Tax Time Tips For Rental Property Investors Home Staging Making Your Home Sellable The Language Of Foreclosures Real Estate Investments Guideline Condo Hotels New Hotel Phenomenon Set To Sweep The Philippines
While owning a rental property can be a terrific way to bring in income, those extra dollars can make things complicated when it comes to preparing a tax return.
Fortunately for the 15 million people who own rental properties in the U.S., there are ways to make tax season a little more manageable:
• Store your receipts, bills and statements during the year. This will make it much easier to locate and organize them at tax time. Create an envelope or folder for each property, and put all of your receipts in there during the year. Do the same for regular bills such as the mortgage, property taxes, insurance, utilities, etc.
• Keep good rental payment records. You probably get a lot of checks-and even cash-from your tenants during the year. It can be really hard to figure out at tax time if you don’t stay organized during the year.
• Know what property each check comes from. You can record this with your bank deposits in your checkbook or a spreadsheet or rental property software.
• Use rental property software like Quicken Rental Property Manager 2.0, designed for people who own up to 10 properties and 25 total units. It makes it easier to file taxes and manage rental property income and expenses. This can help eliminate hours at the end of the year preparing for that Schedule E. Using the software, you can simply print the tax report and transfer the data to the form, give it to your accountant, or export data directly to tax preparation software like TurboTax.
• Separate security deposits from rent payments. Security deposits are not considered income if you intend to return them to the tenant, so make sure these deposits are separated from rent payments.
• Flag expense receipts. Some expenses are hard to classify properly for the IRS. When you replace the faucet in the bathroom, is that considered a repair or a capital improvement? It makes a big difference to Uncle Sam because 100 percent of repairs can be deducted this year, but capital improvements must be deducted over time. When you’re not sure, flag those receipts so you can later discuss them with your accountant. Keep them in a separate place or flag them in your expense journal.
• Lastly, don’t forget the mileage deduction. You probably rack up a lot of miles driving to and from your properties and those trips to the hardware store. It can be tedious to keep track of the mileage, but it really pays off since the IRS allows you to deduct about 45 cents/mile. To make it easier, use an Internet map ser-vice such as MapQuest to look up the mileage for common trips-like between your home and each property.
You’ve listed your home and the agent wants to start showing it to prospective buyers. Here’s a few tips to help it look its best.
You may have already read the importance of clearing out clutter. Well, that’s because it can’t be stressed enough. It is one of the most important aspects of making your home appealing to buyers, for two reasons. First, not just papers and dishes, clutter includes decorations and furniture too. Too much of it can block a persons view of the house itself. If everywhere they look they see stuff, a buyer doesn’t see your home. It is imperative that they have a clear view, or they won’t want to buy. Second, all that clutter screams personality. Your personality. And this is not what a buyer wants to see. When someone is looking over a home, what they need to do in order to be motivated to buy is to imagine themselves living in that home. If the house is so full of the current owner, a potential buyer can’t get past that and make the mental leap to visualizing themselves in the home.
Because of this, some sellers choose to box up a lot of their personal goods and put them in professional storage. This gets it right out of the house, so even the boxes aren’t clogging up the spare rooms and closets, which are also important selling features.
It is also important to fix things around the home. Keep in mind how well the doors around your home work, as buyers will almost always open closets and cupboards. If the doors are sticky or squeak, that gives a bad first impression. Obviously, your front door is the first candidate for a good hinge-oiling.
While you certainly don’t want to enter into major renovations, a new coat of paint can really brighten up a home and make it more appealing. Consider both the outside and inside of your home. And as tempting as it is to choose trendy colors or things you are personally attracted to, neutral tones are best. White or off-white are your safest bets as they will help a home appear bright, and give a new owner a good base if they wish to paint the home more uniquely.
Speaking of a bright home, be sure to leave all the lights on when your home is being shown. Open all the curtains, too, so that viewers feel that your home is bright and welcoming, and they can see clearly. Dusting every surface also helps your home look brighter.
Consider smell, an important sense that impacts our first impression. Do a good deep cleaning, especially if you have pets or smoke indoors. Air the home out a bit. You may wish to install some air fresheners, but be sure not to choose anything too overwhelming, as more and more people have sensitivities to scents these days.
Good luck with showing your home!
Talking about foreclosure real estate can be hard enough without even entering the market. That’s because foreclosures tend to have their own language, employing many obscure words originating in govermnent housing legislation and real estate law. Without a background in these areas, prospective investors won’t be able to decipher even the simplest foreclosure contract. This article lists some of the more common foreclosure-related terms as a reference for people interested in this lucrative market.
Abandonment: Wherein a property owner has given up ownership rights without coercion, and does not want to retrieve those rights, or pass them to somebody else. A situation involving an unused property does not guarantee abandonment.
Acceleration Clause: A clause commonly written in a mortgage enabling the lender to demand full re-payment immediately, rather than at the end of the contracted term. The clause must also detail an occurance that would put it into effect, such as a default on regular payments, sale of the property, or re-assignment of property rights. In most cases the debtor must be given reasonable notice, and a chance to reverse the occurance. The debtor is also immune from acceleration if there is no such clause written into the agreement.
Chattel: Personal property, including household items.
Closing Costs: Expenses not related to the marketing and selling of the property, sure as loan fees and paperwork fees. Foreclosures might also involve extra legal and escrow fees.
Deed in Lieu of Foreclosure: Property owners may deed their property to the lender if foreclosure is imminent, rather than go through the entire process. For the deeding to be official, the lender must give approval.
Default: Failure of the borrower to make payments as required by the lender. “Default” may refer to a missed payment without any further reprecussion, or a series of missed payments resulting in a failed mortgage.
Equity Right of Redemption: The right of the borrower to remove all encumbrances related to the mortgage, in order to avoid foreclosure.
Federal Housing Administration (FHA): A part of the Housing and Urban Development Federal agency responsible for determining industry standards for mortage loans by private lenders. FHA also insures mortgages by private lenders. Forclosure investors must occasionally deal with this agency.
Federal National Mortgage Association: Also known as FNMA, or Fannie Mae, this federal agency oversees conventional residential mortgages, and will buy out loans that follow its rules. Some foreclosure investments require direct communication with this agency.
HUD1 Statement: A form mandated by the US Department of Housing and Urban Development that specifies the costs of acquiring a foreclosed home.
Loan-To-Value Ratio: A comparison of the total loan amount and the lesser of the property’s sale price or appraised value.
Notice of Rescission: A notice from the lender notifying the borrower that he or she is again in good standing with the loan, and payment deficiencies have been corrected.
Short Sale: A property sale priced at or below market value, and lower than the amount of a mortgage on the same property.
Truth-in-Lending Act: A law requiring the lender to provide the borrower with a full written explanation of the mortgage’s terms.
Investing in real estate can be profitable if you know the correct ways to do business in this field. As real estate investment experts say there are several keys to making significant profits in real estate investment deals. And when the deals are profitable, you will certainly be well on your way to success.
For real estate investment neophytes, don’t be afraid of the challenges and pitfalls you may encounter along the way. There is definitely a lot to learn, but in the long run after you have gained some experience, you’ll hopefully become a master at closing profitable real estate deals.
There are 5 core skills that are necessary for building a real estate investment business. These will be the key factors in creating a profitable real estate investment portfolio. These are the 5 core skills of real estate investment:
1) You should totally understand the meaning and concept of investing in real estate, including all of the financial risks and benefits.
2) You must learn when and where to find the right kind of sellers.
3) You must become an expert in all areas of real estate investment and understand such terms as lease options, cash sales, wrap mortgages, short sales and other terminology common in the real estate investment trade.
4) You must be able to quickly and accurately analyze each real estate investment deal so you’ll know exactly when to proceed and when to pull the plug.
5) You must learn the art of being a master negotiator when it comes to closing your real estate investment deals.
After considering these five skills, it is time to consider investing in real estate. There are great potential rewards and the effort you put forth can yield enormous monetary returns on your investment. Your confidence level will grow when you’ve gained some experience and closed on your first few real estate deals. But, don’t stop there… You should continue to learn about real estate investing and to develop your investment skills. In a short time you may find yourself managing a profitable and growing portfolio of investment properties.
Moreover, you should also continue to follow your real estate investment “game plan” and always keep an eye out for the hidden investment opportunities. The opportunities are definitely out there and with a little knowledge and desire can be yours for the taking. So, why not get started in what might be a new and exciting (and profitable) career today?
Interest in the Philippines condominium hotels sector has increased significantly in the past two years following many years of intermittent development and association with other shared ownership vehicles, says Beth Collingz in her recent report: ‘Condominium Hotels-The Philippines Latest Hotel Phenomenon’
Beth Collingz, Overseas Marketing Director, Investment Sales for PLC International Marketing the lead marketing partners for Pacific Concord Properties Inc’s Lancaster Brand of Condotels in the Philippines explained: A condominium hotel is a hotel operating unit which is sold to individual equity investors, where each owner acquires a room, suite or studio whilst the whole enterprise is managed as a hotel operation under a single brand.
Buyers own their units the same as regular condos. There is no time limit to ownership. All Condos come with freehold title deeds. The Condotel model is similar to the serviced apartment or apart hotel sector and is suitable for an investor who wants to test the water in hotel investment.
We are seeing more and more sophisticated customers coming to the market and a change in demand patterns; the traditional timeshare products seem past their prime. This, plus an increase in investment appetite for the hospitality sector, suggests that the condominium market looks set to grow Collingz continued: Many international hotel brands have also declared that the Philippine hotel landscape is ready for condominium hotel developments, either in conjunction with self-contained hotel operations, as fully self-contained condominium plans or as a part of a mixed-use development plan such as the Lancaster Brand.
Condominium hotels are significantly less developed in the Philippines than in the US, in part owing to a low cost residential focused market as well as the lack of development in the hotel sector since the 1997 Asian Crisis.
Alternative hotel ownership are featuring more and more in the hotels sector, with the rise of condominium hotels and a shift in investor strategy, thus creating a new investor profile. At the moment, the Philippine condominium market is being targeted and driven by private retail purchasers, typically reasonably net worth individuals attracted by a city centre or a resort investment foothold although we are now seeing more and more first time property buyers moving into the Condominium Hotel marketplace said Collingz.
Metro Manila and Cebu are particular favorites as an investment destination. There is room for a wider pool of institutional and real estate investors to invest in a portfolio of condominium units or the establishment of an investor-developer partnership.
Collingz continued that a lot of this interest is being driven by the relatively cheap market prices in the Philippines compared to Europe, specially UK Housing prices, and the easy payment options available for our Condo Hotel Developments, but there are other factors, too. Offshore Property Investors, Foreign baby boomers as well as overseas Filipinos, are looking for ways to maximize their return on investments as they approach retirement, and so are purchasing second homes, particularly Condo Hotel Investments where they can use the Condo for vacations and rent it out through our In-House Condotel Management when they are not using the unit thereby gaining rental incomes that on today’s purchase prices, give a projected ROI on their investments of some 12-16% depending upon the mode of payment for the unit.
Pacific Concord Properties Inc’s Lancaster – The Atrium, Shaw Boulevard, Metro Manila, Philippines is a “Full Service” Condominium Hotel offering Studio, One, Two and Three Bedroom Suites for sale. To be completed and ready for turnover from December 2010, the Lancaster Atrium will provide unit owners with premier residential condo units with option of enrolling their units in the Lancaster Condo Hotel Rental Pool and earn Rental Incomes as Owner Non-Residents when not using their units through Condotel Management. This makes the Lancaster Brand of Condotels, one of the Hottest Investment Opportunities in the Philippines.
Part of the success story for this sector will be the education of a whole new investor base previously accustomed to buy-to-let residential plans or conventional commercial real estate investments, together with the emergence of a secondary market in the Philippines to demonstrate transparency and liquidity said Collingz..
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