RealtyCast Global BLOG Header #2 Investing in Foreign Property with Stefano Lucatello

RealtyCast Global #2: Investing in Foreign Property with Stefano Lucatello

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Welcome to episode #2 of RealtyCast Global – a global connection to all things real estate, hosted by Hugh Gilliam, president of Global Property Pros.

Are you dreaming of investing in a property abroad but unsure of where to start? Get ready to have your questions answered by the exceptional Stefano Lucattello, Senior Partner at Kobalt Law LLP. He’s not only a legal eagle when it comes to international property law, but he’s also the author of ‘Investing in Foreign Property: The Ultimate Guide to Buying Safely.’ Stefano’s insights will guide you to safely navigate the often complex world of buying properties abroad.

Our conversation with Stefano takes you on an intriguing journey from his roots in Italy to his successful career as a commercial lawyer in England and now, also an international property expert. He unpacks the intricacies of buying properties abroad, emphasizing the importance of understanding the taxation laws of the country you’re buying property in.

Stefano’s wealth of knowledge doesn’t stop there. He delves into the critical factors to consider when setting up a business abroad, guiding you through the process of declaring income tax for rental income and wealth taxes. We wrap up our enlightening conversation with Stefano sharing his excitement for opening an international cookery school and his plans for retirement. This episode is an essential listen for those considering buying property abroad. So sit back, relax, and let Stefano give you a masterclass on turning your foreign property dreams into a reality!

Those interested in purchasing a book can obtain a copy on Amazon. All profits go towards funding cancer research.

For real estate agents looking to expand their business internationally, expose existing listings to a global pool of buyers, and connect with new clients, check out Global Property Pros.

For Property Buyers & Sellers seeking assistance in the international market, check out RealtyHive’s property marketing solutions.

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About the guest – Stefano Lucatello:

Stefano Lucatello is the Senior Partner and Head of Kobalt Law LLP.  He qualified as a Solicitor in 1988. Languages and Law have always been a very important part of his life and practicing career as a Solicitor. Kobalt Law LLP is the culmination of many years of practice both in England and abroad. Stefano combines his knowledge of English and foreign law to advise clients from around the world.

He practiced in Gibraltar as an international partner of a Leeds-based practice, where he developed his skills in offshore tax and trust law, advising High net worth individuals to protect their fortunes.

Stefano is an accomplished author, writing on many different international property topics and platforms, as well as appearing on his own Property TV shows and seminars.  He has written an international property buying guide, entitled, ‘Investing in Foreign Property: The Ultimate Guide To Buying Safely.’

The first edition was published in 2015 and the second in 2018, with an updated chapter on “Brexit”.

The book is a generic guide about what potential foreign property buyers need to know and be aware of when considering buying property abroad. Stefano says “People never learn that buying foreign property is no less difficult than buying in the UK. How can you possibly buy in a foreign country, without specialist legal assistance, like that provided by Kobalt Law LLP, international property lawyers?

It is very hard when potential buyers don’t speak the foreign language or understand the different foreign law that applies to foreign property purchases. 

They believe the agents, who say that they don’t need this kind of assistance, and merrily follow the agent’s advice to go to a foreign lawyer, without checking them out first.”

The book is filled with great tips and advice, which apply to most countries in the world and takes you from the moment you decide to start the property search journey, to completion of the purchase and then onto living your dream in that foreign country.  It has 10 chapters and takes 2 hours to read.  It has been described by certain well-known foreign property commentators, as “incisive and well written”, explaining difficult topics in an “easy-to-read way”. It has a notepad, at the end, so that readers can take the book with them and write notes as they visit agents.

About the host – Hugh Gilliam:

Hugh Gilliam co-owned a national transportation company, created a land development business, and worked as a general contractor in residential and commercial construction for over two decades. Hugh also co-founded an international distribution company and successfully negotiated and contracted with 135 sales representatives in the United States, Canada, France, Brazil, Japan, and the Netherlands.

Today, Mr. Gilliam is affiliated with RealtyHive, LLC where he serves as Director of International Real Estate and President of Global Property Pros. His duties include involvement in commercial and residential transactions, plus promoting marketing systems and lead generation platforms.

He is also co-founder of the luxury digital magazine, DOORWAYS INTERNATIONAL, powered by RealtyHive, which serves as a platform for Brokers and Buyers throughout 70 countries.

Hugh’s Designations Include:

  • Certified Luxury Home Marketing Specialist
  • Certified Distressed Property Export
  • Certified International Property Specialist
  • Certified International Investment & Immigration Specialist
  • Transnational Referral Certification

Hugh’s Memberships Include:

  • Georgia Association of REALTORS
  • National Association of REALTORS
  • International Real Estate Federation (FIABCI-USA)
  • Asian Real Estate Association of America
RealtyCast Global Episode 1 - Purchasing Property in Portugal with Antonio Barbosa

RealtyCast Global #1: Purchasing Property in Portugal with Antonio Barbosa

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Welcome to the premier of RealtyCast Global – a global connection to all things real estate, hosted by Hugh Gilliam, president of Global Property Pros. During this podcast feature, Hugh discusses the tips, tricks, and benefits of moving to Portugal with industry veteran Antonio Barbosa of Infinite Solutions. Whether you are a real estate agent with a client looking to purchase property in Portugal or a property buyer seeking advice on the steps to take, you don’t want to miss this discussion!

For real estate agents looking to expand their business internationally, expose existing listings to a global pool of buyers, and connect with new clients, check out Global Property Pros

For Property Buyers & Sellers seeking assistance in the international market, check out RealtyHive’s property marketing solutions.

About the guest – Antonio Barbosa:

António Barbosa is a REALTOR® living in Portugal and with more than 20 years of experience in Real Estate. He will tell you that he doesn’t sell homes; He fulfills lifestyle dreams. He’s a charming man with the most disarming smile who makes friends wherever he goes. If you are not his friend, it’s because he hasn’t met you yet!

He prides himself in being part of the decision of more than 500 families making Portugal their new home. In addition, He considers his biggest achievements in life the personal and business relationships he built, which led to long-lasting friendships not only with his esteemed clients but also amongst his distinguished colleagues!!!

He’s happiest helping people to find a home or wealth investment property in Portugal or worldwide. His company name is “Infinite Solutions”, and it’s a perfect name because he’s not problem-oriented, he’s all about solutions.  

He’s also a world traveler and foodie, so if you need a solution of where to go for dinner, on vacation, or where to buy your next lifestyle property, he’s your person! He speaks fluent Portuguese, English, and Spanish.

Antonio is a proud Member of FIABCI-USA as well as NAR® and holds the CRS® / CIPS® and ABR® designations.

About your host – Hugh Gilliam:

Hugh Gilliam co-owned a national transportation company, created a land development business, and worked as a general contractor in residential and commercial construction for over two decades. Hugh also co-founded an international distribution company and successfully negotiated and contracted with 135 sales representatives in the United States, Canada, France, Brazil, Japan, and the Netherlands.

Today, Mr. Gilliam is affiliated with RealtyHive, LLC where he serves as Director of International Real Estate and President of Global Property Pros. His duties include involvement in commercial and residential transactions, plus promoting marketing systems and lead generation platforms.

He is also co-founder of the luxury digital magazine, DOORWAYS INTERNATIONAL, powered by RealtyHive, which serves as a platform for Brokers and Buyers throughout 70 countries.

Hugh’s Designations Include:

  • Certified Luxury Home Marketing Specialist
  • Certified Distressed Property Export
  • Certified International Property Specialist
  • Certified International Investment & Immigration Specialist
  • Transnational Referral Certification

Hugh’s Memberships Include:

  • Georgia Association of REALTORS
  • National Association of REALTORS
  • International Real Estate Federation (FIABCI-USA)
  • Asian Real Estate Association of America

Things to Consider Before You Buy a House that Needs a Lot of Work

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Most people want to make a few changes to a property when they buy it, to make it their own, and bring it to their particular standards. However, if you’re planning to buy a fixer-upper, be aware of what you might be getting yourself into.

While a renovator project is going to be less costly to buy upfront than an already refreshed place, you must do your due diligence to ensure you don’t bite off more than you can chew. Consider and research a variety of factors before you sign on any dotted lines.

Know What You Can Afford

Many people think that buying a fixer-upper for a lower price then doing a few renovation tasks will have them seeing profits in no time. However, in reality, remodel work tends to be both more time consuming and more expensive than expected. As a result, it’s easy to get into a situation where you’ve spent much more money than planned or perhaps can even afford. Sometimes buyers can’t even finish their project because they’ve run out of funds.

To avoid landing in this situation, get clear on exactly how much money, in total, you can afford to spend. Have a set allocated figure, and work back from there. Anytime you look at properties, you subtract the likely purchase price from your budget and see if you’ll have enough funds left over to renovate adequately.

When factoring in financial elements, try to allow for every cost that could arise. This means more than simply the purchase price of the home and laborer and material fees. Don’t forget things like realtor and legal fees, demolition and removal charges, insurance costs, home warranty to cover appliances and other home systems, inspection costs, and so on.

Be Clear on Goals and Expectations

Be clear on your goals for the project, too. That is, are you buying a house to do up to your personal specifications and live in for years? Or are you tackling the task to flip the home ASAP after you’ve renovated it? Perhaps, alternatively, you’re planning to refresh a property so you can rent it out for a top dollar? No matter what you plan to do with the home after its facelift, you need to know what you hope to achieve. Let this guide you when shortlisting properties.

Know your expectations, too. With so many home-renovation reality shows on television now, many people think the process is straight forward and always results in a profit. However, believing you’ll get the same outcomes as the people on TV who usually have years of experience and a vast support system behind them can set you up for failure. Try to have reasonable expectations and plans in place for how you’ll deal when things go wrong.

Organize Inspections

One of the top tips for buying a fixer-upper is to invest money in proper inspections conducted by licensed, experienced, and adequately trained contractors. Before you commit to purchasing a property, know what you’re getting. Some houses look fine on the surface, like they only need a few inexpensive cosmetic touches, but when you start to get into the renovation work, you discover all sorts of more significant problems.

Some of the checks to consider include roof certifications, pest inspections, engineering reports, sewer line inspections, and building reports. Be on the lookout for fundamental, structural, and costly issues that people bring to your attention, such as roof or gutter replacements, shoring up foundations, building garages or additions, and pouring concrete for new driveways.

Other expensive work includes complete kitchen or bathroom remodels and replacing electrical wiring, sewer lines, and plumbing systems. Plus, think hard about buying homes that require you to outlay money on installing replacement windows throughout the house, getting rid of asbestos, mold, and mildew, and replacing or installing HVAC systems.

A fixer-upper home is always going to need work, which takes time and money, but it’s vital to separate extensive rehab needs from more affordable cosmetic tasks. At the end of the day, though, the rehab you can afford and want to do comes down to your specific situation and preferences. Speak with builders and contractors to get quotes on work (and add extra for unforeseen costs), so you can work out if you have the potential to make enough of a return on investment or not.

Buying a rundown property and turning it into something fresh, appealing, and updated is both exciting and nerve-wracking. Give yourself the best chance of success by considering the factors listed above before you sign any purchase contracts.

how much does a real estate agent make

How much does a real estate agent make?

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Much like real estate itself, the answer to how much a real estate agent makes in annual pay is largely based on location, location, location. Commission splits, brokerage fees, and average sales price all affect commission and vary by location. 

Where You Work Determines How Much You Make

The real estate industry is a much different career path than many other jobs. Real estate agents are typically considered private contractors meaning that they technically own their own business and can make their own rules. This is mostly true, but doesn’t tell the whole story. According to laws in every US state, real estate agents are required to work under a real estate broker unless they become a licensed broker themselves. 

Brokers provide agents with the experience needed to make good decisions in tricky situations, something that happens quite often in real estate. They also often provide some benefits to agents in the form of listing/closing departments, usable office space, and errors & omissions insurance. 

The fees brokerage charge agents, often referred to as “splits”,  vary by franchise and broker. Splits of 60/40 (agent gets 60% of their commission, broker gets 40%) aren’t unheard of, but there are also brokerages that offer 0 split arrangements. Many companies choose a hybrid model where the broker gets a part of the agent’s commission until the agent sells a certain volume of property, reaches a particular income threshold, or has worked for a certain amount of time. 

This is largely why the hiring process in real estate also seems completely backwards to non-industry folks. Typically a company hires a contractor, but in real estate, agents typically interview brokerages instead to choose where is the best fit for them. While brokerages can accept or reject agents as they choose, more agents typically means more money to the broker from commission splits so they’ll often accept or even recruit new agents. 

how much does a real estate agent make in your city

Geographic Area Affects Earning Potential

The majority of US real estate agents work on a commission structure meaning that what they make on any given transaction is based largely on the sale price of the property. Like the average cost of a property, the exact percent of the commission can vary by area or property. 

In the US, real estate commission fees vary from place to place, but average about 6 percent. This fee is then divided between the listing agent and selling agent, with the split often being fairly equal, although it’s not uncommon for the listing agent to receive a higher percentage. Both the listing and selling agents will then split their portion of the commission with their respective brokers. 
While commission splits are known from the get-go, the selling price is what really determines how much money an agent makes. At the end of 2019, the average US home was estimated to be valued at $241,000. If a real estate agent sold a house like that at a 3% commission,they would make $7230. However, if an agent sold a property in San Mateo County, California where the average estimated home value was $1,182,300, the agent would make $35,469. Now compare this to Desha County, Arkansas where the average home value was an estimated $65,526. An agent selling a home here could expect a payday of just $1965.78 before broker splits, desk fees, and property marketing.

Real Estate Opens Many Doors

Selling properties isn’t the only way that real estate agents make money. While many practicing agents work with buyers and sellers, others work as property managers, property flippers or landlords. A career in real estate comes with many benefits. Learn more by checking out our article how to become a real estate agent.

5 Things Real Estate Agents Don’t Want You to Know

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Selling real estate is one of the most expensive financial decisions most people ever make. Due to the high monetary stakes, many people look for a real estate agent to guide them through the process, but before diving in and calling just any agent, there are some things you should be aware of. Here are 5 things real estate agents don’t want you to know. 

Agents don’t want you to know: The MLS has lost its power

One of the biggest advantages to selling a property with a real estate agent is their access to the Multiple Listing Service (MLS). Before the days of the internet, the local MLS was the only location where all for sale properties were posted and the information was only available to licensed real estate agents. While the MLS system is still used today, it has been largely democratized by large listing portals like Zillow or Realtor.com. In fact, these portals tend to have direct relationships with MLS organizations meaning that the portals get property information almost as quickly as real estate agents can. If you list your property with a real estate agent, you can request that they add your property to these portals for you however if you choose to sell on your own, listing on these portals is free. 

Agents don’t want to you know: Many properties sell themselves

The real estate industry is HOT right now. Even with the financial and societal chaos caused by COVID-19, cities across the US are reporting a sellers market with a lot of competition among buyers. Many real estate agents are hardworking professionals who will do the necessary work to properly position your property for success. They take good photos, write compelling descriptions, and do additional marketing to get your property as many offers as possible, but in this market many properties will sell quickly without that professional touch. 

Agents don’t want you to know: Not every agent offers the same service

Agents don’t all offer the same service when listing a property. Some real estate agents offer professional photography and drone images as part of their basic service. Others offer staging or guidance on how to improve the curb appeal of a property. Yet others don’t offer any of these services or require additional payment or fees to cover these charges. When looking for a real estate agent to sell your property, make sure you ask exactly what services they will provide. 

Agents don’t want you to know: Beware of dual agency

No matter if you’re buying or selling real estate, you want to work with someone who has your best interests in mind. As a buyer it may seem obvious to call the phone number on the real estate listing or sign, but that’s not always the best idea. Listing agents have what’s called fiduciary duty to the sellers meaning that even if an agent is working with both the buyer and the seller in a real estate sale, all choices they make must be for the best interest of the seller. As a seller, this might seem like a good thing. You have the “in” with the agent on the other side of a deal, but this can also work against sellers. While an ethical agent wouldn’t do this, there are cases where an agent encourages a seller to accept an offer from that agent’s buyer client — even if it might not be the highest or best offer. 

Agents don’t want you to know: You can negotiate rates

Using an agent to purchase real estate costs nothing, but sellers can expect to pay an average of 6% of the sale price of the home in commission to their real estate agent. When a property is sold, a commission is paid to the listing agent (the agent who represents the property). The listing agent then pays the agent who represented the buyer as a “thank you” of sorts for bringing a buyer to the property. As a seller, you are able to negotiate the percentage of your sale price that you are willing to pay. 

Looking for an easier way to get a discount when selling real estate? While some agents and real estate brokerages offer discounted rates for discounted service, RealtyHive has created a program that negotiates with agents on your behalf to get you a discounted rate with full service. This program is available for any property almost anywhere in the US and helps sellers save thousands of dollars in real estate commissions with absolutely no cost to them. Interested in buying? Contact RealtyHive to connect with an agent who will save you money when buying your next property!

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5 Inexpensive Tools for Your Real Estate Business

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Being a real estate agent has its perks. You’re a business owner, you make your own hours and set your own rules. You also wear a lot of hats — accountant, marketing, HR, and more. Fortunately it’s easier than ever to keep your business (and life) organized. Check out these 5 inexpensive tools for your real estate business.

Canva

Establishing a personal brand is a great way to stand out in a crowded market. Your business card, yard signs, and email signature all offer a way to convey information about yourself to potential clients or associates and Canva helps even the most unskilled to create beautiful designs. Canva offers many real estate-specific templates to get you started and there is a free plan available.

WordPress

If you want to take your business to the next level, consider your own website. You can further your brand, showcase your local market expertise, and collect prospect information all from a personal website. While there are a lot of options for inexpensive websites, WordPress (which powers somewhere around 30% of all pages on the internet) is a great option.

WordPress sites are endlessly customizable and offer many plugins making it easy to have a well-designed website without needing to know a programming language. WordPress itself is free and open source, but you will need to purchase website hosting and a domain name to get started.

BoxBrownie

Real estate pros know homes look best on sunny days, but unfortunately not every day has picture perfect weather. Thankfully there’s no need to wait around for sunny days with BoxBrownie. The service uses photo editing technology to improve and alter real estate photos. This can be anything from replacing the sky to virtually staging a room.

via GIPHY

via GIPHY

Interested in a more DIY approach to photo editing? Check out the mobile-only app Pixaloop. This very inexpensive app allows you to replace sky, animate water, or add other little touches and works great for your social media pages.

DocuSign

Real estate is notorious for the amount of paperwork required, but Docusign looks to change that. DocuSign has been a vital business tool for many REALTORS® throughout the COVID-19 pandemic as they offer a way to electronically send documents for signature. The program doesn’t require recipients to have any special software, making it easy to send, sign, and return contracts. Docusign offers monthly plans from just $10 and is available for computers or as a mobile app.

RealtyHive

There’s a lot in real estate that can feel like a gamble. You want to price a property high enough to get the most value for your client, but you don’t want to price it too steeply that you don’t receive competitive offers. RealtyHive time-limited events are a great way to make sure you get the absolute most money for your client in a risk-free way. Time-limited events are a soft auction approach that allows sellers to remain in full control of the final sales price while opening up the pool of buyers. RealtyHive offers programs that are 100% success-based — meaning you only pay if your property sells.

Buying or Selling a Home As-Is

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We all know (or can easily figure out) the concept of buying or something “as-is.” I’m about to try selling my bike as-is for $25 — it works well, but needs some tuning up, the tires are flat and I don’t have a bike pump.

Maybe you’ve seen someone with a “For Sale” sign in the front windshield of their car, parked on the side of the road. There very well might be nothing wrong with it, but the seller thinks they can get a better deal than taking it to a used car dealership by taking matters into their own hands.

When we buy or sell something as-is, that “something” is to be sold and purchased in the state that it’s currently in. But for a massive investment and asset like a house, how does this process work?

Selling a House As-Is

The process of selling as-is is pretty simple. The only real differences from selling the traditional route are:

  • Your listing includes “as-is”
  • If you lived at this house, you have to disclose any/all known issues
    • If you inherited the house, it was a rental you hadn’t lived in, or if it was a bank-owned property, your disclosure requirements are waived.
  • The house doesn’t have to be empty when you move out

With all that in mind, here are some pros and cons to selling as-is:

Pros

You don’t have to clean your house. This is perhaps the biggest benefit to selling as-is. Homeowners with tons of stuff don’t have to clean through and sort everything — they can literally leave their house and its belongings for the next person. This is also beneficial for homeowners who are grieving the loss of a loved one — going through everything can be extremely painful.

You don’t have to fix things up. If that roof has needed replacing for several years but you’ve just never had the time or funds to do so, you don’t have to. Even minor cosmetic issues don’t have to be spruced up.

You might sell faster. Those who invest in real estate are often looking for motivated sellers. There’s a good chance you can get connected with a buyer who’s ready to close in 30 days, with no inspection necessary (this is especially true if you sell with RealtyHive!).

Cons

Your house is almost certainly going to sell for less. All the as-is benefits come with a price. When passing the torch of a rundown house to the next buyer, they won’t go for the property if they can’t afford both the house and the necessary renovations.

Buying a House As-Is

The most important thing to note with buying a house as-is involves inspections and offers. You can still put a home inspection contingency in your offer, but know that the sellers are not obligated to fix anything. This contingency solely protects you from having to purchase the house if, after the inspection, you change your mind about buying. 

For example, you might find out in a house you’re interested in that there’s major foundational damage and termites. You realize the costs are way too high and fixing things would take longer than you’d like. You’ll lose a few hundred bucks on the house inspection, but it’s better than being locked into a home purchase that you later regret.

Pros

You can get a massive deal. Undoubtedly, this is why people buy homes as-is. You could save tens of thousands (and then some) by going this route.

You might love the appeal of a fixer upper. Looking for a major project or love the idea of a house with potential? Buying a house as-is provides that exact opportunity.

You could close faster. With traditional home sales, you might submit one of 20 offers. It could be a few months at least, between submitting an offer and the closing date. Buying as-is can drastically speed up the process.

Cons

You will almost certainly have to deal with lots of issues. Hoarding houses, structural damage — the gamut of home issues runs from moderate to nightmarish when buying as-is. While you could stumble upon an incredible deal with very little to fix, the chances are slim. 

For this reason, including home inspections in an offer letter is necessary, unless you’re completely confident in taking on anything that comes your way. At the very least, consider taking a friend who’s got an eye for home improvement with you to walk by or through the property. 

You might pay more than you bargain (or budget) for. A low price is rarely what you’ll end up paying to make a place liveable. Buying as-is might seem like a steal, but you definitely run the risk of unforeseen costs.

No matter if you’re looking to buy or sell as-is, RealtyHive is the place to go! We list properties from highly motivated sellers and connect them with highly interested buyers — think of us as an as-is online dating service. Fall in love with a new property or our selling process today.

Why we won’t back down

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Seeing the opportunity in hard times

In times of uncertainty it can be easy to hunker down and hide. Seeing the trouble and panic of yesterday leads many to think that tomorrow will be filled with more of the same. It’s okay to be anxious with what we’re seeing, or not seeing,  in the market now. It’s uncertain and it’s human nature to react with hesitancy; if nothing feels the same as it was yesterday, it follows that we should not act as we did yesterday. But this pattern of panic and inaction is not conducive to growth or recovery. What is important now is to have a plan of action. 

RealtyHive began in another time of deep societal unease. Our Time-Limited Events were developed in response to the industry downturn during the Great Recession. We saw the plight of sellers and professionals who had properties they needed to sell, but no way to stand out and reach those who were still interested in buying. For these folks, giving up wasn’t an option and neither was holding on to the properties for longer. The industry was reeling, the market was in shambles, and it would have been easy to give up. We easily could’ve just said that no one was buying real estate and could’ve sat back and watched the industry fall into ever deeper trenches. Instead, we made a plan, executed that plan, and were able to help thousands of sellers and professionals create the property exposure needed to sell then, just as we intend to do now. 

At RealtyHive, we’re continuing to showcase properties to interested buyers in the safest and smartest ways possible. We understand that while many are worried about what the future may hold, now is the time to be prepared for whatever may come next.  We’re proud to be able to offer contactless digital marketing options to agents and sellers as well all work through this tough time together.   

The situation we’re faced with is different for everyone. Many people are facing economic hardships and that is not something to be taken lightly, however for those fortunate enough to have income security, this could be a great time to buy real estate. 

The historically low mortgage rates we’re seeing right now offer an incredible opportunity for buyers and the technology available means that buyers can see properties without ever having to leave their couch. From virtual tours and video walkthroughs to e-signing documents and online meetings, the tools we have mean that we can carry on with business in a safe and productive way. 

Uncertainty is not limited to those buying properties. While RealtyHive always showcases the properties of motivated sellers, now more than ever we encourage you to take a look at the properties available through RealtyHive Time-Limited Events. 

We recently added a new tool to help buyers and sellers get the most value out of their real estate buying or selling experience. Cashifyd is a new program we’ve developed to connect consumers with agents who offer cashback at closing. This helps minimize the money needed to close on a property, freeing that cash up for other uses. This program is free for buyers and sellers and allows you to connect with an agent and start your real estate process without leaving your home. 

 As we weave through these unprecedented times together, it comes down to the way we respond to the challenges we face. We chose to confront these challenges and continue to build for the future and welcome you to reach out and let us know how we can assist in continuing your real estate goals.

Tax Information for Real Estate Investors

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Studying tax codes might sound like a snoozefest, but that couldn’t be farther from the truth. At least, not if you think of yourself as Indiana Jones.

As a real estate investor, you’re on a mission to maximize your revenue, to find the Holy Grail of properties, and to grow your financial portfolio. Understanding taxes that directly benefit your quest is like finding a map in a mysterious language: difficult to decipher, but a necessary part of the journey.

We’ve already covered tax incentives for homeowners. If you’re a property investor, it’s time to grab your bullwhip and fedora. We’re about to give you the Rosetta Stone for understanding property investing tax benefits.

Capital Gains Taxes (and How to Avoid Them)

Any time you profit from a real estate sale (such as a land sale or a rental property), you can be taxed on this income. A capital gains tax is the tax you pay on that profit.

However, one of the biggest draws to the real estate investing game is that there are ways to avoid paying capital gains taxes. It’s like selling a crystal skull that you found but not having to pay taxes on however much you made. Here are some tax things to know:

Opportunity Zones

If you invest in an area that is considered economically distressed, you could qualify for tax breaks. Opportunity zones (sometimes also called tax incremental districts) are places that are certified as economically distressed by the federal government. They have the potential for tax benefits for new investors.

One thing to note: many people worry that opportunity zones contribute to gentrification. In other words, as an economically-distressed neighborhood is reinvested into, the price of everything (especially rent) skyrockets, which hurts the people already living in the area.

All things considered, this is still a tax benefit. It could greatly benefit your personal financial portfolio, but it could also benefit some communities as well. Turning a place (such as a rural, middle-of-nowhere town) into a desirable area definitely still has some pros.

1031 Exchanges

We covered 1031 exchanges in detail in a previous blog, but it’s good to refresh. You can defer capital gains taxes in a 1031 exchange as long as you use the profits from one property sale to buy a similar property.

Picture Indiana Jones using his whip to get some precious item into his hands. You can segue your sold property (the precious item) to a 1031 exchange (the whip) into an opportunity zone  (Indy’s hands) for a commercial property.

Other Tax Benefits for Rental Property Investors

For rental property investors specifically, there are some other tax benefits you’ll want to know about:

  • Mortgage Interest Deduction: The first $1 million of your mortgage ($750k for properties bought after 12/15/17) qualifies for a tax deduction on its interest.
  • Depreciation Deduction: The second your rental property is in use, you can start tracking depreciation (and subsequent costs), which can be deducted on your taxes.
  • Travel Costs: Any time you buy gas or even a plane ticket to get to your rental property (this includes international properties), write this down! Travel expenses are business expenses, and they’re tax deductible.
  • Maintenance & Repairs: These may also qualify as business expenses and can be deducted.

You’ve got your map, you’ve got the keys to the hidden cave chamber. You’ll still cross paths with some snake pits in your property investing journey, but the proper resources will swing you out of them. 

One of those resources is RealtyHive — we connect you with motivated sellers! Whether for residential or commercial properties, these sellers want to see your offer, whether for residential or commercial properties. Look through our listings and join the bidding in one of our time-limited events!

Is Buying an Older Home a Good Idea?

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There’s a certain feeling to older homes, and it’s one that can’t be replicated. The sense of history, the character, the craftsmanship — stepping into old homes is like stepping into another time. 

While we relish in that sense of wonder, there’s a lot to consider from a homeowner perspective. As great as it is to visit a Victorian manor or beautiful house built 100+ years ago, is buying really worth it?

Buying an Older Home: Pros

Unparalleled Character

Like we said, it’s pretty spectacular to walk through an older home. For Victorian-style houses that are at least a century old, there’s something awe-inspiring in walking through a home that’s survived so much history. 

People feel a deeper connection to the past and, to some degree, probably feel hopeful for the future. If this house can stand for so long, so can we. It’s hard to put this exact feeling into words, but anyone who has felt it understands why people love old homes. Their magic is absolutely a draw.

Incredible Craftsmanship

“They don’t make homes like they used to” isn’t just a saying, it’s kind of true. Victorian homes often have details that blow newer houses out of the water. And as we’ve said in past blogs, the devil is always in the details when it comes to how valuable a house is.

Old homes also have features that keep on pace with modern trends. Hardwood floors, unique tile, huge clawfoot tubs (if you’re lucky) — people are renovating their new homes to match these vintage styles!

Potential Value

From the character and craftsmanship to the historic value, old homes could be worth more than newer homes in the area (such as these homes in Wisconsin). This is also due to size — Victorian houses are typically bigger — and the need to preserve the property. Older houses in historic districts tend to fetch higher prices — great news for you when you’re looking to sell.

Buying an Older Home: Cons

Higher Price = Less Buyers?

When the price matches the condition, older, run-down homes are quick to sell. Houses in great condition (even if modernized) can sometimes struggle to find a buyer since their price is inevitably higher.

However, that’s not to say you’ll never sell if your old house is in tip-top shape. Some people even buy older houses to renovate them into commercial spaces. All the same, it’s good to note that an old house (especially a bigger one) may struggle to find the right buyer.

More Upkeep & Renovation

Lead pipes, asbestos, a crumbling foundation — these are the not-so-great parts of owning an old house. There’s a solid chance you’ll need to update the home with everything from light fixtures and wall sockets to adding air conditioning. 

These renovations are both time-consuming and expensive. It’s worth noting that some cities provide grant money to restore a historic home. But if you want a no-muss, no-fuss home, an older property is not for you.

Have an older home that’s in great shape, but not selling? Feeling like your Queen Anne house has lost too much of its regality? Searching for a Victorian house with lots of potentials? You can have it all with RealtyHive. 

We’ll happily list your home through a time-limited event and have tons of properties for you to sift through. Look through our listings or get started on selling with RH!