A HOME AS AN INVESTMENT

AS A REALTOR, ACCOUNTANT AND A HOMEOWNER, SOMETIMES I WONDER WHETHER A HOME IS AN INVESTMENT.  CERTAINLY THERE ARE BENEFITS TO HOME OWNERSHIP, BUT IS A HOUSE AN INVESTMENT?  WHAT SORT OF RETURN SHOULD I EXPECT, IF ANY?  WHAT ARE THE RISKS?

Well, the benefits, risks, costs and ROI of home ownership are unpredictable.  After the recent mortgage crisis, many homes throughout the country have seen a significant decline in value after years of high value appreciation.  So, even though the residential real estate market has definite ups and downs, overall I believe a home is a good investment. 

EXPENSES OF HOME OWNERSHIP

As a home owner, you should expect to encounter a wide array of home-related expenses.  Starting as soon as you make an offer on a house, you'll pay for inspections, closing costs, title insurance, homeowner's insurance, real estate taxes, closing fees, courier fees, copy fees, etc.  After the purchase closes, you can expect more expenses right away.  From painting and decorating to buying plants, wall hangings, candles, rugs, mats, Christmas trees, rakes, lawn mower, leaf blower, tools, more tools, etc., etc.  Don't forget plumbers, electricians, furnaces, air conditioners, appliances, and utility bills.  Don't spend so much on a house that you can't afford to fill it up and maintain it comfortably.  Very comfortably.  Of course, these days you don't have to worry as much about that, because the lenders are doing it for you.  Lenders are making darn sure that you can afford your house, and they are also being more careful about appraising the homes they make loans for.  So, if you're getting ready to buy, be smart.  Don't spend too much on the house.  Shop carefully and try to find a quality home in your price range.  Make sure your home is one that could gain value over time - look for good neighborhoods, quiet streets, great schools, etc.  Use a realtor to make sure that you don't pay too much for your home.  Paying too much for your house might make it hard to sell if the home has not appreciated in value.  When you sell your house, expect to pay 6% in realtor commissions in order to maximize the selling price and minimize days on the market.  Also expect another $1500-$2500 in closing costs. 

SHORT TERM FINANCIAL BENEFIT OF HOME OWNERSHIP

A great short-term financial benefit of home ownership is tax deductions.The ability to deduct interest, property taxes, and insurance as an itemized deduction is awesome!!  As a new homeowner, you will definitely notice the benefits come tax time. Unlike paying rent, paying for a mortgage has a tax incentives.  Especially during the first 5-7 years, a significant part of your mortgage is interest.  Since the interest is deductible, the tax benefits are great during this time period.  The tax benefits will decrease the closer you get to paying off your mortgage.  The smaller your loan balance, the less interest in each payment and thus the less you get to deduct from your taxes.   

LONG TERM BENEFITS

The long-term benefits of home ownership can be great.  Generally, if a house is in a solid, safe, good neighborhood, and if it is bought at a reasonable price and well-kept, then it will be a good investment in the long term.  The short term is not necessarily the same story.  In the short-term, prices can increase and decrease signifantly, but over the long-term, history shows home prices to steadily increase.  Therefore, buy a home you love at a good price and live there for a long time and you are likely to enjoy the long-term financial benefits of home ownership.

TO BE CONTINUED...

THANKS SO MUCH FOR READING!!  PLEASE LEAVE A COMMENT AND COME BACK LATER FOR PART 2.  HAVE A FANTASTIC HOLIDAY SEASON!! 

CHECK OUT OUR WEBSITE IF YOU ARE AN ACTIVE BUYER OR SELLER

http://jocohomesmls.com/

http://www.jocohomesmls.com

http://www.db.reeceandnichols.com

Daniel Bennison, Laura Byram

Bennison Byram Team Realtors

Neighborhood Experts in Prairie Village and Overland Park

HOMEOWNER'S INSURANCE  - RECENT POLICY CHANGES AFFECTING HOME BUYERS

As a licensed Realtors in Kansas and Missouri, Daniel Bennison and I learn something different about the changing KC real estate market every day.  Last month a client of ours bought a house in Kansas City, Missouri and when she tried to get insurance for the house she had under contract, she got rejected.  It turns out the inspection had revealed that her house has a composite roof that was laid over a wood shingle roof.  Evidently many insurance companies have recently stopped providing insurance for homes with wood shingle and composite layers.  An amateur could not have noticed that the roof was two layers - in fact the roof looked like it was in perfect condition.  Anyway, my client was finally able to find an insurance company, but they charged her a higher rate because of the roof.  So - buyer's beware!  Make sure you are prepared to shop around for an insurance company if you encounter this problem.     

  Visit the Bennison-Byram Team website for more information about Kansas City and Prairie Village homes and about the $8000 Tax Credit Extension and Expansion!!  We sell homes anywhere in the KC Metro area and we specialize in Prairie Village Homes.  The Bennison Byram Team are advocates for home ownership!!  Get the help of a neighborhood specialist like Laura Byram with the Bennison Byram Team.  Laura lives in Prairie Village and works in P.V. and surrounding areas, specifically Fairway, Overland Park, Lenexa, Leawood, Roeland Park, Waldo, Brookside, and Kansas City.  

Click on the link below to find a knowledgeable Realtor 

Daniel Bennison, Laura Byram

Bennison Byram Team Realtors

Neighborhood Experts in Prairie Village and Overland Park

http://www.jocohomesmls.com

http://www.db.reeceandnichols.com

http://www.lifeinoverlandpark.com

Obama Signs Extended Tax Credit into Law

 

Real Estate News  |  November 6, 2009  |

     

 

 

The Basics: Extended Home Buyer Tax Credit 2009/2010

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

•·     Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.

•·     Expands the credit to grant a $6,500 credit to current home owners purchasing a new or existing home between November 6, 2009 and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies for the Extended Credit?

•·     First-time home buyers who purchase homes between November 6, 2009 and April 30, 2010.

•·     Current home owners purchasing a home between November 6, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a "first-time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer's tax credit is determined by two additional factors:

•1.The price of the home.

•2.The buyer's income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 6, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000-may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)' Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Daniel Bennison

(816) 507-5932

Reece & Nichols Mission Hills

http://www.jocohomesmls.com

Bennison Byram Team with Laura Byram

 

Source: National Association of Realtors

http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

 

 1217 W 75th Street, Kansas City, MO 64114

Come see this historic Waldo Remodel! Stunning. Seller willing to pay Buyer's Closing Costs up to $2,500.00!!

 2 Bed, 1 Bath | 1,294 Sq Ft on 0.37 Acres (16,117 Sq Ft Lot)

MLS #1628834

 Listing Real Estate Agent: Daniel Bennison of Bennison Byram Team

Laura Byram

Not interested in this house. We can show you many others. We specialize in Prairie Village, Overland Park, and Lenexa. Choose an expert local Kansas City real estate agent. We are Realtors in Johnson County, Jackson County, Wandotte County in Kansas and Missouri.

Daniel Bennison

(816) 507-5932

Reece & Nichols Mission Hills

http://www.jocohomesmls.com

Bennison Byram Team with Laura Byram