Observers of Tri-State home sales have something to smile about.

A report from the Evansville Area Association of Realtors reveals home sales in Vanderburgh, Warrick, Posey and Gibson counties continue to climb, well after federal tax incentives for buyers expired at the end of April.

Chris Dickson, president-elect of the association, said the number of single-family homes in the four-county area were up 18.7 percent the first 21 days of this May, compared to the first 21 days of May 2009.

The increase was slightly higher than the 17.6 percent increase in sales for all of last month, compared to April 2009, he said.

“Clearly the tax credits had their intended effect. They ‘primed the pump’ and got the housing market going,” said Dickson, a real estate agent with ERA 1st Advantage Realty.

“We expect the increased activity to continue, because buyers who did not find the perfect home in April are still looking.”

For statistic lovers, a total of 241 homes were sold in the four counties in the first 21 days of this May, compared with 203 homes sold during the same period in 2009.

Dickson said the median sale price continues to also increase, up 11.2 percent so far this May, compared to May of last year.

He said the current median sale price was $123,500 vs. $111,000 a year ago.

“The overall volume and contribution to the economy has increased by 33.4 percent. Over $34.3 million worth of homes were sold in the first 21 days of this May, compared to $25.7 million during the first 21 days of last May.”

Dickson said that although the tax credits are no longer available for everyone, they are still available for people in the U.S. military.

“Also, there is plenty of FHA and conventional mortgage money available,” he said.

“Interest rates are still at historic lows. Interest rates for a 30-year fixed rate are available for around 5 percent.”

Source: http://www.courierpress.com/news/2010/may/26/tri-state-home-sales-continue-be-strong/

While being a landlord certainly has its cons, tops among its pros are the tax deductions for rental homes enjoyed by owners.

From finding tenants to fixing faucets, renting out a home can be a lot of work. Yet perhaps the biggest reward for being a landlord isn’t the rent checks, but rather the considerable tax deductions for rental homes.

The tax code permits most owners of residential rental properties to offset income by writing off numerous rental home expenses. IRS Publication 527, “Residential Rental Property,” has all the details.

Writing off rental home expenses

Many rental home expenses are tax deductible. Save receipts and any other documentation, and take the deductions on Schedule E. Figure you’ll spend four hours a week, on average, maintaining a rental property, including recordkeeping.

Here are some of the most common deductible expenses for rental homes, according to the IRS. You can usually take these write-offs even if the rental home is vacant temporarily. In general, claim the deductions for the year in which the expenses are incurred:

• Advertising

• Cleaning and maintenance

• Commissions paid to rental agents

• Homeowner association/condo dues

• Insurance premiums

• Legal fees

• Mortgage interest

• Taxes

• Utilities

Less obvious deductions include expenses to obtain a mortgage, and fees charged by an accountant to prepare your Schedule E. And don’t forget that a rental home can even be a houseboat or trailer, as long as there are sleeping, cooking, and bathroom facilities.

Limits on travel expenses

You can deduct expenses related to traveling locally to a rental home for such activities as showing it, collecting rent, or doing maintenance. If you use your own car, you can claim the standard mileage rate of 55 cents per mile (in 2009).

Traveling outside your local area to a rental home is another matter. You can write off the expenses if the purpose of the trip is to collect rent or, in the words of the IRS, “manage, conserve, or maintain” the property. If you mix business with pleasure during the trip, you can only deduct the portion of expenses that directly relates to rental activities.

Repairs vs. improvements

Another area that requires rental home owners to tread carefully is repairs vs. improvements. The tax code lets you write off repairs—any fixes that keep your property in working condition—immediately as you would other expenses. The costs of improvements that add value to a rental property or extend its life must instead be depreciated over several years. (More on depreciation below.)

Think of it this way: Simply replacing a broken window pane counts as a repair, but replacing all of the windows in your rental home counts as an improvement. Patching a roof leak is a repair; re-shingling the entire roof is an improvement. You get the picture.

Deciphering depreciation

Depreciation refers to the value of property that’s lost over time due to wear and tear. In the case of improvements to a rental home, you can deduct a portion of that lost value every year over a set number of years. Carpeting and appliances in a rental home, for example, are usually depreciated over five years.

You can begin depreciating the value of the entire rental property as soon as the rental home is ready for tenants, even if you don’t yet have any. In general, you depreciate the value of the home itself over 27.5 years. You’ll have to stop depreciating once you recover your cost or you stop renting out the home, whichever comes first.

Depreciation is a valuable tax break, but the calculations can be tricky and the exceptions many. Read IRS Publication 946, “How to Depreciate Property,” for additional information, and use Form 4562 come tax time. Consult a tax adviser.

Profits and losses on rental homes

The rent you collect from your tenant every month counts as income. You offset that income, and lower your tax bill, by deducting your rental home expenses including depreciation. If, for example, you received $9,600 rent during the year and had expenses of $4,200, then your taxable rental income would be $5,400 ($9,600 in rent minus $4,200 in expenses).

You can even write off a loss on a rental home as long as you meet income requirements, own at least 10% of the property, and actively participate in the rental of the home. Active participation in a rental is as simple as placing ads, setting rents, or screening prospective tenants.

If you’re married filing jointly and your modified adjusted gross income is $100,000 or less, you can deduct up to $25,000 in rental losses. The deduction for losses gradually phases out between income of $100,000 and $150,000. You may be able to carry forward excess losses to future years.

Let’s say you take in $12,000 in rental income for the year but your expenses total $15,000, resulting in a $3,000 loss. If your income is less than $100,000, you can take the full $3,000 loss. By deducting $3,000 from taxable income of $100,000, a married couple filing jointly would cut their tax bill by $750.

Tax rules for vacation homes

If you have a vacation home that’s mostly reserved for personal use but rented out for up to 14 days a year, you won’t have to pay taxes on the rental income. Some expenses are deductible, though the personal use of the home limits deductions.

The tax picture gets more complicated when in the same year you make personal use of your vacation home and rent it out for more than 14 days. Read our story about tax deductions for vacation homes for an explanation.

Donna Fuscaldo has written about personal finance for more than 10 years at the Wall Street Journal, Dow Jones Newswires, and Fox Business. She one day hopes to own a vacation home in the Catskills of New York.

Source: http://www.houselogic.com/articles/tax-deductions-rental-homes/

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.

You may also need to upgrade your insurance coverage. Your agent can advise you about adding landlord insurance, a special type of policy that covers rental properties. As a rule, landlord insurance costs about 25% more than standard homeowners insurance.

If you’re renting the house furnished, make sure you’re covered for the personal possessions you leave behind. Jane Cline, the insurance commissioner of West Virginia, tells owners to prepare a detailed inventory of household items. If you’re renting the house unfurnished, figure in the costs of moving and storing your items.

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.

MrLandlord.com charges $8.95 for an eviction report. A combined credit and eviction report is $14.95. If you want to be especially careful, a countywide criminal report costs $29.95.

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.

Of course, even if the renters are conscientious, problems can crop up: boilers will fail; roofs may leak; washing machine hoses can burst. If household systems or appliances need repair or replacement, you’re better off spending the money up front, before the fix becomes an expensive emergency.

You may also want to invest in some of the “extras” that Sue Peters, a broker in Wellfleet, Mass., recommends adding to attract a tenant willing to pay a higher fee. She suggests spending money on air conditioning, expanded-channel cable TV, and a Wi-Fi network.

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.

A management company can help you figure out how much to charge, find and vet tenants, and prepare a lease. It will also pay the real estate taxes on your behalf and present you with an annual 1099 form. Many management companies maintain 24-hour emergency lines and a roster of approved service people, so they can take care of plumbing or electrical problems and bill you later. A property manager will also see that driveways and sidewalks are shoveled, so you don’t find yourself with an unpleasant claim against your liability insurance.

Expect to pay a management company 8% to 10% of the annual gross rent, on average, with a $50 to $85 monthly minimum.

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.

The IRS treats maintenance expenditures, like a new hot-water heater, differently from capital improvements, such as a new deck or patio, so you’ll want to consult a tax professional. Meanwhile, keep the two types of receipts separate to make tax prep easier. You’ll have to file Schedule E on Form 1040, which can also serve as a template for the kinds of records you’ll need.

Finally, because of the complex tax and liability issues involved, many financial experts suggest forming a corporation when you become a landlord. An attorney can advise you about whether incorporating makes sense in your situation.

Richard J. Koreto has been editor of several professional financial magazines and is the author of “Run It Like a Business,” a practice management book for financial planners. He and his wife own a pre-Civil War house in Rockland County, New York.

Source: http://www.houselogic.com/articles/costs-renting-out-your-house/

The Indiana Association of REALTORS® (IAR) today released its "Indiana Real Estate Markets Report" for the month of April as a continuation of its "Indiana is Home" project.

The Report, found online at www.IndianaIsHome.com, was the first-ever county-by-county comparison of existing single-family home sales in Indiana. In March, statistics on other types of existing, single-family home sales - condominiums, duplexes, townhomes, mobile homes, etc. - was added to the report.

IAR obtains the data directly from 26 of the state's 27 Multiple Listing Services (MLSs), including the Broker Listing Cooperative® (BLC®) in central Indiana. To date, the Report represents 98% of the housing market statewide and 91 of 92 Indiana counties.

Statewide, April sales of all types of existing, single-family homes increased 28.4% from the same month last year; median prices saw an increase of 13.7%.

This is the seventh consecutive month that there has been an increase in median prices over the previous year.

"April showed continuation of an expected spring surge due to the federal tax credit," said Karl Berron, Chief Executive Officer. "While the increase in sales is positive, the best news is that inventory is trending down and there seems to be a broad stabilization in home prices, demonstrating that the tax credit did its job to preserve housing wealth."

If you live in the Midwest, here are maintenance jobs you should complete in spring and summer to prevent costly repairs and keep your home in top condition.

Certain home maintenance tasks should be completed each season to prevent structural damage, save energy, and keep all your home’s systems running properly. What maintenance tasks are most important for the Midwest in spring and summer? Here are the major issues you should be aware of and critical tasks you should complete. For a comprehensive list of tasks by season, refer to the to-do lists at the end of this article.

When spring arrives in the Midwest, it’s time to clean up your home and yard from the ravages of winter. As the weather warms, you can also accomplish some routine maintenance tasks that are much more agreeable when the sun is shining.

Key maintenance tasks to perform

• Check your gutters and downspouts. “Stuff accumulates even after your fall gutter cleaning,” says Frank Lesh, president of Home Sweet Home Inspection Co. in Indian Head Park, Ill. “Pine needles especially, which fall all year long and are difficult to remove.” Children’s toys, he says, also find their way into gutters between cleanings, as well as nails and other debris from the roof. Look for any signs of wind or ice damage—has the gutter pulled away from the house, or bent so that there are depressions where water can stand? You can usually repair damage yourself for under $50 by adjusting or reattaching brackets and gently hammering out bent areas.

Lesh also recommends examining your downspouts for blockages. “You can’t see inside them,” he says, “so tap them with a screwdriver handle to see if they sound hollow.” If the ends run underground, where animals can build nests or winter debris can become trapped, your best bet is to put a garden hose in the gutter and see where the water discharges. If you have a blockage, you’ll have to disassemble or dig up part of the downspout until you locate it.

• Inspect your roof for winter damage. This is best done from a ladder, but if you’re allergic to ladders, use a pair of binoculars to check your roof from your yard. Look for loose and missing shingles. If anything looks unusual, investigate further yourself or call a roofing contractor.

• Take a close look at your chimney. “Do this even if the winter was mild,” Lesh says. “High winds, rain, and snow can damage a chimney. Look for cracks, missing mortar, loose bricks or boards, and signs of rot.” If any of those things are present, call a chimney sweep certified by the Chimney Safety Institute of America for a repair estimate. If the metal flashing and the cap on a chimney are galvanized, Lesh says, check to see if they look brownish, which means they’re rusting and should be replaced. Also, make sure the cap is still present but hasn’t collapsed and covered the flue opening, which could cause a dangerous carbon monoxide buildup inside the house. Expect chimney repairs to start around $200.

• Examine your drainage. Make sure soil slopes away from your foundation at least 6 vertical inches in the first 10 feet on all sides of the house and that there are no areas of standing water. If you have properly sloped foundation drainage but still have areas of standing water, consider a landscaping solution, such as a swales (contoured drainage depressions), berms (raised banks of earth), terraces, or French drains (a shallow, gravel-filled trench that diverts water away from the house).

• Take a look at your siding. Has any of it come loose or begun to rot? Repair any damaged sections before moisture has a chance to set in. No matter what your siding is made of (wood, vinyl, brick), it may need a spring cleaning. The best DIY method for any kind of siding is a bucket of soapy water and a long-handled brush. A power washer is not recommended and should only be handled by a professional cleaning contractor. If you choose to have your siding professionally cleaned, expect to pay $300–$500 depending on the size of your home.

• Schedule your biannual HVAC appointment. Get ready for the air conditioning season with your spring tune-up. If your system wasn’t running well last season, be sure to tell your contractor, and make sure he performs actual repairs if necessary rather than simply adding refrigerant. “He shouldn’t just charge it up,” Lesh says. “That will work for a while, but it won’t last. Freon lasts forever—if your system is low, there’s a leak somewhere, and he should tell you specifically what he’s going to check to fix it.” Expect to pay $50–$100.

Your contractor’s maintenance checklist should include checking thermostats and controls, checking the refrigerant level, tightening connections, lubricating any moving parts, checking the condensate drain, and cleaning the coils and blower. Duct cleaning, while it probably won’t hurt anything, is not necessary; be wary of contractors who want to coat the inside of the ducts with antimicrobial agents, as research has not proven the effectiveness of this method and any chemicals used in your ducts will likely become airborne.

On your own, make sure your filters are changed and vacuum out all your floor registers.

• Check your GFCIs. The U.S. Consumer Product Safety Commission recommends that you do this once a month, and it’s a good idea to incorporate it into your spring maintenance routine. GFCIs (ground fault circuit interrupters) are electrical outlets that protect you from deadly electrical shocks by shutting off the power anytime even a minimal disturbance in current is detected. They feature two buttons (“test” and “reset”), and should be present anywhere water and electricity can mix:  kitchens, bathrooms, basements, garages, and the exterior of the house.

To test your GFCIs, plug a small appliance (a nightlight, for example) into each GFCI. Press the test button, which should click and shut off the nightlight. The reset button should also pop out when you press the test button; when you press reset, the nightlight should come back on.

If the nightlight doesn’t go off when you press the test button, either the GFCI has failed and should be replaced, or the wiring is faulty should be inspected. If the reset button doesn’t pop out, or if pressing it doesn’t restore power to the nightlight, the GFCI has failed and should be replaced. These distinctions can help you tell an electrician what the problem is—neither job is one you should attempt yourself if you don’t have ample experience with electrical repair.

Spending a weekend or two on maintenance can prevent expensive repairs and alert you to developing problems before they become serious. Be sure to check out the comprehensive seasonal to-do list following this article, and visit the links below for more detailed information on completing tasks or repairs yourself.

Source: http://www.houselogic.com/articles/spring-summer-seasonal-maintenance-guide-midwest/

SANTA CLAUS, Ind. — A Los Angeles couple came through, helping Holiday World & Splashin’ Safari raise $12,000 for Nashville, Tenn.-area flood relief.

Last week the theme park put its management team (15 people) on the auction block, with the highest online bidders winning various tickets, perks and free time with theme park officials, from park President Will Koch on down.

Nine of the 15 auctions were won by Robb and Elissa Alvey, who run the Web site ThemeParkReview along with a coaster enthusiast group called Club TPR.

The West Coast couple plan to bring a group of roller coaster enthusiasts to Holiday World in August, taking advantage of free tickets, behind-the-scene tours, front-of-the-line access to rides and other special offerings.

Proceeds from the online bidding, which ended Monday, will be donated to the American Red Cross for Nashville area relief efforts.

The online auction raised just over $6,000, which was matched by Holiday World, according to park spokeswoman Paula Werne.

Source: http://www.courierpress.com/news/2010/may/18/holiday-world-sending-12000-flood-relief/

As I said last month, pended transactions (signed contracts for sales not yet closed) for March were great.  Pended transactions for April were simply off the chart.  I believe that pended transactions for March and April combined were the best two month period in local MLS history.  As a result, inventory was just over 7 month’s supply.  I think the important questions, as a result of the past two months performance, are what does this mean and where are we going?

I think we know several things and we can draw some conclusions.  First, closed transactions during May and June will be excellent.  This will continue to keep inventory levels relatively low especially compared to unusually high levels we saw at the beginning of the year.  I also believe that the homebuyer tax credits that expired at the end of April were clearly a factor in these remarkable sales numbers.  The key question is: how big a factor were the tax credits?  If average pended transactions for May-July are only down 25% from April’s spectacular numbers the housing market is in excellent condition.  If pended transactions are down closer to 50% then we still have to wait for a fuller recovery.  I believe that the number will be between 30-40%.  That indicates that things have definitely improved and we are moving in the right direction, but we still have room for improvement.

Two other bright spots are an improvement in closed transactions over $200,000 and an improvement in sales price to list price percentage.  For homes over $200,000 sales are up 31.3% in the first four months of this year compared to the same four months last year.  Sales price to list price in April was 95.83%, the highest percentage in almost two years.  This is another sign of our improving market.

 School will be out soon and I’m looking forward to a great summer.  It’s easy to look for homes anytime, regardless of the weather, at http://TheTrentiniTeam.com

Jasper-based German American Bancorp Inc. (Nasdaq: GABC) says it has completed the purchase of two Evansville-area Farmers State Bank branches. The deal expands German American's presence to Evansville and Newburgh.

German American Bancorp, Inc. (Nasdaq:GABC) announced its banking subsidiary had completed its purchase of two Farmers State Bank offices in or near Evansville, Ind.

By this purchase, which is expected to be accretive to German American's earnings per share upon completion of a transition period during the 12 months following the closing of the transaction, German American has expanded its geographic footprint to the Southern Indiana markets of Evansville and Newburgh in Vanderburgh and Warrick Counties, respectively.

German American acquired approximately $51 million of deposits and approximately $44 million of loans at the closing of the transaction, plus the real estate and leasehold improvements at the two branch locations and miscellaneous assets.

Schroeder continued, "We welcome Doug Diekmann, as Market President, and his Evansville team, who will further enhance our growth opportunities under the German American brand. We believe that customers will be very receptive to our comprehensive banking, insurance and investment lines of business and the personalized delivery that is a hallmark of our community banking roots."

About German American

German American Bancorp, Inc. is a NASDAQ-traded (symbol GABC) financial services holding company. German American, through its principal banking subsidiary German American Bancorp, now operates 30 retail banking offices in 12 contiguous southern Ind. counties. The company also owns a trust, brokerage and financial planning subsidiary, operated from its banking offices, and a full service property and casualty insurance agency with seven offices throughout southern Ind.

Source: German American Bancorp Inc. & Inside INdiana Business

http://www.insideindianabusiness.com/newsitem.asp?ID=41589