MLS 2170003

MLS 2170003

When does an investment become a second home?

 

Feb. 20, 2017 – Question: My primary residence is in Florida. I have owned and rented a condo in Hawaii since 2004. If I stopped renting the condo and lived in it for half the year, would my condo be considered a second home? Would there be tax consequences? – Name not provided

Answer: If you lived in the condo half the year and no longer rented it, it would be a second home. You could deduct any mortgage interest and real estate taxes paid on the condo as part of your itemized deductions. You should maintain the depreciation schedule for your records because when you sell the property, depreciation factors can reduce your cost basis.

When you sell a rental property at a loss, you can deduct the loss. When you sell a second home, the loss is considered personal and is not deductible. In both cases, a gain on the sale would be taxable. – Paula Taylor

© 2017 The Orlando Sentinel (Orlando, Fla.); Paula Taylor, CFP, contributes to the Orlando Sentinel's Ask an Expert series. Distributed by Tribune Content Agency, LLC.

Royal Shell Real Estate Wins Awards

December 12 2016
ROYAL SHELL REAL ESTATE WINS AWARD
FORT MYERS, Fla. — The Lee Building Industry Association has named Royal Shell Real
Estate as the Residential Brokerage Firm of the Year for 2016. The nonprofit
organization’s Industry Achievement Pinnacle Award honors Royal Shell for its
management capabilities, customer relations, ethical behavior, community involvement
and excellence in the residential building industry.
Royal Shell Real Estate, the largest and No. 1 independent brokerage in Southwest
Florida, recorded more than $1.2 billion in listings and sales in the first 10 months of
2016. It also was involved in 60 percent of the top-five home sales in Lee County in
2015.
“Achieving a prestigious Pinnacle award is a testament to our agents and staff’s
diligence every day in exceeding clients’ expectations while raising the bar for
excellence,” said Michael Polly, Vice President of Real Estate Operations.
Another honor came this summer when Royal Shell Real Estate was named Best Real
Estate Agency in the residential category in Gulfshore Business Magazine’s 2016 Best of
Business Readers’ Poll.
The brokerage also opened its first Cape Coral office in November, which is the
company’s 15th in Southwest Florida. Royal Shell also has an office in Ocala and four in
western North Carolina, bringing the total number of offices to 20.
Royal Shell Real Estate handles properties of all types, including primary and secondary
residences, seasonal homes and investment properties, while its rental department
focuses on leveraging owners’ investments for maximum return.
Royal Shell Real Estate began primarily as a Sanibel and Captiva island-based company,
and over the years has opened multiple offices in Lee, Collier and Marion counties. The
business differs from other real estate companies in that they hand-select only the
area’s top Realtors® to join the team.

Work begins to extend Fla. property tax increase cap

Work begins to extend Fla. property tax increase cap

CoreLogic reports 34K completed foreclosures in July 2016

CoreLogic reports 34K completed foreclosures in July 2016

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5 Things Renters Should Know About Owning

DAILY REAL ESTATE NEWS | THURSDAY, AUGUST 11, 2016

For renters who aspire to be home owners, transitioning from an apartment to a house requires a shift in their thinking that they may not be prepared to make. The financial changes that come with owning, the need to consider planting longer-term roots in a neighborhood, and new neighborhood rules are things renters may not be thinking about enough.

Read more: Where Buying Beats Out Renting the Most

As their real estate agent, it’s important for you to be there for your clients when they’re embarking on a life-changing event such as buying a home.

Moving can already be one of the most stressful times in a person’s life, but it may be doubly so for a new home owner. In order to be their most reliable resource, using your knowledge and experience to provide them with guidance, share these helpful nuggets of information with your clients so their transition from renter to owner can be as smooth as possible.

They need to understand how their financial investment is changing. Renters may see an increase in their monthly rent every lease term, but they don’t see exactly where it goes — toward property taxes and insurance, even “luxuries” such as trash pickup. As home owners, they don’t have a landlord who handles all those details, so they need to be ready to juggle the financial responsibilities of home ownership. Have an open conversation with your clients about these changes and the importance of budgeting to make sure they make smart financial decisions during this process.

They need to be happy with their location for the long-term. As a renter, you can bounce around from home to home every year if you want. But when you own a home, you have to stay put — unless you plan on renting it out, which most home owners don’t. Impress upon your client that location is going to play a much more significant role in their future, so they should think about evaluating school districts, access to amenities, and commute time now as they search for their next home.

They may need to abide by new rules. Renters don’t think about possible homeowner association rules they may be governed by, such as trash pickup rules or any curfews or rules pertaining to animals. Make sure to get all the information on neighborhood rules and associations to help your client understand what their new obligations will be.

They’ll need to get into the mindset of an owner. Life as your client knows it is about to change. Once your client purchases a new home, they will no longer have a landlord to tend to their many needs, including lawn care and plumbing. The best way you can help them as their real estate agent is to provide them with contact information for local industry experts. They will eventually need certified specialists ranging from HVAC companies to carpenters to electricians. Let them know they don’t have to do everything themselves.

They should know their neighbors can affect their value. Renters don’t care who their neighbors are as long as they’re quiet (enough). But your client is now going to want to know whether their new neighbors are renters or home owners. This knowledge can help your clients gauge current and future home value in the neighborhood. If the neighborhood consists mostly of rental properties, it is likely a home owner will lose money on their house in the future. Renters do not always feel responsible for maintaining their properties the way home owners do. Property value comes down to curb appeal. Less-appealing neighborhoods often have more-appealing prices, which is not always good for buyers and home owners.

Source: Rob Rimeris is owner of EverSafe Moving Co. in Philadelphia. EverSafe is a five-star, full-service company that offers affordable moving and storage services.

Quicken quietly offers 1% downpayment loans

 

NEW YORK – June 29, 2016 – Quicken Loans has been fairly hush about its latest offering of a super low downpayment mortgage, even as rival bank giants like Bank of America, Wells Fargo and JPMorgan Chase all tout their new 3 percent down mortgage products. But late last year, Quicken Loans quietly began offering 1 percent downpayment mortgages.

The program emerged from a partnership between Quicken and Freddie Mac in October 2015 and was structured as part of Freddie Mac's Home Possible Advantage program, which requires a 3 percent downpayment.

However, Quicken Loans offers its customers a 1 percent down because it grants the extra money to the borrower, Bill Banfield, Quicken Loans' vice president of capital markets, told HousingWire in an interview.

"We require 1 percent from a consumer and we give the consumer a 2 percent grant, so the client has 3 percent equity immediately," Banfield told HousingWire.

The 1 percent downpayment loans are available only for those purchasing a home, and they can only be used on a single-family home or condo – second home and investment properties or co-ops aren't included. They must have a FICO score of 680 or above and earn less than the median income for their county. Their debt-to-income ratio must be 45 percent or less.

"We want to try to help people and do it in a smart way," Banfield told HousingWire. "For us, it was really a question of, if you want to provide access to credit, how do you do it responsibly? How can you help people? If first-time buyers are struggling, are there smart ways to help them while still balancing access to credit? … We wanted to have a conventional option to get people into more homes."

Source: "Quicken Loans Now Offering 1% Down Mortgages," HousingWire (June 24, 2016)

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