Tax Laws for Second Homes in the US

While you may decide to buy a second home for yourself, n important consideration, which may affect your decision, is that of the tax laws. With the rapid rise in real estate prices, along with a transient growth in the allied sectors, many people have started opting for second homes. In fact the demand for second homes has gone up manifolds in the last few years. A growing trend in this sector has been that of owners utilizing their equity in the first property, to make for the down payments in the second home.

While you are opting for second home, you need to take into account, tax considerations as well. Now, the most important aspect, as far as calculating tax on the property is concerned, is that of the purpose for which, you are buying the second home.  If you are buying the property for your own residential purpose, then the tax applicable would be different from that if you bought the property for rental purpose.

If your property is not rented out for more than 14 days in a financial year, then it would be considered to be a residential property of the owner and not a rental property.  As it is, property tax is deducted on your second home. Similarly, interest on mortgage is also deducted on your second home.

In case if you use the second home, for rental property, then in that case, the following deductions are available:

1. Depreciation on property
You are entitled to make provision for deduction on your rental property.  This amount of depreciation is allowed as deduction, for the calculation of tax.

2. Mortgage interest deductions
As a rental property holder, you are entitled to a deduction on the amount, which you have paid as interest for the mortgage on the rental property.

3. Deduction on Insurance premium paid
Deduction is also allowed on the amount of premium paid for the insurance of the property. However, it only covers the premium paid in the relevant financial year.

4. Deduction on Repair works
As per IRS guidelines, a holder of a rental property is entitled to tax deduction on the value of repair works, which have been carried out on the rental property.

5. Deductions on legal expenses
You are also entitled for deduction on the amount paid by you in the form of legal expenses on the rental property. So, the fees that you have paid to your real estate attorney, is also eligible for deduction, provided, such expenses have been carried out in the relevant financial year.

While a second home may be a very profitable venture, it is very important for you, to decide, the purpose of buying the property. Most times, people buy a second home, mainly for the purpose of putting it up on rent. However, before you make any decision, it is always better, to consider the tax aspects.

Smarter Renting - By Owner vs. Agency

When it comes to renting out your property, a major question, which occupies the mind of many people, is whether to go for rent by owner, or to hire services of an agency. In the last few years, with the tremendous growth in the rental property segment more and more property management firms and agencies have come up. However, a similar growth has been visible in the field of technological advancement for the owners of the property, like the internet, which has made renting out much more easier for the landlord.

If you go for rental by owner option, then in that case, you will be available with a number of advantages. The first advantage of doing it yourself, is that, you get the entire rent and you do not have to share it with some one else. Apart from that, you can settle for a deal which suits your interest the best. You do not have to settle for a compromise.

However, when it comes to rental by owner, there are a number of disadvantages as well.  A major disadvantage of rental by owner is that, an owner will have to go through the entire process of searching for the tenant, to checking his/her credibility, to the rental contract, to other legal aspects, all by himself.

Not only that, if the rental property is far away from the residence of the owner of rental property, then in that case, it becomes all the more difficult for the owner, to see to it, that his property is in good condition or not. Another disadvantage may be that of lack of knowledge in the segment, due to which, you may settle for a rental charge, which is much below the applicable rental charges.

The other option is that of hiring an agent. Typically, hiring a rental agent would save you from a lot of efforts, related to the search of a tenant for the property. It saves you from the efforts, in relation to the checking of the credentials of the tenant. It also, it minimizes the risk of tenants not paying rentals on due date, along with other problems, related to putting your property on rent. Apart from that, it also saves the landlord from lengthy legal procedures of hiring a tenant.

However, low risks are always accompanied by low gains. So is it, in this case, the returns are far low than what you could actually get by individual search. Although, you get peace of mind, you would be sharing a considerable portion of your rent with the agent. With the number of scams and frauds piling up everyday, hiring an agent can be of significant risk as well. In fact, the agent can pose a bigger risk for you.

Both rental by owner and hiring an agent; have their own advantages and disadvantages; it ultimately depends upon your suitability to decide for an option, which suits your needs the best.

Tax Deed Auctions

You will find two types of properties in the market. The first one is the tax deed properties and the second one is the tax lien properties. In case of the tax lien properties once you buy the property you are not quiet sure that the property is yours for ever. Once the real owner pays back the tax, he is again the owner of the property. You as a tax lien buyer would get an interest as well as a fee as a gain. However in case of the tax deed properties once you pay, you are made the permanent owner of the property.

The tax deeds can prove to be quiet beneficial if you put some extra effort into it. You will be required to do a little bit of research. The research is always beneficial. For example you might see hundreds of properties but you still are not satisfied. And on the other hand just suppose that you are satisfied by seeing one property.

As far as the probability of you going wrong is concerned, I must say that the chances are high if you see only one property than seeing lots o properties and selecting one out of them all. This is one aspect of research. Another aspect of research is that you will have to save yourself from biding blind. You should visit the property once or twice and see it with both eyes open. Just check for each area of the property and then decide whether the bid which you have chosen is correct or not. If you find that you are bidding high then you should immediately lower the bid.

For example if you have decided to bid at $60000 and you find during the inspection that this is too high value for bidding for this property then you should lower your bid to say around $50000.

What to avoid?
After viewing the property I must say that you will have to not become complacent. In fact you will have to keep in touch with the property always. This is because at some stage the owner might pay back the tax and hence the property is now set free. This makes your search worthless because the property which you have seen is now again free from the tax deed auction.

Hence you should really avoid seeing only one property as well as you should be in contact of the property always. This is really very important because all of your hard work can go down as wastage as I have explained above.

Hence if you want to succeed in the tax deed auction then you will have to be in constant contact with the properties from which you are going to buy one.

Spain Property Rental Profits with Viral Marketing

Property rentals have become quite popular in recent times. As it is, you can earn a lot from property rentals, if you possess proper knowledge as to how to carry out marketing for your property, so that more and more people can visit your property. So, no matter if it is a villa rental, a hotel or an apartment for rent, you can always put great marketing techniques, to reap rich dividends.

Viral marketing is fast catching up as an effective way to promote your products. By way of viral marketing, you can get your message across to a large number of people, thereby improving upon your chances of earning great profits.

Although there are a number of ways of viral marketing, the internet is by far, the best way to carry out viral marketing. In fact, internet viral marketing is by far the best way to boost up the profit margins, as far as property rentals are concerned. A major advantage of internet as an effective viral marketing tool is its cost effectiveness. So, by spending a mere $5 to $15 per month, you can advertise your Spain property rental to tourists all across the world. As far as the internet is concerned, you can advertise your property rentals, by way of rental listings.

These listings are viewed by millions of people all across the globe, everyday. Also, these rental listings are connected to your own websites; and as far as your website is concerned, you can put up as many photos and updates as you want. You also have the advantage of offering online specials and discounts to Internet users. Now, the work is still not complete. In order to make your website more popular with the search engines, you should include travel articles and city information about nearby areas. This way, your websites would get more visits per day and it would become more popular as well.

Now, the more popular your website is, the better are your revenues as well, both in terms of tourist inflow, as well as in terms of revenues through advertisements. So, if you own a rental property in Madrid, Spain you can mention ways of travelling to Madrid, ways of transportation, various tourist attractions etc. you can add pictures as well. You can apply the same method for promoting your property in Mijas, Costa del Sol, Fuengirola, Puerto Banus, Elviria and Benalmadena. Tourists will be searching online for a place to stay and your property would be the best place to look for. You can also, promote for various events and recreation, in case if there is scope for it. So, if your property rental is near a major tourist or sports attraction or where major events take place, then you must add feature regarding these occasions on your website.

Along with that, you can also invite your previous guests. So, people who have made a visit to your property rental in the past, can be invited to make another trip and if they were satisfied with your rental property, the last time they made a visit, then there are few chances that they would not like to do it this time around.

Viral marketing has been an effective marketing tool, especially in case of property rentals. You can therefore make use of this technique, to reap rich benefits.

Thailand -Entry Level Investment Property with Finance

Thailand has emerged as one of the most promising Asian economies of the century. As it is, it has it has witnessed an overall economic development in the last few decades. As a direct result of this economic growth, we were also witness to a growth in the real estate sector in Thailand.

Thailand has been exceptionally well in promoting its tourism. In fact, tourism forms the back bone of the Thai economy. As a result, vacation homes and vacation rental properties are in great demand. Also, more and more people are settling up in Thailand, to get a feel of the ever growing prosperity. Due to this reason, real estate prices have undergone sea change.

However, investing in the Thai real estate industry may not be a cakewalk for you, if you are an overseas investor. The main reason for this is the lack of financial institutions, offering loans to overseas investors. This may hamper your prospects of investing in real estate in Thailand.

However, there are a number of alternatives which can help you buy a real estate property in Thailand. The following are some of the points which can help you get finance for your real estate investment in Thailand.

Although most lending institution is not very keen to finance real estate investment by overseas investors, however, you may still find a number of alternate borrowing options. One such option is the finance option by the real estate developer itself. This may prove to be an excellent option for you.

You may take the help of the internet for finding alternate lending options in Thailand. The internet can in fact provide you with the most extensive piece of information in this regard. You can search for information in regard to real estate developers, lending institutions, financial institutions and so on. Not just that, you will also find articles on the real estate segment in Thailand.

Another way of finding credit for your real estate investment in Thailand is to hire the services of a real estate agent. A real estate agent would not only help you in getting the best real estate deals in Thailand real estate market, but would also help you in getting finance for the real estate investment.

As it is, Thailand is fast developing into, a real estate hub, especially in case of vacation homes and properties. Thailand poses immense potential, as far as real estate development is concerned. Due to this reason a number of foreign investors are investing in the real estate sector in Thailand.

Guidelines on Property Management

Property management is a very vital feature of real estate investment. If your real estate property is in perfect shape, then it can fetch you great returns, when you sell it. Proper management of your property becomes more or less of a necessity, when it comes to rental property investment. This is because, a rental property is not only an asset, but it also is, a source of income for the landlord.

Due to this reason, it is in your best interest, to keep your property in great shape, to see to it, that, your get the best rentals on your property. However, managing rental properties might be a tough cookie. Despite this, it needs to be remembered, that, it is in your best interest to manage your rental property properly.

The following are some of the ways, which can help you in managing your properties for rent:

1. The first step of rental property management starts with the hiring of the tenant. Do take good care to check the credentials of the tenant for your property. If your tenant is of vandalizing nature, then you have a potential threat to your property. Therefore, it would be in your best interest, to make contact with the previous landlord of the tenant, before you enter into a contract. This would help you a great deal. Also, you should not miss out on the security deposits. If the tenant causes serious damage to your property, then in that case, you always have the security deposits to compensate for the damages.
2. Professional advice is also of great help. Therefore, hiring a professional property manager would also be a good idea. A professional property manager can be quite useful in managing your property well and seeing to it that no serious damage is done to your property. A property manager provides you with a sense of security, which is very essential.
3. Regular repair of your property, including painting, is a feature, which you should never miss. Therefore, it is very important for you to see to it that, you keep it in proper shape, in order to get the best rentals out of it. An important step in this regard is to maintain your property, by way of proper upkeep. So, regular repair works on your property can actually be a lot beneficial.
4. Apart from the regular repair works, your property would some times, need some serious renovation to be done. For this it would be advantageous on your part to make provisions in the form of depreciation reserves, every year, so that when you finally need to do some serious renovation, you have some reserves to fall back on, which would not let you feel the pinch.

Rental property management is a very important factor for any landlord and if you manage your property properly, then in that case, you will always get the best benefits in the long run. As it is, you are also entitled for tax deduction on the basis of the repair works conducted by you on your rental property.

Rental Property Tax Deductions

Rental property investment is one of the most popular investment options in recent times. As it is, it has been able to generate a lot of attention in the current scenario. However, it needs to be mentioned here, that all your rental revenues are taxable, under provisions of the IRS. However, you can avail a number of tax deductions, which can be availed by you, to reduce your tax burden.

The Internal Revenue Service, or the IRS, offers a number of tax benefits to holders of rental property. As a holder of rental property, you can avail these tax deductions and save a lot of money in the long run. The following are a few of the deductions, which are available to a rental property holder:

1. Depreciation on property
You are entitled to make provision for deduction on your rental property.  This amount of depreciation is allowed as deduction, for the calculation of tax. However, depreciation covers only the value of construction and not that of the value of land.

2. Mortgage interest deductions
As a rental property holder, you are entitled to a deduction on the amount, which you have paid as interest for the mortgage on the rental property. However, you can not get a deduction on the amount paid as part of the principle amount.

3. Deduction on Insurance premium paid
Deduction is also allowed on the amount of premium paid for the insurance of the property. However, it only covers the premium paid in the relevant financial year. Therefore, any advance payment, would not be eligible for deduction.

4. Deduction on Repair works
As per IRS guidelines, a holder of a rental property is entitled to tax deduction on the value of repair works, which have been carried out on the rental property. As it is, your rental property would need regular repairs, as it is not just an asset for you, but also a source of earning for you as well. This amount that you would spend on the repair of your property can also form a basis for tax deduction.

5. Deductions on legal expenses
You are also entitled for deduction on the amount paid by you in the form of legal expenses on the rental property. So, the fees that you have paid to your real estate attorney, is also eligible for deduction, provided, such expenses have been carried out in the relevant financial year.

6. Deductions on other professional services
You are also entitled for deduction on amounts, which you have paid for other professional services, such as payments to accountants, realtors etc. However, such payments should have been paid in regard to the rental property and not for any other purpose.

As it is, apart from the above, other deductions, like that of transport and communication expenses incurred on the rental property, or for the purpose of collecting revenue, are also eligible for tax deductions. These deductions help a lot in lowering the tax burden from your shoulders.

Landlord Tenants Rights

Cordial relationship between the landlord and the tenant is a very important aspect of renting a property. This is because, unless and until, there is cordial relationship between the tenant and the landlord, the rental agreement would not last very long.

Therefore, it is very necessary, to maintain proper relationships between the landlord and the tenant. Knowledge of the landlord and tenants rights can be of great help in avoiding, as well as resolving the conflict between the landlord, as well as the tenant.

The first important right of both the parties is in regard to the signing of the rent agreement.  A rent agreement is a written legal document between the landlord and tenant. It is very vital in protecting the rights of both the parties. The rent agreement is usually for a period of one year or of any other mutually agreed period.

Another right of that of the landlord is that in regard to security deposits. It is the right of the landlord, to hold security deposit, which is refundable, at the time of termination of the rental agreement, i.e. at the time, when the tenant vacates the property. It is the tenants right, to get refund of his security deposit, less any amount which was spent on the repairs of the rental property, caused due to the tenants fault.

The rental agreement also mentions the due date of payment of rent. It also mentions the rights of the tenant and the landlord, if the tenant does not pay the rent on due date. It also contains clauses in regard to the vacation of the property as well.

The tenant has full right to get receipts of the payment of rent. Apparently, it is the duty of the landlord, to furnish receipts, in regard to the payment of rentals. If the landlord refuses to furnish the receipts, then in that case, the tenant has every right to go for the legal course of action.

Another right of the tenant is that of examining the property before he/she enters an agreement. This is done, to avoid any conflicts in future. As it is, the tenant should always check the property, before he enters the contract. This is because, if there are any defects in the property, then they need to be mentioned in the rental agreement as well, so that, the landlord doe not deduct charges pertaining to the damage to the property, which was there before the tenant enters the premises.

The landlord too has the right to check the credentials of the tenant, before he enters an agreement with him. If in case, the tenant refuses to furnish details of his previous landlord, then the landlord may not enter an agreement with him.

Landlord tenant right play a very important role in the landlord tenant relationship. As it is, cordial relationship between both is very necessary and knowledge of rights of both the parties can play a very vital role in it.

How to Create Rental Contracts Online

Tenants continue to be a major force in the national housing scenario. This has led to many people opting for rental properties. There may also be a few people, who did not buy a property, for the purpose of rental investment. But due to some circumstances, like non availability of funds to make repayments, they were forced to put it on rent.

The rise in the popularity of rental property investment has prompted many investors, to invest in rental properties, for reaping rich benefits. Another important feature of the rental property market in the last few years has been the growing influence of technology in this field. The internet has played a very important role in the growth of rental property markets.

Nowadays, tenants can search for a rental property on the internet. While the property owner has the advantage of advertising his property, the tenant gets the advantage in his search for a suitable rental property. Another major advantage, which the internet has put before us, is that of an online contract.

Nowadays, property owners have the option to create an online rental contract. With the help of user friendly tools, which virtually guide the user through each step. An online rental contract has many advantages, such as the fact, that they are easy to use, convenient and affordable. At the same time offer a minimum degree of legal accuracy.  More so, it helps a landlord to develop a lease contract, without much assistance.

While you may be available with a number of websites, which may offer to help you with legal contract, it is always better, to avoid any kind of haste, when it comes to designing the online rental contract.

It is always better, to avail the services of a well known website, in this regard. You should pay considerable attention to areas like quality and features, in deciding the right online contract website. You also need to look out for websites that give you ample information in regard to specific laws on a state wise basis. This would help you to use the site to design a legally sound contract, which would offer both parties a minimum degree of protection.

A lease wizard is a software feature, which helps in the generation of a lease contract. Also, they are often installed with live features.  It is therefore, better, that you select a website which has a lease wizard feature in the website.

Online rental contracts have become very popular in recent years. As a result, a number of websites, dealing with online rental contracts have mushroomed as well.

Bellingham & Whatcom County Real Estate Statistics

The ongoing economic scenario has had a negative impact on the real estate sector as well. Although the situation may not be as bad as the rest of the sectors, it is definitely not the best of times for the real estate sector.

With the average real estate sales plummeting in the later half of 2008 in both Bellingham and Whatcom County, the worst fears of industry analysts have come true. In fact, the number of real estate transactions went down by about 40%. Along with this, the average price of the property was also hit badly. While the average home in Bellingham selling for 14% more than a year ago; the average home sale in Lynden dropped by almost 20%.

The median price in Bellingham increased 0.2%. For Whatcom County as a whole, average home prices were up 4.1%, while the median sales price dropped by 3.3%. Overall inventory levels are remaining stable, with 684 single family homes available for sale in Bellingham in mid August of this year compared to 679 in the same period last year.

As far as the sellers market is concerned, the situation is not very good, but not very bad either. According to a rough estimate, around one third of homes sold in the Bellingham real estate market stay in the market for as long as a month, or less than that. This is a slightly higher ratio than that of last year. These houses sold at around 2% less than the list price, as compared to around .5% less than the list price last year.

So, unlike last year, when real estate investors were buying any thing, the situation today is somewhat different. Therefore, if you are selling your property, then you need to see to it, that your house must offer the best location, the best condition and the best value for the dollar. In case you do not satisfy any of the condition, then in that case, you will have to make adjustments in the price of the house.

As far as the buyers market is concerned, it is actually brilliant. The current scenario has not only put a brake on the rapidly increasing prices of real estate, it also means shopping time for real estate investors. So, if you had missed the bus earlier, then this is the right time for you. However, since it is shopping time, therefore, you would not be alone and so, it is better to stay away from dilemma. Therefore, you may lose a great deal, if you do not take quick decision. Apart from that, good interest rates, you also has really good offers that you had not seen in a long time.

As it is, statistics definitely suggest, that it is indeed a buyers market. One must therefore, lose no opportunity, to buy properties at really low rates.