How will the 2017 Tax Bill Affect Your Real Estate Investment?

How will the 2017 Tax Bill Affect Your Real Estate Investment? Image result for real estate investment

Historically, investing in Real Estate is a gateway to personal wealth and security. With the ability to deduct mortgage interest and real estate taxes, owning a property has been a huge benefit for many hardworking property owners. How does the new tax bill really affect you and your real estate?

In the media and online we are bombarded with all sorts of myths, benefits, and shortfalls of the 2017 tax reform.  It’s important to know the facts.

Here are six facts about the 2018 Federal Tax Guidelines that you need to know as a property owner.

1 – Mortgage Interest Deduction

Will I still be able to deduct the interest on my mortgage?

According to the previous tax code, a home buyer is able to deduct the interest paid on a loan of up to one million dollars on your primary or a secondary home.  This loan amount has been reduced to $750,000.  If you purchased your home BEFORE December 15,, 2017 there will be no change.   The old limit will also stand if you were already under contract and scheduled to close on your home by January 1, 2018.  Also, important to note is that if you refinance the compromise bill recognizes that you already own the property and so the old limit will still apply.

Here is a look at who this would hurt…

Your mortgage will be over $750,000.  That translates into a buyer of a one million dollar property who is putting 20% down or a buyer of a house over one million.  In Staten Island, based on last year’s sales we estimate that this would affect roughly 10% of buyers.  In our community, the median sale price last year was $525,000.

2 – Home Equity Loans

Perhaps an issue more salient with middle-class homeowners is the elimination of the home equity deduction.  Interest on home equity debt will no longer be claimed.  However, HELOC interest is still deductible if proceeds are used for “acquisition indebtedness” (to build or improve a primary residence).

3 – Property Tax Deductions

Property tax deductions have become limited.  In the past homeowners claimed those in their entirety.  This means homeowners may deduct up to $10,000 for a combination of property tax and state and local income taxes.

In the Staten Island community, this may have less of an impact as most of our residents pay under $10,000 in taxes.  This could, of course, become an issue down the road as taxes rise.

4 – Relocation Expenses

This was not a well-known deduction as you did not need to itemize deductions to get the benefit.  My daughter, for instance, saved about $500 on her taxes when she moved to South Carolina.  Good thing she moved in 2016!

Moving expenses are now only deductible for active duty members of the armed forces.

5 – Capital Gains

Exclusion amounts remain unchanged; $500,000 (or $250,000 for single filers).  Owned and used rules for your primary residence remain unchanged; must reside in the home for 2 of past 5 years.

6 – The Standard Deduction

Some or all of the loss of deductions for Real Estate related transactions may be recaptured by virtue of the increase in the standard deduction.  Meaning, you might not need to itemize your deductions in order to get the same tax savings you would have received under the old tax code.

As always, you should consult with your own tax advisor to see how the tax bill will affect your particular circumstance.

Resource: 

The Tax Cuts and Jobs Act – What it Means for Homeowners and Real Estate Professionals https://www.nar.realtor/tax-reform/the-tax-cuts-and-jobs-act-what-it-means-for-homeowners-and-real-estate-professionals

 

Top 5 Tips To Consider Before You Rent Retail Space

Top 5 Tips To Consider Before You Rent Retail Space

By Tara Roed, Community Home BrokerageImage result for neighborhood retail

Top 5 Tips To Consider Before You Rent Retail Space. Lots of us dream of being our own boss.  The idea of opening a storefront to sell those AMAZING cupcakes everyone loves, a coffee shop or yoga studio is appealing to so many of us.   However, we all know there is a lot to consider.  A frightening majority of small businesses fail.  You need to plan and set yourself up for success.

Rent, insurance, parking, utilities, and maintenance are at the top of concerns.  The list is long.  A good business plan is vital to success.  You need to crunch your numbers.

When you are ready to move forward one of the most important considerations is finding a Real Estate Agent savvy with Commercial Properties.   Why?  Location is a big factor in your success.

Here are the big 5 real estate considerations you should discuss with your broker:

Foot TrafficWill you get a lot of people walking by that may pop in and check you out?  If so, you may pick up new customers that don’t know how great you are.  If you are hard to find only your past clients are going to look you up!

Parking – This is Staten Island.  Parking in some neighborhoods is a real problem.   Unless your potential customer really loves you will they circle the block to park?  For example, New Dorp has historically been a great town to shop small businesses but as the population expands the parking options dwindle.  Know your neighborhood!Image result for parking

Lease negotiation – It is your business to run, but it is your agent’s business to assist you in negotiating your terms.  Communicate your financial needs and goals in order to find a space that won’t leave you reaching too far to come out in the black.

Zoning and regulations – Your agent leases and sells commercial space all of the time.  They can be a great source for helping you navigate what the city allows.  Also, that knowledge may help you get creative if you aren’t finding the perfect space.  For instance, a lot of small gyms and Cross Fit facilities are located in traditional warehouse space.  A smart agent may help you think outside the box!

Image result for zoning and regulations map staten island

 Neighborhood demographics – Be sure to hire a professional that can   help you find a space in the neighborhood that best suits your   demographics.  Staten Island has been witness to some great new   restaurants flourishing in unlikely places.  The right Agent can scout out   the best place for YOUR business.

 

Most importantly, make sure to do your homework.  For a more in-depth look into the many aspects to consider when planning your new business take a look at this QuickBooks article.

 

Resource: https://quickbooks.intuit.com/r/office-and-equipment/choose-right-location-small-business

5 Reasons You Should List Your Home This Winter

5 Reasons You Should List Your Home This Winter

There is no doubt about it that warmer weather brings people out to open houses all spring.  The classic thinking is your house has more curb appeal when the flowers bloom.  Not to mention, some folks want to move over the summer when school isn’t in session.  However, there are some truly compelling reasons to put your house on the market this winter.  Here is some serious food for thought!

1 – Quality over Quantity is the key.   You are definitely not going to get springtime traffic after Thanksgiving and into the winter.  However, you have serious buyers coming to look.  These are not people driving by and stopping in out of curiosity.   These are the people who are in need of moving.  tree snow winter architecture mansion house home suburb weather backyard facade residential season estate neighbourhood residential area outdoor structure

2 – Inventory is low.  Most people wait to list until the Spring.   This translates into fewer homes on the market.  Your property stands out in the crowd.  That’s simple economics!

3 – Curb appeal only applies to the interior.  There isn’t the same pressure to have the best-manicured lawn and garden on the block when you show your home in the winter.  No one is going to hold it against you that your grass isn’t greener than everyone else’s.

4 – A home warmly decorated for the holidays makes people see the way your house is a HOME!  Buying a house for many is about gathering family and having space to entertain and enjoy the holidays.  This is an opportunity to show buyers how yours can help them do just that.  Light your fireplace, string some lights, bake some cookies.

5 – The slower market helps move everything along a little faster.  Mortgage brokers have a little more time to process your loan, property attorneys have a more time on their calendar.  Time is on your side.

Truth is there is no time like the present to sell your home.  The right buyer just needs to be brought to your home and winter definitely affords everyone the time and attention to do just that!

COME HOME TO COMMUNITY COMMUNITY HOME BROKERAGE STATEN ISLAND, NEW YORK

Real Estate, Staten Island, New York
Community Home Brokerage Staten Island

Ten years of dedicated commitment to helping grow our city has been well worth it. We’ve helped countless families find their first home, or expand into something bigger with new additions to their families.

 

Our office is located in the heart of downtown Staten Island, an area which has attracted over $1,500,000,000 of investments. Including the Empire Outlets, New York Wheel, Lighthouse Point, and the mixed-use community URBY.

Get in touch with us:

145 Beach St
Staten Island, NY 10304

+1-718-448-1991

admin@chbrokerage.com

Available by appointment.

Mon – Sat 10 am – 6 pm
Special appointment times considered.