be so desirable.
CHOOSING THE TYPE OF REAL ESTATE YOU WILL BUY
When deciding on the type of real estate you are going to buy, you will need to take some factors into consideration. For example, single-family houses are usually less expensive than apartment complexes since they are so much smaller. At the same time, a house will bring in less income than an apartment complex. Keep in mind that an apartment complex will often require more upkeep than a house. Take all of these factors into consideration when deciding on the type of real estate you plan to invest in.
PICK THE RIGHT LOCATION FOR YOUR INVESTMENT
Obviously, when you buy real estate with the intention of renting it out, you want to find property that is desirable. Otherwise, you will have a difficult time finding someone willing to rent it out from you. Therefore, you should select real estate that is in an area where people want to live.
In order to determine if the property is in a good area, consider the available shopping and activities that are near to the property. You should also consider the schools and the crime rate, as well as the general attractiveness of the neighborhood.
Unless you are looking for a fixer-upper and you have the time to fix up the home or apartment, you should look for a place that is in good shape. By purchasing a well maintained piece of property in a good location and within your budget, you will be certain to start a solid career as a landlord.
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
COMMERCIAL REAL ESTATE SOUND BUT INVESTMENT SLOWING
1/10/2008
| Commercial Real Estate Sound But Investment Slowing |
| The fundamentals in commercial real estate remain healthy with only slight increases in vacancy rates expected for the office and industrial sectors during 2008, although credit restrictions have recently slowed overall investment activity, according to the latest Commercial Real Estate Outlook from the National Association of Realtors®. According to Patricia Nooney, chair of the REALTORS® Commercial Alliance, "Even with the credit crunch there's been no significant impact on institutional investors, and ? commercial property in the U.S. has become very attractive to foreign investors." Read more... http://www.realtor.org/press_room/news_releases/2007/commercial_real_estate_fundamentals_sound.html?&WT.mc_t=LS010908&WT.mc_n=Comm |
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
A NORMAL MARKET: OUTLOOK SHOWS STEADYING PICTURE
1/8/2008
By Robert Freedman:
The National Association of Realtors is forecasting existing-home sales and prices to stabilize in the second quarter and rise throughout the second half of the year, reaching 5.7 million sales by the end of 2008, equalling the forecast for 2007. The median national price for existing homes is expected to level off, ending a 1.7 percent decline in 2007.
To get more stats and info on the stabilizing market click on:
http://www.realtor.org/press_room/news_releases/2008/pshi_jan08_stable_existing_home_sales.html
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
FLIPPING DOS AND DON'TS
1/7/2008
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MORTGAGE INTEREST DEDUCTIONS FOR PRIMARY AND SECONDARY HOMES
1/3/2008
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.
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If you get a new home during the year, you can choose to treat the new home as your second home as of the day you buy it.
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If your main home no longer qualifies as your main home, you can choose to treat it as your second home as of the day you stop using it as your main home.
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If your second home is sold during the year or becomes your main home, you can choose a new second home as of the day you sell the old one or begin using it as your main home.
Go to http://www.irs.gov/publications/p936/ar02.html for more information on this topic...
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
TAX BENEFITS OF HOME OWNERSHIP
1/2/2008
Owning versus renting a property, although sometimes on the surface may appear to be more expensive, actually is much more beneficial.
Here is an example (using simple numbers) to illustrate the point:
You rent a house for $1,000 a month payment which would cost you $12,000 a year... $12,000 that offers you no long term benefit or credit from the IRS.
That same property, when owned, if purchased for $100,000 might cost $1,200 a month in interest. On the surface it home ownership appears to cost an extra $200/month, $2,400/year.
The reality of the situation.
The interest on your home's mortgage is a tax deduction. Using the example above, approximately $1,100 of your $1,200 payment will be considered interest creating a yearly deduction of $13,200.
In other words, you can reduce your taxable income by $13,200. If you are in a 35% tax that would mean a $4,620 of real dollar savings on your taxable income .
The next benefit is known as appreciation. Historically, the national average for property appreciation has been about 6% per year; thus, this $100,000 property will go up to $106,000 in value.
You've made $6,000 on your property in one year.
Keep checking for the blog for the tax benefits of SECOND home ownership...
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
HAPPY NEW YEAR!!
1/1/2008
HAPPY NEW YEAR FROM PLATINUM PROPERTIES! WE’RE LOOKING FORWARD TO ANOTHER PROSPEROUS AND FULFILLING YEAR AND TO HELPING MANY OF YOU PURCHASE THE HOME OF YOUR DREAMS!
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com