Lifestyle

Category: Miami Real Estate

  • Feeling over-taxed in Miami? Maybe. But it’s four times worse in New York.

    Feeling over-taxed in Miami? Maybe. But it’s four times worse in New York.

    Property taxes may be high in Miami, but they’re not New York high.

    An analysis by Attom Data Solutions found the average owner of a single-family home in Miami-Dade paid $4,129 last year. That’s higher than most large counties across the country, but still trailing 100 of the priciest large counties for tax bills.

    There’s Marin County in California, across the bay from San Francisco, with an average tax bill topping $10,500. That’s not even a Top Five bill, though. The highest rankings go to the New York suburbs. Number One on the list, New York’s Westchester County, sent out an average tax bill of more than $16,000 for single-family homes last year.

    High tax bills in South Florida

    The average tax bill in South Florida is steep. In terms of taxes paid, Miami-Dade and Broward both land in the top 25 percent among the country’s 586 largest counties. Those counties each have a population of at least 100,000 and have at least 10,000 single-family homes.

    The rankings compare only property taxes charged to single-family homes, offering a broad look at a a top household expense across nearly 600 of the country’s largest counties.

    “Nobody likes to pay property taxes,” said Daren Blomquist, a senior vice president at Attom, an Irvine, California, firm that tracks public record real estate data and operates RealtyTrac.com. “Property taxes are a major but largely hidden cost of home ownership that may not be clear to buyers until they actually own a home and start receiving the tax bill.”

    South Florida tax rates are about average

    Miami-Dade and Broward counties’ tax rates straddle the middle of the pack. Miami-Dade has a lower effective tax rate than 54 percent of the country’s largest counties. Broward charges a bit more for property taxes with an effective rate that’s lower than just 42 percent of the country’s largest counties. This data looks at the country’s 586 largest counties, defined as having a population of at least 100,000 and having at least 10,000 single-family homes.

    Miami-Dade’s average tax bill of $4,129 is higher than those in 75 percent of the country’s 586 largest counties. That’s largely thanks to Miami-Dade’s pricey real estate market, where the average single-family home is worth more than its counterpart in 88 percent of the other large counties.

    In terms of the actual tax rate, Miami-Dade comes in lower than more than half of the large counties. The average single-family owner pays an “effective” tax rate of 1.01 percent.

    Home values super high in South Florida

    South Florida’s single-family home values are some of the highest among the country’s largest counties. Miami-Dade County’s home values are higher than 88 percent of the country’s 586 largest counties, defined as having a population of at least 100,000 and having at least 10,000 single-family homes. Broward’s values are higher than 85 percent of counties.

    Miami-Dade property owners actually pay property-tax rates of between 1.6 percent and 2.6 percent, depending on the city.

    Attom calculated its “effective” tax rate by limiting the data to single-family homes across the country. That excludes condominiums, which make up a significant chunk of Miami-Dade’s housing stock. Census data from 2015 show just 51 percent of Miami-Dade’s homes are detached single-family residences.

    “It’s good news for taxpayers to see that kind of a tax rate,” Blomquist said. “That may be a small consolation. It’s still more than $4,000 a year.”

    In Broward, the 1.19 percent effective tax rate is higher than Miami-Dade’s. The average tax bill is a bit steeper too, at $4,295. That gives the average single-family-home owner in Broward a higher tax bill than 78 percent of the country’s largest counties.

    SOURCE

  • 5 Great Neighborhoods in Miami

    5 Great Neighborhoods in Miami

    Discover five of Miami’s most notable neighborhoods and find the one that fits you.

    Miami is lush and green all year round. Although summers are steamy, an ocean breeze pushes temperatures down a few notches, making Miami a great place for windsurfing, cycling, golf, boating and tennis. The city is part of the South Florida region, with Fort Lauderdale to the north and the Florida Keys to the south. To the west, suburbs run from the edge of the city to the Everglades, and the Atlantic Ocean borders Miami to the east.

    East

    South Beach and its lesser known neighbor, North Beach, have a village feel with its bodegas, boutiques and lots of Art Deco architecture.

    Flagship Neighborhood: South Beach

    South Beach, also known as “SoBe,” sits on the barrier island between the ocean and downtown on the mainland. It’s a pedestrian friendly locale with the added plus of being low-maintenance since housing consists mostly of condos. You can park your car for the weekend and walk to shops, restaurants, nightclubs, parks and the beach.

    South Beach has easy access to the mainland and Interstate 95 with two major bridges. Ocean Drive, which runs along the beach, is the main tourist drag. But locals dominate the area just a few blocks away.

    The historic Art Deco district is central to SoBe, while farther north, a few of the classic Miami Modern (or MiMo) hotels dot the landscape. Single-family homes tend to be pricey, but condos can be reasonable, especially as the housing bubble has deflated.

    The Neighbors: Young professionals, childless couples and celebrities

    Also Consider: North Beach is more popular with families and people who want something a little quieter at night.

    West

    Coral Gables and Little Gables is where old Miami money meets the nouveau riche with some of the most expensive homes and best schools in the area.

    Flagship Neighborhood: Coral Gables

    At the heart of Coral Gables stands the venerable Biltmore Hotel, with gracious, Spanish-style architecture that so many people identify with South Florida. Miracle Mile, a shopping-and-eating street, forms the center of the small commercial district boasting a lively happy hour crowd, good local restaurants and high-end boutiques. The streets of Coral Gables are lined with tree canopies, lush landscaping and charming 1920s stucco homes with tile roofs, archways and private courtyards.

    Coral Gables is located close to highways and is a quick drive to the beach. While many homes qualify as estates in “the Gables,” smaller, less-expensive houses and some condos are also available and sought-after due to the good schools and Old World ambiance.

    The Neighbors: Multigenerational Miami families and deep-pocketed new arrivals from Latin America make up the majority of Coral Gables residents.

    Also Consider: Little Gables, just north of Coral Gables, has most of the amenities with smaller homes and relatively lower prices.

    South

    Coconut Grove and Brickell Village, where the Miami skyline is close but not too close.

    Flagship Neighborhood: Coconut Grove

    Coconut Grove was once a funky 1960s haven for hippies and drifters. Although it’s now home to many modern homes and large estates, the neighborhood still maintains vestiges of its freewheeling roots.

    The marina at Dinner Key is central to the boating community. The Pan Am building on the waterfront, where the now-defunct airline’s former headquarters used to be, now serves as Miami City Hall.

    Home to a small, bustling commercial center with boutiques, juice bars and cafes, “The Grove” features winding roads and bike paths, leading to popular bay front parks and sailing marinas. Much of Coconut Gove runs close to the waterfront, and homes tend to be pricey. Condos are generally cost less, but some are top-of-the-line as well.

    The Neighbors: Coconut Grove has a broad mix of younger families, older empty-nesters and singles.

    Also Consider: Brickell Village is north of the Grove, but is still on the south banks of the Miami River. Thousands of new apartments, condos and townhouses offer a low-maintenance urban lifestyle.

    North

    Aventura and North Miami Beach offer newer construction with breathtaking views of the Intracoastal Waterway and the ocean.

    Flagship neighborhood: Aventura

    Gleaming, modern high-rise condos line the coastline. A community anchored around a popular, high-end shopping mall, Aventura features easy access to the highways and is just as close to Fort Lauderdale as it is to downtown Miami.

    If you want condo life, boating and tennis plus easy access both north and south, this is a good location. Many condos offer valet parking and private facilities. Mid-range chain restaurants dot the area along with more luxurious offerings.

    The Neighbors: Older generations make up the majority of the winter residents, also known as “snowbirds.” Aventura is popular with young professionals and Latin American investors as well.

    Also Consider: Sunny Isles

    City Center

    Home to the region’s central business district and many cultural and tourist attractions, Downtown and the Upper East Side neighborhoods make up the city’s urban core.

    Flagship Neighborhood: Downtown Miami

    Newly constructed lofts and high-rise condos give way quickly to well-established single-family residential neighborhoods, all with shopping and restaurants nearby. An added bonus is the short commute to downtown offices, the airport and the beaches, which also connect to downtown via two neon-lit causeways.

    Downtown isn’t fully redeveloped, but lofts and condos are spawning new mini-neighborhoods in what used to be derelict areas. Wine bars, sushi restaurants, high-end gyms and yoga centers have developed near new condos. The second-Saturday gallery walk in Wynwood and top-notch restaurants along Biscayne Boulevard are luring new residents to the area.

    The downtown condo glut is creating excellent rental and investment opportunities for first-time homebuyers. The older, mostly gated neighborhoods east of Biscayne Boulevard have also fallen from their top-dollar prices and are now more affordable. Plenty of fixer-upper opportunities remain for the DIY crowd.

    The Neighbors: Downtown is a trend for younger families both gay and straight.

    Also Consider: Wynwood, the Design District, Buena Vista East and Miami Shores

    SOURCE

  • Real Estate Investing for Novices

    Real Estate Investing for Novices

    An Overview of Real Estate Investing Basics for Beginners

    Simply stated, when investing in real estate, the goal is to put money to work today and allow it to increase so that you have more money in the future. The profit, or “return”, you make on your real estate investments must be enough to cover the risk you take, taxes you pay, and the costs of owning the real estate investment such as utilities, regular maintenance, and insurance.

    Real estate investing really can be as conceptually simple as playing monopoly when you understand the basic factors of the investment, economics, and risk.

    In order to win, you buy properties, avoid bankruptcy, and generate rent so that you can buy even more properties. However, keep in mind that “simple” doesn’t mean “easy”. If you make a mistake, consequences can range from minor inconveniences to major disasters. You could even find yourself broke or worse.

    The 4 Ways Real Estate Investors Make Money

    When you invest in real estate, there are several ways you can make money:

    1. Real Estate Appreciation

    This is when the property increases in value due to a change in the real estate market, the land around your property becoming scarcer or busier like when a major shopping center is built next door, or upgrades you put into your real estate investment to make it more attractive to potential buyers or renters. Real estate appreciation is a tricky game. In fact, it is riskier than investing for cash flow income.

    2. Cash Flow Income

    This type of real estate investment focuses on buying a real estate property, such as an apartment building, and operating it so you collect a stream of cash from rent, which is the money a tenant pays you to use your property for a specific amount of time. Cash flow income can be generated from well-run storage units, car washes, apartment buildings, office buildings, rental houses, and more.

    3. Real Estate Related Income

    This is income generated by “specialists” in the real estate industry such as real estate brokers, who make money through commissions from buying and selling property, or real estate management companies who get to keep a percentage of rents in exchange for running the day-to-day operations of a property. This type of real estate related income is easy to understand. For example, a hotel management company gets to keep 5% of a hotel’s sales for taking care of the day-to-day operations such as hiring maids, running the front desk, mowing the lawn, and washing the towels.

    4. Ancillary Real Estate Investment Income

    For some real estate investments, this can be a huge source of profit. Ancillary real estate investment income includes things like vending machines in office buildings or laundry facilities in low-rent apartments. In effect, they serve as mini-businesses within a bigger real estate investment, letting you make money from a semi-captive collection of customers.

    Tips for Purchasing Real Estate Investment Properties

    There are several ways to buy your first real estate investment. If you are purchasing a property, you can use debt by taking a mortgage out against a property. The use of leverage is what attracts many real estate investors because it lets them acquire properties they otherwise could not afford. However, using leverage to purchase real estate can be dangerous because in a falling market, the interest expense and regular payments can drive the real estate investor into bankruptcy if they aren’t careful.

    SOURCE

  • Why East Edgewater is the best opportunity since ‘South of Fifth’

    Why East Edgewater is the best opportunity since ‘South of Fifth’

    Miami is a town of visionaries

    From the original pioneers like Julia Tuttle and Mary Brickell to modern-day trail blazers like Tony Goldman, the urban place-maker responsible for emerging neighborhoods like New York’s SoHo, Miami Beach and the Wynwood Arts District. The “Magic City” has been erected on the dreams and determination of few. It has been built on a philosophy embodied in Goldman’s immortal words: “If you just look at what you see, you won’t go anywhere. You’ve got to look beyond what you see to be able to know you can realize the dream you imagine.”

    Before it was one of the most valuable destinations in the world, Miami Beach South of Fifth neighborhood was a rundown neighborhood.

    Those of us in the industry who have been around Miami real estate long enough will remember that 20 years ago, the tall glistening towers that welcome cruise passengers to our city were but a glimmer in the eye of a few forward-thinking developers that saw the potential of this area.

    Alongside those developers, our firm’s strategic sales and marketing efforts contributed to the transformation of this neighborhood, which runs south from Fifth Street to Government Cut. Apogee, Icon South Beach, Murano Grande, Ocean House, 321 Ocean, Portofino Tower and Yacht Club at Portofino were among the 90 percent of the waterfront buildings we represented in the South of Fifth area. In the process, we helped brand this exclusive neighborhood, now known as SoFi.

    It wasn’t easy, but the developers, brokers and buyers who believed in SoFi’s potential were the beneficiaries. For example, the residences at Apogee, the pinnacle of SoFi luxury living, had an average price per square foot just more than $1,000 at launch in 2004. Today, Apogee’s residences average $2,500 per square foot, with penthouses well over $4,000 per square foot.

    Two decades removed and two miles west across the shimmering waters of Biscayne Bay, another SoFi is emerging. East Edgewater, with its strategic waterfront location, proximity to Miami’s most in-demand zones and amazing value proposition, is the best opportunity Miami has seen since abandoned dog tracks and retirement homes called South Beach home. We find ourselves again staring down opportunity and potential.
    East Edgewater is immediately north of downtown, between the Venetian and Julia Tuttle Causeways, east of Biscayne Boulevard adjacent to Biscayne Bay. With the beaches to its east, Wynwood Arts District and the airport to the west, downtown Miami to the south and the Design District to the north, it sits at the crossroads of luxury retail, high-end dining and world-class arts and culture.

    In the 1930s, East Edgewater was home to the city’s most affluent individuals. By the 1980s, as other areas of Miami developed, the once highly regarded zone had fallen into disrepair. In the early 2000s, with the zoning changes allowing high-rises, came forward-thinking developers: Quantum on the Bay set the pace for the resurgence of this area, and today it sits as the only neighborhood in downtown Miami with waterfront that is zoned for high-rise condominium residences, presenting a rare opportunity. Miami’s major developers — Terra Group, Melo Group, Two Roads, OKO and RELATED, among others — have doubled down.

    When the smart people of Miami set their eyes on an area, smart money follows. Since 2011, 10 pre-construction projects have launched in East Edgewater, putting it among Miami’s fastest-growing neighborhoods. Of those, Crimson, Paraiso Bay, Icon Bay and Bay House have been delivered. Another five projects are expected to be delivered by the end of 2017, bringing 1,500 new residences to East Edgewater. As demand for the neighborhood increases, so has the level of ultra-luxury offerings. Elysee Miami (starting at $1.5 million) and Missoni Baia (starting at $2 million), which my firm represents, have launched sales in the last 12 months.

    Buyers have flocked from all around the world: Venezuela, Argentina, Brazil, Colombia, Mexico, France, Italy and Turkey being among the top international countries of origin. Emerging Latin American markets such as Ecuador and Peru, as well as markets farther east from China, Singapore and UAE, have also begun to take interest in the area’s ultra-luxury inventory.

    Easy access to major transit links, spectacular waterfront views and close proximity to Miami’s in-demand zones only add to the appeal of East Edgewater’s value proposition. By far, the major motivator for buyers has been the opportunity to purchase ultra-premium luxury residences significantly below comparable premium waterfront in Miami, Miami Beach and most of the world’s leading global cities. The average per-square-foot for ultra-luxury waterfront residences in East Edgewater ranges from the low $700’s to the high $800’s, more than three-times lower than SoFi’s $2,805 average per square foot. Simply put, East Edgewater offers an unprecedented value proposition, with an outlook toward exalted appreciation.
    We need look no further than the thriving Wynwood Arts District to realize the power of Goldman’s words. From his singular restaurant (Joey’s) has emerged an epicenter of art and culture. This history, this promise for the future, is all around us. It was the case in SoFi, and it is the case today in East Edgewater.

    SOURCE

  • Buildings in Miami with Iconic Architecture

    Buildings in Miami with Iconic Architecture

    When you think of Miami, there are certain buildings that come to mind

    From the Art Deco styled buildings down Washington Ave to national landmarks that tell the the story of our history.
    For locals and visitors alike, we share 8 buildings in Miami with iconic architecture. Each building is filled with character that makes it unique from others. Learn more about their style, history, purpose and the architect who envisioned it.

    1. Biltmore Hotel

    Built in: 1926
    Location: 1200 Anastasia Ave, Coral Gables, FL 33134
    Architect: George Merrick
    Purpose: Resort
    Style: Lush Landscapes, with Italian,Moorish and Spanish architectural influences.

    History: The Biltmore hotel has a lot of history. Originally built in the 1920’s as a destination for the rich and famous, this city gem has also served as a hospital during the war and a University of Miami campus.

    Fun fact: Unlike most buildings, the Biltmore Hotel has a 13th floor – which is the location of their famous Everglades/Al Capone suite.

    2. Freedom Tower

    Built in: 1925
    Location: 600 Biscayne Blvd, Miami, FL 33132
    Architect: Schultze and Weaver.
    Purpose: HQ and printing facility for the The Miami News
    Style: Mediterranean Revival

    History: In the 1960’s, this building was used to process documents and provide medical care to refugees from Cuba. The sight of the building was a beacon of freedom, which is how it earned its name Freedom Tower.

    Fun fact: The Freedom Tower has housed the works of Dalí and Da Vinci.

    3. Fontainebleau Hotel

    Built in: 1954
    Location: 4441 Collins Ave, Miami Beach, FL 33140
    Architect: Morris Lapidus
    Purpose: Luxurious hotel
    Style: Miami Modern Architecture (MiMo)

    History: The Fontainebleau Hotel was built to be the epitome of luxury hotels in Miami. The design was so iconic, it was featured in movies like Goldfinger, The Bellboy, Scarface, The Specialist and The Bodyguard.

    Fun fact: The owner of the hotel built a new addition called the Chateau to purposely spite former partner and owner of the next door hotel, Eden Roc, and is nicknamed “The Spite Wall.”

    4. Vizcaya Museum and Gardens

    Built in: 1914-1923
    Location: 3251 S Miami Ave, Miami, FL 33129
    Architect: Paul Chalfin, F. Burrall Hoffman, and Diego Suarez
    Purpose: Private estate
    Style: Italian Renaissance

    History: Vizcaya was built to be the summer home of James Deering, a wealthy businessman.
    The home was built in an European style with many surrounding gardens and fixtures imported directly from Europe. It also infused many of Miami’s distinct features like limestone and palm trees to create a stunning mix of styles. Today, the estate is owned by the government as has been converted to a museum filled with antiques and history.

    Fun fact: In 2008 the National Trust for Historic Preservation listed Vizcaya as one of america’s eleven most endangered historic places

    5. Raleigh hotel

    Built in: 1940
    Location: 1775 Collins Ave, Miami Beach, FL 33139
    Architect: L. Murray Dixon
    Purpose: Luxurious hotel
    Style: Art Deco

    History: The hotel was originally built during the “Boom over Miami” period, where countless hotels were built on Miami Beach. During WWII, it became an administrative office and also housed troops. After the war, it was renovated a few times into a luxury hotel – though keeping the key details that made it unique like their “most beautiful pool in America”.

    Fun fact: After WWII, The Raleigh briefly became a kosher hotel and the ballroom was used as a synagogue.

    6. Miami Tower

    Built in: 1987
    Location: 100 SE 2nd St, Miami, FL 33131
    Architect: Pei Cobb Freed & Partners
    Purpose: Signature office Tower and Landmark
    Style: Modern

    History: The Miami Tower is best known for lighting up the skyline in changing colors. From Patriotic holidays to our local sports teams, the Miami tower stand out against other building with its 3-tiered multi-colored building. It’s made up of a 10 story city-owned parking garage and a 47-story office building on top and the only building in Miami to house a metro station (Knight Center Station).

    Fun fact: The Miami Tower has been featured in many films including Miami Vice and Fringe.

    7. Olympia Theater

    Built in: 1926
    Location: 174 E. Flagler Street, Miami, FL 33131
    Architect: John Eberson
    Purpose: Silent movie theatre
    Style: Spanish garden

    History: The history of the Olympia theater changed and adapted as the way people enjoy the theatre has changed. Once a silent movie theatre, it has been renovated to serve as a live performance stage, rock concert venue, and finally to the performing arts center it remains today.

    Fun fact: This was the first air-conditioned building in the South.

    8. Venetian Pool

    Built in: 1924
    Location: 2701 De Soto Blvd, Coral Gables, FL 33134
    Architect: Phineas Paist
    Purpose: Public lagoon and Mediterranean Revival project
    Style: Mediterranean Revival

    History: Originally an abandoned coral rock quarry, George Merrick developed the area along with the Coral Gables neighborhood. Although mostly used as a pool, in the past, it was drained and used by the Miami Symphony for performances.

    Fun fact: The Venetian Pool is the largest freshwater pool in the United States.

    SOURCE

  • 2017 is a good year to buy luxury real estate in South Florida, experts say

    2017 is a good year to buy luxury real estate in South Florida, experts say

    It’s a good year to snatch up some luxury real estate

    According to ONE Sotheby’s International Realty’s year-end report, 2017 will be a buyers market thanks to an abundance of luxury options available. Sellers are expected to reduce their prices, particularly in the $1 million to $5 million range.

    That is thanks in part to the end of the election season and an increase in consumer confidence, said Anthony Graziano, senior managing director for Integra Realty Resources — Miami/Palm Beach, which produced the report.

    “I think a lot of people delayed purchasing decisions, waiting to see what was going to happen in the economy and the election and everything else,” Graziano said.

    Waterfront prices decrease

    In 2016, Miami-Dade County had 36 percent more single-family homes available in the $1 to $5 million range than in 2012, according to the report. The number of single-family homes in that range was up nearly 25 percent in 2015 over 2012, while prices were lower by 3.5 percent.

    “Most of that product tends to be on the waterfront, and as a result, the waterfront pricing took a hit because there is more inventory,” Graziano said.

    Miami-Dade prices for non-waterfront properties, both single-family homes and condos, rose in 2016 by 9 percent, he said.

    This year, the majority of Miami-Dade single-home sales are expected to be in the under-$1 million market, the report said, forcing sellers for higher-priced homes to bring down their prices.

    Brickell, downtown Miami, Edgewater and Midtown continue to lead the market, with almost 60 percent of all new units being delivered in 2017 and 2018, the report said. After 2018, Sotheby’s predicts a shift in new units to Miami Beach, Sunny Isles and Hollywood Beach, followed by a smaller number of boutique units in South Beach, Miami Beach and Surfside.

    Also incentivizing buyers this year is the specter of higher interest rates, which are expected to increase twice in 2017.

    “If interest rates are continuing to go up and the market senses that, that’s going to bring people up from the sidelines to buy at this price and lock in my interest rate for five to six years,” Graziano said.

    Condo sector

    In the condo sector, a slowdown of buyers from Latin America is expected to continue, while domestic buyers and those from Canada and Europe are expected to increase.

    “Remarkably, the Miami brand continues to sell worldwide, and long-term trends indicate no reversal in Miami’s fortune as the dominant gateway city along with NYC and San Francisco,” the report said.

    Still, the overall condo market is expected to remain choppy. The loss of Latin American buyers will drop waterfront condo prices by another 5 to 8 percent. Non-waterfront condos are expected to drop their prices by 3 percent, making it a good time to buy a resale condo in Miami.

    But new units are projected to maintain or increase prices.

    Steady growth

    In Broward County, the single-family-home market is expected to continue its growth from 2016. Broward homes, in large part because of their value, are priced 30 to 50 percent less expensive than comparable homes in Miami-Dade, the report said.

    The condo market will benefit from an influx in domestic retirees that will snatch up properties in Broward, instead of Miami-Dade, because the dollar stretches farther, Graziano said.

    “People make housing choices and say, ‘You know what? I’m going to go here,’ ” Graziano said. “They don’t have to move to Miami. For them, this is their retirement home, so more people are looking at Broward as an alternative.”

    A positive economy — Florida was one of four states in 2016 with 3 percent employment gains — is likely to drive the region to a successful 2017, the report predicts.

    “I personally think 2017 is going to be a better overall year [than 2016]” Graziano said.

    SOURCE

  • 3 Things to Consider Before Buying a Home

    3 Things to Consider Before Buying a Home

    At some point in your life, you may look around you and feel like everyone is buying a home. While this is the goal for many Americans, it occurs at different times for all of us.

    There are many key factors you should have in place before buying a home

    When buying a home, it definitely helps to be financially aware. It also benefits to be aware of your personal preferences and even work circumstances before buying a home. Buying a home is one of the biggest financial investments you will make in your entire life. It comes with an incredible amount of responsibility. Before buying a home, you should take a step back to decide whether you are in the right position to move forward.

    A Measure of Certainty

    Remember, a home is supposed to be a long-term investment. Not only does it help store up equity, but to live, raise a family, and partake in a community. Maybe you have the type of job that requires a move every few years. Or you could be contemplating a career change or going back to school full-time soon. If a change lies in your near future, it may not be the best idea to purchase a home.
    Everyone’s circumstances are different and renting out your home for a period of time is often an option. Still, you should at least have a plan for 5-10 years in the future. If you cannot see yourself living in a home or community for that long, then buying a home may not be right for you quite yet.
    A Strong Credit Score

    A good credit score can save you thousands of dollars over the life span of your mortgage. Applying for a mortgage is a very in depth process. Mortgage lenders want to ensure that lending to you makes a good investment. This is especially true now, after the mortgage bubble burst revealed the problematic nature of the subprime mortgage industry. A score of 700 – 720 can get you a good rate while 750 or above gets the best rates.

    Do Your Research

    Utilize the internet to research the home buying process. Look into any issues you don’t understand. You may decide you want professional help. Working with an exclusive buyer agent can help during the bidding process to get a good deal. But remember seeking professional advice and assistance will cost you, so factor this expense into your home buying budget. And much of the advice can be found online.

    Final Word

    Buying a home is an exciting, yet stressful, time in anyone’s life. You have to do your research before getting started to make the process as seamless as possible. It helps to plan for the future and working on your credit score, as well. This way you can make the home-buying process as enjoyable as possible. You can also make sure that you end up in the right home at the right time for you.

    SOURCE

  • Why Location Matters in Real Estate

    Why Location Matters in Real Estate

    Location, location, location.

    Ask just about any real estate agent to list the three most important things a property should have, and you’ll likely hear: “location, location, location.” That phrase has been in use at least since 1926, according to The New York Times, and is just as relevant now as it was then.

    But why does location matter so much? For starters, you can’t move a home — at least not easily or inexpensively. When you buy a home in a good location, it’s usually a solid long-term investment.

    Real estate agents often advise their clients to buy the worst house — a property that could use some TLC — on the best block. Why? Because fixing up a home in a great neighborhood will give you the best return on your investment. Quite simply, it will be easier to sell later on. Conversely, you can buy a beautiful home that doesn’t need any work. But if the block is sketchy or just plain bad, you could have a hard time selling the property at a decent price.

    So if “location, location, location” is so important, what makes a location good? Here are five characteristics to look for when buying a home. If you can get all five, chances are the home’s a great investment.

    1. A safe neighborhood

    People want to live where there’s little or no crime. Naturally, they want to feel safe in their homes and will pay extra for it. A safe neighborhood means people will feel free to walk around, be outdoors and interact with their neighbors. Communities still exist today where people don’t lock their doors, and they know their neighbors are there for them in a pinch.

    2. Good schools

    Being in a good school district Opens a New Window. is important, even if you don’t have school-age kids and never plan to have any. Fact is, young families always will be buying their first or second homes. They will do their home search based on location in general and good school districts in particular. The better the school district, the higher the values of the surrounding homes can be.

    Found a home you love but the school district is subpar? Be aware of that issue for resale down the road. Bottom line: When you buy a home, you should always think like a future seller.

    3. Convenient access to popular places, shops and restaurants

    Everyone wants to be near the best commercial districts. The closer to the hubbub of a particular town or the best parts of a city, the better the location — and the more someone is willing to pay for a home. In beach communities, the closer to the beach, the more valuable the property.

    4. Water access and views

    No matter which town or city, someone will always pay for a great view or to be on or near the water. Put a home right on a waterway or on a hill with panoramic views and you’ve got a great location.

    5. Access to public transit and/or freeways

    In major cities, the farther you live from the bus, subway or other types of mass transit, the less valuable the home. A good location means being very close, and having easy access, to public transportation. Being near a train or bus can get you anywhere in a short amount of time. In some towns, where a commute by car is inevitable, easy access to the freeway makes for a good location. Adding 20 minutes to a commute just to get to the freeway never helps a location.

    What makes a bad location?

    There are some common characteristics that make a location “bad,” no matter where you are.

    Ever see a home with a backyard that faces the freeway? Whether the home is in Denver, Dallas or Dubuque, such a location is likely always going to be considered undesirable. Is the home on a busy intersection or a four-lane road? Again, it’s probably considered a bad location, no matter which town it’s in or what the nearby neighborhood is like.

    Other factors that can make for a “bad” location: very close proximity to a fire station (good if your house is on fire, not so good if you’re trying to sleep); a hospital (frequent ambulance sirens); an airport (sounds of jet engines 18 hours per day) or a school (traffic from buses or parents dropping off children or kids yelling and playing).

    Some “good” and “bad” qualities simply vary by community. If you know your local community, you know which parts of town are less or more desirable. It’s always smart to rent in a new community before committing to a home purchase. Renting allows you time to become familiar with the location.

    All these things matter when you’re considering the location of a home for sale. But never lose sight of what matters most to you about the location. If you’re crazy about baseball, for instance, you might love owning a condo near your city’s professional baseball team ballpark. Someone who doesn’t like baseball, on the other hand, would probably not want to live near all the commotion.

    Location, location, location really does matter — a lot. But as always, the most important thing is to buy the right home for you, at the right time.

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  • Vacation Home or Income-Producing Investment?

    Vacation Home or Income-Producing Investment?

    The American Dream has undergone a fair amount of change over the last 50 years

    It has expanded to include being able to buy a second home — a vacation home. These are the cottages on the lakeside, the cabins in the mountains and the huts on the beach that all sit empty 90% of the year while their owners are banking time for the next vacation — and footing the bill for the mortgage and property taxes.

    There is, of course, an alternative to letting your cottage collect dust during the down time. You can rent it out to other people looking to enjoy some time away from work. This article will look at some of the issues that surround renting out a second home.

    Buying a Second Home

    Keeping a primary residence is an enormous financial decision. If you’re considering a second home, use a mortgage calculator to research interest rates from lenders in the area where your vacation property is located. Then, once you’ve gathered estimates of the total cost of your monthly mortgage payments, go over your financials to see if you may be better served to go with a mortgage or to pay cash.

    Here’s why. Keeping a second home is a step up in magnitude because a second home has all the costs (often more) of your first home without the easy write-offs from the IRS. Also, if you are set on getting a vacation home but don’t have the capital for an all-cash purchase, do not take a second mortgage on your home. The IRS has closed the loophole whereby a person could use a second mortgage to purchase a separate investment property while still deducting his or her mortgage from taxes. If you take a mortgage on your primary residence to buy a second home, you will not be allowed to deduct the payments as personal mortgage interest. Thus, if you intend to borrow for a second home, you will have to take out another mortgage that allows for tax-deductible interest.

    As It Stands

    Current tax rules surrounding second homes, vacation homes and investment-class second homes have changed more frequently than those of primary residences. As of 2010, if you currently own a second home for personal use, you are allowed to rent it, or your primary residence for that matter, to another party for up to two weeks (14 nights) without reporting any of the income. On the flip side, a second home is considered an investment property if you spend less than two weeks in it and then attempt to rent it the rest of the time. It is important to remember that, with the advent of resorts and such, the demand for a cabin in the woods may only come at the peak times – the same period you would probably want to use the property yourself. (To learn more about being a landlord, see Tax Deductions For Rental Property Owners, Investing In Real Estate and Tips For The Prospective Landlord.)

    The IRS on Vacation-Home Investment

    Although taxes for investment properties have been traditionally softer than for other types of investing, second homes seem to be a gray spot for the IRS. All rental losses are “passive losses” or “hobby losses”; and, these can only be used against — written-off against — income from other passive activities like other rentals, a private partnership you don’t help operate or an S-corporation. Passive losses that you can’t use are carried forward until you sell the vacation home. When you sell the property, the past losses can be used to offset any gains and, if you have more passive loss write-offs afterward, you can claim them against regular income.

    You can, however, deduct up to $25,000 a year, if:

    – Your adjusted gross income is less than $100,000 or
    – You actively participate in the management of the property.

    This tax break vanishes at $150,000 adjusted gross income (AGI). If you are between $100,000 and $150,000 you qualify for half the deduction. This seems foolish, as most of the people who can afford to buy a second home will have an AGI far above these numbers. Still, the real challenge is in the second condition. You can use the yearly deduction if you or your spouse want to become a qualified real estate professional and actively manage the property that is posting the passive losses. Be warned, however, the IRS is not likely to believe that you hold a full-time job and moonlight as a property manager. You will need a detailed journal on why, when, where and what you are doing as a property manager in order to prove your case.

    Selling a Vacation Home

    Properties in popular vacation areas usually tend to see higher-than-average appreciation, so there may be a time when you want to cash-in and find a new place to stay. When selling a vacation home, the length of time you have held it affects your capital gains tax. If you sell before a year has passed, you will be subject to the short-term capital gains rate. If you sell after a year, your federal tax will be calculated at the long-term capital gains rate. (To read more about capital gains tax, see A Long-Term Mindset Meets Dreaded Capital-Gains Tax, Capital Gains Tax Cuts For Middle-Income Investors and To Sell Or Not To Sell.)

    You can, however, do a bit of a dodge if you are willing to completely relocate. If you sell your primary residence with the $250,000 per person tax-free, and then move into the vacation home and declare it your new primary residence, you will be able to use the $250,000 ($500,000 for couples) exemption again – providing you live there for two years. Unfortunately, this strategy is often only practical for the self-employed or retired. There also other restrictions on the use of the capital gains exclusion for vacation homes that have been converted to a primary residence. (For more insight, see Is it true that you can sell your home and not pay capital gains tax?)

    Tips for the Second Homeowner

    If you own a second home for the purpose of renting it, and you have an AGI under $150,000, then get in there and start managing. This means that you won’t be able to use an agent to find tenants, and you will be arranging repairs personally, but it will give you passive losses to write off. Or, if active management doesn’t appeal to you or your AGI is too high, you can spend more time at the cabin and turn it into a mixed-use property rather than an investment property. This means that the taxes change with the change of designation – mainly that you can’t use passive losses, but you will be able to claim a percentage of the mortgage interest and property taxes as deductions against your income tax.

    The Bottom Line

    Turning a vacation property into a profitable rental tends to be an uphill battle. Before you jump into being a vacation-home landlord, take a good look at how your taxes will be affected. Most people who own second homes would be better served by getting them classified as a mixed-use property for tax purposes and renting them out for only the tax-free 14 nights in a given year. The people who do become second-home landlords, however, usually are driven by the same compulsion that forced them to buy the place in the first place. If you are one of those people, your best course of action is to get actively involved in managing your own property.

    What Do Other Investors Know That You Don’t?

    If it seems like you’re always late to the party when the market is swinging, it’s because other investors are beating you to the news. If you’re tired of making losing trades day after day and are looking for an edge then feel free to contact us and start your day better informed and ready to take on the markets.

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  • A Quick Checklist for Finding Your Dream House

    A Quick Checklist for Finding Your Dream House

    Above all, think about whether it’s something that you really want!

    Finding a new place to live is an exciting time, but can be met with many obstacles along the way. It is often the way that, although you may have your heart set on something at the time and think that it’s the one for you, your new abode may not be all that it’s cracked up to be. You have to look past the interiors and the lingo of the salesperson who’s trying to earn extra commission and think about whether it’s something that you really want.

    The size of the place

    Size matters. If you are looking at a property that is out of your budget due to size, then step away from it. A simple stroll into your local IKEA will show you that you don’t need to have a lot of space to be able to utilize it well. If you know that you can cope in a smaller space but are scared about the stuff that you’ll be bringing along with you, either find a place for it (either in the house or in storage) or sort through what you will keep and what you will sell or donate.

    The location

    You’ll need to be thinking about a lot of things to do with the location, not just picking it because it’s pretty or your friends live there. One of the best things you can do is look for recommendations on great places to go. Some things that you need to take into consideration include: how far you are away from your workplace, what it costs in comparison to other areas and whether you can afford it, if it’s accessible by public transport and what your insurance bills and rates are going to be like. Also, always think about the price you have to pay to live in a specific location.

    Nearby amenities

    Properties that have a lot of amenities on their doorstep (like doctors, dentists, and shops) are more likely to be snapped up quickly. You will be better getting one with all of these features available so that you can easily get yourself sorted should you be short of anything.

    How you’ll benefit from it

    Don’t go into a new property thinking about how happy it will make you feel – you need to look at the other benefits of it, too. Will it be easily expanded into a family home? If you are buying instead of renting, is it something that you could sell quickly and easily make money on? Would you easily be able to start a business there? Although these are questions that you may not necessarily be asking yourself currently, they still need to be thrown about there just to make sure that you are getting the right stuff for and from your money. Ploughing it into something just because it looks good on paper or you get a ‘wow’ from the first impression isn’t the be all and end all.

    If you can keep these four things in mind when searching for your dream house, then you’re sure to make the best decision for you!

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