Are you overlooking your Recordkeeping?

There is great opportunity for  Home owners! Especially with the appreciation we have experienced over the last 5 years. When the tax laws changed last year I know I was excited that this part of the law did not change and that means we can keep our equity, tax free. Then you must ask, what is the cost of waiting? So as we have had  appreciation for 3 years that means your property is worth more today, and that may be tax free for a principle residence.   But read on about the tax law…

Homeowners are familiar that they can deduct the interest and property taxes from their income tax returns. They also understand that there is a substantial capital gains exclusion for qualified sales of up to $250,000 if single and $500,000 for married filing jointly. However, ongoing record keeping tends to be overlooked.

New homeowners should get in the habit of keeping all receipts and paperwork for any improvements or repairs to the home. Existing homeowners need to be reminded as well, in case they have become lax in doing so.

These expenditures won’t necessarily benefit in the annual tax filing but may become valuable when it is time to sell the home because it raises the basis or cost of the home.

For instance, let’s say a single person buys a $350,000 home that appreciates at 6% a year. Twelve years from now, the home will be worth $700,000. $250,000 of the gain will be exempt with no taxes due but the other $100,000 will be taxed at long-term capital gains rate. At 15%, that would be $15,000 in taxes due.

Assume during the time the home was owned that a variety of improvements totaling $100,000 had been made. The adjusted basis in the home would be $450,000 and the gain would only be $250,000. No capital gains tax would be due.

Some repairs may not qualify as improvements but if the homeowner has receipts for all the money spent on the home, the tax preparer can decide at the time of sale. Small dollar items can really add up to substantial amounts over many years of home-ownership.

You can download a Homeowner’s Tax Worksheet (https://www.irs.gov/pub/irs-pdf/p530.pdf)  that can help you with this record keeping. The important thing is to establish a habit of putting receipts for home expenditures in an envelope, so you’ll have it when you are ready to sell.

As always let me know if I can be of any assistance.  Feel free to call (480-355-8645) or email (Info@LocateArizonaHomes.com) with any questions.

 

Costs More…Takes Longer?

Certainly one of the tougher functions in a Real Estate transaction is negotiating the inspection items. Some believe the seller should do everything and yet in a highly focused seller’s market that is not likely the case. The replacement of a roof covering can often become a real issue especially when using the contractor that just knocked on your door. Why? Their workmen may or may not show up and the roof may not get installed on time! When you hire an experienced Realtor those items should be non issues….but it does happen to all of us. The contractors I work with know that and are committed to get the job done on time, and often will wait for their payment until closing. Now a remodeling project…read on…

The one experience that homeowners can agree upon after completing a remodeling project is that it costs more and takes longer than expected. It doesn’t really matter that you researched, planned, and received multiple bids, it will, invariably, cost more and take longer than you originally anticipated.

Replacing floorcovering or painting is a project that a homeowner can easily get bids and contract with the workmen directly. A new level of complexity occurs when the project involves more specialized contractors, like plumbers, electricians, carpenters, counters, and others.

Now, a homeowner is faced with dealing with one general contractor who will run roughshod over the sub-contractors or make the decision to do it themselves. Typically, you’ll pay more for a general contractor, but the trade-off is that they have the contacts and experience to make things go smoothly.

Subs are notorious for wanting to finish their “part” of the project and move onto to the next job. Sometimes, they’re not interested in the “big picture” enough to consider doing things in a way that are best for the overall outcome.

When you start tearing out some things, you find out that there may be unexpected expenses involved. Another common occurrence is that during the project, you get a new thought about changing something else “since it is already torn up anyway.” This will add time and money to the job.

There can be the situation that the homeowner doesn’t even know the right questions to ask or what to consider when trying to coordinate the different workers. The most detailed timetable can be thrown off track if one set of workers don’t show up or finish on time. At best, it delays the project for a few days. At worst, it can delay it for a few weeks because the individual workers may have committed to other jobs that don’t allow them to reschedule.

Once the work is done in a professional manner, you’re probably going to live with it for years. If it is something you’ve wanted to do and it will allow you to enjoy your home more, it is worth doing. Just be patient and enter this adventure with the understanding that it will cost more and take longer than you expect.

We have all experienced good and bad contractors.  If you are considering a home improvement project let me know and I can refer you to a reliable contractor for the project you are considering. 

Call 480-355-8645 Or Email Us Info@LocateArizonaHomes.com

Welcome to 22167 E Via Del Palo

Adorable move in ready home backing to the golf course with fabulous panoramic views! Home features great room style floor plan and a light and bright eat in kitchen with island for plenty of counter space. Low maintenance desert landscaping allows you time to enjoy the beautiful view of the golf course with the serene San Tan Mountains backdrop. The exterior was painted in 2015 and Low E windows for energy efficiency. Great subdivision in the heart of Queen Creek with community pool and planned activities. Festive events are just minutes away at QC Olive Mill and Schnepf Farms. Close to shopping and great schools, too.

 

For more information visit our website

Visit our website:  WWW.LocateArizonaHomes.com

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Housing Decision During Retirement

Recently I took a  certification class for the designation of Senior Real Estate Specialist. I found there was  a wealth of information to assist my clients that are reaching retirement age or have parents with limited and/or fixed income.  All of that to say is there is a lot to think through when planning for retirement.  Certainly the below is a unique view of how some approach retirement. The Phoenix metropolitan area is wonderful place to retire with the mild climate and plentiful golf courses, so read on for more enlightening information…

A couple is planning to tour the United States in a travel trailer during their first few years of retirement. They are going to sell their current home now and purchase another home when they finish their travels.

An interesting exercise is to determine the optimum time of selling the home: now or when they’re ready to buy their replacement home.

If they intend on traveling for more than three years, then, it may be a good decision to sell prior to the sojourn to avoid paying taxes on the gain in their home. IRS allows for a temporary rental of a principal residence while still keeping the $250,000/$500,000 capital gains exclusion intact. A homeowner must own and use a home for two out of the previous five years which means that it could be rented for up to three years, but it would need to be sold and closed before that three-year window expires.

If the travel will be less than three years, there is an option of selling now or later. Using the example below, the homeowner sold the home, paid their expenses and invested the proceeds in a three-year certificate of deposit until the replacement home was purchased.

case study retirement-1.jpg
As an alternative, if the homeowner rented the home, not only would they have income, the home would continue to appreciate and the unpaid balance would go down resulting in larger net proceeds. Based on a 5% appreciation and continued amortization of the mortgage, the net proceeds could easily be $40,000 more.

case study retirement-2.jpg
Obviously, there are a lot of considerations that affect the decision to sell now or later but in an appreciating real estate environment, being without a home for several years could affect the financial position of the owner in the replacement property.

It is certainly reasonable to look at various alternatives before making a decision. Call me at 480.355.8645 or Email me Info@LocateArizonaHomes.com to help you look at the different possibilities and talk to your tax professional.


Welcome to 1581 E Shannon St., Chandler – Ashley Park

This home has been highly upgraded and remodeled lovingly by the owners. Upon entry you’ll notice the natural stone Travertine floors in the ample great room and the elegant French doors leading to the yard. The gourmet kitchen has been set up for the most discriminating cook with high end Kitchenaid stainless appliances, gas range, granite counters and stained cabinets. New dual pane vinyl frame windows throughout for energy efficiency. Split Master features a large Bay window overlooking the rear yard, luxurious master ensuite with granite and tiled shower plus a private water closet. The low maintenance yard features a sparkling play pool with oversized decking for relaxing by the pool or enjoy the shade under the covered patio outdoor living space. The home is a move in ready gem!

Contact Us at:  Info@LocateArizonaHomes.com   480-355-8645

Welcome to 1431 W Folley Street, Chandler!

Adorable home in a great Chandler location! This home is ideally located just north of the 202 and close to both Chandler Fashion Square and DT Chandler for all of your shopping, dining experiences, and easy commuting.  This home features a light and bright den upon entry with large bay window. The great room style living area features beautiful stone flooring and a cozy fireplace perfect for relaxing evenings.  Efficient galley style kitchen features a breakfast bar and eat-in area that overlooks the sparkling pool.  Split floorplan gives the master added privacy plus both the master bath and secondary bath feature granite counters.  Enjoy the lush back yard sitting under the covered patio or splashing around in your private play pool.

Coming Soon! 1431 W Folley St., Chandler

Beautiful home! Slate tile flooring throughout! Tiled bathrooms.  Granite tops in both bathrooms with new fixtures! Formal dining room or den,big eat in kitchen with breakfast bar and room. Vaulted ceilings! Fireplace in large great room. Covered patio fenced! Sparkling play pool, beautiful back yard! Ac/heat installed march 2013 with 10 year warranty! Incredible floor plan!

For more information visit our website

Visit our website:  WWW.LocateArizonaHomes.com

Or Contact Us Info@LocateArizonaHomes.com

480-355-8645

Welcome to 2132 W Myrtle Drive, Chandler!

Don’t miss this beautiful home in the coveted subdivision of Cypress Point in Ocotillo! On a gorgeous lot backing to the pristine Ocotillo Golf Course, this home features new flooring, exterior paint, new appliances, custom plantation shutters and more! Entertaining is a breeze in the open kitchen with high windows for plenty of natural light. Gather around the island, hang out on the patio or enjoy the sparkling pool! After your guests have gone, relax in the downstairs master suite with its own private exit to the backyard. Upstairs, you’ll find a spacious loft with vaulted ceilings and two additional bedrooms overlooking the golf course. All this and more in one of the hottest locations in Chandler! *Exterior paint scheduled to be completed prior to close of escrow.

Convincing Advantages with Standard Deduction

Lots of folks  are asking what are the new tax laws going to do to my taxes?

Read on. Then contact me if you need more.

The new tax law doubles the standard deduction and it is estimated that over 90% of taxpayers will elect to use it. However, even without considering tax benefits, homeownership has convincing advantages.

Besides the personal and social reasons for owning a home, one of the most compelling is that it is cheaper. Principal reduction and appreciation are powerful dynamics that reduce the effective cost of housing.

Amortized loans apply a specific amount of each payment to the principal amount owed to retire the loan over the term. Some people consider it a forced savings account; when the payment is made, the unpaid balance is reduced.

The price of homes going up over time is appreciation. While there are lots of variables and it is not guaranteed, it is easy to research the history of an area and make predictions based on supply and demand.

Interest rates are still low and can be locked-in for 30 years. Without considering the tax benefits at all, the appreciation and the amortization dramatically affect the “real” cost of owning a home.

Consider a $250,000 home that appreciates at 2% a year for the next seven years instead of paying $2,000 a month in rent. In the example, the payment is less than the rent being paid even including the property tax and insurance.

rent vs own 020518.png

When you factor in the monthly principal reduction and appreciation and consider additional owner expenses like maintenance and possible homeowners association, the net cost of housing is considerably lower than the rent. In this example, reduced cost in the first year alone is more than the down payment required on a FHA loan.

Based on the assumptions stated, the down payment of $8,750 could grow to $73,546 in equity in seven years. Can you name another investment with this kind of potential that also provides you a place to live, enjoy, raise your family and share with your friends?

Use this Rent vs. Own to make projections using your own numbers and price range. We’re available to answer any questions you have and to find out what it will take to own your own home.

We would love the opportunity to help you with any questions you may have about the new tax laws! 

Please call (480-355-8645) OR email Info@LocateArizonaHomes.com.

We look forward to hearing from you!

Welcome to 4158 S White Drive, Chandler!

This former model home features many luxurious upgrades and is THE best waterfront location in Old Stone Ranch! You will be delighted with the custom paver courtyard to enjoy sunny mornings. The grand entry features a beautiful stone and tile medallion that leads to the formal dining and living rooms where the wrought iron and wood rail adds to the open style floor plan.

The home features beautiful wood floors and high end patterned carpet. The full bath down is tiled throughout. The kitchen features newer, high-end stainless appliances with a gas range for those gourmet cooks plus granite counters, beautiful brushed nickel back-splash and a custom style breakfast room. Cozy up to the stone fireplace listing to your favorite tunes from the surround sound built in speakers in the ample family room. Other upgrades include decor paint, custom draperies, and real wood window sills throughout.

The upper level features a large loft with an elevated den that can also be a great playroom. The dual entry door to the master suite gives an grand entrance and leads to the luxurious bath featuring a soaking tub and shower with tile accents. Garage features an epoxy floor, softwater system, too.

The lush yard features lots of shade and overlooks the lake plus sides to the park and stone waterfall entry. Enjoy many a evening listening to the waterfall in peaceful serenity watching the sunsets and wildlife over the lake.