Some clients are looking at down sizing for lower maintenance, having fewer steps to climb, etc and wondering how to finance. If looking at bridge loans, equity based products, or reverse mortgages please allow me to help supply information and put them in touch with the right people.
There are investors who have always done their own property management, but may need an alternative in the future. A 1031 exchange into tenants in common property with a triple net lease situation might be appropriate. This still provides monthly income, appreciation, and a depreciation deduction.
If rents are not increasing cash flow every year, it may be time to exchange the property into one of the tenants in common situations that have an escalator clause. Rent obsolescence should cause a 1031 exchange to be evaluated. This obsolescence should also take neighborhoods and appreciation into account.
If an investment property has been held for five, ten fifteen years or more the cost basis used for depreciation should be evaluated. There are times when increasing the tax deduction for depreciation as a result of a 1031 can mean a major tax savings.
Using real estate in a self directed IRA is becoming more common. Compare real estate with other investments over different time spans and it is obvious that there is a place for it.
Investors or owners wanting cash for something else have several tools that may help. Second homes and vacation homes also can be exchanged.
When considering an irrevocable trust, far enough ahead of time, some of the preceding could come into play prior to the Medicaid look back period.
Many investors exchange out of a single family rental, duplex, or any other type of investment property and into a vacation/second home. Many tax/legal advisors believe it is possible to perform an exchange on a vacation property which has no rental history but can be considered held for investment.
By
The classic way for homeowners to
increase the value of their house is by remodeling existing rooms or
adding on to its current plan.
Some choose to build recreation rooms and studies while others add
new appliances, fixtures and cabinets to enliven rooms and make their
home more attractive to future buyers.
But, when should you decide to stop sinking money into a home and
buy a bigger place? And how much rehab is too much when it comes time
to recovering remodeling costs through a home sale
For instance, if you’ve just spent $1,000 remodeling your living
room and didn’t expand your small bathroom, the chances of increasing
the number of interested buyers are slim.
With these concerns in mind, Century 21 sales associates offer a
few tips for those struggling to add value to their home.
First, always protect the character of your home. Nothing sticks
out more than a new addition that is in a completely different
architectural style. Be consistent. Recognize your home’s character
and stay within its framework.
The most financially rewarding areas to remodel are usually the
kitchen and bath. Newly re-done cooking spaces and cabinets can attract
more buyers and may command a slightly higher price for the home than a
comparable one on the market. Simple repairs that are made to last will
bring you the biggest returns upon sale.
Enlarged bathrooms are the most popular attraction for new home
buyers, according to the National Kitchen and Bath Association. Today,
the most popular additions for younger buyers are sunken whirlpool baths
and showers. But be sure to install modest, solid amenities. It’s easy
to quickly over-spend on bathroom fixtures.
Buyers are, by convention, more interested in above-ground living
space – not basements, yards and walkways. Swimming pools can be a poor
investment if installed for the sole purpose of increasing a home’s
value; it’s rare that a pool’s cost will be recovered in a home sale.
It can also be a negative feature for potential buyers with very young
children.
Replacing worn carpeting, tiles and wood floors can give your home
an immediate advantage over similar properties in the area. Updating
paint colors in all areas of your home can also prove beneficial.
However, it’s recommended that you use neutral colors, such as
gray, beige and off-white when adding new floor and wall coverings.
Fewer buyers will then turn away because of differing tastes.
Stay simple with your remodeling and look at your home as though
you were the buyer. Chances are that if you find the upstairs bedroom
could be brightened by a larger window, potential buyers will probably
feel the same.
Don’t go overboard. Concentrate on improving two or three
deficiencies in your home. More than likely, the time and money you
spend adding quality to your home will be rewarded with greater profit
at selling time.
