Two Fla. cities rated ‘best places to be a landlord’

 

ORLANDO, Fla. – Oct. 20, 2017 – Higher home prices and a tight supply of homes for sale may be the mantra nationwide – but certain markets are still offering lucrative options for investors, including two in Florida.

Real estate sales and auction company TenX released its top picks for investors. Texas had the most markets on the list, scoring three out of the top five, as it continues to post strong growth in employment and home construction. San Antonio topped TenX's list for best places for investors, posting strong population growth for six years and having incomes hit all-time highs. San Antonio is followed on the list by two other Texas hot spots: Fort Worth and Dallas.

Home prices are rising quickly in Texas, but they remain low compared to some other hot markets, like in California, TenX notes.

"If you look at our report, probably eight or nine of the top 20 markets in terms of housing performance are in either Texas or Florida," says Rick Sharga, executive vice president at TenX.

"The Florida markets will be more directly impacted because Irma hit everything, but even in Texas, a lot of the construction and labor and materials and so forth that's been going to build new properties in Dallas and Fort Worth and San Antonio might get diverted to rebuild Houston, and that could have a noticeable impact on home sales and home starts over the next six to nine months."

Investors have had to shift course in many cities as the number of low-priced or foreclosed homes dries up.

"What they're really looking to do now is make money on the month-to-month rent, so in a lot of cases they're buying properties at full value," Sharga told CNBC. "In some cases, they may even be slightly overpaying for properties, but they're making it up in the rental income over the period of time."

The following are the top 10 markets for investors, according to TenX:

1. San Antonio
2. Fort Worth, Texas
3. Dallas
4. Columbus, Ohio
5. Tampa, Fla.
6. Orlando, Fla.
7. Indianapolis
8. Austin, Texas
9. Nashville, Tenn.
10. Raleigh, N.C.

Source: "Want to be a Landlord? These Are the Top Markets This Fall for Investing in Rental Homes," CNBC (Oct. 13, 2017)

Two Fla. cities rated ‘best places to be a landlord’

Condos and hurricane damage: Who pays? What’s the process?

By John C. Goede

 

Condos and hurricane damage: Who pays? What's the process?

By John C. Goede

Oct. 16, 2017 — Question: Our condominium suffered wind damage from Irma and the biggest problem is the windows. Our documents require the owners to repair and replace windows but the owners are claiming it is the association's responsibility. Who is right? –B.A., Stuart

Answer: Under the current statutes, the first question in this analysis is whether the damage was caused by an insurable event. If the damage is from a hurricane, this is going to be an insurable event. Therefore, window replacement responsibility is not necessarily governed by the documents, but rather by the statutes. Specifically, section 718.111(11) of the Florida Statutes provides that the condominium association is responsible to repair and replace property insured by the condominium association. It is important to note that insurance responsibility may be the same, or it may be different, from the responsibility set forth in your governing documents.

Thus, I would contact your insurance carrier and determine whether your condominium policy covers the windows. If so, the condominium association will be liable to repair and replace the windows damaged by Irma and the cost would be a common expense.

Notwithstanding the above, there are a few exceptions. First, the statute provides that the condominium is responsible to insure "all portions of the condominium property as originally installed or replaced of like kind and quality, in accordance with the original plans and specifications." So, if an owner previously replaced the original windows with something other than "like kind and quality" then the condominium may not insure those improved windows.

Second, the statutes also allow a condominium to "opt out" of the above analysis. If the association has opted out, the analysis would be governed by your governing documents and not the statute.

Third, the condominium association is not responsible to repair or replace when the damage is caused by intentional conduct, negligence, or the failure to comply with the rules. For example, if the rules require the owner to deploy hurricane shutters and the owner failed to do so, the condominium association may not be responsible for those particular windows under the above analysis.

My recommendation is you contact your insurance carrier as well as a licensed Florida attorney to make sure that the condominium association is acting under its documents and the applicable statutes.

Question: Is the Board still required to give 48 hours' notice of a Board meeting to deal with Irma issues? –T.G., Deerfield Beach

Answer: The statute provides exceptions when the Board is responding to damage caused by an event for which a state of emergency is declared in the relevant area. Because a state of emergency was declared for the state, the answer depends on whether the need for shortened notice is in response to damage caused by Irma. If so, section 718.1265 provides that the association may conduct Board meetings with "notice given as is practicable." Therefore, the answer is very dependent on the specific facts and needs, but the Board should provide practicable notice and that will be different for every community.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

Editor's note: Attorneys at Goede, Adamczyk, DeBoest & Cross, respond to questions about Florida community association law. The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, litigation, estate planning and business law.

John C. Goede Esq. is co-founder and shareholder of the Law firm Goede, Adamczyk, DeBoest & Cross, PLLC.

© 2017 Journal Media Group, John C. Goede

Condos and hurricane damage: Who pays? What’s the process?

How would tax plan alter mortgage interest deduction?

WASHINGTON (AP) – Oct. 11, 2017 – Each year, taxpayers subsidize America's homeowners by roughly $70 billion, with the benefits flowing disproportionately to coastal areas with high incomes and pricey homes, from New York and Washington to Los Angeles and San Francisco.

The subsidy for homeowners comes in the form of a deduction from their taxes for the interest they pay on their mortgages. An affluent New Yorker, for example, would have saved an average of $3,694 in 2015, according to an analysis of IRS data released Wednesday by the real estate company Apartment List. In metro Los Angeles, the deduction was worth an average of $4,568, in San Francisco still more: $5,500.

But under President Donald Trump's tax proposal, some Americans would likely be steered away from this tax break. Here's why: Trump's plan would double the standard deduction, which taxpayers can take if they don't itemize deductions. The doubled standard deduction could exceed the savings many receive now from itemizing their expenses for housing, state and local taxes and related costs.

But the Trump plan would also eliminate many existing itemized deductions, including those for state and local taxes, so that some people who now itemize might end up paying more.

The president's proposal would essentially marginalize the use of the mortgage interest deduction, which is the government's primary form of direct housing assistance: It distributes three times more money this way than it does in the form of vouchers for impoverished renters.

Trump administration officials say their tax plan is designed to benefit the middle class. Yet it's not clear from the scant details of the framework released so far how many families would enjoy lower tax bills and how many would face higher bills.

Even though the Trump measure would preserve the mortgage interest deduction, it's confronting resistance from the real estate industry because it would likely reduce the number of people seeking the deduction.

Estimates by the real estate firm Zillow suggest that someone buying a home worth at least $305,000 today would still qualify for the deduction. But under the Trump plan, only homes worth $801,000 or more would receive the deduction.

This has led the industry to push back against the plan.

"We don't want to go backwards – we don't want to lose what incentives that we have," said Jamie Gregory, deputy chief lobbyist for the National Association of Realtors (NAR).

The National Association of Homebuilders says it might be open to eliminating the mortgage interest deduction so long as homeownership was protected elsewhere in the tax code through the use of a possibly more generous tax credit. (A credit, which is subtracted from the amount of tax someone owes, is more generous than a deduction, which reduces the amount of income to be taxed.)

The advantage of moving to a credit is that more homeowners would be eligible to claim it than the 34 million who receive the mortgage interest deduction, said Rob Dietz, the homebuilder association's chief economist. But there are no signs that the idea of a credit has gained traction within Congress or the White House.

Trump proclaimed in June that his tax plan would accelerate economic growth to ensure that "hard-working Americans enjoy a fair chance at becoming homeowners."

Chris Salviati, a housing economist at Apartment List, noted that the main effect of the mortgage interest deduction is to enable people to spend more on homes rather than to increase ownership, which is near a 51-year low.

Though the benefits of tax breaks for housing skew most toward people in the top 20 percent of income, they also tend to help middle class Americans. Roughly half the households in metro Washington with incomes between $74,000 and $112,000 – a group that could be considered middle class in that area – take the mortgage interest deduction and saved an average $2,530 in 2015. The average home price in the Washington area is just below $400,000.

Areas with lower home values tend to benefit less from the deduction. A similar group of middle-income households in Indianapolis – where the average home cost around $140,000 – saved only $655 on average in 2015, and just 19 percent of them took the deduction. The savings for middle-income households are just $691 in Cleveland, $666 in Little Rock, Arkansas, and $673 in Memphis, Tennessee.

Yet the Apartment List analysis also indicates that Trump's tax plan would do little for lower-income households. A mere 11 percent of households with income below 80 percent of the national median qualify for the mortgage interest deduction or rental housing vouchers.

How would tax plan alter mortgage interest deduction?

More buyers reach for ARMs as home prices swell

 

NEW YORK – Dec. 9, 2017 – As home prices heat up across the country, buyers looking to lower their monthly mortgage payment are being lured to adjustable-rate mortgages (ARMs).

ARM originations surged over 40 percent in the second quarter compared to the first, according to Inside Mortgage Finance data.

ARMs are currently offering lower interest rates than fixed-rate mortgages. The average 30-year fixed-rate mortgage was 4.11 percent last week; a five-year ARM averaged 3.38 percent, according to the Mortgage Bankers Association.

ARMs usually offer an interest rate for a fixed period, such as five or seven years. Then, the rate can change depending on the broader market rate.

ARM originations typically increase from the first to the second quarter of each year since spring is the busiest time of year for home purchases. However, the jump in ARMs in the spring of 2016 was 15 percent compared to 2017's 40 percent jump, CNBC reports.

Some in the housing industry are cautious about the uptick in ARMs again. ARMs were blamed for igniting the housing crisis in the late 2000s and leading to an elevated number of homeowners who defaulted on their mortgages. However, lenders say today's ARMs are very different. Negative amortization loans, for example, no longer exist. Also, all loans must be fully documented to ensure that borrowers can pay even when the preset rates do eventually rise.

More home shoppers may be drawn to ARMs for the potential to trim their monthly payments. Some economists predict that the increase in ARMs will continue, particularly over the next few months, if mortgage rates continue to move higher as generally predicted and the inventory of for-sale homes remains tight.

"[Home] prices are being driven up by very tight market conditions," says Matthew Pointon, property economist at Capital Economics. "On a per capita basis, the number of existing homes for sale is at a record low, and buyers are therefore having to up their offers to secure a home."

Source: "Homebuyers Rush to Riskier Mortgages as Home Prices Heat Up," CNBC (Oct. 3, 2017)

© Copyright 2017 INFORMATION INC., Bethesda, MD (301) 215-4688

More buyers reach for ARMs as home prices swell