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How to Help Your Family Members to Buy their First Home

I found this interesting article on how parents can help their children to buy their first home. There is a way, though, I would suggest  that you consult with the bank or what your partner thinks about it.

SHARED EQUITY: HELPING FAMILY MEMBERS BUY THEIR HOUSE

Written by  | source: http://realtytimes.com

This is an arrangement where you — as investors — own a portion of the property with your children. Under a shared equity arrangement, there generally are two separate entities. You (and your spouse, if applicable) would be considered the owner-investors, and your son and daughter-in-law would be considered the owner-occupants. The four of you would take title to the property. You could own fifty percent, for example, with your children owning the remaining fifty percent. Your children, as owner-occupants, would pay half of the monthly principal, interest, taxes and insurance, as well as half of the estimated fair market rental of the property. You, as owner-investors, would pay half of the monthly costs, would receive the rental income, but would also be able to get some tax benefits if the transaction is properly structured.

In today’s market conditions, where prices are clearly higher than many young couples can afford, shared equity may be the only way to permit our younger generation to get into the home ownership arena.

Here is a general outline of how shared equity works. Although there is no magic formula by which one takes title, often — especially when dealing with family — title is taken on a 50-50 split.

The owner-occupant and the owner-investor each pay 50% of the monthly mortgage costs and taxes. Both parties are entitled to deduct from their income taxes their share of the mortgage interest and the real estate taxes. The owner-occupant pays rent to the owner-investor.

In our example, because your children — as owner-occupants — will only own half of the house, they will have to pay 50 percent of the fair market rental to you as owner-investors. This rental is considered income to an owner-investor, and must be included in your tax return. The main advantage for the owner-investor is that you can depreciate 50% of the property. However, this depreciation is subject to the passive tax rules which Congress enacted with its sweeping tax reform legislation in 1986.

There are a number of legal requirements for qualifying for the shared equity program.

1. The owner-occupant must pay a fair market rental for the portion that he or she does not own.

Perhaps the best way to determine this fair market value is to ask a real estate agent to give you a statement in writing as to what they believe is the fair market rental of the property. With such a document in your files, you should be able to justify the rental if and when the IRS comes knocking at your door to challenge the shared equity concept. A Tax Court opinion has ruled that owner-occupants could pay a somewhat lower rent than fair market rental because the investor will not have any vacancy losses, and because the owner-investor will save the additional costs of hiring a property manager.

A safe harbor would be to deduct 15% from the fair market value, and then your children, as owner-occupants would pay half of that amount to you.

2. There must be an equity sharing agreement. This document, which must be in writing and signed prior to the purchase of the property, should spell out the terms and conditions between the owner-occupant and the owner-investor.

For example, when will this agreement terminate? Who has the right to buy out the other, and under what terms and conditions?

These very serious questions must be resolved, and it is strongly recommended that you do so now while you are still talking with your children. As harsh as it may sound, parents and children often get into major fights, and you do not want to wait until you start having problems in an effort to resolve these important questions.

3. One of the owners must actually occupy the property as his or her principal residence.

Read more at http://realtytimes.com

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New List of Handpicked Homes in Carlsbad 92009 and Encinitas 92024

It’s that time of the week where our team post another amazing handpicked listings for Carlsbad 92009 and Encinitas 92024. I always look forward to the handpicked listings that we post every week. I always love seeing new properties listed, you’ll never know what you will find from those listings! For example the perfect view, the swimming pool and a lot more!

Since there are only few new listings for this week and had been posted over the weekend, I decided to break out of what we usually post and removed the price range, in this way you will get to see all the new listings and what they have to offer!

Also, since we have started to include other zip codes from our last week’s post, we have included another yet amazing properties for other zip codes from 92007,92008,92011, 92037, 92130 and 92014. You can download the pdf file for these zip codes just CLICK HERE.

Here is our new list of handpicked listings for Carlsbad, 92009 and Encinitas, 92024.

 

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Read more at http://sandiegoestatehomesforsale.com

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Handpicked Properties within $500,000- 800,000 in Carlsbad, 92009

10 Carlsbad 92009 Properties in $500,000- 800,000 range.

Town Homes, Condos and Homes under $500,000- $500,000- 800,000 in Carlsbad.

The Biszantz Connection Team is dedicated to delivering the latest most affordable and just listed properties in Carlsbad, 92009. Our team, always handpick the best properties as we try our best to limit within the range of $500,000 – 800,000.

We have chosen the best properties within the range of $500,000 – 800,000 in Carlsbad 92009. The Best value for a home currently listed in the market.

Click here, to request for your free home valuation and don’t forget to subscribe for our Weekly Listings and Open Houses of the week.

 

Here is our list of Handpicked Properties in $500,000- 800,000 in Carlsbad.

7235 Plaza De La Costa

Carlsbad, California

VIEW DETAILS

6805 Urubu Street

Carlsbad, California

VIEW DETAILS

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$500,000- $800,000 Homes Listed in Carlsbad

Properties in Carlsbad for $500,000 – $800,000

Listed homes ranging from $500,000 – $800,000 in Carlsbad

Our team is dedicated looking for the best properties in Carlsbad, within the range of $500,000- $800,000. We just love providing you a list of homes that we know you will love and because we think it’s the best value for a home in Carlsbad. Your dream home might be on our list and we would love to be of assistance to you!

So for this week we have chosen homes in the range of $500,000- 800,000 within the zip code of 92009. If you are looking for a price range of homes in a specific zip code or neighborhood, please let us know and we will send it straight to your inbox.

Here is our list of homes for $500,000 – $800,000 in Carlsbad, 92009.

Featured Home in Carlsbad:

7359 Alicante Road Carlsbad, CA 92009

It’s gorgeous, spacious and they have a bar for entertaining guests! You just got love this house and all the space that you need! It’s a steal for their price. A House in this area is seldom seen in the market.

Read more at http://sandiegoestatehomesforsale.com

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UNDER $1 Million Homes in Village Park Community, Encinitas

Village Park Community, Encinitas List of Under $1M Homes

List of Homes in Encinitas Village Park Community under $1M.

 

Encinitas is a beach city in North San Diego and the largest single industry in the city is the growing of ornamental flowers, particularly poinsettias.

Village Park Community is one of the best and most sought after location in Encinitas. Village Park is one of the best family friendly community. It has this suburban- modern feel and the majority of the homes in were built in the early 1980’s. Most of this homes offer three to six bedroom homes that average around 2,000 square feet of living space.

Condos in Village Park will range from two to four bedroom and average 1,500 square feet, but we wanted you to have a pick of the homes being sold in this amazing family friendly community.

    Read More at http://sandiegoestatehomesforsale.com

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Shannon Biszantz

Shannon Biszantz

Shannon Biszantz reviews

CalBRE #01787015
16236 San Dieguito Road, Suite 4-12,
Rancho Santa Fe, CA 92067

Work Cell: 619-417-4655
Office: 858-755-0075




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