Key Largo Real Estate by Sally Stribling

There is more to home improvement than a new floor or a paint job. There is infinite planning and designing to make the home appear as you intended. Use these tips to improve your own skills when it comes to home improvement. You can save a lot of money and create your dream home.

If you’re thinking of making some improvements to your home, consider updating your front porch. A porch is highly visible to the public and gives a lasting first impression to guest visiting your home. Clean up clutter and add nice enhancements such as flowers and flower pots, patio furniture, wood varnish, and light fixtures. This work will enhance the look of your home while also increasing your home’s value.

If you are working out in the heat, it can be easy to lose track of time. When the weather is hot, hydration is just as important as safety issues. Give yourself frequent breaks to rest and have a drink, especially when you are doing demanding physical work.

Work from the inside out when improving your home. These projects often require you to work with wires or pipes inside your walls; finish these repairs before you tackle any other jobs. Also, it is much simpler to do wiring and plumbing repairs once the walls open.

Building supplies are often stolen because they are valuable. Take the time to secure all building supplies while work is halted. If the house being worked on is secure you can leave them inside. If you house is not complete, and impossible to lock, consider buying a lockable container.

Anyone can take on some home improvement projects. The novice will quickly gain skill and speed if they are patient. As you grow your skills, you can begin accomplishing home improvement projects that will amaze those around you!

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Sally Stribling®REALTOR
Key Largo office
Coldwell Banker Schmitt Real Estate Co.
305-453-7552
877-289-0035 x7552
Mobile Number:305-283-2002
Fax:  305-451-1220
Email Address:keysproperty@bellsouth.net
Previews International Agent: Yes
Languages Spoken: Spanish
Personal Website:http://keysbestproperty.com/

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Updated Executive pool home in Thousand Pines Subdivision. Completely renovated kitchen with custom wood cabinetry including cabinetry clad appliances , high end granite counter tops. eat in granite breakfast bar, formal dining room, custom wet bar in family room, and wood burning fireplace.Generator system. Master bedroom suite is enormous with walk in master shower with dual shower stations. Listing # 554621 $569,000

Sally Stribling®REALTOR
Key Largo office
Coldwell Banker Schmitt Real Estate Co.
305-453-7552
877-289-0035 x7552
Mobile Number:305-283-2002
Fax:  305-451-1220
Email Address: keysproperty@bellsouth.net
Previews International Agent: Yes
Languages Spoken: Spanish
Personal Website: http://keysbestproperty.com/

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Avoid 12 Common Mistakes Made by Novice Investors and Ensure

High Rates of Return!

Real estate investment has provided many investors with positive cash flow, tax

benefits and satisfaction of making an impact in others lives. Like any investment

however, real estate has intricate nuances and market trends that when ignored

can cause an investor tremendous heartache.

Unbelievably many first time investors are willing to part with their hard earned

cash without taking the time to study their investment. They rely on traditional

trends and gut feelings. Before you risk your investment take the time to learn all

you can about your market. By aligning yourself with the right Professional you

can avoid these 12 common mistakes, and you’ll ensure an excellent return on

your investment.

1. Failure to Determine Your Time Need – Cash flow, capital appreciation, tax

benefits, loss of management, equity pay down and pride of ownership are just

some of the thing s that need to be addressed before you make that investment. A

service -minded real estate professional can be a tremendous asset by taking the

time to evaluate your needs and making sure you’ve got all your bases covered.

2. Not Checking out the Seller or Sellers Agents Numbers – Claims of extremely

high rates of return run rampant in real estate investment. Don’t get caught up in

the excitement – check everything: rents, payment history, taxes, expenses,

deposits, future modifications… everything. Make sure you have the right

agent…it’s like having a good insurance policy against overlooking all the

seemingly insignificant but very important details.

3. Forgetting You Are Buying a Business – Owning investment property carries

with it a great potential for creating wealth and… some potentially difficult

decisions. Evictions, re -investment into the property and time management all

needs careful consideration. Remember this is not a ‘hands off ‘business.

4. Avoid Negative Cash Flow – Property that eats cash every month can drain

your working capital. This can create stress, frustration and become quite painful.

Predicting constant appreciation is extremely difficult if not impossible for the

unseasoned investor. A strain on your cash flow may cause you to sell the

investment before the benefits of ownership are ever realized.

5. Failure to do a Thorough Inspection – Look under every rock! Hire a

professional inspector. Ask the tenants about pest problems, structural damage

or reoccurring problems. Don’t overlook anything! A value driven real estate

professional will help you find the right inspector and can help you avoid costly

mistakes. When investing your hard earned money be sure and use sound

business judgment!

6. Failing to Have Adequate Insurance – Investment property brings liability.

Tenants, cars, parking lots, cleaning facilities, and property liability – the list is

quite extensive. Adequate insurance coverage is an absolute must! Be sure to

consult with an insurance professional and protect your hard earned assets.

7. Inspect, Approve, and Confirm All Documents – The list of documents that

need to be proofed can be overwhelming to the first time investor. Building

permits, zoning laws, rental and lease applications, CC&R’s, by-laws, title policies,

inspection reports, purchase contracts, insurance.. Don’t attempt to do it alone.

The right professional can remove most of the stress and bring the transaction to

a conclusion smoothly.

8. Get a Bill of Sale For All Property Involved – Many types of personal property

can be involved in an investment sale. Be very detailed -know who owns what!

9. Charge Fair Rents – Vacancies, turnovers and lease terminators are your

biggest expense. Charge fair rents, treat your tenants with respect and respond as

quickly as possible to their needs. It’s a lot less costly in the long run to take care

of the little problems before they become big problems. Vacant property is your

Achilles heel.

10. Select Qualified, Good Tenants From t he Start – Take the time to check

references. Previous landlords, employers, financial references, credit and

judgments are all vitally important. If there are any questions–do a thorough

investigation. Drive by their previous residence. A little work up front can save

tremendous problems later.

11. Make Sure You Get Estoppel Letters – Get letters from tenants confirming the

status of tenancy. Make sure their version of the rental or lease agreement

corresponds with the seller’s interpretation.

12. Don’t Spend Positive Cash Flow – Most of successful investors have free and

clear properties. Be sure to re-invest your cash flow back into the property

payment and speed up the amortization schedule. This decreases your debt load

and increases your equity, which builds your net worth. Investment property can

be one of the most rewarding aspects of your financial portfolio. Be certain to

have all your ducks in a row before you invest. Do your homework! Consult with a

professional real estate investor and protect yourself from the hidden troubles

that can plague first time buyers.

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The tax benefits of homeownership

Real Estate Tax Talk

By Stephen Fishman
Inman News™

February 04, 2011

Q: How can real estate agents be a resource for buyers on tax issues, such as the tax benefits of buying vs. renting?

A: Unless a real estate broker or agent is a bona fide tax professional — for example, has an MBA or other specialized training in taxation — he or she should not give clients detailed tax advice. As a real estate professional, you are licensed to help your clients buy real estate — not serve as their professional tax adviser.

If you give tax advice and it turns out to be wrong, it could cost the client a bundle of money, and leave you with a lawsuit for malpractice.

If a client does ask you for tax advice, and you give it, a good practice is to have the client sign a statement providing that he or she has not relied on your advice and that the transaction is contingent on the approval of the client’s tax or legal counsel.

That said, the tax benefits of real estate ownership are something every buyer should understand. You need to understand them as well.

When it comes to the tax benefits of renting vs. buying, the benefits of buying are many, while there are few or no tax benefits for renting. This simple fact can help get renters motivated to take the plunge into homeownership.

The tax benefits of buying a home include:

Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership.

Depending on the state a buyer lives in and his or her tax bracket, this deduction can reduce the cost of borrowing by one-third or more.

Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible.

Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don’t get.

Deductible homebuying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.

$250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit — $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months.

14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns.

Tax benefits of renting:

The only tax benefit that a renter can qualify for by virtue of being a renter is the home office deduction. This is a business deduction available to renters who own a business and have a home office they use regularly and exclusively for business purposes.

Some employees can qualify for this deduction as well. The deduction is limited to the amount of profit earned from the business each year. If a renter pays a lot of rent, this deduction can be substantial. Homeowners who are in business and have a home office can also qualify for the deduction.

Of course, the value of the tax benefits of buying a home depends on the state the buyer lives in and his or her tax bracket. Buyers who live in high tax states like New York or California get the most benefit.

This is why the blanket statement “it’s always better to buy than rent” is not always true. It all depends on the buyer’s individual circumstances.

You should encourage prospective buyers to run the numbers. There are some excellent websites you can refer clients to that have online calculators they can use to compare the costs of renting vs. buying a home.

A good rent vs. buy tool can be found on the Smart Money Magazine website: http://www.smartmoney.com/personal-finance/real-estate/to-rent-or-to-buy-9687/.

Freddie Mac also has a good online calculator: http://www.freddiemac.com/corporate/buyown/english/calcs_tools/.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including “Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants,” “Deduct It,” “Working as an Independent Contractor,” and “Working with Independent Contractors.” He welcomes your questions for this weekly column.

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The real estate market throughout Florida as in many other area of the country, looks like a dangerous place with the potential that prices may continue to fall…with the possible exception of the Florida Keys. Yes, it is true that during the incredibly oversold market commencing in 2003 and on, prices within Florida spiked only to come tumbling down during 2007 which continues to this day. This was the inevitable consequence of bad lending decisions coupled with buyers lacking the wherewithal to carry the home. This happened virtually everywhere else in the country.

The Florida Keys are Exceptional and an Exception

One of the main strengths of that market protecting the Keys from some of the dangers in the current real estate market is the fact that the vacation rental market environment is a life preserver to the real estate investor, despite the fact that many have chosen to reside there on a permanent basis. In other words, many of the properties whether condos or homes, are still attractive vacation destinations. As long as a property can be rented, the investment is self sustaining. The Keys can always be rented, depending upon the area, on a weekly or monthly basis. This makes them more attractive for investment purposes than the typical home purchased by the home owner as a primary residence anywhere else in the country. In other words, the Florida Keys real estate market was never in a “bust” situation.

The facts bear this out. According to Standard and Poors.com, aggregate real estate prices throughout the U.S., comparing 2000 with 2010 were only 2.6% greater in 2010 than during 2000. While actual sales price in the Florida Keys were 52.1% higher in 2010 than in 2000 ($274,995 vs. $418,209)! Certainly there were declines in Keys real estate prices on a comparative basis during the last half of the decade. This only serves to point up the fact that Keys real estate is very high priced and even when it had declined, prices remain at levels significantly above 2000.

Moreover, this data includes all Keys “residential” real estate, which also takes in vacation rental property, such as homes or condos that are rented out. If that data were available for comparison, it is highly likely that the historical prices would even have exceeded 52%.  However, it is important to point out that certain other areas such as New York City and Washington, DC also fared very well over the decade because of explosive Wall Street wealth and the growth of the federal government which affected real estate in the greater Washington DC area.

Short Term Rentals are Key

Despite the overall weakening in the economy and the unsteadiness in the real estate market, vacation rentals in the Keys are strong and this will of course, maintain housing prices within the Florida Keys. However, to the joy of potential real estate investors, the current market rating for buyers is now resting at 1.0 indicating that it’s an excellent market in which to purchase. Certainly, if one’s intentions are to make a property a business investment and pursue the short term (1 week to 1 month) rental route, the investment will pay for itself in the short term. In fact, the shorter the duration of rentals, the higher the rent and thus, the better ROI the investor enjoys.

There are other advantages that work for the investor. If the property is set up as a business and incorporated, many of the normal housing expenses incurred can be deducted as a business expense. This has the result of decreasing an investor’s personal income and taxes, overall. Also, an investor is permitted to make trips to the property for “business purposes” which also permit the investor to use the house or condo and mix business with pleasure, with all expenses being tax deductible.

The longer term real estate outlook for the Florida Keys is exceptional. Because Monroe County has a moratorium on building and because of obvious geographic reasons, the amount of homes and condominiums is finite and for all intents and purposes, capped. Therefore, the market will dictate that the only place for prices to head is up. Even if a recovery is slow, the fact that a property can maintain itself through short term rentals makes the Florida Keys an incredible year round vacation/business destination investment.

Sally Stribling®REALTOR
Key Largo office
Coldwell Banker Schmitt Real Estate Co.
305-453-7552
877-289-0035 x7552
Mobile Number:305-283-2002
Fax:  305-451-1220
Email Address:keysproperty@bellsouth.net
Previews International Agent: Yes
Languages Spoken: Spanish
Personal Website:http://keysbestproperty.com/

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