Thursday, January 17 2013
The real estate climate forecast for the coming year is partly sunny -- and warming up! Yet, with no double-digit appreciation in sight, some who plan on selling a home inEvansville face the very practical question: is the winter of ’13 the right time to sell?
For those who stand to make a gain from selling, the decision boils down to convenience. Whether sale prices rise or fall, the cost of their next home will probably move in the same direction.
But what about those who suspect that the overhang from the financial crisis will probably result in some degree of net loss? How do they decide whether it makes more sense to sell and take the loss, or to rent -- and wait? Emotions aside, the financial impacts can be examined. If you are considering selling a home in the area and don’t stand to make a profit, asking yourself some questions can help reach a decision:
· Can I afford to take a loss? If you might need cash from your current property to purchase another, waiting is likely to be the safest course.
· If I have to take a loss, will there be a tax advantage to doing so in 2013? If you expect to sell a business or come into any other form of extra income during this tax year, check with your CPA to see if this year’s the right time.
· If I choose to rent my home, am I prepared to be a landlord? Are you up-to-date on applicable federal and local fair housing ordinances and tenants’ rights issues? If not, it’s practical to factor in the cost of a property management agency (usually 7 – 15%)
· Am I prepared to wait it out? If you decide to rent a local home and wait for the market to catch up to your profit goals, are you prepared to wait X years before selling? On-again off-again selling decisions can result in high tenant turnover -- which eats into your bottom line.
Selling a home vs. renting it out is a decision only you can make -- why starting with accurate information is so important. I will be happy to meet for a confidential consultation on the value of your local home in today’s market. It is a very good place to start.
Monday, August 08 2011
Homeowners are familiar with the tax deductions that are available to them but there are also potential deductions available for those who own rental properties. Realtor® Joe Cline of Austin, Texas lists seven possible deductions that rental property owners will want to be aware of:
Do you own any property that you rent out as investment? If yes, did you know that you can take advantage of tax deductions provided for owners of rental properties? That is right; aside from the income you earn by renting out and the possible profits from appreciation of your capital, owing a property can also reduce your income tax. In fact, rental real estate offers the most tax benefits compared to almost any other investment out there. Here are some of the possible tax deductions property rental owners can enjoy:
1. Tax deduction from interest
2. Tax deduction due to property depreciation
3. Deduction from repairs
4. Deduction from insurance
5. Deduction from professional and legal services
6. Tax deduction from hiring employees and/or independent contractors
7. Deduction from travel expenses
As a rental property owner, there are tax deductions you can take advantage of to lower your yearly taxes. The abundance of these deductible expenses makes rental real estate one of the most attractive investments there is. Know which types you qualify for, and see how much potential savings you have been missing out on.
Read more: Seven Possible Tax Deductions For Property Rental Owners | REALTOR.com® Blogs
Wednesday, May 26 2010
Renting out your house can be a smart financial move, as long as you calculate your costs carefully.
You have a single-family house you’d like to rent out. Perhaps you’re temporarily relocating for work, or maybe you inherited your childhood home from your parents, and you’re not quite ready to part with it yet.
Renting can be a profitable choice, but it requires an investment of time, money, and organization to make it work. Here’s how to determine whether renting out your house is worth the cost.
Calculate your monthly expenses
You want to charge at least enough to cover your monthly outlay. So the first step is to use our free downloadable worksheet to calculate your costs. Start with regular expenses like mortgage, maintenance, and homeowners association dues.
Check out prospective tenants
As a practical matter, you’ll have to formally check out your prospective renters. MrLandlord.com, an information and service site for landlords, suggests a variety of background checks: credit reports, eviction reports, and criminal background reports. None of these is expensive, but you must get your prospects’ permission.
Account for maintenance and upgrades
Even with the most scrupulous checks, you can’t be completely sure renters will take good care of your home. Eva Rosenberg, an enrolled agent in Northridge, Calif., advises that if you’re not within easy driving distance of your rental property, you’ll need to arrange for someone else to keep an eye on the place, even if it’s just to make sure the lawn is mowed. If the tenants are neglecting upkeep, you’ll want to know about it sooner rather than later, since it could be a warning sign of trouble down the line.
Don’t want the headaches? Hire a property manager
You can save yourself a lot of time and effort if you engage a management company to oversee the property and take care of the details. Some firms charge a percentage of the rental fee, others a flat monthly fee, based on the extent of services. Joe Aimone of GoRenter in Phoenix, Ariz., says his firm offers a variety of services, starting at as little as $50 a month, including general maintenance, rent collection, and—if necessary—eviction.
Keep scrupulous records
Whether or not you use a management company, you’ll have to keep extensive business records. DeDe Jones, CFP, CPA, in Lakewood, Colo., advises owners to save receipts for any expenses and to file them carefully.