The Tax Benefits of Owning Real Estate

 If you are still renting, now may be the time to switch to homeownership and start enjoying certain tax benefits.

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Owning a home offers a number of practical benefits, but did you know that it also offers some incredible tax advantages?

There’s a good reason that homeowners have an average net worth that’s 47 times more than the typical renter’s. So if you don’t already own a home, now may be the time to start your search.

When you rent a property, you may already be paying at or above the amount you’d pay each month if you owned a home. Why not make the switch to homeownership and start enjoying tax benefits? There are far more benefits to paying your own mortgage than there are to paying someone else’s.

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There are far more benefits to paying your own mortgage than there are to paying someone else’s.

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Imagine you took out a 30-year mortgage, which is typical for most homeowners. Though your first year of payments will go almost exclusively toward paying off the interest, the portion of payments applied toward interest become a tax write-off. Not only that, but, unlike rental payments, mortgage payments are fixed.

And as you make these mortgage payments over the years, less and less will be applied toward interest and more and more will go toward principal. You can see a graph illustrating the breakdown of these payments over time in the video above.

The bottom line is this: There are many tax advantages associated with homeownership. To make sure you’re taking full advantage of them, though, I highly recommend meeting with your CPA within your first year of homeownership.

If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.

How Real Estate Commissions Work On the Hauer Team

In real estate, commissions have been a somewhat questionable topic to discuss, but it’s important you understand how they actually work.

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There is no such thing as a set commission in real estate. By law, commission rates have to be negotiable; the real estate community as a whole can’t just decide what you’ll pay.

And when it comes to real estate, it’s important to know that you get what you pay for. If a firm says they’ll do a 1% commission, it will still be a 4% commission because you’re still paying the buyer’s agent when they bring the buyer a 3% commision. If they’re being deceitful in how they market themselves in the first place, how do you think the rest of the transaction will go?

The Hauer Home Team’s philosophy when it comes to commissions is if you’re aren’t getting value from what we bring to the table, then we don’t see the point of charging you money for it; it’s as simple as that.

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The Hauer Home Team’s philosophy about commissions is if you’re aren’t getting value from what we bring to the table, then we don’t see the point of charging you money for it.

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We have what we refer to as our variable commission schedule—it’s entirely dependant on the value that we bring to you. For example, if you have a friend or family member who is interested in purchasing your house, that’s totally unrelated to the elaborate marketing efforts that we normally put forth to get your home on the market, and in that situation, we’ll charge you a big, fat 0% commission for the transaction.

That’s part of the benefit of working with a team of our volume: The average agent sells eight homes a year, while we sell over 100 homes in that time frame. Because of how much business we consistently pull in, we can take the loss of money we spend on marketing when you don’t end up needing it.

Additionally, if you find the buyer for your house on your own, we can help you facilitate the sale for a 1% commission. That way, you know that everything has been done properly in the transaction, and you’ll still pay much less than if we had found the buyer for you. If we find your buyer for you, we charge the typical 5% commision, and if an outside agent ends up bringing the buyer, then it’s a 6% commission. However it happens, we’ll take good care of you.

If you have any questions regarding commission or how we can help you sell your home, please reach out to us. We can discuss in detail exactly how we can help you make the most money possible from your transaction.

Showing You Our Appreciation With the Hauer VIP Program

We appreciate our supporters and want them to be part of our VIP program. See how to join below.

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After all the support our team has been given, we want to make sure you know about our Hauer VIP program. As a token of our appreciation, those who have referred us or have done business with us can become VIP members.

Why should you join the program? We want to spoil you, and we do so with events and giveaways such as:

• Crock-pot packages
• Monthly gifts
• March Madness giveaways and events
• Sip n’ paint events
• Sporting outings
• Lake days

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We want to spoil you.

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If you’re not already a member, let us know by emailing hauersupport@fivedoors.com. From there, you’ll begin receiving notifications about our upcoming VIP events. The only qualifications are that you have either referred someone to us or you have done business with us before.

We look forward to seeing you become one of our VIPs. Thank you for being a supporter of Hauer Real Estate Group.

How Often and by How Much Should You Increase Your Rent?

When is it time to increase the rent on a property? Today I’ll discuss.

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A good rule of thumb is to plan a 5% increase in rent every year. If you have great tenants that keep your property in amazing condition, it does bear consideration; is it worth it to you to raise the rent and risk having a less-than-stellar, long-term tenant? There are also costs associated with having vacant properties.

As you can see in the graph in the video above at the 1:00 mark, the trajectory of rents since 1988 has gone consistently upward. Very seldom have we seen dips in rent. Of course, one of the benefits of buying a home is being able to avoid the consistent rise in rental rates.

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I recommend setting the appropriate expectation with your clients regarding your yearly rent increase to keep up with the costs of rising insurance and tax rates.

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Ultimately, I recommend setting the appropriate expectation with your clients regarding your yearly rent increase to keep up with the costs of rising insurance and tax rates; this measure will make sure that your margin isn’t shrinking as those costs go up.

If you have any further questions, don’t hesitate to reach out to us. That’s what we’re here for.

An Area-by-Area Breakdown of Our Pierce County Market: Part 2

 

For part two of my latest Pierce County market report, you’ll see the latest statistics from Steilacoom, Lakewood, Southeast Tacoma, South Tacoma, Parkland, Fife, Puyallup, Lake Tapps, Roy, Graham, and Spanaway.

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Here is the second part of my area-by-area Pierce County August market report. As with the first part, I’ve attached timestamps of the video above so you can jump ahead to your specific community:

1:00 (Lakewood): The likelihood of sellers getting their home sold dropped from 114% to 61.9% compared to the previous month. Year over year, the median sale price increased 16.5%, inventory rose 11.9%, and sales increased 4.5%.

1:45 (Steilacoom): The likelihood of sellers getting their home sold dropped from 114% to 100% compared to the previous month. Year over year, the median sale price increased 21.3%, inventory rose 15.7%, and sales increased 31%.

2:51 (South Tacoma): The likelihood of sellers getting their home sold dropped from 209% to 97.5% compared to the previous month. Year over year, the median sale price increased 15.2%, inventory dropped 12.9%, and sales decreased 15%.

3:45 (Southeast Tacoma): The likelihood of sellers getting their home sold dropped from 214% to 113% compared to the previous month. Year over year, the median sale price increased 13%, inventory dropped 9.2%, and sales decreased 8.2%

4:29 (Parkland): The likelihood of sellers getting their home sold dropped from 120% to 90.4% compared to the previous month. Year over year, the median sale price increased 27%, inventory didn’t change at all, and sales increased 37%.

5:20 (Fife): The likelihood of sellers getting their home sold dropped from 110% to 50.4% compared to the previous month. Year over year, the median sale price increased 30.3%, inventory dropped 4%, and sales increased 1.7%.

6:03 (Puyallup): The likelihood of sellers getting their home sold dropped from 92% to 58.6% compared to the previous month. Year over year, the median sale price increased just over 18%, inventory rose 9.7%, and sales decreased 6.7%.

6:45 (Spanaway): The likelihood of sellers getting their home sold dropped from 222% to 99% compared to the previous month. Year over year, the median sale price increased 15.2%, inventory dropped 21%, and sales decreased 17.5%.

7:23 (Lake Tapps): The likelihood of sellers getting their home sold dropped from 102% to 59.7% compared to the previous month. Year over year, the median sale price increased 24.2%, inventory dropped 16%, and sales increased 9.3%.

8:01 (Roy): The likelihood of sellers getting their home sold dropped from 73% to 52% compared to the previous month. Year over year, the median sale price increased 27.5%, inventory rose 14.5%, and sales increased 22.2%.

8:47 (Graham): The likelihood of sellers getting their home sold dropped from 90.5% to 54.6% compared to the previous month. Year over year, the median sale price increased 26.7%, inventory rose 1.7%, and sales increased 14%.

If you have any questions about your specific market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d be happy to help you.