Tax Reform: Do No Harm To Home Ownership

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There’s been quite a ruckus over President Trump’s first few months in Office as he begins to forge his path as America’s forty-fifth president. He has already ruffled a few feathers and caused strong opposition from different fronts as he set to work “making America great again.” With such uncertainty many are wondering just what changes will occur and how they will affect American lives. This uncertainty also reaches into the real estate industry. With much talk about the elimination of the mortgage interest deduction in the months prior to Trump’s first days in the Oval Office, many are wondering what other changes will likely affect real estate, housing inventory and lending practices.

Most would agree that Trump is a wild card as there has not been another president like him in the past. Without a comparison to get a base-line on our new leader, many are scrambling for solid ground as “what-if” stories are circulating through the media. Truly a man of and to himself, he has a different outlook on how he will run America. Just because things are going to be different doesn’t necessarily mean things will be negative or for the worst. Everyone will have their own opinions and each rightly owns their opinions. But we’ll stick to the facts and take a look at what could be in store for American real estate and the potential effects on the market.

Trump is a real estate mogul and understands the benefits of real estate as an investment. Some say because of this he will continue to be a friend to the real estate industry. And it is no surprise that Trump is a supporter of fewer business regulations. Fewer business regulations would allow lending companies more flexibility in negotiating with underwriters and allow non-traditional lenders to enter the lending field. Small-sized banks typically fund construction and land development. Decreasing compliancy cost for small banks means more loans will be processed and spur the housing market creating more inventory, which has been lower than usual. Also, less regulatory land-use and zoning burdens for construction would lower the cost of building and developing. With more money to build more will be built.

With much talk and speculation about the tax changes bound to be implemented, Trump is looking for the most advantageous tax structure that could possibly prompt holding companies to sell investment real estate. As the mortgage interest deduction, property tax deduction, and exemptions on capital gains from home sales are all looking at some form of tax reform. Realtors are holding strong to the belief those are not to be “harmed” or altered in any way. We, as an industry, will continue to educate our elected officials as to the importance of home ownership and its intrinsic benefits to the individual homeowner and the community as a whole. Real Estate will always be a good investment and the broad benefits it provides to families and communities are too important not to protect!

 

*Silverhawk Realty (Treasure Valley and Western Treasure Valley Real Estate) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Destination Vacation Spots

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What do destination spots mean for real estate? Most might think expensive or over-saturated and competitive, possibly too touristy and cliché. But what if you could find a piece of real estate in a destination spot that claims none of those characteristics – would you be willing to check it out for yourself, possibly see and experience what a vacation rental as an investment option might offer?

When looking for vacation rental options in destination areas, be it beachside, cityscape, country living, or tropical, most folks are traveling for the experiences to be had and new views to take in on their average ten-day vacation. A full year of ten-day vacations is a lot of time to get vacationers in your vacation rental and a lot of money to be made. While hotels are a dime a dozen and on every corner depending where you’re vacationing, condos, townhouses, vacation homes and apartments are still preferred by families. With the added space, privacy and amenities, vacation rentals offer more space for less cost per night than hotels, which makes vacation rentals a win for investors.

Of course finding the ideal vacation rental is key, but that might be easier and more local than you could imagine. You’ll never guess what local city made Vogue’s Ten Hottest Travel Destinations of 2017*.  Right up there next to tropical paradises, infinite beaches, islands, and must-have cultural experiences, our little Idaho has made the list, with Boise as “one of America’s most desirable second-tier cities.” Vogue gushed over the Modern Hotel and Bar, quintessential coffee shops, the booming craft beer venues, distilleries, and Boise’s cultural feel. But what would Idaho be without giving props to its outdoorsy life? Credit to Sun Valley and Ketchum were likened to Aspen in the 1960’s, a throwback to laidback attitudes. With access to trails for hiking, running, and biking in the foothills and camping, skiing, boarding, and whitewater rafting just beyond the backyard in the miles of mountain terrain, Idaho boasts a nature and outdoor adventurer’s delight.

If Idaho is booming as a vacation hot spot, now is the time to get in on the opportunities while it is still in the beginning phase. Tapping early into the reservoir of vacation rentals in a destination hot spot is the ideal investment. The right investment will yield high returns and have minimal maintenance. But you will have to do a little investing of yourself to make a vacation rental ideal. With as little as ten hours per week a recent survey* found that vacation rentals comprised a quarter of survey participants’ income. Time was spent advertising, responding to traveler’s questions, and coordinating cleaning and maintenance of the property. Think how much easier it would be if your vacation rental was just across town – accessibility for a quick check-in, variety of known local cleaners, maintenance, and contractors to choose from, all equal peace of mind.

If you’re still on the fence, there is always the option to use your current home as a vacation rental and purchase an upgraded home for yourself. In the end there is always the option to sell if it doesn’t work out.

*Silverhawk Realty (serving real estate needs in the Treasure Valley and Western Treasure Valley) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

www.SilverhawkRealty.com

* http://www.vogue.com/13515667/top-travel-destinations-2017/

* https://www.homeaway.com/info/media-center/press-releases/2016/vacation-rentals-provide-valuable-income-source-for-owners-again

Photo by: Alamy

The Bathroom Option

DSC_1109 (1280x821)Bathrooms have come a long ways over the decades. Bathrooms of yesteryear had all the essentials – toilet, sink, tub, and shower (sometimes), but they lacked layout and functionality and most of the time personality, not to mention the number of bathrooms per house. Think back to your grandma’s bathroom or Aunt Suzie’s bathroom or maybe even your own childhood bathroom. Today bathrooms still contain the essentials, if they’re a full bath (more on this in a bit), but they also have functional layouts, storage, and personality as builders get crafty and accessories are in abundance. With marble or granite counter tops, tile back splashes, and vinyl flooring made to look like stone or actual stone flooring bathrooms nowadays are a creative endeavor worth showing off.DSC_5690-1

As shower surrounds improved and bath shower combos became spacious and functional (no shower curtain sticking to your legs or drafty air freezing you out) with space for your bathing items the place where you perform your daily hygiene routine is easier. And if you have a newer home much more stylish. Accessories abound as towel racks, facets, mirrors, lighting and toilet paper holders all of sudden look like someone took the time to make them fashionable – not to mention fun to use.

IMLS98623950O[1]Another trend is bathrooms that are a fraction less than a full bathroom. Most houses being built today come with a half bath, a bathroom that typical has a sink and toilet, to accommodate your guests, often called “powder rooms” from lingo of days old. In newer homes, this bathroom is a little bigger than a closet close to the common areas and away from bedrooms. Some houses might also have a three-quarter bath, which contains a shower, sink and toilet, foregoing the tub. Older homes might have a three-quarter bath missing the shower instead of the tub. In todays fast pace society, showers get more use than bathtubs, as bathing in a tub is now seen as a luxury. Master bathrooms of new homes typically boast a standalone shower and a deep, jetted tub, which is often more for looks and is actually rarely used. And for knowledge sake, there is a quarter bath, which as you can guess only has one of the four bathroom essentials, typically a toilet. This is unheard of in new construction.DSC_1111 (1280x842)

Bathroom sizes do affect the value of your house. If you are thinking of remodeling or adding a bathroom a full bath will give your home more value than any other bathroom option. The National Association of Home Builders conducted a study in 2006 and found that a full size bathroom will add about 20% to a homes value, while a half bath will add about 10.5%. This was true even if the number of bathrooms equaled the number of bedrooms. And if the bathrooms were less than the number of bedrooms a bathroom addition could add even more value. Thinking back to older homes with only one bathroom…we’re lucky bathroom norms have come a long way.

www.SilverhawkRealty.com