I know it’s still a few months away but just a reminder of what you can deduct if you are a homeowner. It’s always good to have a reminder that there are some benefits at tax time to owning instead of renting and giving your landlord the tax breaks.
It is always beneficial during tax season to own real estate, which gives you many annual deductions. If you purchased residential real estate during this year, however, you can look forward to even more generous savings at tax time.
Mortgage Interest
Though there are several real estate deductions you will be able to take this tax year, the largest is the interest you paid on your mortgage. According to Kiplinger’s (August 31, 2006), you may write off up to $1 million in mortgage interest for your primary or secondary home (does not apply to third home real estate, unless it is a business or rental property). This can be an enormous tax savings, especially within the first years of ownership with most of your monthly payments going to interest.
Property Taxes
Each year, you may deduct the property taxes you paid. If you recently purchased your home real estate, you also may deduct any taxes the seller paid in advance that were applied to your property tax debt. This applies even if you did not reimburse the seller for these real estate taxes.
Points Paid For Mortgage
Even if the seller paid your points, you may deduct them on your tax return within the year of purchase of the real estate. Each point is worth one percent of the real estate mortgage. For a loan principal of $250,000, you may deduct $2,500 for each point. For a loan face value of $500,000, you may deduct $5,000 per point.
If you refinanced your real estate, you also may deduct these points paid. However, the deduction must be spread over the life of the loan. If you sell the real estate or pay off the loan early, then the remaining deduction may be taken within the year of sale or loan payoff.
Home Equity Debt
You are allowed to deduct up to $100,000 of home equity debt each year, regardless for what you used the money. This makes home equity loans low-interest alternatives for purchasing cars, paying student tuition, underwriting your dream vacation, and so on.
Home Business Use Deductions
If you run a business out of your home or use the real estate for business purposes, such as rental property, you have many deductions for the use of this space. For home offices, the percentage of space you actually use may incur the same percentage in deductions for mortgage payments, utilities and home insurance. Improvements made to accommodate the business, such as bringing the real estate up to standard as rental property or installing a private bathroom when renting out a room, may qualify for a deduction against your profits.
Property Damage
If you incurred uninsured real estate damage due to a qualifying disaster (especially within a presidential declared disaster area), you may qualify for a tax deduction. There are limitations, however, and the deduction generally must be taken within the year the disaster occurred.
What You Cannot Deduct
If you recently purchased or sold real estate, you incurred many costs but not all may be deducted from your taxes. Examples of nondeductible expenses are closing costs, major home improvements to attain a higher sales price, title insurance, appraisal and inspection fees, or attorney fees.
Don’t forget, deductions that lower your federal tax debt also decrease your state tax obligation! As with all financial advice, always check with a qualified accounting professional.
Sally Morris in Greenwood SC at RE/MAX Action Realty
specializing in Lake Greenwood property sales.
There are many ins & outs when you’re buying or selling lake property
you absolutely want an agent who is current on what is happening.
Lake Greenwood is growing by leaps and bounds new lake developments
going up all the time.Come grow with us. Search all properties at
Lake Greenwood SC Real Estate
Real Estate
October 04 2008 | Money Matters | No Comments »
Lake Greenwood lot for sale a very popular gated community, Crystal Bay. My seller has given me the go ahead to practically give this lot away. Sitting on a rise overlooking a narrow cove with access to the main body of water, this 1 acre home sight with 100 + ft. of water frontage and 143 ft. rd frontage will be a great place to build your home. The community offers a neighborhood boat ramp, leases for a private boat slip, fenced locked storage, picnic area, and a sandy beach area. This is a ridiculous price but he says move it. You’ve asked for a bargain and here it is. Don’t miss out!
Crystal Bay
Sally Morris in Greenwood SC at RE/MAX Action Realty
specializing in Lake Greenwood property sales.
There are many ins & outs when you’re buying or selling lake property
you absolutely want an agent who is current on what is happening.
Lake Greenwood is growing by leaps and bounds new lake developments
going up all the time.Come grow with us. Search all properties at
Lake Greenwood SC Real Estate
Real Estate
October 01 2008 | Featured Listings and Just reduced Lake Properties and Listings | No Comments »
BY FRANK O’HARA
Mention “real estate investing strategies” and the first thing that typically comes to mind is buying and selling. But a strategy often overlooked and underutilized is the option–and the smart use of options can generate some fast and impressive profits.
An option gives the buyer the right but not the obligation to buy–but the seller is obligated to sell. Combine the option with a lease, and you have an excellent tool to use when you have a motivated seller with little or no equity in the property, or one who doesn’t have time to wait for the traditional sales process to run its course.
Instead of buying, you lease the property with an option to buy. That gives you control of the property and lets it generate cash for you–but you don’t have to own it.
The rate of residential foreclosures in on the rise in many parts of the country. A pending foreclosure for any reason is just one of many situations where lease option strategies can be used. Other situations include sellers seeking debt relief or facing personal situations such as a divorce.
“Lease options are a great way to get started investing in real estate, especially if you have little or no cash,” says Michael Van Horn, an advanced trainer with Wealth Intelligence Academy™. “Options let you control property without having to buy it, and you can profit at every step of the process.”
Why do people use lease options instead of an outright sale? Owner/sellers are likely to consider a lease option when they need to get rid of the property but do not have enough equity to sell immediately through traditional methods.
For example, if the property has mortgages of up to 95 and even 100 percent of its market value, the seller would have to come up with cash to pay a real estate agent’s commission. On the other side, buyers who have flawed credit, who may need time to come up with a down payment, or who want to “test drive” the house or the neighborhood are all candidates for a lease/option deal.
One of the most common option strategies is the sandwich lease option, which works like this: You lease a property with an option to buy in three years. You find a tenant/buyer who leases the property from you with an option to buy in two years. When the tenant/buyer is ready to close, you exercise your option, buy the property and sell it to the tenant/buyer.
There are, of course, possible variations. You can use different time frames. You can assign your option to the tenant/buyer or to another investor. You can buy the property instead of leasing it, and then sell it with a lease option arrangement instead of putting a traditional tenant in the house.
“Tenant/buyers are much more attractive than traditional renters,” says Van Horn. “You can set up your lease so that the tenant/buyer takes care of a lot of the routine maintenance. Also, because tenant/buyers expect to eventually own the property, they are much more likely to take good care of it and make their payments on time.”
Van Horn recommends focusing your lease option efforts on desirable neighborhoods–generally, working-, middle-, and upper-income areas. These are the areas where potential tenant/buyers want to own homes.
Also, remember that lease options can work on multi-unit buildings as well as single-family homes. “If someone wants to get rid of a small apartment building and is having trouble finding a buyer, he may be willing to lease option it to you,” Van Horn says. “You get into the property for a smaller-than-normal down payment and you benefit from the cash flow while you’re working on the financing over a year or two or more.”
Laws regarding real estate options vary by state and it’s a good idea to check with a real estate attorney in your state to be sure are in full compliance with all applicable regulations when you put together a lease option transaction.
Frank O’Hara is a real estate investor, freelance business writer, author, publisher and webmaster. You can obtain some very useful know-how on a wide variety of subjects including lucrative internet opportunities and much more at his web site: http://infomaniamall.tripod.com
Sally Morris in Greenwood SC at RE/MAX Action Realty
specializing in Lake Greenwood property sales.
There are many ins & outs when you’re buying or selling lake property
you absolutely want an agent who is current on what is happening.
Lake Greenwood is growing by leaps and bounds new lake developments
going up all the time.Come grow with us. Search all properties at
Lake Greenwood SC Real Estate
Real Estate
September 30 2008 | Money Matters | No Comments »
Once again it’s time to bring you the Lake Greenwood Market Stats and it seems like a lifetime ago instead of just a month ago that I reported on what the Lake Greenwood market is doing. With everything that is going on it is a whole different world we are facing today, from last month. What will the outcome be? It’s hard to tell but it seems that more people than myself have stood up and said no way! We’re not going for a bail out! We don’t have to pay the price for some CEO’s making some very bad decisions and then send them on their way with full pockets. The news media would have you to believe that the mortgage industry has closed down, that no one can buy real estate. That is not accurate reporting. Has it tightened up? Yes it has but not soon enough. I happen to know several sources, that if you have money to put down and a decent credit score they are waiting with bated breath to give you a mortgage. The interest rates are low and it is great time to buy! But the lake sales reflect the effect the media is having on real estate sales. Here are the numbers for the month of September.
Active Lake Homes Sept.1-30-08 113
High listed price $1,495,000 Avg listed price $411,244 Low Listed price $59,500
High DOM 802 Avg. DOM 146 Low DOM 1
Lake Homes Sold Sept.1-30-08 1
Listed Price $57,000 Sold Price $57,000 DOM 77
% of Sold To Listed Price 100%
Active Lake Lots Sept.!-30-08 323
High listed price $5,475,000 Avg. listed price $200,846 Low listed price $16,000
High DOM 1211 Avg. DOM 220 Low DOM 1
Sold Lake Lots Sept.1-30-08 3
High listed price $125,000 Avg. listed price $58,966 Low listed price $22,900
High sold price $114,000 Avg sold price $70,500 Low sold price $27,000
High DOM 201 Avg.DOM 137 Low DOM 74
% of sold to listed price 93%
Sally Morris in Greenwood SC at RE/MAX Action Realty
specializing in Lake Greenwood property sales.
There are many ins & outs when you’re buying or selling lake property
you absolutely want an agent who is current on what is happening.
Lake Greenwood is growing by leaps and bounds new lake developments
going up all the time.Come grow with us. Search all properties at
Lake Greenwood SC Real Estate
Real Estate
September 30 2008 | General Information and Lake Greenwood Market Stats | No Comments »
Sally Morris in Greenwood SC at RE/MAX Action Realty
specializing in Lake Greenwood property sales.
There are many ins & outs when you’re buying or selling lake property
you absolutely want an agent who is current on what is happening.
Lake Greenwood is growing by leaps and bounds new lake developments
going up all the time.Come grow with us. Search all properties at
Lake Greenwood SC Real Estate
Real Estate
September 26 2008 | General Information and Just My Opinion | No Comments »
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