TAX BENEFITS OF HOMEOWNERSHIP (www.horizonpropertiesguam.com)

Owning a home is one of those landmarks that signify financial adulthood. And one of the things that responsible financial adults do is get professional help when the situation requires it. Taxes are one of those areas that often do warrant calling the pros in.

I'm not just shilling for the tax prep industry here, either: The ultimate aim of using a tax professional is to make sure you get every deduction, credit and other tax advantage for which you qualify, without jacking up your chances at triggering the universally dreaded Internal Revenue Service audit by claiming dubious deductions.

Your mortgage debt is fairly small, as was your home's purchase price, though I don't know whether they are large or small in the context of your overall financial picture (i.e., income, assets, investments, etc.).

The fact that you saved or somehow came up with such a sizable chunk of change to put down makes me hesitate to assume that your finances are as simple as your mortgage balance might otherwise lead me to believe.

So, it might be the case that you can easily handle your own taxes -- in fact, it's even possible that your real estate-related deductions won't even outweigh the standard deductions, so that filing a simple form without even itemizing your deductions is actually the financially advantageous move.

Whether that's the case cannot be determined in a vacuum -- you may have other financial and tax issues going on. But with software and tax preparation services as inexpensive as they are, starting at under $20 for simple returns, I think it behooves you to get some professional advice and ensure you get the deductions you need.

Hiring a tax preparer might be a worthwhile investment to make, even if just this year, so he or she can brief you on what records you should keep and strategies you should do moving forward, like home repair and improvement receipts, or documentation of your use of an area of the home as a home office.

Now, let's talk more substantively about the deductions that are available to you, in the event you do decide to itemize your taxes (IRS Publication 530 offers a more nuanced view into Tax Information for Homeowners):

1. Mortgage interest deduction. Assuming this home is your personal residence, 100 percent of the mortgage interest you owe and pay before Dec. 31, 2011, is deductible on your 2011 taxes. In January, your mortgage lender will send you a form documenting the precise amount of interest you paid, although most lenders also now make this form immediately available to borrowers online.

Chances are good that you paid some amount of advance interest on your home loan at closing -- expect to see that on your statement from your lender, but you should also be able to find it on the HUD-1 settlement statement you received from your escrow agent at closing.

2. Property tax deductions. Again, assuming that this is the home you live in most of the time, you should be able to deduct 100 percent of the property taxes you've paid to your state and/or local taxing agency this year.

3. Closing-cost deductions. Discount points and origination fees paid to your mortgage lender and/or broker at closing are frequently deductible, but there are rules around this, which tax software and/or professionals can help you make sure you meet. Note that, according to Internal Revenue Service Publication 530, "You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home."

There are various home improvements (especially those that increase your home's energy efficiency), state and local tax credits for buying a foreclosure, and other tax advantages that might be available to you.

My advice is to work with an experienced, local tax preparer or, at the very least, use reputable tax preparation software to ensure that you get the maximum tax advantages available to you as a result of your new role as a homeowner.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Fence Etiquette: Tips to Avoid Neighbor - Horizon Properties Guam (www.horizonpropertiesguam.com)

If you practice fence etiquette and bone up on local zoning regs, you can avoid neighbor disputes.

Avoid fence disputes by practicing fence etiquette—a good neighbor policy. If you follow zoning regulations and share basics with neighbors before construction, you can install a new fence AND stay on good terms with the folks next door.

Must-dos

Observe boundaries: Don’t risk having to tear down that fence by going even one inch over your property line. Study your house line drawing or plat or order a new survey ($500 to $1,000) from a land surveyor to be sure of boundaries. Fence companies usually install a foot inside the line, to be on the safe side.

Respect limits: Fencing companies obtain permits and must know local zoning regulations for height, setbacks, and other restrictions. Height limits typically are 6 feet for side and back yards; 4 feet for front yards. More restrictive rules often apply to corner lots, where blind curves can limit driving visibility. To avoid disputes, review restrictions with your fence company before choosing a fence.

Follow HOA rules: Fencing companies are not responsible for knowing homeowners association dos and don’ts; that’s your job. Unless you want to suffer committee wrath, and engage in a dispute, follow HOA guidelines. HOAs can dictate style, height, and maintenance. If your HOA wants all structures to match, you won’t have much wiggle room.

Nice-to-dos

Share your plans: No one likes surprises. Before installing, save yourself a fence dispute and have a conversation with neighbors. If property line issues exist, resolve them before installation. No need to show neighbors the design—that’s just inviting trouble. They have to live with your choice unless it lowers property values or is dangerous.

Put the best face outward: It’s common practice to put the more finished side of your fence facing the street and your neighbor’s yard.  

Maintain and improve: It’s your responsibility to clean and maintain both sides. If an aging section starts to lean, shore it or replace it.

Good-to-knows

• The term “fence” includes trees or hedges that create barriers.

• If you have a valid reason for wanting an extra high structure, to block a nasty view or noisy street, apply to your zoning board for a variance. Neighbors can comment on your request during the variance hearing.

• If your neighbors are damaging your fence, take photos and try to work it out with them first. If they don’t agree to repair it, take your fence dispute to small claims court. Award limits vary by state: $1,500 in Kentucky to $15,000 in Tennessee.

Ann Cochran has written about home improvement and design trends for Washingtonian, Home Improvement, and Bethesda Magazine. 

Read more:

http://www.houselogic.com/home-advice/fences/fence-etiquette/#ixzz1ikOpTw1o

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For additional information contact Horizon Properties Inc.

Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Real Estate - Horizon Properties Guam (www.horizonpropertiesguam.com)

By Kerri Panchuk kpanchuk@housingwire.com

• March 6, 2012 - 5:47pm

The Echo Boomers, better known as children of Baby Boomers and Gen X, are the future of the housing market. Unfortunately, they continue to struggle financially creating uncertainty in the real estate market, the Bipartisan Policy Center said.   

The organization, which brings together bipartisan lawmakers, released a study called "Demographic Challenges and Opportunities for U.S. Housing Markets." The report suggests demographic trends are potentially a boon and a bust for today's housing economy.

As boomers age and look to downsize, younger Americans are seeking opportunities to create homes. The report says growth in the 65-plus population will create new demand for "affordable, accessible housing." Meanwhile, echo boomers over the next 20 years have the potential to create the demand needed to stimulate housing. The only problem is their demand remains contingent on economic growth trends and policy tools.

The report says between 1975 and 2000, the United States saw two periods of prolonged increases in median household income, but a shift occurred in 2000, impacting younger generations.

"Since 2000, however, the real median household income has hovered between $68,000 and $71,000, ending the decade just below $68,000 — approximately equal to the 1998 median household income in real dollars," the report said.  

The study added that rising income levels are inextricably linked to the ability to buy homes, creating a demographic dilemma as more young Americans struggle to form households.

Evidence of those struggles include more younger Americans living at home and increased rental trends among Americans in their thirties.

"First, working-age adults 35 years and older either have shifted from owning homes to renting or are delaying the transition to homeownership," said the Bipartisan Policy Center. "Second, Echo Boomers are maturing into adulthood, entering the housing market and searching for rental housing."

"Even with higher levels of rental-housing demand from 2010 to 2020, however, the most pessimistic demographic scenario developed here would result in national homeownership rates above 60 percent between now and 2030," the report concluded.

The report says 22% of 18- to 24-year-olds in 2010 lived in poverty and the median income of people aged 15 to 24 dropped 9% between 2009 and 2010. And of the 25- to 34-year-olds who moved in with family and friends to save money about half would have lived below the poverty line otherwise.  

The lowest income quintile in 2009 was for those making $11,550 per year, which is down 9% from 1999 and only 10% above 1975 levels in real dollars. The second lowest quintile had income levels below $30,000, which is 7% lower than inflation-adjusted income from 1999 and 13% higher than 1975 levels.

Looking ahead, the Echo Boomers born after 1981 are expected to be the saviors of the housing market, but their financial agility entering adulthood could slow them down.

"Young adults carry high levels of credit card and student loan debt; even young people who already had formed households had higher debt loads in 2009 than people of the same age 10 years earlier. Rates of marriage declined in the 2000s from 8.2 per thousand to 6.8 per thousand," the report said.

In addition, baby boomer households also lost wealth in the recession, which means younger people can no longer count on building off their parents financial wealth. 

While the main theme of the report stresses younger Americans opting for rental housing longer, it also warns rents are getting high and a recovery with increased immigration could push multifamily housing prices beyond levels of affordability. 

For additional information contact Horizon Properties Inc.

Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Buying is cheaper than renting in most U.S. cities - Horizon Properties Guam (www.horizonpropertiesguam.com)

By Les Christie August 16, 2011: 6:07 AM ET

NEW YORK (CNNMoney) -- Home prices have taken such a beating and demand for rental units has increased so much that it's now cheaper to buy a two-bedroomhome than to rent one in most major U.S. cities.

According to real estate web site Trulia, buying was cheaper than renting in 74% of the country's 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying.

In addition to a continuing decline in home prices, rock-bottom interest rates have added a lot of weight to the buy side of the scale. The overnight average rate for a 30-yearfixed was just 4.19% on Monday, according to Bankrate.com. A 15-year fixed averaged just 3.43%.

Add in the tax perks of home ownership and for those who can afford it (and who can actually qualify for a loan), it certainly is a buyer's market.

"It's a personal decision, of course. But if you have a steady job and you are planning to stay for seven years or more and have enough cash to put 20% down and enough left over for seven or eight months of expenses, you're better off buying in most places," said Daisy Kong, a spokeswoman for Trulia.

Top buyer's markets

Las Vegas offered the most compelling buy-side math, Trulia's survey found.

Prices there have plunged more than 59% from their August 2006 peak, according to the S&P/Case-Shiller home price index.

The median price of a two-bedroom, two-bath condo or townhouse is about $60,000, according to Trulia, a ratio of only six times the median annual rent of a similar rental apartment, which is $9,700.

Monthly mortgage payments on a median-priced Vegas condo would come to only $256 on a 30-year, 5% interest loan. Even factoring in property taxes and common charges of roughly $300 a month, the monthly amount is still much lower than the $810 in monthly rent they would pay on a similar place.

Detroit, according to Trulia, is another metro area where buying is better. The median price for a condo or townhouse is about seven times annual rent. Home prices in Mesa, Ariz. and Fresno, Calif. also clock in at seven times rent.

Arlington, Texas, Sacramento, Calif., Phoenix and Jacksonville, Fla. all had buy-rent ratios of eight, Trulia said.

Top renter's markets

Even though rents average $2,980 a month in New York (the highest of any of the 50 markets), it's still the best city for renters, according to Trulia's survey.

Paying for the same kind of two-bedroom Manhattan apartment would cost 36 times as much, nearly $1.3 million.

Big money towns

One surprising place where renting is cheaper is Ft. Worth, Texas; buying exceeds renting costs by 32 times. Part of the reason is there are relatively few condos in the city and they tend to be upscale and costly. That, combined with low rents of about $9,500 a year, make renting cheaper.

Omaha, Neb., where buying is 27 times annual rents, Seattle and San Francisco, which both clock in with purchase prices that are 24 times rents, and Kansas City, at 22 times rents, are other places where renting makes financial sense.

Should you rent or buy?

The buy-rent calculation is just one part of the decision-making process. Other factors include:

·   How long you plan to stay. If you're not keeping the home for several years, transactional costs of buying and selling (e.g; commissions, closing costs) can wipe out any buying edge.

·    Whether you have cash for closing. It's not easy to find banks willing to lend more than 80% of the cost of a home. That means buyers have to come up with 20% down, plus closing costs. On a $200,000 home, that's $40,000.

·     Whether you can cover all the homeownership costs. It's not just the mortgage: There are property taxes, insurance, heat, utilities and regular maintenance.

·   Whether you can claim the tax advantages of homeownership. Mortgage interest is deductible and can shave a lot off tax bills but this benefit accrues mostly to high income earners with substantial mortgage payments. Many borrowers claim the standard deduction on their taxes and so derive no savings from the deduction.

Even where it's cheaper to rent, it doesn't necessarily mean renters will come out ahead, according to Ken Johnson, a real estate professor at Florida International University and co-author of a new study on whether it's better to buy or rent.

"Paying off a mortgage is a kind of forced savings," he said. Each check homeowners write lowers the balance they owe and increases the value of their property holdings. That, unlike cash in a bank account, is not easy to tap.

Where the jobs are

Homeowners have to go through a lengthy and costly process to access it by taking out a home equity loan or a cash-out refinance -- actions they tend not to take unless there's a specific need.

Depending on where they live, renters may save on monthly expenses but, unlike the forced savings of mortgage payments, they won't have anything to show for their monthly payments in the way of savings.

Ultimately, however, the decision whether to buy or rent depends on each person's situation and their plans for the future.

While buying a home may be an attractively cheap option these days, many mortgage holders have found out the hard way that the joys of homeownership can turn sour should the unexpected strike. 

For additional information contact Horizon Properties Inc.

Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability.