Dallas Appraiser L.L.C. wants your help and commentary on our Real Estate Blog

Title: 

5 Ground Rules for Home Buying Success

Word Count:

851

Summary:

There are five basic ground rules that you must know when it comes to buying a home and shopping smart, and they are ....

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Article Body:

There are few purchases in life that carry the financial and psychological weight of buying a home.  Whether you are buying your first home, moving up to your dream home, or downsizing your home and your life after the kids have gone, it is important to understand the ground rules for success in the world of buying a home.

Making the wrong decision in buying a home can have devastating and long lasting effects, while making a wise decision in home buying can greatly enhance the overall value of the investment.  It is necessary to learn all you can about the world of home buying and mortgages before setting out to purchase the home of your dreams.

While there are plenty of web sites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for the good old one-on-one learning. Fortunately, most mortgage lenders, home inspectors and real estate agents will be able to provide this kind of one-on-one learning.

When buying a home it is often best to use a systematic approach as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion.  Buying a home can be an emotional process, nevertheless it is imperative to keep your emotions under control and not let them cloud your judgment.

There are five basic ground rules when it comes to buying a home and shopping smart, and they are:

1 - Get your financing before you get your home

There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding.  While the desire to get out there are search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.

Getting the financing ahead of time has a number of important advantages, including knowing how much you can buy and gaining more respect from the listing agents.  By knowing how much home you can afford before you shop you will avoid wasting your time looking at unaffordable properties, and the listing agent will be more than willing to show you the homes in your price range.

It is also important to take a good look at the various types of mortgage on the market before getting started in the home buying process.  These days, mortgages come in far more choices than the typical 15 or 30 year. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.

2 - Look at the community, not just the home

It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new metropolitan area, as these buyers will be unfamiliar with the local climate and lifestyle.  It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.

We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case.  Buying a house in the wrong area can be a big mistake, and it is important to choose the location as well as the home.  Potential buyers can learn a great deal about the nature of the various neighborhoods simply by driving around town, as well as by talking to other residents.

3 - Be fair with your first offer

Trying to lowball a seller on the first offer can backfire, as can paying too much. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for.

Comparing the sales of comparable homes, what are known as "comps" in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property.

4 - Always get a home inspection

Always investigate the home for any possible defects before making an offer.  Compared to the cost of the average home, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy.

To find the best home inspector, it is a good idea to seek out word of mouth referrals as many of the best home inspectors rely on word of mouth advertising.

5 - Do not alienate the sellers of the home

Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller.  It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale. 

Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.

Title: 

5 Features to Look for when Choosing a Property Rental Service

Word Count:

628

Summary:

Thinking of using a property rental service to manage your vacation rentals or apartment for rent in Spain?  Here are five key features to watch for before choosing a service...

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Article Body:

If you're thinking of using a property rental service for your Spain holiday rental or apartment for rent, there are some key features you should look for before making a commitment. You'll want the best possible service while also earning maximum profits for your vacation rental. Here are five major features every property rental service should offer.

1. Excellent Customer Service

Your guests will remember you by the service they receive during their stay at your villa rental, apartment or vacation rental. The property rental service you choose should offer excellent customer service and be able to provide testimonials from satisfied property owners. Your guests should arrive to a clean villa, home or apartment. 

If renting for a vacation, golf holiday or some other Spain holiday, each guest should receive a welcome packet including directions to the rental property as well as helpful information about the surrounding area. If you have an apartment for rent, tenants should be treated well. Rental payment collection, service maintenance and assistance with local utility and phone set-ups should be provided with friendliness and thoroughness.

2. Cleaning Management

A property rental service should provide reliable cleaning management. You might live too far away to handle cleaning or manage a maid service. If you live in England or the U.S., but your vacation rental or apartment for rent is located in Fuengirola, Mijas, Puerto Banus, or Elviria of Spain, then you'll need a property rental service that will handle cleaning with care. For holiday rentals and villa rentals, cleaning must be provided between each guests' stay and sometimes during the week of a stay as well. For vacation homes and villas, the lawn must be maintained as well. Be sure this is included with your service.

3. Key Holding, Inventory, and Detailed Necessities

You may not be able to handle local errands for your vacation rental or apartment for rent. Therefore, the property rental service should be entrusted with these tasks. Some necessities to keep the rental property operating legally include key holding, insurance, property tax and levies, building permits or licensing, bank account management, phone and utility set up and billing, etc. 

Another area of importance is inventory.  The furniture and other valuables in your apartment or villa rental must be kept on an inventory list and checked physically each time a guest departs. If you live in another country but own rental property in an area of Spain such as Costa del Sol, Marbella, or any other area, then obviously you're going to need someone locally who can check your inventory for you. Choose a property rental service that provides these types of services to eliminate worries while you're away.

4. Building Refurbishing and Major Repairs

Another feature to look for in a property rental service is whether or not they provide building refurbishing services and major repairs. The benefit of this is the provider will already have contacts to do the jobs needed. You won't have to spend endless hours trying to find a dependable contractor or handyman.

5. Promoting Your Apartment or Spain Holiday Rental

Check to be sure the property rental service will promote your apartment for rent or Spain holiday rental. Promotions will increase your number of rentals and profits each year. A property rental service may handle your advertising in local, national and international venues. If they have a website, they may promote your holiday rentals at the site. If you own a vacation rental near golf courses, then make sure they will advertise your rental from the angle of "golf holidays."

Keep these features in mind during your search for a property rental service. By choosing a service with great features, you'll have peace of mind knowing that your holiday rental or apartment for rent is in good hands!

Title: 

Save Money On Relocating

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512

Summary:

Moving can get expensive quickly.  Learn some tips and tricks for saving money on your relocation.

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Article Body:

When you are moving, you are already spending a lot of extra money.  It helps to know some tricks for saving some money.  Then your moving expenditures will not be so great.

One of the easiest ways to save money on relocating is to move less stuff.

Be sure to go through your things beforehand and throw out, give away, or sell whatever you will not need. A lot of people get into a time crunch when they are relocating, and they don’t have time to do this. They end up moving a lot of stuff that they then throw out when they reach their destination. 

Talk about a waste of money. Take the time to get rid of these things before you move.

Remember that if you give some of your stuff away, you should request a receipt so that you can deduct the amount donated from your taxes.  This will save you money again.

Another way to save money is to do a lot of the work yourself. Even if you hire movers, you can do the packing yourself. This will save a lot of money. The time-intensive work costs the most, so do your own packing and save a bundle.  Remember to get started early if you are going to be doing your own packing. You can’t pack up an entire household at the last minute.

Of course, you can save even more by renting a moving truck and loading and driving it yourself. But here you have to think about how much help you have. If it takes you two days to load the truck, you might be cheaper off to hire professionals to do your relocation. They will do it a lot quicker and you will lose less friends too.

When you are relocating, there are a lot of ways to save money besides the obvious. For example, make sure you leave your old apartment in pristine condition, so that you will get your security deposit back. This is like found money that can be used for other things when you are moving.

You can also save money by canceling your cable service a month early. You won’t have much time to watch it anyway. You will be too busy packing and going through your things in preparation for the move. In the place you are relocating to, wait a month before hooking up the cable. In this way, you save the money of two months of cable service.

On the day of the relocation, pack yourself some meals in a cooler and you can save a lot of money on restaurant meals.

Sometimes the stress of relocating makes you spend money just to save time and energy. But if you plan ahead, you will not have these unexpected expenses. Instead of renting an expensive hotel room, try to stay with friends, or at least pack the kids of to Grandma’s until the move is over.

Be creative, and you will come up with a lot more ways to save money on relocating.

Title: 

Buy Properties in Pre-construction or Off Plan

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956

Summary:

With many new condo hotel properties coming on the market, when is the best time to buy? The answer is easy. In early pre-construction phase of development.

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Article Body:

Interested in getting in on the condo hotel trend in the Philippines? Perhaps you’ve heard about this new type of vacation home ownership and it sounds right for you.

A condo hotel unit, or ‘condotel’, is typically a three-star or higher property with a management company that takes care of all the hassles typically associated with ownership, including maintenance and finding renters when you’re not using your condotel unit.

With many new condo hotel properties coming on the market, when is the best time to buy? The answer is easy. In early pre-construction phase of development. Most condo hotels begin selling their units long before the property is built, and often before even the first shovel-full of dirt is overturned. The idea behind a pre-construction purchase is that you’re buying tomorrow’s property at today’s price.

One such property now on the market in the Philippines is Pacific Concord Properties, Inc., Flagship Lancaster Suites Condotel [Manila] development located along Shaw Boulevard, Mandaluyong City, Metro Manila, one of the hottest Condotel Investments in the Philippines

To be called Lancaster - The Atrium [which is the second Tower adjacent to the existing ‘Sold Out’ Tower I] PCPI is now accepting Reservations for Studio, One, Two & Three Bedroom Suites adopting International Standard Escrow Trust Account ‘Buyer Safe’ Easy Secure Payment PlansÖ with 6 year interest free payment terms or up to 12 year ‘In-House’ financing available, full condo ownership, no management costs for Condotel Suites, and minimum monthly maintenance fees, as buyers or sellers of Real Estate you really should take a moment to look at this Philippine Condotel Investment Opportunity

Marketed by PLC International Marketing Networks, the lead Marketing Partners with PCPI, the Lancaster Manila Atrium Tower A, Shaw Boulevard, Metro Manila, Philippines is a ‘Full Service’ Condominium Hotel [Condotel] offering Studio, One, Two and Three Bedroom Suites for sale.

To be completed and ready for turnover from December 2009/2010, the Lancaster Suites Manila Atrium Tower II will provide unit owners with premier residential condo units with the option of enrolling their units in the Lancaster Condotel Rental Pool.

Beth Collingz, PLC’s International Marketing Director said ëThis is a great investment opportunity for Fil-Amís whom visit Manila for Vacations or Business as they can earn Rental Incomes [at current purchase levels] of some 12-16% ROI per annum as Owner Non-Residents when not using their units through Condotel Management and reciprocal arrangement with Lancaster Cebu Resort Residences. This makes Lancaster Suites one of the Hottest Investment Opportunities in the Philippines.

All units at the Lancaster Suites have kitchen facilities. The standard unit price provides for the suite to be finished but not fully furnished. Included in the current price are the interior finishing’s such as tiled & fitted bathrooms, bedrooms with simulated wood plank flooring, living and dining area tiled floorings and lower kitchen cabinets/work tops installed. A complete optional extra interior fit-out package including appliances will be available towards the time the units are closer to being completed towards the latter part of 2009. Monthly condo dues are currently around 80 pesos/square meter of the unit floor area/month..

The Lancaster Atrium Suites are now available on the very affordable and competitive New Payment Plan that provides for Suites to be purchased on a No Interest No Down Payment basis with 67% of the payment payable over 60 equal consecutive monthly installments without interest and the 33% balance payable upon turnover of the unit or to be paid over an additional 5 years from turnover through our hassle free no pre-qualification ‘In-House’ Finance Plans.

The current selling price [effective March 1, 2007] for the Lancaster Manila Atrium Tower A Tax Exempt Studio Units is Pesos 75,888 or $1,615.00 per square meter. The One Bedroom, Two and Three Bedroom Suites are priced at Pesos 84,994.56 or $1,808.80 per square meter including Government Taxes [R-Vat 12%]. Units may be purchased on a Six Year No Interest Charge Term of payment or longer term ‘In-House’ financing plans. Turnover of units for Tower A will be from December 2009/2010

‘Foreign Nationals are legally allowed to purchase as much as 40% of the total number of condominium units on the market at any given time. Overseas Filipinos and more and more foreigners are now emerging as a market for condotel units. Many or our clients are coming from different countries like South Korea, Australia, United Kingdom, Saudi Arabia and other parts of the Middle East’, Collingz said.

Appreciation Makes Pre-construction Appealing. Some people wonder why they should buy in pre-construction phases. After all, your deposit monies are tied up for one to two years. The answer is you get in on the ground floor when prices are lowest and unit selection is greatest. As the condo hotel is being built, it is gradually appreciating. Developers implement planned price increases at various stages of the selling process, often as many as three to five price hikes.

If you purchase your unit at a pre-construction price, it potentially could be worth significantly more at completion. When you sell, that translates into a higher profit for you. The actual profit of course depends on the general market conditions, interest rates and competition. All preconstruction payments will be made to the Lancaster Suites Manila Atrium Tower A Equitable PCI Bank Escrow Trust Account. It is anticipated, given the track record on sales of Tower I Units that property appreciation for initial buyers of Tower A Atrium Units will be at least 60-70% on turnover of units.

Beth Collingz is the International Marketing Director for PLC Global Pinoy located in Metro Manila, which specializes in the sale of the Lancaster Brand of condo hotels. Visit her web site, www.plcglobalpinoy.com for more information on condo hotels and to see condo hotel listings, photos and prices.

Beth Collingz

Director - PLC International Marketing Networks

Title: 

4 Dangers In Flipping Real Estate

Word Count:

338

Summary:

If you have recently purchased some real estate for investment purposes, you are in good company. Recent reports suggest that as many as 25% of these purchases are made by those who plan on using the property for investment purposes only. If you hope to "flip" the property there are 4 things you must be aware of that can put a crimp on your profits.

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Article Body:

If you have recently purchased some real estate for investment purposes, you are in good company. Recent reports suggest that as many as 25% of these purchases are made by those who plan on using the property for investment purposes only. If you hope to "flip" the property there are 4 things you must be aware of that can put a crimp on your profits.

1. Property Taxes - Keep the property for a few years and you may experience a surge in property taxes especially if your taxes are reevaluated during that time. Some hot real estate markets have seen taxes nearly double in just 5 or 6 years.

2. Renovation Expenses. - You may have purchased a "fixer upper" at a bargain rate. Once your project is complete will you be able to recover the expenses and make a profit especially if the value of your renovated property is above those in your neighborhood? In addition, can you withstand a correction in real estate values?

3. Insurance and Mortgage  Costs - You will pay more for homeowners insurance if you do not occupy the residence and you have tenants. If you are financing the property you know that your mortgage rate is higher as well.

4. Rental Pressures - A market saturated with rentals will mean that the rents you can charge will be less than what you had hoped to receive. In some markets you are required to get special licensing in order to be a landlord. In other markets the legal rights of tenants mean you could have a lengthy and expensive battle in ridding yourself of a bad tenant. Will the lower income levels coupled with the added expenses drag your investment down?

Of course, you can limit your risks [and costs] by doing the majority of the upgrades yourself, appealing excessive property tax increases, and finding for yourself a trusted and dependable tenant. It isn't easy flipping a home, but with a lot of pluck and determination it can result in strong profits for you.

Title: 

Buying Rental Property - Avoid Seller's Tricks

Word Count:

546

Summary:

Buying rental property is a great way to invest for the future. Just watch out for these common tricks that sellers use to inflate the appraised value.

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Article Body:

Be careful when buying rental property. We stayed at a motel for a week one winter. The bill showed twice what it should have, but since I already paid the correct amount in cash, I thought nothing of it. When we noticed that the lobby and swimming pool were unheated, we thought it was frugality. Only a year later, when I read a news story about a new owner struggling to make the motel work, did I realize what was going on.

The owner had been planning to sell. To prepare, she was using the two most basic ways to inflate the appraised value: decrease expenses and increase reported income. By stopping repairs and quietly adding $100 in income every day, she may have shown $45,000 more net income for the year. At a .08 capitalization rate, that means the appraisal would come in $562,000 higher than it should have. Oops! The poor guy who overpaid!

Do you want to avoid a mistake like that when buying rental property? You need to watch for tricks like these. You also have to understand the basics of appraising income property.

It starts with the capitalization rate, or "cap rate." If investors in an area expect a return of 8% on assets, the cap rate is .08. Net income before debt service is divided by this to arrive at the value of a property. I explain this further in another article, but the primary point here is to remember that every dollar of extra income shown will increase the appraised value by $12.50 with a cap rate of .08, or by $10, if the cap rate is .10.

Sellers Dirty Tricks

If sellers of rental properties increase the net by honest means, then the property should sell for more. Unfortunately, there are many dishonest ways, both legal and fraudulent, that are sometimes used. Unlike sellers of houses, who may cover foundation cracks with plaster, the tricks used by sellers of income properties aren't about appearance. They are about income and expenses.

Income can be inflated by showing you the "pro forma," or projected income, instead of the actual rents collected. Ask for the actual figures, and check to see that none of the apartments listed as occupied are actually vacant. Also, be sure that none of the income is from one time events, like the sale of something.

Income from vending machines is a gray area. Smart investors subtract this from the net income before applying the cap rate, then add back the value of the machines themselves. If laundry machines make $6,000, for example, that would add $75,000 to the appraised value (.08 cap rate), if included. Since they are easily replaceable, adding the $10,000 replacement cost instead makes more sense.

Hiding expenses is the most common of seller's tricks. Paying for repairs off the books, or just avoiding necessary repairs for a year, can dramatically increase the net income. Demand an accounting of all expenditures. If a number in an expense category is suspicious, replace it with your own best guess.

Analyze each of the following, verifying the figures as much as possible, and substituting your own guesses if they are too suspect: vacancy rates, advertising, cleaning, maintenance, repairs, management fees, supplies, taxes, insurance, utilities, commissions, legal fees and any other expenses. This is how you make buying rental property safe.

Title: 

Be Careful and Diligent When Leasing Your Real Estate to the Government

Word Count:

467

Summary:

Beware of the very unique contract terms used in GSA lease contracts to avoid headaches.

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Article Body:

The general services administration (GSA) leases more than 150 million square feet of space from private building owners in over 2000 communities.  This makes them an extremely important player in the real estate community. Because of the unique terms and conditions contained in government releases, buyers of office buildings where the government is already a tenant basis the learning curve.

The number of potential conflicts between building owner and government tenant increase as the square footage under lease increases. Some investors assume wrongly that entering into lease agreement with the government is the same as a standard commercial lease.

The examples below the list rate some of the many unique terms and conditions in government leases back and have a big financial impact:

They use a standard tax escalation clauses stating that the amount of any increase in taxes about the first fully assessed year will be paid in a lump sum payment. Yet buried in the contract is a clause that requires the lessor to submit the tax escalation claim within 60 days of the tax payment date. If they miss the deadline, the lessor forfeits the entire escalation.  

When they want to make alterations to a space, the GSA may ask building owners to sign a ìwaiter of restorationî clause, stating that when the lease ends, it wonít be required to restore the space to its original condition.  Some owners think that by refusing to sign the waiver, they stop any alterations. But in a standard lease, there is a clause that allows alterations to take place.  The protections for owners lie in the fact that, by refusing to sign the waiver, they may be able to force a restoration when the government tenant moves out.  Keeping good records is critical for this.

Conflicts occasionally occur, and when they do, thereís another interesting clause that comes into play.  The day contract disputes that clause outlines procedures to follow its owners have a disagreement with the government they canít resolve through negotiations. It allows of building owners to submit a claim against the government by simply writing a letter to the government contracting officer outlining the basis for the claim and the amount.  The government contracting officer can then either negotiate, pay the client, or issue a denial of claim.  The denial of clay is in the form of a ìfinal decisionî which is misleading because the decision is not final. If the owner doesnít agree with what the contract in officer decides he can appeal to a board of contract appeals which renders unbiased decisions. This is all done simply by mailing a letter.

Ultimately, there could things and bad things associated with government leases. To avoid any unpleasant surprises, owner should do their homework and understand their options in the event of conflicts.

Title: 

10 ways to cut your property taxes

Word Count:

556

Summary:

Property taxes are decided collectively by school boards, town boards, legislators, and councils. The tax rate is set by collating the amount of funds an area needs. This is then divided that by the ‘total taxable’ assessed value of the area.

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Article Body:

Property taxes are decided collectively by school boards, town boards, legislators, and councils. The tax rate is set by collating the amount of funds an area needs. This is then divided that by the ‘total taxable’ assessed value of the area. The tax an individual pays is computed by multiplying the tax rate by the assessed value of your property and then deducting any applicable exceptions. Property taxes are at an all time high. Studies indicate that they have increased more than 35% in five years.

Property is assessed by determining property costs in any given area. Property is valued by studying: the current sale price of properties in the area, costs to be incurred to replace the property, potential realization of property if it is rented, sold, or gifted, and the historical value of a property.

There are a few ways in which you could save on taxes:

1. Check if the state you reside in is offering any rebates.  For example, a money back rebate, energy rebate, capping of taxes, or home owners rebate where under certain conditions you may be eligible to claim a rebate. 

2. Ensure that the property is assessed right. This will ensure that you do not have to pay excess taxes. Assert your right to check you assessment report ensure that there are no miscalculations, mistakes, or assumptions. If in any doubt, do put in an appeal. According to statistics almost 50% of the cases win some relief. 

3. Check all exemptions allowed according to the law. 

4. Buy property jointly with a partner or family member. This way both owners become eligible for tax rebates.

5. Check if your assessment is in according to other properties in your neighborhood. Check with the assessment office or with your neighbors themselves. It helps to know applicable laws. Use the help of a real estate professional to put together a file of properties similar to yours that have a lower assessment. Or, use the bank’s appraisal to support your case. Be sure that the case you gather together is water tight.

6. Use a property consultant to help you save taxes. Some charge a flat fee while others just a percentage of what you save. A professional will check how assessment is done and also if there are any loop holes you can use.

7. There is strength in numbers. Get together with other owners who are also checking or fighting assessments. Check on the National Taxpayers Union Web site http://www.ntu.org   for your rights.

8. Ask you home loan provider whether you are eligible for refund of property taxes paid. Some agreements have a provision for this. Many mortgages have automatic escrow of taxes.  

9. Even before you buy a home find out what the property taxes are in the area and what have been the increases in tax rates. 

10. Be sure to read through assessment and tax manuals published by your local authorities. These will give a clear idea of what are the parameters used and what you must do to reduce or pay the correct property taxes.

In order to be money smart you need to get the help of an efficient and dedicated accountant, plan your tax liabilities well, known thoroughly all aspects of Property Tax. If you are prudent, you can benefit by using ways and means to cut your tax burden and liabilities.

Title: 

Tax Deductions for Real Estate Home Businesses

Word Count:

584

Summary:

Discover the many tax deductions for the home based business owner.

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Article Body:

For most home business owners, tax deductions may be the key that can help put a little extra cash back into their pocket. Tax deductions vary from business to business but it is worth your time to familiarize yourself with some of these common tax deductions. 

First, determine if you qualify for a home business tax deduction. A home office is generally defined as a place where you meet with clients, patients, or customers. Or if this part of the house is used exclusively for business purposes. Most people have a general image that comes to mind when they hear the words ‘home office.’ In reality, tax deductions can apply to a variety of places. Your home office can be a garage, basement, or a studio. If you do qualify as a home business, it is crucial to keep all records, receipts, and paperwork that you have accumulated throughout the year. 

It will make tax time a much less stressful experience for the home business owner. Do not overlook the small things. This can be as simple as keeping the receipts when you purchase paper, staples, or toner. Any item that is purchased for your home business is usually considered a tax deduction. This may seem tedious and unimportant but nothing could be further from the truth. You might be amazed when all these little things add up at the end of the year. 

Home business deductions can be separated into two categories. The first is for Direct Expenses. These are expenses that are needed for your actual home office. Direct expenses include office furniture, decorating costs, or equipment. Indirect Expenses are the expenses that must be paid the entire house. This includes heating, electricity, or mortgage interest payments. You can deduct the percentage of your business expenses from your utility costs. 

Another tax deduction to consider is telephone expenses. If you have one telephone line, the IRS is usually not going to believe that you use this only for your home business. The second phone line installed in your home is purely one hundred percent deductible. Another common deduction that is often missed is the lost distance charges incurred because of business calls. 

An overlooked tax deduction for some home business owners are the meal expenses when they entertain an employee, a customer, or a client. Save all your receipts from these business dinners. It is possible to deduct fifty percent of meal expenses.  Education expenses can also be a tax deduction if it is required by law to update your skills or if you are trying to enhance your skills for your current position. 

Most home business owners use a vehicle as a means of transportation for their business. This vehicle can be used for running to the post office, or meeting with a client. Keep a log book in the vehicle to keep track of the mileage on these errands. Vehicles can be vital to run your home business, and overtime these kinds of charges can hurt your profits. There are many valuable tax deductions for vehicles, such as car repairs and car insurance. Airline fare can be another costly, but necessary aspect for home business owners. The IRS does allow your trip expense as another tax deduction. 

As you can see, home business owners have a variety of options when it comes to tax deductions. Remember to keep records of all your home business activities and consult with a tax advisor to get the best deductions for your home business.

How do Mortgage Interest Tax Deductions Work?

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Many people know that the interest paid on a mortgage is deductible on their income taxes. But they don't understand how it really works.

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Many people know that the interest paid on a mortgage is deductible on their income taxes. But they don't understand how it really works.

When you understand the way a tax deduction works, you should be able to estimate the amount of tax relief you would receive from owning your own home and paying a mortgage.

First, you need to know what is deductible. In many cases, homeowners are allowed to deduct the amount of mortgage interest paid from their income. They are also able to deduct the amount of real estate property taxes paid on the property.

For example, we have a homeowner and a renter who both make the same annual income of $60,000.

The renter pays $1,000 a month in rent and receives no tax benefits for renting a home.

The homeowner holds a $140,000 fixed rate mortgage with a 7% interest rate. His total mortgage payment is $1,100 a month. He pays $1,500 in real estate property taxes. His total mortgage interest paid for this tax year was $9,755.

Here's where the taxes make a difference. The owner is able to deduct $11,255 from his income before he calculates his tax liability. The renter has no deduction from his income and is taxed on $11,255 more than the owner.

Let's keep it simple and assume that both are in a 25% tax bracket. The renter will owe the IRS $15,000 in taxes on his income of $60,000. The owner's taxable income has been reduced to $48,745 after his deductions. He only owes $12,186 in income taxes. The owner saves $2,814 in taxes each year. That's a savings of $234 each month.

Basically, the homeowner's after-tax monthly payment is actually $866. The renter is still paying $1,000. The homeowner gets to keep his house in the end.

There are many variables that can affect the amount of mortgage interest you pay in any given year. But, you could often say that you can take 20% off of your mortgage payment to get a rough idea of the tax benefits of owning.

Ask your lender. A good loan officer should be able to give you a reasonable estimate of your mortgage interest and tax payments over a given period of time. Many lenders will give you a schedule when you close on your home.

When it comes to determining your tax bracket and deductions, ask your CPA or tax attorney for advice. Your loan officer can't really help you with tax details.

The bottom line is that owning your own home has many financial advantages. If you are tired of spending your paycheck on rent, but getting nowhere, home ownership may prove to be a more affordable solution for you.