(Williamsburg, VA) In a difficult housing market, buyers and sellers rely upon good, solid real estate counsel to close deals. Many properties in the Virginia real estate market have lost value over the last two years, and sellers are faced with the prospect of short sale or foreclosure.
Elaine VonCannon, a REALTOR with Coldwell Banker Traditions in Williamsburg, is providing buyers and sellers solid solutions and additional help in the sale or purchase of a home to make the transition easier in this climate. VonCannon says, “In the current market, in most cases I have provided a free one-year home warranty to home buyers and home sellers.”
To make certain pricing reflects what an appraiser would price the property for, she also offers a free Current Market Analysis to buyers and sellers. “I will continue to provide complimentary CMAs and home warranties until the real estate market is stabilized,” said VonCannon. Buyers in this real estate market want assurance they have little or no out-of-pocket home repair expenses during the first year of home ownership. Sellers need to be listing their properties within the guidelines of the CMA.
To complement VonCannon’s residential and commercial real estate business, her business partner, John Starke, offers financial and investment services. Starke is offering VonCannon’s clients a free asset evaluation. Some other services he provides include insurance, long-term care insurance, estate planning and retirement planning.
In many areas of the United States, including Southeastern Virginia, the housing market is nearing bottom. According to an article by the Wall Street Journal in November 2011, “Bank of America Merrill Lynch economists expect the foreclosure process to speed up in nonjudicial states next year, with liquidations peaking in 2013. This is partly why they expect home prices to drop another 8% on average nationwide over the next 18 months before bottoming.”
Currently, property is a good value in several Virginia counties. Investment is highly recommended in real estate in Central Virginia, the Northern Neck, Hampton, Newport News, James City and York Counties. This is mainly due to price reductions over the last two years in these geographic areas.
Elaine VonCannon joined Coldwell Banker Traditions in 2011 because the real estate agency was expanding, and had a reputation for delivering the best client service in Williamsburg, Virginia. VonCannon has built her real estate business model on customer service, so Coldwell Banker’s reputation dovetails nicely with her philosophy. This includes keeping in touch with clients, past and present, returning phone calls promptly, and showing homes in the evenings and on weekends and holidays.
Elaine VonCannon believes there is no magic bullet for selling or buying a home. The buyer and seller need to have the right agent who understands the timing of contracts and is a good negotiator. A REALTOR is preferred since he or she will abide by the code of ethics.
For more information on homes for sale in Virginia, visit: http://www.voncannonrealestate.com or http://www.estatesinvirginia.com. Or, call Elaine VonCannon directly at 757-288-4685.
Monday, February 6, 2012
Monday, January 16, 2012
Buying and Selling a Home: Assessment vs. Real Estate Listing Price
Real estate assessment values are essentially taxes determined by the county or municipality where a property is located. These taxes are collected from the property owner and used to pay for municipal services.
Assessment values on properties in Williamsburg, James City and York Counties are on the decline in 2010 and 2011. Yet actual home prices are showing great variance – either above or below assessed value. For example, in York County two out of eight homes sold for less than assessed value in 2011 while the other six sold for more than assessment, according to an article in the Virginia Gazette, “Price Vs. Appraisal” by Steve Vaughan. The article also noted that in James City County pricing above or below assessed value has been found even in the luxury real estate market.
James City County Real Estate to Decline 6% in Assessed Value by July
Final 2011 end-of-year figures indicate pricing for real estate assessments in James City County are down. Assessments in James City County completed in early 2010 declined by .9%. According to research collected by Steve Vaughan, “real estate assessments in James City are estimated to drop by 6% come July.” James City County properties are assessed every two years and are due to be re-assessed in 2012.
York County Property Assessments Down in 2010 & 2011
Vaughan’s article also indicated York County assessments are on the decline. Decreases of 1.4% in 2010 and 4.5% in 2011 are cited. Rick Millman, the County Assessor said, “Homes below $250,000 have held up better than town homes or condos. Homes in the $250,000-750,000 range have not done as well because of the limited number of potential buyers that can, or are willing to purchase homes in that range.” Meanwhile, Millman indicated waterfront properties and luxury homes have been able to hold their value.
How Important is a Tax Assessment When Determining Market Value?
Buyers and sellers should not use the tax assessment as a guideline for the value of a home. Many home sellers do not understand that tax assessment value has little to do with the market price for a home. In real estate transactions, market price is determined by an appraisal.
The Current Market Analysis (C.M.A.) is a wonderful tool REALTORS use in order to price a home before it is placed on the market. This report will survey comparable properties and recommend realistic price ranges. Matters affecting current real estate price variation include: age (when home was first built and recorded), short sales and foreclosures that have closed in the past 12 months, location of the home, and other factors.
Home Valuations on Popular Real Estate Listing Websites
Many homeowners are using websites that display free or low cost real estate listings to find values on their homes. This type of property valuation is fraught with difficulties and produces mostly inaccurate market pricing. These websites are usually reliant upon computer-generated methods to determine pricing on a property, and their estimates are generally based on averages.
When a seller lists a property, no matter where it is located, he or she should have a qualified REALTOR gather real time home pricing information. Do not rely on tax assessments or real estate websites to provide accurate, current information on home listing prices.
In conclusion, tax assessments are not the primary source of pricing information for real estate transactions, in any real estate market. Assessments exist and are collected so a tax base can provide the necessary support for a community. For pricing, request a Current Market Analysis from a real estate professional. Buyers truly interested in a property will have an appraisal conducted because it will be required by a lender or bank to close the sale.
For a free C.M.A. on your home for sale in Virginia, email voncannonrealestate@cox.net, or visit http://www.voncannonrealestate.com.
Assessment values on properties in Williamsburg, James City and York Counties are on the decline in 2010 and 2011. Yet actual home prices are showing great variance – either above or below assessed value. For example, in York County two out of eight homes sold for less than assessed value in 2011 while the other six sold for more than assessment, according to an article in the Virginia Gazette, “Price Vs. Appraisal” by Steve Vaughan. The article also noted that in James City County pricing above or below assessed value has been found even in the luxury real estate market.
James City County Real Estate to Decline 6% in Assessed Value by July
Final 2011 end-of-year figures indicate pricing for real estate assessments in James City County are down. Assessments in James City County completed in early 2010 declined by .9%. According to research collected by Steve Vaughan, “real estate assessments in James City are estimated to drop by 6% come July.” James City County properties are assessed every two years and are due to be re-assessed in 2012.
York County Property Assessments Down in 2010 & 2011
Vaughan’s article also indicated York County assessments are on the decline. Decreases of 1.4% in 2010 and 4.5% in 2011 are cited. Rick Millman, the County Assessor said, “Homes below $250,000 have held up better than town homes or condos. Homes in the $250,000-750,000 range have not done as well because of the limited number of potential buyers that can, or are willing to purchase homes in that range.” Meanwhile, Millman indicated waterfront properties and luxury homes have been able to hold their value.
How Important is a Tax Assessment When Determining Market Value?
Buyers and sellers should not use the tax assessment as a guideline for the value of a home. Many home sellers do not understand that tax assessment value has little to do with the market price for a home. In real estate transactions, market price is determined by an appraisal.
The Current Market Analysis (C.M.A.) is a wonderful tool REALTORS use in order to price a home before it is placed on the market. This report will survey comparable properties and recommend realistic price ranges. Matters affecting current real estate price variation include: age (when home was first built and recorded), short sales and foreclosures that have closed in the past 12 months, location of the home, and other factors.
Home Valuations on Popular Real Estate Listing Websites
Many homeowners are using websites that display free or low cost real estate listings to find values on their homes. This type of property valuation is fraught with difficulties and produces mostly inaccurate market pricing. These websites are usually reliant upon computer-generated methods to determine pricing on a property, and their estimates are generally based on averages.
When a seller lists a property, no matter where it is located, he or she should have a qualified REALTOR gather real time home pricing information. Do not rely on tax assessments or real estate websites to provide accurate, current information on home listing prices.
In conclusion, tax assessments are not the primary source of pricing information for real estate transactions, in any real estate market. Assessments exist and are collected so a tax base can provide the necessary support for a community. For pricing, request a Current Market Analysis from a real estate professional. Buyers truly interested in a property will have an appraisal conducted because it will be required by a lender or bank to close the sale.
For a free C.M.A. on your home for sale in Virginia, email voncannonrealestate@cox.net, or visit http://www.voncannonrealestate.com.
Thursday, December 29, 2011
Luxury Homes for Sale in Virginia a Good Bargain
(Williamsburg, VA) Reduced pricing on real estate listings in Williamsburg and surrounding areas indicates many sellers are still over leveraged and experiencing some sort of financial hardship. Divorce, death and the necessity to relocate also create a need to sell quickly. In Virginia, there are many opportunities to find luxury homes, waterfront estates, historic homes and estate properties. Farms, farmettes, equestrian properties, homes with acreage and waterfront properties are also listed. Many properties are priced to sell and are a good value.
The pressures of the new economy are affecting real estate listings over $500,000. According to Virginia Association of Realtors (VAR), median home values in the Chesapeake Bay and Hampton Roads region of Virginia declined 9.8% since last year; homes prices in Norfolk, Virginia Beach and Chesapeake are reduced 15.9%; and in Richmond, there are 6% decreases. Northern Virginia median home sales prices have increased by 1%.
Foreclosures and short sales are plentiful in luxury real estate. Coldwell Banker recently unveiled a new program for luxury buyers and sellers: Coldwell Banker Previews. This allows luxury buyers a detailed look at exclusive properties. Many real estate professionals recommend casting a wider geographic area for a home search to find the best deals.
Elaine VonCannon, a Coldwell Banker REALTOR, recommends taking a closer look at homes for sale in several areas of Virginia. “Look at waterfront homes in Chesapeake Bay Country and estates and historic homes in Williamsburg, James City County and York County. In York, Henrico and Chesterfield Counties, buyers will find horse farms and estates with equestrian facilities for sale. High end home buyers in these areas of Virginia will find excellent bargains right now,” said VonCannon.
“Interest rates are historically low, at approximately 4% for well-qualified buyers,” said VonCannon. “This, combined with the sharp reduction in prices for luxury homes in Williamsburg, Richmond, and Tidewater Virginia, creates an excellent opportunity for home buyers,” she added.
Although median sales prices for homes are declining in some Virginia real estate markets, the number of home sales across the Commonwealth is stabilizing, according to VAR QE3 2011 report. In Richmond, Southside Virginia, Chesapeake Bay and Hampton Roads, the number of home sales has increased, indicating many real estate investors see now as a good time to buy and find values.
Visit VonCannonRealEstate or EstatesInVirginia.com to view property listings in Virginia. Or call 757-288-4685 to schedule some viewings.
The pressures of the new economy are affecting real estate listings over $500,000. According to Virginia Association of Realtors (VAR), median home values in the Chesapeake Bay and Hampton Roads region of Virginia declined 9.8% since last year; homes prices in Norfolk, Virginia Beach and Chesapeake are reduced 15.9%; and in Richmond, there are 6% decreases. Northern Virginia median home sales prices have increased by 1%.
Foreclosures and short sales are plentiful in luxury real estate. Coldwell Banker recently unveiled a new program for luxury buyers and sellers: Coldwell Banker Previews. This allows luxury buyers a detailed look at exclusive properties. Many real estate professionals recommend casting a wider geographic area for a home search to find the best deals.
Elaine VonCannon, a Coldwell Banker REALTOR, recommends taking a closer look at homes for sale in several areas of Virginia. “Look at waterfront homes in Chesapeake Bay Country and estates and historic homes in Williamsburg, James City County and York County. In York, Henrico and Chesterfield Counties, buyers will find horse farms and estates with equestrian facilities for sale. High end home buyers in these areas of Virginia will find excellent bargains right now,” said VonCannon.
“Interest rates are historically low, at approximately 4% for well-qualified buyers,” said VonCannon. “This, combined with the sharp reduction in prices for luxury homes in Williamsburg, Richmond, and Tidewater Virginia, creates an excellent opportunity for home buyers,” she added.
Although median sales prices for homes are declining in some Virginia real estate markets, the number of home sales across the Commonwealth is stabilizing, according to VAR QE3 2011 report. In Richmond, Southside Virginia, Chesapeake Bay and Hampton Roads, the number of home sales has increased, indicating many real estate investors see now as a good time to buy and find values.
Visit VonCannonRealEstate or EstatesInVirginia.com to view property listings in Virginia. Or call 757-288-4685 to schedule some viewings.
Tuesday, November 1, 2011
Buying Real Estate: Building a Lifestyle
In the current real estate market, both buyers and sellers have different objectives then they did five years ago. Then, many homeowners bought with the intention to hold a property for one to three years and sell it for a profit or to gain equity for the next property purchase. After the real estate and mortgage market downturn, many areas of the U.S. were flooded with short sales and foreclosed properties -- so buyers can no longer rely on this fast equity. Nowadays, most real estate professionals are recommending that homebuyers plan to hold their property investment for a minimum of 10 years.
Homes for Sale are More Likely to Sell if They are Move in Ready
These days, the trend in home buying is for move in ready homes. Most buyers cannot take out home equity loans for property improvements. It is imperative the seller makes certain appliances, fixtures, flooring, kitchens and bathrooms are in good condition or recently renovated or replaced. Homebuyers are in a place to be choosy. If they want fixer uppers they can purchase foreclosures or distressed properties. Sellers serious about closing on their homes will make the necessary renovations even before putting the home on the market.
Homebuyers Want to Purchase Homes Near Shopping Districts
If the home purchase is intended as a primary residence for ten years, it needs to fit the lifestyle of the family or individual who owns it-- perfectly. Right now the most popular trend in real estate purchases is to live close to mass transit, shopping and entertainment. Many people want to walk in their own neighborhoods and have easy access to everything they enjoy: the gym, restaurants, bars, movies, and more. Neighborhoods and condominiums close to main shopping districts will be more desirable then other areas where driving is necessary.
I have worked with many homebuyers over the years. Generally, I break down lifestyles into three types of areas: rural, suburban and urban. I ask homebuyers I work with which of these lifestyles they desire. Then we work on identifying other specifics about the home such as: pools, garages, multiple bathrooms, square footage and more. The most important parameter in purchasing a home is location. Price range for home purchases sometimes limits choices to certain areas, but I have found we can usually work around this and still find the buyer a desirable location.
Here’s my breakdown of the three locations related to lifestyle choices for homebuyers:
Rural: Do you need a property with acreage?
Many rural homebuyers are used to this lifestyle. They often own horses or enjoy boating, gardening, hiking or other outdoor activities. Some of these buyers will be new to rural living and making a change in lifestyle. To many who choose the rural lifestyle, living near a small town or in one is best, because there are grocery stores, doctors, restaurants and businesses nearby. Rural buyers will want a certain amount of acreage and outbuildings for additional guests or activities. Some of the buyers who want to own rural property will be more inclined to ask about green built features in a home, or be willing to purchase green built homes.
Living in the Suburbs
Some families and couples want peace and quiet or they choose to raise their children outside of rural areas and big cities -- but still want to be close to a host of activities. So they choose suburban lifestyles. Many suburban developments and communities are close to a city or an interstate entrance. Subdivisions appeal to various lifestyles such as: golf communities, waterfront homes with docks or dock access for boating, homes near a historic area, houses close to a national park or public trails, or nearby a shopping district. Suburban lifestyles can be varied but many have the same themes running throughout. Families want to be close to school and churches and have plenty of green space in the backyard for leisure activities such as grilling, swimming, playing or just relaxing. Multiple bedrooms and bathrooms are required with plenty of square footage.
Choosing the Urban Lifestyle
Professionals, people who travel a great deal, and individuals with sophisticated tastes in cultural choices, dining and entertainment want to live in urban areas. Mass transit and airports are easily accessible. A choice of restaurants and leisure activities is literally at the doorstep. Urbanites live life on the go and do not want to be bogged down with yard work. Many urbanites will want to purchase a townhome or condominium that will include exterior maintenance. Some urban dwellers will want amenities such as pools, gyms and community rooms included as amenities to complement the condominium lifestyle. Many will want to be within walking distance of restaurants, markets and bars.
These three lifestyle choices are a matter of personal taste and preference. Since home ownership is now a decade long commitment, lifestyles need to be carefully considered prior to purchasing a home. I often tell homebuyers to project 10 years into the future. For example, will the homebuyer need a space for an aging parent? Or, will the homeowner need extra room for a child or grandchild who may have to move back in for a while? These lifestyle changes could weigh in heavily on the decision of which home to buy.
Plan ahead by carefully considering lifestyle in your home purchase.
For more information on different lifestyles, visit http://www.voncannonrealestate.com.
Homes for Sale are More Likely to Sell if They are Move in Ready
These days, the trend in home buying is for move in ready homes. Most buyers cannot take out home equity loans for property improvements. It is imperative the seller makes certain appliances, fixtures, flooring, kitchens and bathrooms are in good condition or recently renovated or replaced. Homebuyers are in a place to be choosy. If they want fixer uppers they can purchase foreclosures or distressed properties. Sellers serious about closing on their homes will make the necessary renovations even before putting the home on the market.
Homebuyers Want to Purchase Homes Near Shopping Districts
If the home purchase is intended as a primary residence for ten years, it needs to fit the lifestyle of the family or individual who owns it-- perfectly. Right now the most popular trend in real estate purchases is to live close to mass transit, shopping and entertainment. Many people want to walk in their own neighborhoods and have easy access to everything they enjoy: the gym, restaurants, bars, movies, and more. Neighborhoods and condominiums close to main shopping districts will be more desirable then other areas where driving is necessary.
I have worked with many homebuyers over the years. Generally, I break down lifestyles into three types of areas: rural, suburban and urban. I ask homebuyers I work with which of these lifestyles they desire. Then we work on identifying other specifics about the home such as: pools, garages, multiple bathrooms, square footage and more. The most important parameter in purchasing a home is location. Price range for home purchases sometimes limits choices to certain areas, but I have found we can usually work around this and still find the buyer a desirable location.
Here’s my breakdown of the three locations related to lifestyle choices for homebuyers:
Rural: Do you need a property with acreage?
Many rural homebuyers are used to this lifestyle. They often own horses or enjoy boating, gardening, hiking or other outdoor activities. Some of these buyers will be new to rural living and making a change in lifestyle. To many who choose the rural lifestyle, living near a small town or in one is best, because there are grocery stores, doctors, restaurants and businesses nearby. Rural buyers will want a certain amount of acreage and outbuildings for additional guests or activities. Some of the buyers who want to own rural property will be more inclined to ask about green built features in a home, or be willing to purchase green built homes.
Living in the Suburbs
Some families and couples want peace and quiet or they choose to raise their children outside of rural areas and big cities -- but still want to be close to a host of activities. So they choose suburban lifestyles. Many suburban developments and communities are close to a city or an interstate entrance. Subdivisions appeal to various lifestyles such as: golf communities, waterfront homes with docks or dock access for boating, homes near a historic area, houses close to a national park or public trails, or nearby a shopping district. Suburban lifestyles can be varied but many have the same themes running throughout. Families want to be close to school and churches and have plenty of green space in the backyard for leisure activities such as grilling, swimming, playing or just relaxing. Multiple bedrooms and bathrooms are required with plenty of square footage.
Choosing the Urban Lifestyle
Professionals, people who travel a great deal, and individuals with sophisticated tastes in cultural choices, dining and entertainment want to live in urban areas. Mass transit and airports are easily accessible. A choice of restaurants and leisure activities is literally at the doorstep. Urbanites live life on the go and do not want to be bogged down with yard work. Many urbanites will want to purchase a townhome or condominium that will include exterior maintenance. Some urban dwellers will want amenities such as pools, gyms and community rooms included as amenities to complement the condominium lifestyle. Many will want to be within walking distance of restaurants, markets and bars.
These three lifestyle choices are a matter of personal taste and preference. Since home ownership is now a decade long commitment, lifestyles need to be carefully considered prior to purchasing a home. I often tell homebuyers to project 10 years into the future. For example, will the homebuyer need a space for an aging parent? Or, will the homeowner need extra room for a child or grandchild who may have to move back in for a while? These lifestyle changes could weigh in heavily on the decision of which home to buy.
Plan ahead by carefully considering lifestyle in your home purchase.
For more information on different lifestyles, visit http://www.voncannonrealestate.com.
Tuesday, July 19, 2011
Investment Rental Properties: When It’s Time to Buy or Sell
How does one determine when to sell a rental property investment? If you are going to buy rental properties – having a plan in place for the appropriate time to sell is important.
I have worked with many individuals over the years and showed them how to buy rental property. There are many things that need to be considered when purchasing for investment purposes. There is also – definitely – a time to sell.
How to Buy an Investment Property
- Is the property in a convenient location? Is it near shopping, in a neighborhood with good schools, and is it easily accessible to interstates and connecting roads?
- Does the potential investment property have a sound foundation? What sort of issues does the home have? If it needs a new roof or the foundation is sunken in and is creating issues within the structure, it might not be a good investment at this time. If the issues are only cosmetic (needs a new bathroom floor, or painting, or carpeting) it may be worthwhile. Inspection reports will reveal the property’s flaws so the buyer and real estate professional can make a good decision.
- Do you have enough of a down payment to purchase the rental property so financing will not be an issue? In the current real estate market, most lenders will see a down payment of 40-50% as a good risk. If you can invest 100% into the property – this is even better.
- Income gained from the property needs to exceed expenses. Identify a credit worthy tenant, a reliable property manager, and a solid lease to make your property investment profitable. Property management fees are tax deductible.
- For residential property investments, single-family homes as well as multi-tenant properties such as duplexes and fourplexes are great ways to build income and wealth. Some investors may want to consider apartment complexes. In this case a commercial property loan will be necessary to obtain financing.
- Use depreciation on the investment property as a way to receive an annual tax deduction. Check with your accountant, who will apply the depreciation deduction on the building, appliances -- even window treatments. The government still allows tax deductions for accelerated depreciation on properties. Savvy real estate investors use this deduction to increase cash flow and net operating profit on a property.
When to Sell a Rental Property
I have a term for properties that need to be sold: alligator properties. These are properties that are eating the investor alive with carrying costs. When an investor looks at the bottom line on an alligator property – there is no profit – just expenses. An alligator property today may have been a good investment ten years ago. But some individuals will continue to hold a property until it depletes all of the profits they may have made in the first 5-7 years.
If a property has sentimental value (it was your first home, or your mother once owned it but now she’s deceased), some investors may tend to want to hold onto it. Having an emotional attachment to an investment property that is supposed to be generating income is not good. Sometimes an individual will hold this type of property even if it is not profitable. It may be time to consider selling this property.
- After a certain number of years, the depreciation tax deduction is used up on a property. Ask your accountant when this depreciation is no longer applicable. When the investment can no longer be depreciated – it’s time to sell that property, and purchase another rental.
- Consider selling the property and applying the 1031 tax code, so no capital gains tax is imposed on the profits. To paraphrase, the code states that an owner can sell one property in exchange for a securitized piece of property or tenant in common piece of property. Roll the profits from one property into a new investment to increase wealth and maintain it.
- On average, in the 12th year of property ownership -- it is time to sell an investment. The decision to sell will depend on two factors. 1. Is there enough equity in the property to sell? Or, have you pulled out too much equity in the property? 2. Will the real estate market allow you to sell and obtain a nice profit? Ask a real estate professional for a custom market analysis on the property to see if it’s realistic to obtain a price that nets a nice profit.
- Alligator properties are not profitable for a variety of reasons. I am amazed at the number of investors who are not even aware that their property is losing money. If you have a property that might be losing money, then ask your real estate professional or accountant to perform a cost to income analysis. If it is indeed an alligator property -- consider selling.
Investors buy and sell equities all the time. There is a time to purchase and a time to sell a home as well. Learn more about buying and selling rental properties by visiting http://www.voncannonrealestate.com.
I have worked with many individuals over the years and showed them how to buy rental property. There are many things that need to be considered when purchasing for investment purposes. There is also – definitely – a time to sell.
How to Buy an Investment Property
- Is the property in a convenient location? Is it near shopping, in a neighborhood with good schools, and is it easily accessible to interstates and connecting roads?
- Does the potential investment property have a sound foundation? What sort of issues does the home have? If it needs a new roof or the foundation is sunken in and is creating issues within the structure, it might not be a good investment at this time. If the issues are only cosmetic (needs a new bathroom floor, or painting, or carpeting) it may be worthwhile. Inspection reports will reveal the property’s flaws so the buyer and real estate professional can make a good decision.
- Do you have enough of a down payment to purchase the rental property so financing will not be an issue? In the current real estate market, most lenders will see a down payment of 40-50% as a good risk. If you can invest 100% into the property – this is even better.
- Income gained from the property needs to exceed expenses. Identify a credit worthy tenant, a reliable property manager, and a solid lease to make your property investment profitable. Property management fees are tax deductible.
- For residential property investments, single-family homes as well as multi-tenant properties such as duplexes and fourplexes are great ways to build income and wealth. Some investors may want to consider apartment complexes. In this case a commercial property loan will be necessary to obtain financing.
- Use depreciation on the investment property as a way to receive an annual tax deduction. Check with your accountant, who will apply the depreciation deduction on the building, appliances -- even window treatments. The government still allows tax deductions for accelerated depreciation on properties. Savvy real estate investors use this deduction to increase cash flow and net operating profit on a property.
When to Sell a Rental Property
I have a term for properties that need to be sold: alligator properties. These are properties that are eating the investor alive with carrying costs. When an investor looks at the bottom line on an alligator property – there is no profit – just expenses. An alligator property today may have been a good investment ten years ago. But some individuals will continue to hold a property until it depletes all of the profits they may have made in the first 5-7 years.
If a property has sentimental value (it was your first home, or your mother once owned it but now she’s deceased), some investors may tend to want to hold onto it. Having an emotional attachment to an investment property that is supposed to be generating income is not good. Sometimes an individual will hold this type of property even if it is not profitable. It may be time to consider selling this property.
- After a certain number of years, the depreciation tax deduction is used up on a property. Ask your accountant when this depreciation is no longer applicable. When the investment can no longer be depreciated – it’s time to sell that property, and purchase another rental.
- Consider selling the property and applying the 1031 tax code, so no capital gains tax is imposed on the profits. To paraphrase, the code states that an owner can sell one property in exchange for a securitized piece of property or tenant in common piece of property. Roll the profits from one property into a new investment to increase wealth and maintain it.
- On average, in the 12th year of property ownership -- it is time to sell an investment. The decision to sell will depend on two factors. 1. Is there enough equity in the property to sell? Or, have you pulled out too much equity in the property? 2. Will the real estate market allow you to sell and obtain a nice profit? Ask a real estate professional for a custom market analysis on the property to see if it’s realistic to obtain a price that nets a nice profit.
- Alligator properties are not profitable for a variety of reasons. I am amazed at the number of investors who are not even aware that their property is losing money. If you have a property that might be losing money, then ask your real estate professional or accountant to perform a cost to income analysis. If it is indeed an alligator property -- consider selling.
Investors buy and sell equities all the time. There is a time to purchase and a time to sell a home as well. Learn more about buying and selling rental properties by visiting http://www.voncannonrealestate.com.
Tuesday, July 5, 2011
Stabling Horses in Counties in Southeastern Virginia – Part 2
Virginia is a ‘horse friendly’ Commonwealth, where the horse owner can find ample land and facilities to stable horses throughout the state. This article will focus on the Richmond, VA area and detail county laws for the number of horses allowed on properties and on acreage in various counties in Virginia. The counties selected stretch from the Northern Neck in Chesapeake Bay Country to James City County, where Williamsburg is located.
Each county has different requirements for stabling horses, and some may even limit the number of horses per property or per acre. Though this article attempts to provide a comprehensive overview of county laws in each area, I still encourage home buyers to contact the county directly once they finalize a contract on a property. For the most part, horses are allowed on agriculturally zoned properties. There may be cases in which exceptions are made on residentially zoned properties if they are located close to an agricultural area or are grandfathered in under older laws.
Hanover County
In this Virginia County, one horse is permitted for every one acre of land.
Henrico County
The Henrico County zoning ordinance regulates the keeping of horses in three ways. In most cases the main requirement is that any buildings or yards to enclose and feed the horses must be at least 400 feet from any lot in a residential zoning district and at least 200 feet from any other lot occupied by a dwelling. Henrico County advises horse owners to limit their stables for personal use. The excerpted code reads as follows, “Keeping of not more than three horses and/or ponies for personal enjoyment and not as a business.” In that case, the stable must be at least 400 feet from any dwelling in a Residential zoning district or 200 feet from any other dwelling. Measuring from the dwelling, rather than the property line, allows much greater flexibility in the location of the buildings or yards. In exchange, however, this provision comes with a restriction that no more than one horse or pony is allowed per acre of fenced pasture.
James City County
If the property is zoned A-1 it is general agricultural, and the county allows up to seven horses per acre. If the property is zoned R-8, rural residential, up to seven horses are permitted per acre. Horses are not permitted in R-2 or R-1 zoned areas.
York County
Horses are permitted on properties that are zoned Rural Residential (RR) or Resource Conservation (RC) properties. Property owners must have a minimum of two usable acres, excluding the home or setbacks. If a portion of the property has environmental issues, or other restrictions, then this area cannot be counted as usable acres. The number of horses allowed is one per usable acre. Stables have to be constructed 100 feet form abutting properties and 100 feet from public right-of-ways. The stables must also be 1,000 feet from drinking water reservoirs (exceptions to this are possible if a zoning administrator determines that runoff goes away from the reservoir and public health will not be negatively impacted). In addition, horses cannot be stabled within 100 feet of an active well nor can runoff from the stable, pasture or animal yard flow within 100 feet of an active well.
Isle of Wight
In this county, there must be one acre of land for the personal dwelling and one acre of land per horse for private stables.
Sussex County
Sussex County requires the property parcel to be zoned A-1 General Agricultural (with a 2 acre minimum) in order to stable horses. The county is mostly agricultural. If the agricultural property has been subdivided, check the deed for any restrictions on horses.
Essex County
In this county the agricultural district is zoned A-1 and A-2. If the property is zoned A-1 or A-2 zoning laws apply to keeping of horses or ponies for personal enjoyment. Any building for keeping animals must be 300 feet from any residence not located on the same property or from any lot in a residential district and at least 200 feet from any residential property line. Horses are not permitted in most residential areas.
King George County
Horses are only allowed in agriculturally zoned districts A-1 or A-2. According to King George County zoning, “The keeping of a horse shall require a minimum lot area of two acres [dedicated to pasturing] plus one acre for each additional horse. Horses may not be kept in a subdivision with lots of less than five acres.
Powhatan County
In this county, if a property is agriculturally zoned there is no limit to the number of horses allowed. Generally, these properties are zoned as A-1. There are a few properties zoned RR -- Rural Residential. This section of Powhatan County is small in scope and is bordered by the James River in the North East part of the county. RR is agriculturally zoned and the same laws apply to stabling horses as A-1. However, horse owners should call the county and double check the number of horses allowed on parcels in RR areas. Horse stabling is limited in residential areas of Powhatan County. Property owners must have a minimum of 3 acres for one horse in R-2. For each additional horse, another acre is required and the total number of horses is capped at three horses. R-5 properties must have a minimum of 5 acres for one horse, and one additional acre for each additional horse. R-5 properties are 20 acres or less.
Goochland County
In this county any agriculturally zoned property or R-1 zoned properties allow horses. There are two acres required for the first horse and an additional acre is required for each additional horse. In RR zoned properties the parcel must be a minimum of 10 acres to stable horses.
Richmond County
A minimum of five acres is needed for a horse, whether it’s zoned agricultural or R-1 or R-2. Up to three horses are permitted for the first five acres. An additional acre is needed for each additional horse.
There is quite a bit of variation for laws on stabling horses in these Virginia counties. The closer a county is to a town or city, the more restrictions seem to apply, and the less agricultural land there is available.
For more information on horse farms, estate properties, farmettes and other types of properties in Virginia, visit http://www.voncannonrealestate.com.
Each county has different requirements for stabling horses, and some may even limit the number of horses per property or per acre. Though this article attempts to provide a comprehensive overview of county laws in each area, I still encourage home buyers to contact the county directly once they finalize a contract on a property. For the most part, horses are allowed on agriculturally zoned properties. There may be cases in which exceptions are made on residentially zoned properties if they are located close to an agricultural area or are grandfathered in under older laws.
Hanover County
In this Virginia County, one horse is permitted for every one acre of land.
Henrico County
The Henrico County zoning ordinance regulates the keeping of horses in three ways. In most cases the main requirement is that any buildings or yards to enclose and feed the horses must be at least 400 feet from any lot in a residential zoning district and at least 200 feet from any other lot occupied by a dwelling. Henrico County advises horse owners to limit their stables for personal use. The excerpted code reads as follows, “Keeping of not more than three horses and/or ponies for personal enjoyment and not as a business.” In that case, the stable must be at least 400 feet from any dwelling in a Residential zoning district or 200 feet from any other dwelling. Measuring from the dwelling, rather than the property line, allows much greater flexibility in the location of the buildings or yards. In exchange, however, this provision comes with a restriction that no more than one horse or pony is allowed per acre of fenced pasture.
James City County
If the property is zoned A-1 it is general agricultural, and the county allows up to seven horses per acre. If the property is zoned R-8, rural residential, up to seven horses are permitted per acre. Horses are not permitted in R-2 or R-1 zoned areas.
York County
Horses are permitted on properties that are zoned Rural Residential (RR) or Resource Conservation (RC) properties. Property owners must have a minimum of two usable acres, excluding the home or setbacks. If a portion of the property has environmental issues, or other restrictions, then this area cannot be counted as usable acres. The number of horses allowed is one per usable acre. Stables have to be constructed 100 feet form abutting properties and 100 feet from public right-of-ways. The stables must also be 1,000 feet from drinking water reservoirs (exceptions to this are possible if a zoning administrator determines that runoff goes away from the reservoir and public health will not be negatively impacted). In addition, horses cannot be stabled within 100 feet of an active well nor can runoff from the stable, pasture or animal yard flow within 100 feet of an active well.
Isle of Wight
In this county, there must be one acre of land for the personal dwelling and one acre of land per horse for private stables.
Sussex County
Sussex County requires the property parcel to be zoned A-1 General Agricultural (with a 2 acre minimum) in order to stable horses. The county is mostly agricultural. If the agricultural property has been subdivided, check the deed for any restrictions on horses.
Essex County
In this county the agricultural district is zoned A-1 and A-2. If the property is zoned A-1 or A-2 zoning laws apply to keeping of horses or ponies for personal enjoyment. Any building for keeping animals must be 300 feet from any residence not located on the same property or from any lot in a residential district and at least 200 feet from any residential property line. Horses are not permitted in most residential areas.
King George County
Horses are only allowed in agriculturally zoned districts A-1 or A-2. According to King George County zoning, “The keeping of a horse shall require a minimum lot area of two acres [dedicated to pasturing] plus one acre for each additional horse. Horses may not be kept in a subdivision with lots of less than five acres.
Powhatan County
In this county, if a property is agriculturally zoned there is no limit to the number of horses allowed. Generally, these properties are zoned as A-1. There are a few properties zoned RR -- Rural Residential. This section of Powhatan County is small in scope and is bordered by the James River in the North East part of the county. RR is agriculturally zoned and the same laws apply to stabling horses as A-1. However, horse owners should call the county and double check the number of horses allowed on parcels in RR areas. Horse stabling is limited in residential areas of Powhatan County. Property owners must have a minimum of 3 acres for one horse in R-2. For each additional horse, another acre is required and the total number of horses is capped at three horses. R-5 properties must have a minimum of 5 acres for one horse, and one additional acre for each additional horse. R-5 properties are 20 acres or less.
Goochland County
In this county any agriculturally zoned property or R-1 zoned properties allow horses. There are two acres required for the first horse and an additional acre is required for each additional horse. In RR zoned properties the parcel must be a minimum of 10 acres to stable horses.
Richmond County
A minimum of five acres is needed for a horse, whether it’s zoned agricultural or R-1 or R-2. Up to three horses are permitted for the first five acres. An additional acre is needed for each additional horse.
There is quite a bit of variation for laws on stabling horses in these Virginia counties. The closer a county is to a town or city, the more restrictions seem to apply, and the less agricultural land there is available.
For more information on horse farms, estate properties, farmettes and other types of properties in Virginia, visit http://www.voncannonrealestate.com.
Thursday, May 26, 2011
Rental Shortages in VA Real Estate Markets: Invest in Rental Properties NOW!
With listing prices down across the United States and many foreclosures and bank owned properties on the market -- the time is certainly right for buying property. It is also the perfect time for real estate investors to enter or re-enter the market. There are rental shortages in various markets in the U.S. The low inventory and high demand for rentals is driving the cost of rental properties higher. Now is the time to purchase single family homes, duplexes, four plexes, and commercial apartment complexes. A lower vacancy rate coupled with a predictably higher return on investment makes it an attractive time to invest in real estate.
According to an article published by the Daily Real Estate News in April 2011, "The cost of renting continues to rise as vacancies remain low. The number of renters increased 8 percent nationally between 2007 and 2009, according to Census Bureau figures, and rents climbed 3 percent nationwide." Online sources concur. In 2010, rental prices soared even more. HotPads.com, a highly trafficked and well-respected real estate website, reports that "rent prices nationwide rose 11.6 percent in 2010, from an average of $1,181 in January to $1,319 in December." Multiple sources report a trend in rental property price increases nationwide.
As a property manager in the Williamsburg, VA real estate market, I have seen rental property prices increase over the past three years. A single family home that used to rent for $900-1000 per month now costs $1,100-1,250 per month. As more and more people feel the strains of the present economy, renting is their only option. It's more challenging to purchase a home now than before. The homebuyer must have a down payment, be willing to pay closing costs and have a high enough credit score to qualify for a mortgage.
For property investors looking to purchase a single family home or duplex, a traditional mortgage will apply. However, if the investor wants to purchase a multi-family dwelling, fourplex or an apartment complex, a commercial property loan is needed. When investors choose the latter, I encourage them to review the rent rolls. This will include the rental history of the property. Rent rolls are an indispensable financial tool for making the decision to buy. Currently, rehab loans are only available on primary residences - not on rental property. This means investors should also have the cash available to repair, update or rehab a property, in addition to the down payment and monthly mortgage.
Real estate can also be an excellent tax shelter. Rental properties can be depreciated on taxes. Repairs, maintenance, property management fees, travel to and from a property and other expenses related to the property are all tax deductible. If a real estate investor wants to defer taxes, he or she has the option now to place the real estate property into an IRA or charitable remainder trust.
Compared to other types of investments real estate is less risky. The owner has more oversight and control over residential and commercial property investments. It's true that real estate investments may lose value over the short term, but historically, property investment has been established as a reliable way to create and keep wealth over the long term.
As investors enter the real estate market after several years of sitting back, they will want to secure a reliable and experienced property manager to maintain a good, even cash flow. With rentals absorbing up to 50% of most household incomes these days, it could conceivably become more difficult to collect the monthly rent. A savvy and aggressive property manager will ensure rents are collected in a timely manner and that repairs are made on the property when tenants request them.
Real estate investment is not for everyone. So, think carefully about whether acquiring property is the way to go before making a purchase.
For more information on residential and commercial investment properties or property management services, visit http://www.voncannonrealestate.com. Or, email voncannonrealestae@cox.net or call 757-288-4685.
According to an article published by the Daily Real Estate News in April 2011, "The cost of renting continues to rise as vacancies remain low. The number of renters increased 8 percent nationally between 2007 and 2009, according to Census Bureau figures, and rents climbed 3 percent nationwide." Online sources concur. In 2010, rental prices soared even more. HotPads.com, a highly trafficked and well-respected real estate website, reports that "rent prices nationwide rose 11.6 percent in 2010, from an average of $1,181 in January to $1,319 in December." Multiple sources report a trend in rental property price increases nationwide.
As a property manager in the Williamsburg, VA real estate market, I have seen rental property prices increase over the past three years. A single family home that used to rent for $900-1000 per month now costs $1,100-1,250 per month. As more and more people feel the strains of the present economy, renting is their only option. It's more challenging to purchase a home now than before. The homebuyer must have a down payment, be willing to pay closing costs and have a high enough credit score to qualify for a mortgage.
For property investors looking to purchase a single family home or duplex, a traditional mortgage will apply. However, if the investor wants to purchase a multi-family dwelling, fourplex or an apartment complex, a commercial property loan is needed. When investors choose the latter, I encourage them to review the rent rolls. This will include the rental history of the property. Rent rolls are an indispensable financial tool for making the decision to buy. Currently, rehab loans are only available on primary residences - not on rental property. This means investors should also have the cash available to repair, update or rehab a property, in addition to the down payment and monthly mortgage.
Real estate can also be an excellent tax shelter. Rental properties can be depreciated on taxes. Repairs, maintenance, property management fees, travel to and from a property and other expenses related to the property are all tax deductible. If a real estate investor wants to defer taxes, he or she has the option now to place the real estate property into an IRA or charitable remainder trust.
Compared to other types of investments real estate is less risky. The owner has more oversight and control over residential and commercial property investments. It's true that real estate investments may lose value over the short term, but historically, property investment has been established as a reliable way to create and keep wealth over the long term.
As investors enter the real estate market after several years of sitting back, they will want to secure a reliable and experienced property manager to maintain a good, even cash flow. With rentals absorbing up to 50% of most household incomes these days, it could conceivably become more difficult to collect the monthly rent. A savvy and aggressive property manager will ensure rents are collected in a timely manner and that repairs are made on the property when tenants request them.
Real estate investment is not for everyone. So, think carefully about whether acquiring property is the way to go before making a purchase.
For more information on residential and commercial investment properties or property management services, visit http://www.voncannonrealestate.com. Or, email voncannonrealestae@cox.net or call 757-288-4685.
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