5 Tips When Buying a Newly Constructed Home

5 Tips When Buying a Newly Constructed Home

5 Tips When Buying a Newly Constructed Home

The lack of existing inventory for sale has forced many homebuyers to begin looking at new construction. When you buy a newly constructed home instead of an existing home, there are many extra steps that must take place.

To ensure a hassle-free process, here are 5 tips to keep in mind if you are considering new construction:

1. Hire an Inspector

Despite the fact that builders must comply with town and city regulations, a home inspector will have your best interests in mind! When buying new construction, you will have between 1-3 inspections, depending on your preference (the foundation inspection, the pre-drywall inspection, and a final inspection).

These inspections are important because the inspector will often notice something that the builder missed. If possible, attend the inspection so that you can ask questions about your new home and make sure the builder fixes any problems found by the inspector.

2. Maintain good communication with your builder

Starting with the pre-construction meeting (where you will go over all the details of your home with your project manager), establish a line of communication. For example, will the builder email you every Friday with progress updates? If you are an out-of-state buyer, will you receive weekly pictures of the progress via email? Can you call the builder and if so, how often? How often can you visit the site?

3. Look for builder’s incentives

The good thing about buying a new home is that you can add the countertop you need, the mudroom you want, or an extra porch off the back of your home! However, there is always a price for such additions, and they add up quickly!

Some builders offer incentives that can help reduce the amount you spend on your home. Do your homework and see what sort of incentives the builders in your area are offering.

4. Schedule extra time into the process

There are many things that can impact the progress on your home. One of these things is the weather, especially if you are building in the fall and winter. Rain can delay the pouring of a foundation as well as other necessary steps at the beginning of construction, while snow can freeze pipes and slow your timeline.

Most builders already have a one-to-two-week buffer added into their timelines, but if you are also in the process of selling your current home, you must keep that in mind! Nobody wants to be between homes for a couple of weeks.

5. Visit the site often

As we mentioned earlier, be sure to schedule time with your project manager at least once a week to see the progress on your home. It’s easy for someone who is not there all the time to notice little details that the builder may have forgotten or overlooked. Additionally, don’t forget to take pictures! You might need them later to see exactly where that pipe is or where those electrical connections are once they’re covered up with drywall!

Bottom Line

Watching your home come to life is a wonderful experience that can sometimes come with hassles. To avoid some of these headaches, keep these tips in mind!

If you are ready to put your current home on the market and find out what new construction is available in your area, let’s get together to discuss your options!

Like your mother always told you, don’t play with fire!

Like your mother always told you, don’t play with fire!

FIREPLACE INSPECTION:

Like your mother always told you, you don’t ever want to play with fire.

 

Fireplaces should be inspected and/or swept once a year to prevent fire damage and to keep your home safe.

To be sure that all of your systems are in working order and operating as they should, it is recommended that homeowners get an annual chimney inspection. The specialist will generally open and adjust your damper, caulk the flashing on the roof if needed, and clean & adjust the fireplace screens & doors. They will also generally check the condition of the chimney spark arrestor and clean the fire chamber. Most chimney sweep companies will put you on an annual inspection plan once you work with them. During this inspection they will tell you if it’s time to sweep. Many homeowners opt to have a chimney cleaning done every year as well at this time, especially if they use their fireplace on a regular basis.

Don’t delay, get your fireplace inspection scheduled before the cold weather hits!

Can You Get an Income Tax Break if You Own Multiple Homes in the U.S.?

Can You Get an Income Tax Break if You Own Multiple Homes in the U.S.?

For those of you who own multiple properties – vacation homes, lake homes, second homes, rental properties – real estate taxes can become an issue. Here is a brief discussion on real estate taxes to take to your tax accountant or attorney when you prepare for this years taxes:

 

Are there any income tax benefits to owning multiple homes in the U.S.?

Extra residences are not often a huge benefit or tax haven for investments, according to William Kambas, a partner at Withers, an international law firm with offices around the world.

Property taxes are due on each property, but owners can save when filing their federal income taxes. For starters, state and local property taxes on second homes are still deductible from one’s federal income returns, according to Mark Stone, a partner at New York City-based firm Holland & Knight.

The same goes for mortgages, although the Tax Cuts and Jobs Act of 2017 limited both of these. (The tax changes are in effect for the period between Dec. 31, 2017 and Dec. 31, 2025, although Congress is considering making them permanent.)

That means $10,000 of one’s combined property taxes for all residences is deductible, he said. However, keep in mind that state and local income taxes are also included in that bucket. And up to $750,000 in mortgage interest, again, for one an owner’s principal residence and one additional residence is also deductible.

For rental properties, there are additional tax benefits, Mr. Kambas said. To qualify, the home must be rented out for more than 14 days a year, or 10% of the total days it is rented, whichever is greater. So if an owner spends 30 days a year at a residence, he or she must rent it for 300 days or more to qualify for the deductions, according the IRS.

Then, “the expenses of doing business will be deductible,” he said. That includes travel to do work on the home or to show it, costs of advertising the property and other activities that benefit the business.

Maintenance, cleaning, professional fees and insurance, utilities and common charges are also deductible, Mr. Kambas added.

If owners are operating multiple homes as a business, they are likely eligible for a 20% qualified business income deduction. The company needs to be set up as a sole proprietorship or through a limited liability company, partnership, S corporation, trust or estate, according to the IRS.

LLCs are most commonly used by real estate investors. Those businesses do not pay income taxes; the tax is instead passed through to the owner or owners of the company. For individuals with less than $157,500 of income (or less than $315,000 of income for couples), there is a 20% deduction. So the owner ends up only being taxed on 80% of the income from that business.

For those with a higher income, the taxes are a bit more complicated. Individuals making more than $207,500 ($415,000 for couples), can deduct either the lesser of 20% of the qualified business income, or the greater of 50% of the W-2 wages paid from the business; or 25% of the W-2 wages paid from the business, plus 2.5% of the unadjusted basis of the qualified property, according to the IRS.

Either way, the owner is taxed at his or her individual rate, not the corporate rate.

Many real estate investors buy property under an LLC for that reason, but Mr. Kambas warned that it is a “highly scrutinized area by the IRS.”

 

Article originally published by Mansion Global 2018.

Why not turn a family activity into a tradition? 12 fun ideas!

Why not turn a family activity into a tradition? 12 fun ideas!

Why not turn a family activity into a tradition? Check out these12 fun ideas!

Incorporating a family ritual into your regular routine can be fun and end up being a tradition that will last for years. Traditions make memories your children will cherish for years to come and create family bonds that will last a lifetime.
  1. Family video night. Rent a movie, order in a pizza, make popcorn. Agree to something the whole family wants to watch (and is appropriate for teens and younger children). Make it an event around a special occasion like a child’s birthday or a special family movie.
  2. Pumpkin Carving. Make an event out of going to the local pumpkin patch and picking out individual pumpkins for each member of the family to take back and carve up for the Autumn season. Make it a contest of skill and creativity where everyone is a winner!
  3. Sharing the Sunday newspaper over a special breakfast. This is a ritual with Mom and Dad in mind. Do you still get the Sunday Newspaper? Read a particular comic or opt ed that can entertain and inform the entire family. Then dig in to a family style brunch at your favorite restaurant or at the family table.
  4. Buy a special dessert to transform dinner into an occasion, and not just on birthdays, wedding anniversaries and graduations. Celebrate family members’ achievements. An unexpected high grade on a test at school or a promotion at work deserves a cake—with candles and an inscription. Be creative!
  5. Spiritual pursuits bring many families together, whether it’s attending services or saying grace or toasting together at the dinner table.
  6. Sit around together flipping through old photo albums or watching vintage family videos and home movies. You’ll relive fond memories and give one another hiccups laughing at the sight of certain members’ now-outdated hairstyles and assorted fashion faux pas. “Wow, Dad: Really nice leisure suit.”
  7. Take a car ride. Where? Anywhere. Take the slow, scenic route and stop off at whatever looks interesting. Plan a special weekend outing during the Autumn season to see and photograph the beautiful foliage.
  8. Go bowling together. Golf and miniature golf are two other examples of individual sports that you can do together. Perhaps you have a family league or summer miniature golf events that you can repeat every year.
  9. Build a fire in the fireplace, or at a camping ground, or on the beach, and share stories. Why not have a “first lighting” of the fireplace event complete with hot chocolate and sweet snacks!
  10. Cook dinner together, with each member of the family taking part. Wednesday cook night, where every family member has an assigned task to help mom and / or dad prepare “hump-day” dinner
  11. Play board games, cards, dominoes and so on. Pop popcorn, or set out veggies and hummus for a competitive round of family games.
  12. Communal chores or collaborating on a household project can be a lot of fun. How about Saturday clean up once a month? Assign indoor and outdoor activities to clean and organize then end it with a special pizza party!

The ideas are endless to plan activities and events for your family to celebrate being a family! Think outside the box, add it to the calendar and make a plan. These moments will be remembered and talked about for generations!