credit: davey-boyPast wisdom has informed us that even in housing slumps luxury will withstand the pressures and continue to thrive. This conventional notion is not only being tested but its being cast aside as luxury home, condo, and apartment owners are seeing the value of their homes drop and watching them sit on the market for months, even years, without a legitimate bite.
Archive for March, 2008
Is Luxury a Safe Bet
Wednesday, March 12th, 2008No Glass Ceiling for Women in Real Estate
Tuesday, March 11th, 2008
Real estate has traditionally been a good opportunity for women. More than 65 percent of real estate agents are women. The flexibility and higher than average income was a draw to career-minded mothers long before flex-time and family benefits were even considered in other industries. Yet, historically, the top management spots were held by men. All of that has changed.
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Real Estate Tax Tips
Monday, March 10th, 2008
credit: Jeff Belmonte
Taxes are tricky. Are you taking advantage of all the breaks you’re entitled to as a real estate owner? Everyone knows you can deduct your mortgage interest from your federal taxes, but property owners can also take advantage of a number of other breaks.
- Points: The IRS consider those hefty fees paid to lenders as a form of prepaid mortgage interest. So if you bought a home in 2007–or refinanced your adjustable rate mortgage you get a break.
- You may also qualify for a mortgage interest deduction on a second vacation home as well as any second mortgages or home equity loans you hold.
- Owners of investment property can deduct expenses related to the property, so keep receipts for repairs, upgrades, or real estate management fees.
- If you rent out your vacation home when you aren’t using it, you might be able to deduct the cost of travel there and routine upkeep.
- Home improvements made for health reasons are deductible from your taxes, if they’re made for the chronically ill or disabled and don’t add value to your home.
- Tax credits can also be deducted for “green” improvements, such as energy efficient windows and doors and solar energy systems.
If you sold your home and moved because of a job, you may be able to deduct some of your moving expenses. You must move at least 50 miles and you must have moved in order to take a full-time job. You can deduct the cost of packing and transporting your household goods. You can also deduct travel expenses for yourself and your family, which includes lodging, but not food.
You cannot deduct:
- Any part of the purchase price of your new home
- Expenses of buying or selling a home
- Expenses of entering into or breaking a lease
- Home improvements to help sell your home
- Loss on the sale of your home
- Losses from disposing of memberships in clubs
- Mortgage penalties
- Pre-move househunting expenses
- Real estate taxes
- Refitting of carpet and draperies
- Return trips to your former residence
- Security deposits
- Storage charges except those incurred in transit and for foreign moves
If you invest in real estate good record-keeping is essential. Keep the purchasing contract and closing statement, which establish the basis on which you’ll calculate depreciation as well as capital gains. Also keep track of capital improvements you’ve made, which you can depreciate; rental income records, including vacancy periods and security deposits received; and operating expenses.
If you work from home, you can deduct expenses that are related to business, including real estate taxes, rent, insurance and maintenance and repairs. Those expenses are based on the amount of square footage you use exclusively for business.
If you have a lot of complex real estate investments, or even if you just own your own home, it’s a good idea to read up on what the IRS allows you to deduct and when.
For example, timing is everything. If you sell your home but immediately reinvest the windfall in a better property, you may be entitled to defer the taxes on those capital gains. On the other hand, homeowners who have lived in a house that served as their primary residence for two years can exclude up to $250,000 of the profit from their reported income–twice that for married couples. Investment property, on the other hand, has a whole different set of rules.
There are a number of places on the Web with information on real estate taxes, starting with the IRS:
- IRS: Selling a home looks at when you can avoid paying capital gains on the sale of your property.
- IRS: Rental Income and Expenses details how to report income and what expenses are deductible.
- IRS: Passive Activity Losses covers rentals.
- IRS: Residential Rental Property is the IRS’ guide to preparing your 2007 return if you own a vacation or rental home.
- Financial Web: A few investment real estate tax tips.
- Motley Fool: Trump Your Taxes With Real Estate.
- Field Guide to 1031 Exchanges by the National Association of Realtors looks in depth at the rule that investors to defer capital gains taxes on the exchange of like-kind properties.
- Financial Web: Taxes and Your Investment Real Estate.
- Smart Money: Taxes when you sell your home.
- Federal Real Estate Tax Rules for Property Owners.
British Guidelines for “Age-Friendly” Neighborhoods
Sunday, March 9th, 2008The British government unveiled a new housing strategy this week, designed to help their aging population stay in their own homes longer. UK Housing Minister, Caroline Flint said the new policies are “about giving all older people a better choice.” Highlights of the new program includes:
- Requiring new homes to meet age-friendly design guidelines, including wider doors, improved bathroom designs, and stairways wide enough to accommodate lift chairs, by 2013.
- Requiring new social housing to meet those standards by 2011.
- Suggesting developers of new housing projects follow age-friendly guidelines, including better paving and curb design, convenient public rest rooms, disabled parking bays, and good street lighting.
For existing housing, the British government proposes to:
- Adopt a national rapid repair and repair service which will enable an estimated 125,000 older citizens per year to get the repairs and modifications they need to be able to support themselves at home independently.
- Establish a dedicated National Housing Advice and Information line to provide expert advice for older citizens about home repair.
- Increase funding for disabled citizens to be able to make home modifications to accommodate them in their exisiting property.
Although these policies apply to England, similar measures are likely to make their way across the Atlantic. What do you think?
Cities Deep in the Housing Slump
Saturday, March 8th, 2008
credit: EdTarwinski
It’s no secret that the real estate market is in a bit of a slump or even worse, but some cities are faring worse than others. The hardest hit cities are ones which have high negative equity. Negative equity means that more is owned on the home than its current market value. RealtyTrac has examined recent foreclosures and found the worst counties to own property in are, not surprisingly, some of the hot spots during the most recent housing boom.
Wayne County, Michigan the home of Detroit saw some unexpected and wholly remarkable property values during the boom, and it shouldn’t have come as such a shock when those values plummeted and many people found themselves with homes they couldn’t afford.
Clark County, Nevada, the county which receives a large part of its income from the gaming industry, saw fortunes being gambled on property and eventually lady luck turned her frown upon this area.
Maricopa County, Arizona looked like the darling market to many, at a point during the boom civil servants could often not afford to purchase homes in downtown Phoenix and had to move to the suburbs or surrounding communities. There was no where for this market to go but down.
Los Angeles County, California has been hit very hard by the current state of affairs in real estate and this shouldn?t come as a shock to anyone, this trend-friendly town is used to watching fads come and go and the real estate craze wasn?t anything new to these residents.
It was hard to see at the time, but with 20/20 hindsight it?s easy to see why some of these regions were just too good to be true.
Real Estate Investments
Friday, March 7th, 2008
credit: pfala
The bubble has popped, or so the media says, but does that mean that real estate is now a bad investment? Not necessarily. In the last couple decades you would have been well advised to do your homework before you bought, but you probably could have ignored that advice and still done ok. Now it’s absolutely essential that you do the research before your purchase or you could be stuck with a home that’s overpriced and no one wants to buy.
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Best Cities for Couples
Thursday, March 6th, 2008
credit: mrhayata
Forbes Magazine has come out with its top cities for couples by looking at some of the top metropolitan regions in the country, examining their divorce and marriage rates, the price of first time homes, income disparity between the sexes and the availability of marriage counselors. So, if you’re in a relationship and looking to get married, and stay married, you may want to consider a move to one of the following couple-friendly cities.
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How to Get your Dream Home
Wednesday, March 5th, 2008
If your dream house is on the verge of becoming a reality, make sure you don?t make any huge blunders that will turn it into a nightmare.
Pick the Right Lender
Shop between banks and mortgage companies to find the best percentage rate and best loan terms. A little research can save you thousands over the long haul.
Get Pre-Approved
Talk to your banker or selected mortgage lender and get pre-approved for your loan. It’s best if you know what you can afford before you start shopping.
Bargain Shopping
The dream home is probably unrealistic, you know that so convince yourself of it by making a list of what you believe you cannot live without and what you?d like. Then, at the top of the list, make note of how much you were pre-approved for and start looking for a bargain.
Hire the Inspector
Even though it looks perfect and the seller assured you that everything is in perfect condition, spend that extra money to have the home inspected. It’s another preventative measure that can end up saving you thousands (if not more) when all is said and done.
Taking these steps will help you insure that your home purchase will be something that you love for a long time and will make you feel as if you’ve turned your dream into reality.
Condos at Sea
Tuesday, March 4th, 2008
photo via residentialcruiseline.com
Imagine spending the winter in the Caribbean, the summer in the Med, and the fall amid the fall foliage of the St. Lawrence Seaway. Residential cruise ships make all of this possible, with owning just one home. A growing concept, residential cruise ships are luxury vessels that offer buyers a floating home with all of the comforts of a five-star hotels.
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What is a Real Estate Broker
Monday, March 3rd, 2008
What is a real estate broker and do you need one? In general the term is used to describe someone who works between the seller and the buyer of property. Usually they not only help find a buyer or seller, but they’re also involved in making sure all the legal documents are signed and finalized and that the end deal is legal and binding. A more common term is real estate agent.
