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Things to consider before Buying an Investment Property

Factor’s to Consider before buying a property for investment

 

Owning a property is not always easy, let alone paying, maintaining, and other associated headache that you have with your first property will be doubled. However, real estate is one of the best investment that you can possibly have as long as you have planned and saved more than enough what is needed to pay for before purchasing the property.

It’s spring time and some of you might be thinking of buying a second property. I found this article in money.usnews.com to help you decide or to guide you in purchasing your investment property.

8 Things to Consider When Buying Investment Property

By David Schepp | money.usnews.com

Whether you’re considering purchasing a multi-unit complex for immediate rental, buying a home now with the idea of selling it a few years or profiting from the purchase of a fixer-upper that can be resold at a much higher price, here’s what to look for when considering real estate as an investment:

  • Plan on a big down payment. Mortgage insurance isn’t available for investment properties, so a 20 percent down payment is required to get traditional financing. And putting even more down can result in a better rate. Also, loan costs are generally higher for investment properties.
  • Enjoy being handy and fixing things. Opting for the landlord route brings with it lots of challenges, including making repairs. Be sure to have enough savings on hand to handle any unexpected repairs in the short term – before the rent checks start rolling in.
  • Income varies. Tenants come and go, and it may take a while to rent out a just-vacated unit – especially if it needs substantial repairs or rehabbing, reducing your income. But you’ll still have to pay the bills, including mortgage, property taxes and insurance.
  • Property taxes. Depending on the type of rental property purchased and how long it is kept, investors could discover a big increase in property taxes, if a homestead exemption had been in place for the previous owners.
  • Beware of fixer-uppers. If you’re new to investing in real estate, beware of taking on a bigger challenge than you can handle. Unless you have the skills for large-scale improvement – or know someone who does quality work at bargain prices – you’ll likely pay too much to rehabilitate the property and still make a profit on its sale. A better option is to look for properties that need modest repairs that are priced at below-market rates.
  • Start small. While repairs present a challenge, so can buying a larger property than you’re ready to handle. Starting small – purchasing a single apartment, condo or duplex, for example – can help you get grounded in the idea of investing in real estate and decide whether it’s really the right step for you.

Read more at money.usnews.com

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selling strategies

Selling Strategies To Get You The Most Money For Your Home.

Useful Selling strategies and Tips for Sellers to get the MOST money and multiple offers.

The Biszantz Connection Tips for getting the most money and multiple offers for your listed home.

How to sell your home fast with multiple offers? Listen to this!

For more tips from Shannon, subscribe to her Youtube channel and don’t forget to like Shannon’s Facebook Page The Biszantz Connection for Real Estate Updates in San Diego.

SELLING STRATEGIES

Get your FREE HOME VALUE REPORT with The Biszantz Connections.

For San Diego real estate inquiries or concerns, you may reach Shannon at 619-417-4655 or email: Shannon@ShannonBiszantz.com.

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Biszantz Connection

How Buyers Gain A Huge Advantage Using The Biszantz Connection.

How we can help you Buy a property in San Diego

 Gets you weekly deals at your price range delivered to your email box. 

Watch Shannon’s Video as she explains on how The Biszantz Connection team can help you with buying a property in San Diego Area.

 

For more tips from Shannon, subscribe to her Youtube channel and don’t forget to like our Facebook Page for Real Estate Updates in San Diego.

 

SELLING STRATEGIES

Get your FREE HOME VALUE REPORT

For San Diego real estate inquiries or concerns, you may reach Shannon at 619-417-4655 or email: Shannon@ShannonBiszantz.com.

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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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Staging Strategy: 5 Reasons Every Room Needs a Clear Purpose

By Shannon Biszantz on August 10, 2015
in Tip's for Buyers

 

 3895 Avenida Brisa, Rancho Santa Fe CA 92091.

3895 Avenida Brisa, Rancho Santa Fe CA 92091.

5 Reasons Every Room Needs a Clear Purpose

Help buyers begin to see your home as their own as soon as they walk in the door.

By Lori Livers

When staging a house for sale, it’s crucial to consider every space with the buyer’s perspective in mind. Once you’ve accomplished the five basic staging steps, make sure every room in your house has one clear purpose.

Defining how to use a room is incredibly important for buyers because it helps them connect to a home. Here are the top 5 reasons every room needs a clear purpose:

1. Buyers subconsciously feel lost if they don’t know what to do with a room

They will wander in and out of a room very quickly if they cannot easily tell what the room should be used for. The house will not feel comfortable, which will make it hard for them to imagine it as home.

sunroom

2. Buyers don’t know how to place furniture in a room they can’t define a use for

When buyers walk into a room they feel comfortable in, they’ll start to picture their belongings where yours are now. A big comfy bed signals “This is a bedroom,” so buyers will be able to imagine their own bed in the space. This is exactly what you want them to do.

But if buyers can’t tell the room’s purpose, they won’t know if they need new furniture to fill it, or if they have something perfect for it already.

bedroom

3. Buyers assume they don’t need a room they can’t see the purpose of

If a buyer can’t see what a room’s purpose is, they go one of two ways. They either assume they don’t need the space, or they decide your home doesn’t have a room that will serve a purpose they do need. Either way could cause them to pass on your house and go on to the next.

office

4. Buyers don’t have time or energy to figure it out for themselves

There is so much competition for buyer dollars – even in a seller’s market. Buyers have no time, energy or need to “figure out” a house. They can simply go visit the next one or go visit the new home builder they’ve seen advertised. You can bet the builder will show them exactly what every space is for and tell them why they need it.

pool room

5. Buyers can’t emotionally connect to rooms they can’t see themselves using

You want buyers to picture their sofa in your living room so they can start seeing themselves living in your house. This is when they truly connect with a house and decide they have to have it as their own home. This connection brings you the best offer possible.

master suite

Many homes today feature a “great room” that contains many spaces to be used as individual rooms. This is what the term “open concept living” refers to, and it is highly desired by modern buyers. Mixed purpose rooms can confuse buyers. They may think that if one room has to be used for multiple purposes, the home must be too small.

If your house fits this description, be sure to clearly define spaces within the great room to serve only one purpose. For instance, define a family room space and a dining space separately so that buyers know how they can use these areas.

open plan

Staging your house for sale is a lot of work. But as difficult as it can be, don’t skip it. The way you present your home makes a big difference in finding a buyer.

See more home design inspiration.

Related:

Lori Livers is a Certified Professional Home Stager in the Houston, TX area specializing in staging both occupied and vacant homes for sale.  Lori understands staging a home is not about decorating, but about focusing a potential buyer’s attention to the most positive aspects of a house so that buyers want to make the staged house their home. Lori regularly offers staging advice and tips on her website.  Connect with her via Facebook or at her website.

http://www.zillow.com/blog/staging-rooms-with-clear-purpose-181314/

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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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