Since we have been selling some investment property this year including a number of multi-family properties, this law applies to a larger number of our clients. I thought it was pertinent enough to post here as well. Most importantly, talk to your accountant to make sure you comply.
Here is an article from the National Association of Realtors (NAR) explaining the new law:
New IRS 1099 Requirements for Landlords
Starting in 2011, there are new tax requirements for landlords. All landlords who receive rental income of more than $600 a year from a tenant must file a Form1099 information return for all rental income received and send a copy of the 1099 to the tenant. Landlords must also send a 1099 to all service providers who received payments of $600 or more during the year, such as plumbers, carpenters, yard services, and repair people.
The new requirement applies to owners of both residential and commercial property. The only exception to the new requirements occurs when an owner temporarily rents out his/her primary residence, so long as the owner’s income does not exceed a “minimal” amount to be determined by the IRS. Prior to 2011, this requirement had only applied to those involved in full-time property management, but now the requirement covers all types of landlords. Landlords will need to gather federal tax ID numbers from both their tenants and service providers in order to file the 1099s. Failure to file the 1099s with the IRS can result in fines of $50 per 1099 not filed with the IRS.
NAR (National Association of Realtors) actively opposed this change in the law and is working with others to have this requirement repealed or otherwise modified. Congress took this action in order to assure that income paid to contractors can be verified through a 1099.
Thursday, December 2, 2010
Friday, May 21, 2010
Great Article on Vacant Homes
Here is an article that I found on the Florida Association of Realtors website that was from the Detroit Free Press. While it mentions issues that are more relevant up north, the general idea is there. Susan and I have a lits of qualified inspectors who explain which issues are significant and which are not.
What to watch for when buying a vacant home
DETROIT – May 20, 2010 – When it comes to the housing market for foreclosures – buyer beware.
"One mistake that we see all the time is buyers going in and assuming all the mechanicals are working," said Brandon T. Johnson, president of GTJ Consulting in Roseville, Mich. "You have to be careful you don't get burned that way."
Johnson's company maintains foreclosed homes for a number of lenders, Realtors and Freddie Mac. He said the term "as is" shouldn't scare buyers off as long as they know what it means. He recommends that buyers get private inspections on houses they want to buy to avoid surprises such as missing plumbing or water damage.
Here's a list of 10 things to watch for in foreclosed or vacant homes from Ross Kollenberg, mitigation and construction manager for On-Site Specialty Cleaning & Restoration in Troy, Mich:
1. Air quality. This tells a lot about the home's condition. Include air and surface testing in your home inspection. It is a few hundred dollars well spent.
2. Black cobwebs, greasy gray residue on walls and/or a strong oily odor. This is soot damage, which requires professional cleaning, and points to a malfunctioning furnace. It also could be a tip-off that the home had a fire.
3. Discolored subflooring. From the basement, check the subflooring above for stains and small holes, both caused by mold.
4. An older home with extensive renovations. Check with the city for permits: You'll get remodeling details. If asbestos or lead paint is present and has been disturbed, be sure it's been remediated by a certified specialist. It the home has four or five major changes, it may not be up to code, and that could mean extensive fixes for the next owner.
5. Peeling, bubbling, and discolored paint; swelling in walls or ceilings (especially around kitchens and bathrooms); a musty odor: All indicate water damage and, potentially, the presence of moisture and mold.
6. Missing sinks, toilets and other fixtures. Sometimes the previous owner will take the fixtures with them, but won't shut off the pipes or will rip fixtures from the wall. If a pipe was cracked during the fixture removal, it could start a slow leak in the wall that isn't easily seen. Make sure those fixtures have been properly removed and not ripped from walls and floors.
7. Fungus growth inside cabinets, behind drawers and built-ins. That could mean there has been water damage. Since water falls down, look for the source above the mold. One trick inspectors use to determine whether there could be hidden water damage is to pull out the kitchen drawers and look inside to see whether the back wall has been rebuilt. If it has, that could mean water damage has been covered up.
8. Excessive painting of every nook, cranny, door and floor. The seller may be covering up mold. "When you go do a home that is 'landlord white' and the trim is flat, we tell people there is a reason the house was painted this way," Kollenberg said. "When we see it is over everything, it is a tip-off that it is just covering something up."
9. Unheated house in winter months. If the home has been properly winterized, there's no need for heat. If not, pipes will burst and cause water damage.
10. Blocked drains or pipes. These will cause future problems and may have already created sewage backups. Check for a telltale water ring in the basement, Kollenberg said.
Copyright © 2010 Detroit Free Press. Distributed by McClatchy-Tribune Information Services.
What to watch for when buying a vacant home
DETROIT – May 20, 2010 – When it comes to the housing market for foreclosures – buyer beware.
"One mistake that we see all the time is buyers going in and assuming all the mechanicals are working," said Brandon T. Johnson, president of GTJ Consulting in Roseville, Mich. "You have to be careful you don't get burned that way."
Johnson's company maintains foreclosed homes for a number of lenders, Realtors and Freddie Mac. He said the term "as is" shouldn't scare buyers off as long as they know what it means. He recommends that buyers get private inspections on houses they want to buy to avoid surprises such as missing plumbing or water damage.
Here's a list of 10 things to watch for in foreclosed or vacant homes from Ross Kollenberg, mitigation and construction manager for On-Site Specialty Cleaning & Restoration in Troy, Mich:
1. Air quality. This tells a lot about the home's condition. Include air and surface testing in your home inspection. It is a few hundred dollars well spent.
2. Black cobwebs, greasy gray residue on walls and/or a strong oily odor. This is soot damage, which requires professional cleaning, and points to a malfunctioning furnace. It also could be a tip-off that the home had a fire.
3. Discolored subflooring. From the basement, check the subflooring above for stains and small holes, both caused by mold.
4. An older home with extensive renovations. Check with the city for permits: You'll get remodeling details. If asbestos or lead paint is present and has been disturbed, be sure it's been remediated by a certified specialist. It the home has four or five major changes, it may not be up to code, and that could mean extensive fixes for the next owner.
5. Peeling, bubbling, and discolored paint; swelling in walls or ceilings (especially around kitchens and bathrooms); a musty odor: All indicate water damage and, potentially, the presence of moisture and mold.
6. Missing sinks, toilets and other fixtures. Sometimes the previous owner will take the fixtures with them, but won't shut off the pipes or will rip fixtures from the wall. If a pipe was cracked during the fixture removal, it could start a slow leak in the wall that isn't easily seen. Make sure those fixtures have been properly removed and not ripped from walls and floors.
7. Fungus growth inside cabinets, behind drawers and built-ins. That could mean there has been water damage. Since water falls down, look for the source above the mold. One trick inspectors use to determine whether there could be hidden water damage is to pull out the kitchen drawers and look inside to see whether the back wall has been rebuilt. If it has, that could mean water damage has been covered up.
8. Excessive painting of every nook, cranny, door and floor. The seller may be covering up mold. "When you go do a home that is 'landlord white' and the trim is flat, we tell people there is a reason the house was painted this way," Kollenberg said. "When we see it is over everything, it is a tip-off that it is just covering something up."
9. Unheated house in winter months. If the home has been properly winterized, there's no need for heat. If not, pipes will burst and cause water damage.
10. Blocked drains or pipes. These will cause future problems and may have already created sewage backups. Check for a telltale water ring in the basement, Kollenberg said.
Copyright © 2010 Detroit Free Press. Distributed by McClatchy-Tribune Information Services.
Tuesday, May 11, 2010
Upside Down?
According to a report by CoreLogic the West Palm Beach-Boca Raton-Boynton Beach metro statistaical area (MSA) is the 9th most upside down area in the country (highest negative equity). It states that over 45% of the properties are upside down in terms of equity in the property. Fort Lauderdale and Miami are also on the list at numbers 5 & 6 respectively.
If you weren't thinking about short selling your home, you may want to rethink it!
If you weren't thinking about short selling your home, you may want to rethink it!
Monday, May 10, 2010
Active Duty Military can still get Tax Credit
The tax credit may have ended for many but there are still some who have an opportunity to take advantage of some government incentives. Active duty military have another year to benefit from the governments tax credit. Get a home under contract by April 30, 2011 and close by June 30, 2011 and you are eligible for up to $8,000 for first time home buyers and up to $6,500 for current homeowners. Since home prices are low, now would be the time to get in touch with a mortgage expert to see if you qualify and for what price range. It is likely that you will find some attractive opportunities out there now that most of the first time home buyers either have something under contract.
Wednesday, April 21, 2010
Tax Credit coming to an end
We’re a week away from the tax credit coming to an end and what do you think is happening? Yes, the phone is ringing and some home buyers are getting into the game late. They hopefully will get under contract and close in time to get the tax credit being offered. The real winners are the sellers though. When you look at the inventory there really isn’t a lot out there and the good stuff is getting multiple offers. My partner Susan took clients out yesterday and their number one choice is already negotiating an offer. Looks like we will still submit and offer but it has to be our best up front. No time to nickel and dime now!
In every market, up or down, sellers think their home is worth more and buyers think it’s worth less. Right now, and I mean this week, sellers may be right because buyers know they will have some money coming back after they close. Buyers may be willing to absorb a little more on the purchase price (since it is financed) always having the protection of an appraisal to make sure that they don’t pay too much.
As a former engineer I still rely on the statistics and they are generally positive. We seem to be in a stable market with regards to homes for sale, home pending, sales and time on the market. Ask me about my newsletter if you want more details on the stats for Palm Beach County.
See you around town!
In every market, up or down, sellers think their home is worth more and buyers think it’s worth less. Right now, and I mean this week, sellers may be right because buyers know they will have some money coming back after they close. Buyers may be willing to absorb a little more on the purchase price (since it is financed) always having the protection of an appraisal to make sure that they don’t pay too much.
As a former engineer I still rely on the statistics and they are generally positive. We seem to be in a stable market with regards to homes for sale, home pending, sales and time on the market. Ask me about my newsletter if you want more details on the stats for Palm Beach County.
See you around town!
Thursday, March 11, 2010
Thinking of Selling...Consider all marketing avenues!
Once again we are selling our inventory faster than we can replenish it. With a number of our listings due to close in March, we will continue to market the homes we still have available using every means possible.
Recently we have been gaining tremendous exposure for our clients through Facebook, Trulia, Realtor.com, Listingbook, the Illustrated Properties website (www.ipre.com), and some more traditional methods such as advertising in the Real Estate Showcase (the only real estate magazine in the airports!) and postcard mailings. What's really surprising is that we hosted a booth at the 2nd Annual Pets in the Plaza in Lake Worth and one of the visitors to our booth wrote a contract on one of our listings the very next day! In this market it is important to adapt to the changing market, culture and technology. We all agree that the internet is king right now, but back to basics feet on the street marketing still works!
I cannot stress enough how important it is that each home is marketed through a variety of methods. It seems that the agents willing to put in the effort are finding that they achieve the best results for their clients.
See you around town!
Recently we have been gaining tremendous exposure for our clients through Facebook, Trulia, Realtor.com, Listingbook, the Illustrated Properties website (www.ipre.com), and some more traditional methods such as advertising in the Real Estate Showcase (the only real estate magazine in the airports!) and postcard mailings. What's really surprising is that we hosted a booth at the 2nd Annual Pets in the Plaza in Lake Worth and one of the visitors to our booth wrote a contract on one of our listings the very next day! In this market it is important to adapt to the changing market, culture and technology. We all agree that the internet is king right now, but back to basics feet on the street marketing still works!
I cannot stress enough how important it is that each home is marketed through a variety of methods. It seems that the agents willing to put in the effort are finding that they achieve the best results for their clients.
See you around town!
Thursday, February 25, 2010
From LP's to Short Sales...
I have had the nostalgic tug lately and so I dusted off my stack of LP’s sitting in the closet, bought a new needle for my turntable and listened to some albums I haven’t listened to since I bought my first CD player in the late 80’s. (By the way, I have some great U2 twelve inch singles)
Anyway, it got me thinking about the recession we were in when I graduated from Northeastern back in 1991. I graduated 3rd in my class in engineering but couldn’t find a job. I moved back home, took some odd manual labor jobs while I sorted through every newspaper, every day. I mailed out resumes, waiting weeks for all those denial letters and occasionally landing an interview. All the hard work finally paid off and someone offered me a job and I went on to a successful engineering career. We came out of that recession and the company that hired me went on to have a pretty good run as the economy turned around.
Now I don’t presume to have all the answers as to when the economy will turn around this time, but what I relate to my experiences is that the successful people (companies) know what their goals are and set a plan to get there. How does this relate to today’s real estate market?
Well, let’s start by looking at the seller’s perspective. If you are a current homeowner and looking to sell your home then you have a goal. Within that goal there are financial and emotional ramifications, which may or may not be at odds with one another. When you owe more on your mortgage than your home is worth then you are in a short sale position. The benefits of going through the short sale is that you achieve your goal (to sell the house) but at the expense of some other terms. You may have put money down and at risk of losing that money. There will also be a dip in your credit. Even in a non short sale situation, the perceived loss of equity can leave a bad taste in someone’s mouth. Ultimately though what I have seen is that the relief from feeling trapped outweighs the negative consequences. This is especially true when someone is moving to be closer to family, to be in a better school district or for a job change. Because then the ultimate goal is achieved.
A buyer will always ask the question, “What’s going to happen with prices?” First time homebuyers don’t know what it feels like to sleep in your own home for the first time. Sort of like when people tried to explain to me what it was like to have kids before I had kids. I just couldn’t get it, but now I do! I still remember that first night going to bed in the first condo my wife and I had bought. I laid down that night and thought about how it was mine! No one could evict me, my parents couldn’t tell me what to do and, most of all, I really wanted to take care of it. So ultimately, while very important, is price really the most important thing when you are buying a home?
Everyone has a budget and everyone has a certain tolerance for pain. We need to manage home sales and purchases within those parameters, but what is really most important is how you feel the day after. Set your goal, frame it with realistic criteria and parameters, and go for it!
Anyway, it got me thinking about the recession we were in when I graduated from Northeastern back in 1991. I graduated 3rd in my class in engineering but couldn’t find a job. I moved back home, took some odd manual labor jobs while I sorted through every newspaper, every day. I mailed out resumes, waiting weeks for all those denial letters and occasionally landing an interview. All the hard work finally paid off and someone offered me a job and I went on to a successful engineering career. We came out of that recession and the company that hired me went on to have a pretty good run as the economy turned around.
Now I don’t presume to have all the answers as to when the economy will turn around this time, but what I relate to my experiences is that the successful people (companies) know what their goals are and set a plan to get there. How does this relate to today’s real estate market?
Well, let’s start by looking at the seller’s perspective. If you are a current homeowner and looking to sell your home then you have a goal. Within that goal there are financial and emotional ramifications, which may or may not be at odds with one another. When you owe more on your mortgage than your home is worth then you are in a short sale position. The benefits of going through the short sale is that you achieve your goal (to sell the house) but at the expense of some other terms. You may have put money down and at risk of losing that money. There will also be a dip in your credit. Even in a non short sale situation, the perceived loss of equity can leave a bad taste in someone’s mouth. Ultimately though what I have seen is that the relief from feeling trapped outweighs the negative consequences. This is especially true when someone is moving to be closer to family, to be in a better school district or for a job change. Because then the ultimate goal is achieved.
A buyer will always ask the question, “What’s going to happen with prices?” First time homebuyers don’t know what it feels like to sleep in your own home for the first time. Sort of like when people tried to explain to me what it was like to have kids before I had kids. I just couldn’t get it, but now I do! I still remember that first night going to bed in the first condo my wife and I had bought. I laid down that night and thought about how it was mine! No one could evict me, my parents couldn’t tell me what to do and, most of all, I really wanted to take care of it. So ultimately, while very important, is price really the most important thing when you are buying a home?
Everyone has a budget and everyone has a certain tolerance for pain. We need to manage home sales and purchases within those parameters, but what is really most important is how you feel the day after. Set your goal, frame it with realistic criteria and parameters, and go for it!
Thursday, February 11, 2010
Wednesday, February 10, 2010
It's been a while
Well, I used to blog a whole bunch on my old website, www.homatrix.com, but it has been a while, so forgive me if I'm rusty!
My goal has been and always will be to write informative blogs about Lake Worth, the local real estate market and I even throw in some fun blogs like restaurant and golf course reviews (since I am a self proclaimed "foodie" and an avid, but not very good, golfer).
Since I was last blogging I have partnered my business with Susan Fleming and we moved over to Illustrated Properties. We made the move because Illustrated Properties offered us more tools and better ways to market properties, which ultimately helps our clients! The one great thing about this move is that we actually didn't change locations. We are still located in the same office in Manalapan which allows us to serve all the surrounding areas.
As time goes on and I get this blog up and running I hope you will come back and check out what we have to offer. Stay tuned for good stuff.
See you around town!
By the way, my wife is hosting Pets in the Plaza this Saturday the 13th from 10am to 4pm in the Lake Worth Cultural Plaza at the corner of M Street and Lake Ave. It is a great family fun event geared towards promoting responsible pet ownership and pet adoptions. There are a number of rescue groups that will be receiving the proceeds of all donations!
My goal has been and always will be to write informative blogs about Lake Worth, the local real estate market and I even throw in some fun blogs like restaurant and golf course reviews (since I am a self proclaimed "foodie" and an avid, but not very good, golfer).
Since I was last blogging I have partnered my business with Susan Fleming and we moved over to Illustrated Properties. We made the move because Illustrated Properties offered us more tools and better ways to market properties, which ultimately helps our clients! The one great thing about this move is that we actually didn't change locations. We are still located in the same office in Manalapan which allows us to serve all the surrounding areas.
As time goes on and I get this blog up and running I hope you will come back and check out what we have to offer. Stay tuned for good stuff.
See you around town!
By the way, my wife is hosting Pets in the Plaza this Saturday the 13th from 10am to 4pm in the Lake Worth Cultural Plaza at the corner of M Street and Lake Ave. It is a great family fun event geared towards promoting responsible pet ownership and pet adoptions. There are a number of rescue groups that will be receiving the proceeds of all donations!
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