Senior Planning with

Some clients are looking at down sizing for lower maintenance, having fewer steps to climb, etc and wondering how to finance.  If looking at bridge loans, equity based products, or reverse mortgages please allow me to help supply information and put them in touch with the right people. 

 

There are investors who have always done their own property management, but may need an alternative in the future.  A 1031 exchange into tenants in common property with a triple net lease situation might be appropriate.  This still provides monthly income, appreciation, and a depreciation deduction. 

 

If rents are not increasing cash flow every year, it may be time to exchange the property into one of the tenants in common situations that have an escalator clause.  Rent obsolescence should cause a 1031 exchange to be evaluated.  This obsolescence should also take neighborhoods and appreciation into account.

 

If an investment property has been held for five, ten fifteen years or more the cost basis used for depreciation should be evaluated.  There are times when increasing the tax deduction for depreciation as a result of a 1031 can mean a major tax savings.

 

Using real estate in a self directed IRA is becoming more common.  Compare real estate with other investments over different time spans and it is obvious that there is a place for it.

 

Investors or owners wanting cash for something else have several tools that may help.  Second homes and vacation homes also can be exchanged. 

 

When considering an irrevocable trust, far enough ahead of time, some of the preceding could come into play prior to the Medicaid look back period.

 

Many investors exchange out of a single family rental, duplex, or any other type of investment property and into a vacation/second home. Many tax/legal advisors believe it is possible to perform an exchange on a vacation property which has no rental history but can be considered held for investment.

 

CONDITIONS ARE RIGHT FOR BUYING THE

HIGHER PRICED HOME YOU’VE ALWAYS WANTED

 Higher interest rates and home prices in the past have kept home owners from purchasing larger homes.  The current real estate market conditions, however, are encouraging for many home owners who want to “buy up” to higher priced homes with more to offer.

If you are considering trading up for a larger and more expensive home, conditions for doing so couldn’t get much better.  Interest rates are the lowest they’ve been in two decades, and home prices in many regions are the most affordable they’ve been in years.

     You should consider a few factors before reaching a decision to trade up:

·        Can you afford higher mortgage payments and property taxes?

·        Is your credit record solid enough to qualify for the probable higher monthly mortgage payments?

·        Do you plan to stay in your new home long enough to recoup your investment?

Obviously, you’ll need to sell your current home before getting serious about trading up to a new one.  A healthy real estate market indicates that you’ll have little trouble selling your existing home.  The national Association of Realtors reported in August that sales of existing single-family homes are rising steadily, especially among first-time buyers.  Affordable home prices and low interest rates could make the starter home you purchase several years ago particularly attractive.

          You’ll still need a significant down payment on a new house.  If you can afford the up-front cost, you may want to consider switching the fixed-rate mortgage on your old house for an adjustable rate on a new one.  This could allow you to trade up without increasing your monthly payments.

The type of mortgage you choose also depends on how long you plan to stay in your new home.  A good mortgage lender can advise you on whether a fixed-rate is an advantage is you’re planning on staying for more than 10 years.  A fixed-rate may be better for long term owners who don’t want to worry about rising mortgage payments.

              Trading up may not be worth the move if you’re planning on living in the new home for only a couple of years.  You might have to stay three to five years for your house to appreciate enough to recoup the closing costs.

            Conditions for a move-up haven’t been this good in many years, and you may not want to wit much longer to consider it.  An experienced real estate broker can help you decide if buying a new house now is a good investment for you.

 

 

There are several websites that I am constantly working on.  The home improvement page, INMAN real estate news, economic news, are updated by RSA feed, and the blog page takes care of itself.  Marketing information is available on several sites and pages.  MLS searching is available in about five different formats.  First time  home buyers, those needing down payment assistance or lease purchase-option, credit repair and budgeting, growing families, relocation, and buyers information pages are available.  All the senior planning, downsizing, reverse mortgage, trust, medicaid links, and senior housing pages will get additional attention.  Each website has pages on real estate investment, 1031 exchange, and tenants in common information.