1. Winter is upon us so flush your water heaters. This is a cheap and easy procedure that only costs about $30. Flushing water heaters helps to control the buildup of mineral deposits, resulting in a more efficient heater. 2. At the end of the year, two ways for real estate professionals to reduce their tax burden is to pay more business-related expenses before the end of the year and defer income until early next year. For example, you can send invoices late in December so collections won’t occur until January of 2019 which will likely reduce your tax burden by reducing your taxable income for 2018. 3. Take advantage of reduced competition and real estate activity during the holidays […]
continue reading Q: Gerald, I’m a real estate professional. Do you have any year end real estate tips for me? Lance, New Bedford, MA A: Hi Lance, last week I mentioned that you can reduce your tax burden as a real estate professional for this current tax year by paying more of your business-related expenses before the end of this year and by deferring some of your income til next year. Here are 3 more year-end real estate tips that’ll get through the winter: 1) Flush your water heaters. This is a cheap and easy procedure that only costs about $30. Flushing water heaters helps to control the buildup of mineral deposits, resulting in a more efficient heater. 2) Service oil or […]
continue readingQ: Gerald, I’m a real estate professional. Do you have any year end real estate tips for me? Lance, New Bedford, MA A: Hi Lance. Two ways to reduce your tax burden as a real estate professional for this current tax year is to pay more of your business-related expenses before the end of this year and defer income til January of next year. For example, you can send invoices late in December so collections won’t occur til January of next year–doing this will reduce your tax burden by reducing your taxable income. Thanks for your question, Lance-stay tuned for next week when I’ll reveal another end of year real estate tip. For more real estate tips and information visit […]
continue readingYou can legally invest in real estate with your IRA and 401(K) and pay little or no taxes provided your IRA or retirement plan uses an approved custodian. The widespread misconception that permissible IRA investments are limited to stocks, bonds, mutual funds and CDs is the result of people and companies who are in the business of selling these products.
continue readingQ: I want to partner with other people on real estate deals that I find. What should I be looking for in a real estate partner? Brian, Westerville, Ohio A: A healthy partnership can benefit you as a real estate investor. Partnerships provide moral support and encourage creative brainstorming. It’s useful to get a second opinion on decisions you make in your real estate business, particularly when you start out. I’ve been involved in many partnerships over my real estate investing career. Here are the top 3 qualities you should look for in a real estate partner: Complementary skills: partnerships are most effective when each partner specializes in certain aspects of the business–this specialization is easier when partners bring different […]
continue readingSelect a real estate attorney that specializes in real estate rather than a jack of all trades.
continue readingIn order to maximize return on investment (ROI), getting a property rented fast to a good tenant is more important than getting the highest rent because just 1 month of vacancy can destroy your ROI and cash flow for the year.
continue readingIf you own rental property, monitor market rents where your property is located by looking at rental ads online so you can see what your prospective tenants or current tenants are seeing.
continue readingHomes that spend more time on the market usually sell for less money.
continue readingBuy property that is consistent with other properties in the neighborhood. It is smartest to buy the cheapest rather than the most expensive house in an acceptable neighborhood – this increases the odds that your property value will increase and often makes it easier for you to sell.
continue readingReal Estate Insights: Whenever the pace of property sales slows, negotiating power transfers from sellers to buyers.
continue readingRecent changes to the way Fair Isaac computes people’s credit score are welcomed, long overdue and benefit borrowers, creditors and real estate markets across the country. The revision to the credit score algorithm that eliminates medical bills from consideration is especially appropriate given the high incidence of mistakes and miscommunication. What a lot of people don’t know is that creditors report information to the 3 major credit reporting agencies on a voluntary and inconsistent basis which unfortunately means that mistakes are made all the time; AND the 3 big credit reporting agencies : Experian, Transunion and Equifax, really don’t have much of an incentive to fix mistakes on your credit report. The good news is that you can take control […]
continue readingRule of 72s: You can quickly calculate the number of years it will take for your real estate investment to double in value by dividing the annual % growth rate by 72: # years to double in value = 72/Rate of Growth. For example: At an 8% annual growth rate, your real estate investment will double in about 9 years (72/8=9) At an 12% annual growth rate, your real estate investment will double in about 6 years (72/12=6) At an 24% annual growth rate, your real estate investment will double in about 3 years (72/24=3)
continue readingThe Capitalization or Cap Rate for a property is the ratio between its net operating income (NOI) and the property’s value: Capitalization Rate = Net Operating Income/Value You can transpose the formula to solve for property value or net operating income: Property Value = Net Operating Income/Capitalization Rate Net Operating Income = Property Value*Capitalization Rate
continue readingUntapped home equity can be a dangerous temptation for homeowners and real estate investors. You have to be careful before you take on additional debt, even if it’s mortgage debt which is normally considered to be good debt, because when you do, you increase your monthly fixed payments. People often tap home equity to renovate or upgrade a property. This may be a very good idea if you’re renovating an income-generating property so that it earns more money for you. However, I have seen many people over-renovate their primary residence spending tens of thousands of dollars on over-the-top kitchens and bathrooms that they didn’t need and didn’t really increase the value of their home!—also, don’t forget, you’re supposed to pay […]
continue readingSalt used to remove ice during winter is often harmful to concrete surfaces.
continue readingThe recent cooling of the US housing market is as much the result of unrealistic earlier expectations of another impending real estate boom as anything else. The first signs of increased real estate activity sent journalists into a frenzy. Economic fundamentals not media hype drive real estate, as all economic activity ultimately is driven by demand. Also, every residential property market is different and some markets aren’t cooling right now. Housing affordability in many places has gone down which obviously has a dampening effect on demand particularly for first time home buyers who are essential to all residential real estate markets. Click here for the full article!
continue readingClassifying real estate expenditures as repairs rather than capital improvements often results in tax savings.
continue readingMore foreign buyers of US real estate is a natural consequence of increased global trade. In addition, housing bubbles in places like China make US real estate investment more attractive. The percentage of foreign buyer-driven real estate transactions throughout the United States is exaggerated. Foreign buyers are only buying in big numbers in a small select group of markets and they are only buying certain types of properties so their impact on US real estate in general is not as high as you may think. Ultimately, income and household formation are bigger drivers of real estate demand than foreign buyers. -Gerald Click here for the original article!
continue readingLandlords normally must deposit security deposits into an interest bearing account within 30 days of the receipt of the security deposit.
continue readingUse low-flow toilets to reduce your water bill or make your existing toilet more efficient by dropping a soda bottle filled with sand or water into the tank. It will use less water each time it flushes. -Gerald
continue readingQ: Gerald, we had a really rough winter and just when I caught a break from record heating bills, the summer is in full swing. Do you have any tips to lower my utility bills in the summer? Charlie, Chicago, Illinois A: Great question, Charlie. I’m going to give you 3 tips to lower your utility bills during the summer: 1) Clean air-conditioning filters every month and check your air conditioner once a year to make sure that it’s functioning property. People often ignore their air conditioning system until something goes wrong, then they end up having to buy a new unit instead of making minor fixes. 2) If you need a new air conditioner, buy an energy-efficient one—it’ll lower […]
continue readingReal Estate Tip: Use logic and never let emotions affect real estate investing decisions. -Gerald
continue readingThis latest data that shows a record low in real-estate-linked debt’s share of bank assets highlights the mortgage lending reluctance that we’ve been seeing in US real estate for quite some time. Unfortunately, good borrowers today are being penalized for the sins of the past. In a typical knee-jerk reaction, the pendulum has swung way too far in the other direction locking many responsible buyers, particularly younger, first time buyers out of the real estate market. The fact that Wells Fargo is cutting its minimum credit scores for loans backed by Fannie Mae and Freddie Mac however is a welcome sign. -Gerald Click here for the original article!
continue readingQ: Gerald, I’m looking at buying a home and because I’ve never seemed to have much luck negotiating when I bought a car, I’m nervous about the negotiation side of purchasing a property. Do you have any tips you can give me? – Larry, Sparta NJ A: That’s a great question, Larry and by the way it’s normal to be nervous about negotiating especially if you don’t have a lot of experience doing it-this applies to most people. There’s a myth about effective negotiating that a lot of people hold which is that being a good negotiator is about one person dominating and getting his or her way over the other person-that couldn’t be further from the truth. Effective negotiation […]
continue readingBuy property that is consistent with other property in the neighborhood. It’s smarter to buyer the cheapest rather than the most expensive house in an acceptable neighborhood-this increases the odds that your property value will increase and often makes it easier for you to sell. -Gerald
continue readingQualifying to short sale your home generally boils down to 3 main challenges: 1) Getting your lender’s attention and giving your lender a reason to discount your mortgage loan 2) Demonstrating that you have a legitimate financial hardship preventing you from paying your mortgage 3) Getting your lender to accept that the price your buyer is paying for your property is close enough to your bank’s independent valuation of the property. Banks earn profits by collecting interest payments on money they lend. However, when those payments stop, instead of making money, the bank is now losing money and as a result has an incentive to limit those losses. Banks always take notice when they don’t get their money and borrowers […]
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