Property Tax Extension in Major Disaster Area

16 12 2005

Gov. Jeb Bush signed H.B. 15 (B) into law on December 14, 2005, and counties declared a major disaster area in 2005 may now extend the discount period for early payment of property taxes.

The bill does not automatically extend the window for homeowners in counties declared major disaster areas to pay their property taxes at a discount. Instead, it authorizes these counties to adopt a rule change that allows taxpayers a longer period of time to pay while still getting an early-payment discount. Counties may adopt extensions in whole or in part by issuing an emergency ordinance. The extension does not apply to mortgages, lien holders or vendees that make tax payments on behalf of the property owner; and the county tax collector is responsible for implementing the discount period.

The bill allows counties to extend the following early-payment of property taxes discount periods:

• the 4 percent discount period from Nov. 30, 2006 to Jan. 31, 2006
• the 3 percent discount period from Dec. 31, 2005 to Feb. 28, 2006
• the 2 percent discount period from Jan. 31, 2006 to March 31, 2006

The bill is effective immediately and will expire April 1, 2006.

Source: FLORIDA ASSOCIATION OF REALTORS

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Condo for College Students

16 12 2005

More parents are viewing their children’s college experience as a way to get on the property ladder. As the real-estate market has taken off, so have parents’ interest in off-campus housing. And while most wait to buy until the child’s sophomore year, some parents figure the earlier, the better.

Historically low rates and flexible financing have driven the trend in recent years. The National Association of Realtors found last year that 6 percent of investment buyers purchased a second home for use by a child attending school, a figure that equates to about 169,000 properties. The association hadn’t asked the question before, so a year-to-year comparison isn’t available.

Many parents would rather buy a condominium or house rather than spend the money on campus housing, which has steadily risen. For 2004-2005, room and board amounted to $7,434 at four-year private colleges and $6,222 at four-year public colleges, according to the College Board.

The real impetus, though, is diversification of the portfolio, financial planners say. Amid bubble concerns, the college market is perceived as more secure because of the steady flow of incoming students.

Parents can write off mortgage interest and property taxes, and either sell the place at graduation or keep it as a rental property.

Parents of college-bound kids are jumping on the opportunity early, often when their child has just sent in applications. A popular purchase for parents is a two-bedroom, two-bath condo.

Nevertheless, parents should factor in a long holding time in the event of a market dip. Taxes and mortgage interest, while a write-off, may cause a cash-flow crunch.

While renting is an option, some parents might be ill-prepared to be landlords.

Parents might need to hire an agent to manage the property, especially if the condo or house is out of state. Parents also should consult a tax adviser about the differences between treating the property as a second home versus an investment property.

Source: Associated Press





Convey or Not Convey?

16 12 2005

What happens when a seller leaves things behind after they move out? In most cases, buyers can expect permanent fixtures or those that cannot be removed without causing damage to convey when a residential property switches hands. Additionally, custom-made items such as window treatments may remain. But buyers also can find themselves saddled with other items — from old furniture and appliances to storage sheds — that are not normally conveyed and can become a nuisance. In order to avoid these situations, practitioners typically note conveyable items in the sales contract, using a check-off list or standard form. Buyers should also do a thorough walk-through of the home a day before closing and note any unwanted items that the seller may be trying to convey. In the current seller’s market, buyers may have a more difficult time negotiating conveyable items, but experts say they should try anyway. To avoid the expense of removing unwanted items discovered just before closing, buyers could arrange for an escrow account to cover removal expenses or negotiate a cash payment plan with the seller.

Source: Washington Times





Condo-Hotel Concept

16 12 2005

The concept of a luxury hotel that sells some of its units as condominiums has become one of the most popular trends in the real estate industry in recent years. Condo-hotels have expanded into destinations such as Orlando. Hotel developers like them because they spread their financial risk among the future condo unit-owners. Individual condo owners like them for the resort-style luxuries, and in many cases the hotel rents out their units when they’re away.

Condo-hotels in the past two or three years have expanded beyond traditional markets in ski resorts or Hawaii and into other tourist destinations such as Orlando and Las Vegas. Projects also are under construction in urban centers like Atlanta, Chicago and New York, where the Plaza Hotel is being converted.

The condo-hotel units that are rented are not the same as traditional timeshares. A condo-hotel unit is purchased by its owner outright while someone who invests in a timeshare is only entitled to the time that he or she occupies a unit.

Nowhere is the concept hotter than in Florida, where the Orlando and Miami-Fort Lauderdale area each could have as many as 10,000 units in the next few years, up from less than 1,000 units five years ago.

Several factors have led to the nationwide boom – the improving performance of hotel companies, the recent investment appeal of real estate over the stock market, low interest rates and baby boomers approaching retirement who want to invest in a second home.

Hotel occupancy rates dropped after the 2001 terrorist attacks, limiting the amount of Wall Street money available for building new hotels, so developers went looking for another way to finance their projects. A developer typically has to come up with around 40 percent of the equity for a traditional hotel; a condo-hotel development requires much less investment.

But the concept has risks for both the developer and the condo buyer.

The Securities and Exchange Commission considers the condo offering a security if income and expenses from the rental units are pooled and if a condo unit is sold with the explicit expectation the buyer will earn money or derive tax benefits from it. If the development is structured as a security, it can only be sold by a securities broker and it is easier for an investor to sue the developer under the SEC’s anti-fraud rules.

Most developers choose not to sell their projects as securities to avoid the SEC complications, so they are prohibited from discussing the economic or tax benefits from a rental arrangement or project on how much a condo unit can earn in rental income. Many buyers make decisions without all the facts.

Source: PlanetRealtor.com





Property Tax Extension in Major Disaster Area

15 12 2005

Gov. Jeb Bush signed H.B. 15 (B) into law on December 14, 2005, and counties declared a major disaster area in 2005 may now extend the discount period for early payment of property taxes.

The bill does not automatically extend the window for homeowners in counties declared major disaster areas to pay their property taxes at a discount. Instead, it authorizes these counties to adopt a rule change that allows taxpayers a longer period of time to pay while still getting an early-payment discount. Counties may adopt extensions in whole or in part by issuing an emergency ordinance. The extension does not apply to mortgages, lien holders or vendees that make tax payments on behalf of the property owner; and the county tax collector is responsible for implementing the discount period.

The bill allows counties to extend the following early-payment of property taxes discount periods:

• the 4 percent discount period from Nov. 30, 2006 to Jan. 31, 2006
• the 3 percent discount period from Dec. 31, 2005 to Feb. 28, 2006
• the 2 percent discount period from Jan. 31, 2006 to March 31, 2006

The bill is effective immediately and will expire April 1, 2006.

Source: FLORIDA ASSOCIATION OF REALTORS





Condo for College Students

15 12 2005

More parents are viewing their children’s college experience as a way to get on the property ladder. As the real-estate market has taken off, so have parents’ interest in off-campus housing. And while most wait to buy until the child’s sophomore year, some parents figure the earlier, the better.

Historically low rates and flexible financing have driven the trend in recent years. The National Association of Realtors found last year that 6 percent of investment buyers purchased a second home for use by a child attending school, a figure that equates to about 169,000 properties. The association hadn’t asked the question before, so a year-to-year comparison isn’t available.

Many parents would rather buy a condominium or house rather than spend the money on campus housing, which has steadily risen. For 2004-2005, room and board amounted to $7,434 at four-year private colleges and $6,222 at four-year public colleges, according to the College Board.

The real impetus, though, is diversification of the portfolio, financial planners say. Amid bubble concerns, the college market is perceived as more secure because of the steady flow of incoming students.

Parents can write off mortgage interest and property taxes, and either sell the place at graduation or keep it as a rental property.

Parents of college-bound kids are jumping on the opportunity early, often when their child has just sent in applications. A popular purchase for parents is a two-bedroom, two-bath condo.

Nevertheless, parents should factor in a long holding time in the event of a market dip. Taxes and mortgage interest, while a write-off, may cause a cash-flow crunch.

While renting is an option, some parents might be ill-prepared to be landlords.

Parents might need to hire an agent to manage the property, especially if the condo or house is out of state. Parents also should consult a tax adviser about the differences between treating the property as a second home versus an investment property.

Source: Associated Press





Convey or Not Convey?

15 12 2005

What happens when a seller leaves things behind after they move out? In most cases, buyers can expect permanent fixtures or those that cannot be removed without causing damage to convey when a residential property switches hands. Additionally, custom-made items such as window treatments may remain. But buyers also can find themselves saddled with other items — from old furniture and appliances to storage sheds — that are not normally conveyed and can become a nuisance. In order to avoid these situations, practitioners typically note conveyable items in the sales contract, using a check-off list or standard form. Buyers should also do a thorough walk-through of the home a day before closing and note any unwanted items that the seller may be trying to convey. In the current seller’s market, buyers may have a more difficult time negotiating conveyable items, but experts say they should try anyway. To avoid the expense of removing unwanted items discovered just before closing, buyers could arrange for an escrow account to cover removal expenses or negotiate a cash payment plan with the seller.

Source: Washington Times








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