......it also saves you money on your taxes.
Owning your home not only allows you to build wealth through appreciation, but it can also reduce the amount of income tax you pay every year.
Here are seven tax benefits for homeowners.
1. Homebuyer tax credits
If you purchase your first home before April 30, 2010, you’re entitled to a tax credit of up to $8,000. If you currently own a home, but sell it to purchase another home before April 30, 2010, you’re eligible for a federal tax credit of up to $6,500.
2. Deductions for loan fees
Typically, you can deduct the “prepaid interest” you paid when you got your mortgage loan. That includes points, loan origination fees, and loan discount fees listed on your settlement statement, even if the seller paid those fees for you. Each time you refinance your home, you can deduct prepaid interest fees.
However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you’re following the rules.
3. Property tax deductions
In the year you purchase your home, you’re entitled to deduct the real estate taxes you paid at the closing table. You can continue to deduct the property taxes you pay each year.
4. The mortgage interest deduction
Every year, you can deduct the amount of interest and late charges you pay on your mortgage and home equity loans, though there are limitations. If you’re required to purchase private mortgage insurance (PMI) because you made a downpayment of less than 20% on your home, you can also deduct those premiums as mortgage interest expenses.
5. Home office expenses
If you have a home office you use only for business, you may be eligible to deduct the prorated costs of your mortgage, insurance, and other expenses related to that space. The government scrutinizes home-office deductions closely. Be sure you’re entitled to the deductions before claiming them.
6. The costs of selling your home
In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees. You can also deduct decorating or repair costs you incur in the 90 days before you sell your home.
7. The gain on your home
If you lived in your home for at least two of the previous five years before you sell it, the government lets you to take up to $250,000 of profit on the sale of your home tax free. That amount is doubled for married couples. This deduction isn’t available on rental or second homes.
The government also allows you to subtract from your home sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn’t count.
Dec 28, 2011
Dec 21, 2011
Indecision may be costing you money
What’s that? Is it a bird? Is it a plane? No, it’s the return of the bidding wars. That’s right – we’re bold apples – we’re courageous – we’re putting a stake in the ground and calling the beginning of bidding war season. We’re already seeing this trend rear its head in a few deals we’re working on, but we’re expecting it to only strengthen over the coming months.
Why are we making this call? Certainly not because we think the market is oh-so-healthy and the economy is booming that bidding wars are the only way to make a foothold into the wonderful world of home ownership. No, we’re saying this because of more micro-dynamics at play. Simply:
low inventory + even lower good quality well-priced inventory + rising rents
+ low interest rates = increasingly frustrated buyers
We’ve been mentioning this frustration for a while and it’s showing no signs of abating. Quite the opposite – and it’s got to go SOMEwhere.
We’re seeing more buyers having to meet asking prices and more sellers getting to pick from multiple bidders. With interest rates remaining low, and a robust rental season starting in April, we believe that buyers who have been patiently looking for 4+ months are going to feel increasingly anxious and find themselves competing with other anxious buyers over those quality properties. Llleeeeet’s get ready to rumbleeeeee! And let us know if you’d like to see your property’s unique supply and demand curve before listing.
Why are we making this call? Certainly not because we think the market is oh-so-healthy and the economy is booming that bidding wars are the only way to make a foothold into the wonderful world of home ownership. No, we’re saying this because of more micro-dynamics at play. Simply:
low inventory + even lower good quality well-priced inventory + rising rents
+ low interest rates = increasingly frustrated buyers
We’ve been mentioning this frustration for a while and it’s showing no signs of abating. Quite the opposite – and it’s got to go SOMEwhere.
We’re seeing more buyers having to meet asking prices and more sellers getting to pick from multiple bidders. With interest rates remaining low, and a robust rental season starting in April, we believe that buyers who have been patiently looking for 4+ months are going to feel increasingly anxious and find themselves competing with other anxious buyers over those quality properties. Llleeeeet’s get ready to rumbleeeeee! And let us know if you’d like to see your property’s unique supply and demand curve before listing.
Dec 14, 2011
Wall Street's effect on the Real Estate Market
It’s hard to tell nowadays which end is up. One day we’re headed towards economic Armageddon and the next day we hear of steady growth and inflation threats. It’s enough to give you whiplash, to be sure. Instead of becoming one of the many prognosticators of what’s to come, we’d rather help you think out your own strategy and make sure it’s aligned with your beliefs.
Double Dipper:
If you believe in a double dip scenario, this means that you expect GDP growth to be negative and the economy to shrink. Rates should continue being low for two some years, and we can expect deflationary pressure on real estate prices. Although the job picture would be highly uncertain, rents would continue to climb higher due to increasing renting demand from the growing renter pool.
RENTERS: reassess your rental scenario. Are you currently stretched? Particularly if rents go up 20% and concessions are gone, you will need to either downsize or buy within your means. If you are not stretched and got yourself a rental deal in 2009 with minimal annual rent increases, then stay put and thank your lucky stars.
BUYERS: current at-market-price apartments are not pricing in a double dip recession. Sellers have not adjusted for this would-be reality right now. Wait for 3 – 6 months to pound the pavement and allow for prices to adjust. Rates will continue to be low so you should still be able to benefit from them.
SELLERS: sell now and price properly. The optimal timing for you would be to sell, then rent an apartment for the 6 months that it will take for prices to adjust to the new reality so you’re not pressured. You would thus be selling high and buying lower; what more could you ask for?
Growth ahead:
If you believe we will avoid another recession, you likely believe that growth will be up but slow. It’s questionable on how long rates would stay low under this scenario. What’s more certain is that real estate prices would see flat to low single digit growth over the next 12 months, against a backdrop of an improving job picture.
RENTERS: the rental market growing at a faster clip than are housing prices – reconsider your renting position and see what’s within your reach to buy. It may surprise you.
BUYERS: this means higher rates are not too far down the road. You know the worst is behind you and therefore you could buy now for your needs 2-3 years down the road (not too much further). That way you don’t find yourself in the position of needing to upgrade so soon after your purchase and pay more for it.
SELLERS: if you are very bullish, you may want to rent your place out now to take advantage of hot market and sell 2 years down road when prices will have appreciated. Another option is upgrading now rather than later, as prices are likely to go up along with interest rates.
So, which camp are you in? Inquiring minds want to know!
Double Dipper:
If you believe in a double dip scenario, this means that you expect GDP growth to be negative and the economy to shrink. Rates should continue being low for two some years, and we can expect deflationary pressure on real estate prices. Although the job picture would be highly uncertain, rents would continue to climb higher due to increasing renting demand from the growing renter pool.
RENTERS: reassess your rental scenario. Are you currently stretched? Particularly if rents go up 20% and concessions are gone, you will need to either downsize or buy within your means. If you are not stretched and got yourself a rental deal in 2009 with minimal annual rent increases, then stay put and thank your lucky stars.
BUYERS: current at-market-price apartments are not pricing in a double dip recession. Sellers have not adjusted for this would-be reality right now. Wait for 3 – 6 months to pound the pavement and allow for prices to adjust. Rates will continue to be low so you should still be able to benefit from them.
SELLERS: sell now and price properly. The optimal timing for you would be to sell, then rent an apartment for the 6 months that it will take for prices to adjust to the new reality so you’re not pressured. You would thus be selling high and buying lower; what more could you ask for?
Growth ahead:
If you believe we will avoid another recession, you likely believe that growth will be up but slow. It’s questionable on how long rates would stay low under this scenario. What’s more certain is that real estate prices would see flat to low single digit growth over the next 12 months, against a backdrop of an improving job picture.
RENTERS: the rental market growing at a faster clip than are housing prices – reconsider your renting position and see what’s within your reach to buy. It may surprise you.
BUYERS: this means higher rates are not too far down the road. You know the worst is behind you and therefore you could buy now for your needs 2-3 years down the road (not too much further). That way you don’t find yourself in the position of needing to upgrade so soon after your purchase and pay more for it.
SELLERS: if you are very bullish, you may want to rent your place out now to take advantage of hot market and sell 2 years down road when prices will have appreciated. Another option is upgrading now rather than later, as prices are likely to go up along with interest rates.
So, which camp are you in? Inquiring minds want to know!
Dec 12, 2011
How many Square Feet is this Apartment?
An inch is an inch is an inch. Or, so you’d think. But when it comes to measuring the square footage of a property, it’s not quite that simple.
I doubt there exists a buyer in the entire world of real estate who hasn’t asked, at one time or another, what is the square footage of a particular property. The fact is, however, measuring the size of a home isn’t an exact science.
You can hire three different appraisers to measure the same house and they may come up with three different measurements. Because there are multiple ways to measure and different mechanisms used, the physical act of measuring can be done differently. Some appraisers will measure square footage with a good old measuring tape, albeit a large one. Others come equipped with those new state-of-the-art laser devices. I have been present when an appraiser will just eyeball a difficult-to-measure space or even do the wide-arm measurement. The point is, there aren’t any universally applied standards.
What does this mean for sellers and buyers?
Sellers: Avoid providing square footage whenever possible and always add a disclosure
Buyers: Never take square footage at face value
Buyers want to know the square footage of a home they are interested in. They want some idea of the size of the house they’re serious about. They want to know exactly how much house they’re getting for the money. But these numbers should be used only as a reference point. A buyer should never make their home buying decision based on square the square foot of a home.
Read more: http://www.businessinsider.com/youll-probably-be-surprised-by-how-square-footage-is-really-measured-2011-12#ixzz1gLKcBAaX
Dec 9, 2011
Dec 6, 2011
Holiday Gifts in the Rental Market
Posted by Douglas Wagner, Executive Director of Leasing
Brokers around New York City are experiencing the seasonal, if momentary, slowdown for the holidays. Every December about this time, the rental market pauses slightly as consumers (and some industry professionals) become distracted from the rush of the rental market by Christmas time in the City. This means OPPORTUNITY for any consumer who is able to rent a new apartment for the next couple of weeks!
Although vacancy rates in NYC remain at around 1% throughout the city (below 1% Downtown, just above 1% Uptown), there is less demand in December. Landlords feel the slow down, and they become slightly more flexible on rent prices, move in dates, and other lease provisions before the end of the calendar year. BOND has identified 36 buildings Downtown and 20 buildings Uptown where the landlord is offering the pay the broker fee, or at least part of the fee, for leases signed before December 31! Other buildings are offering some free rent rather than paying fees, and in some cases, landlords are simply negotiating prices lower in order to secure tenants during this month.
There is no indication that “No Fee” apartments are back on the rise, because the supply / demand relationship doesn’t warrant such a dramatic market shift. The biggest landlords and management companies typically lead the pack when offering long-term tenant incentives such as free rent, no-fee apartments, or free gym memberships. None of the biggest developers are offering more than a partial month free here or a broker bonus gift card there this December. We anticipate that as of January 2012, the holiday specials will fade with the tree lights, and business will spark anew in 2012.
For now, though, anyone looking to rent a new apartment has more choices than any other time of year. They also have less competition in the market! In the warm weather months, good apartments might last a day or two on the market, and frequently are the subject of heated multiple bids or races between tenant applicants to put down their deposits and sign leases before they are beat by someone equally qualified. Right now there’s a little more breathing room. Good apartments are still renting briskly, but one has a moment to make up their mind before having to commit for the next year or two.
December is also a great time for consumers to meet different real estate agents and discover one who can represent them now and again in the future. Most affluent New Yorkers recognize the benefit of a true expert consultant in the residential real estate market, and many of the pros who are overloaded during the other eleven months of the year have a moment to extend themselves beyond their day-to-day practice and meet new clients.
As you deck the halls, take a look at the rental market this December. Visit our offices or take a tour on our website. We’ll be happy to invite you in for a cup of cheer and some great values!
Dec 5, 2011
Predictions for 2012
As the year draws to a close, the future seems as opaque as a glass of eggnog. Some real estate professionals say pent-up demand in the residential market could foster a busy 2012, while others predict that a sluggish economy will keep prices and activity in check.
Citi Habitats vice president Jay Molishever said the high rents, relatively low sales prices and increasing activity he is seeing in the current market are good signs for the New Year.
"At some point," he said, "the kindling is going to burst into flames again," bringing high prices and high volume.
Michael Signet, executive director of sales at Bond New York, anticipates a "very busy year," with rising prices bringing inventory to market, and buyers feeling "compelled to make a decision faster, as the competition for quality apartments increases."
Meanwhile, on the rental side, buyers on the sidelines continue to power the market, which is evidence that people still have money to spend, according to Scheff.
In the rental market, "we haven't seen the beginning of the usual slow season as we used to see [at] this time of the year in the last few years," said Dmitry Daniel Kramp, a senior agent at City Connections Realty.
Jason Fien, director of leasing at the brokerage Platinum Properties, said he observed a drastic increase in demand for luxury rentals, as would-be buyers fail to find a "steal" and settle for renting. But he urged discouraged buyers to keep looking.
"If you can afford to buy, buy," he said. "You are only flushing hard-earned money down the really flashy and expensive self-cleaning toilet that your $20,000 rent affords you."
Citi Habitats vice president Jay Molishever said the high rents, relatively low sales prices and increasing activity he is seeing in the current market are good signs for the New Year.
"At some point," he said, "the kindling is going to burst into flames again," bringing high prices and high volume.
Michael Signet, executive director of sales at Bond New York, anticipates a "very busy year," with rising prices bringing inventory to market, and buyers feeling "compelled to make a decision faster, as the competition for quality apartments increases."
Meanwhile, on the rental side, buyers on the sidelines continue to power the market, which is evidence that people still have money to spend, according to Scheff.
In the rental market, "we haven't seen the beginning of the usual slow season as we used to see [at] this time of the year in the last few years," said Dmitry Daniel Kramp, a senior agent at City Connections Realty.
Jason Fien, director of leasing at the brokerage Platinum Properties, said he observed a drastic increase in demand for luxury rentals, as would-be buyers fail to find a "steal" and settle for renting. But he urged discouraged buyers to keep looking.
"If you can afford to buy, buy," he said. "You are only flushing hard-earned money down the really flashy and expensive self-cleaning toilet that your $20,000 rent affords you."
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