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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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San Diego Homes For Sale for $500,000

What $500,000 will buy you in San Diego!

 

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What $500,000 will BUY you in North San Diego County, Feb.16

I often wonder…what I could buy for a certain price in San Diego….and I’m sure you do to on occasion!

We started compiling a list of the best buys weekly in different price ranges All over San Diego. This week it is $500,000.

My criteria includes:

Detached, if possible, best backyards, inspiring views, great space, fab location, low HOA’s, no Mello Roos…basically all the things that I would want for my purchase.

This week we have:

Homes  in Carlsbad, Carmel Valley, Vista, Clairemont, Del Cerro, and   TIERRASANTA.

 Take  this journey with me as I explore every Tuesday…what your money will buy you in  San Diego! 

We simply ask for your contact info on signing up so that we can send you this list weekly to your mailbox.

Register here to receive our weekly update!

Enjoy!

Shannon Biszantz

The Biszantz Connection

 

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More homes at www.sandiegoestatehomesforsale.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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Shannon Biszantz

Shannon Biszantz

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

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Office: 858-755-0075




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