Finance

Hurricane season starts on June 1, so now is a great time to take a look at your insurance policy and your coverage.

Hurricane season starts on June 1, so now is a great time to take a look at your insurance policies and your coverage. Here are five mistakes people make when it comes to insurance.

More and more retirees, hit hard by the downturn in the stock market, are turning to the once-controversial reverse mortgage to tap into their home's equity and boost their monthly income.

A reverse mortgage is a special type of home loan that lets seniors convert a portion of the equity in their home into cash, according to the U.S. Department of Housing and Urban Development.

Unlike a traditional equity loan, a reverse mortgage does not have to be repaid as long as the borrower lives in the house. There are no qualification requirements based on assets, income or credit score.

Millions of people took advantage of the $8,000 tax credit for first-time homebuyers that was set to expire on Dec. 1. But there’s good news for many people: Congress extended the program through April 30, 2010, and it’s not just for first-time home buyers anymore.

The credit, called the Worker, Homeownership, and Business Assistance Act of 2009, now also allows those who have not have owned another home for at least the previous three years to take advantage of the $8,000 tax credit.

The experience of renting out a home can be both rewarding and challenging. If you’re pondering on the idea of renting out an existing residence or purchasing a property for the purpose of renting it out, there are a few things to know before you get started.

CHOOSING THE RIGHT PROPERTY
The popularity of investing in a home as a rental property has increased over the years. Right now is an ideal time to purchase a home for investment. With interest rates low and a multitude of homes on the market, many homeowners are choosing to purchase a home solely for the purpose of renting it out. Investors are looking to sell the home later to make a bigger profit.

When searching for a rental property, the location should be a top priority. In the Lowcountry, it’s not difficult to find residential properties with ocean front lots, golf course views or an array of fabulous amenities. Purchasing a home that backs up to the green or is close to beach is desirable to many tenants and can get the property rented quickly. Other amenities to consider are gated communities with swimming pools, tennis courts, playgrounds and fitness centers.

Strategies for maximizing your deductions in 2008.

As we reach the close of a very troubling year for markets and the economy, astute investors need to use all the tools at their disposal to make the best of a bad situation and maximize their tax advantage. Here are some important end-of-year tax items we think are worth reviewing.

First, estimate adjusted gross income, for both 2008 and 2009.
The time-honored strategies of accelerating deductions and deferring income need to be evaluated carefully; these are tied to adjusted gross income, and thus impact your ability to maximize itemized deductions related to gross income.

If you anticipate being in a higher tax bracket in 2009, you may benefit from accelerating income into 2008. If you expect your adjusted gross income to be higher in 2008 than in 2009, or you anticipate being in a higher tax bracket in 2008, you may benefit by deferring income into 2009. Be sure to consider the effects on Social Security; additional income may increase the rate of tax paid or the percentage of benefits taxed.

A few signs that point to a true professional property management firm.

Just a quick survey of the traffic on U.S. 278 on a summer Saturday is enough to remind anyone of the incredible draw the Lowcountry continues to have. Two and a half million people travel to the Lowcountry each year – some for a golf weekend, others for a week’s retreat and some for months at a time. Whatever the duration of stay, most who visit never want to leave. Travelers are treated to the area’s many spectacular attractions – immaculate beaches, championship golf courses, picturesque flora and fauna and rich cultural history, to name a few.

Yes, tourism is big. And with that comes a booming rental market upon which many want to capitalize. And why not, if you have the means. But perhaps you lack handyman expertise or the patience to get into the popular real estate investing business. How about a more hands-off approach?

Wondering how to make the most of your property with the least effort? Consider a property management company.

The American dream is home ownership, and many homeowners are dreaming even bigger by buying second, third, even fourth properties – with property management companies making those properties work for them.

So, how can you jump into this lucrative business and, first things first, is now the time?

Money smarts you can share with your children.

You may have at one point in your adulthood said to yourself, “If only I knew more about money then.” Well it may be too late for you, but you can fix it for your children. Here are some easy to teach tips that will make a difference in their financial lives.

When they’re young show them the basics, the difference between something needed and something wanted. Discuss spending priorities; is something really needed for survival, work or school? Will it make life appreciably better, or is it just for fun and entertainment? Teach them to pay the most important bills and make the most important purchases first.

In this number-crunching world, your credit score helps define your financial future.

We’ve all seen the commercial: the smug financial wizard warns us, “I’m thinking of a number between 450 and 850; can you guess what it is?” We grit our teeth, we change the channel, but we know, when he tells us that the number is his credit score, and it can help him save a lot of money, that he’s right. Your credit score is one of the most important aspects a lender will take into consideration when defining the terms, rates and parameters of your mortgage.

By keeping your credit score in check, you can help make the process of buying your dream home from becoming a total nightmare. With every purchase you make on plastic, with every payment you send in to your credit card company, you place yourself in the seat of judgment before the three credit bureaus: Experian, Equifax and Transunion. They each tabulate a score based on your patterns of borrowing and paying back, and their three decisions, combined with other factors, become your credit score.

So you want to keep your credit score high, how can you do that? Well, the simple way is to borrow responsibly and pay back on time.

If you are trying to make sense of the condition in the real estate and mortgage industries these days, don’t bother referring back to your old Economics 101 textbook where you first read about the laws of supply and demand. You’ll remember the side of the equation that says when the price of a product goes down, the demand for that product goes up.

According to The Wall Street Journal, the median U.S. home price was $201,000 in January of this year, down 4.6 percent from January 2007. The S&P/Case-Shiller National Home Price Index for the fourth quarter was down 8.9 percent from a year earlier, the biggest drop in 20 years. Furthermore, there was a 10-month supply of existing homes for sale in January, up from just under five months during boom times. The supply is up so prices are down.

In The Interest of Better Serving Our Readers, Real Estate Resourcebook Explored Two Sides of the Transfer Fee Issue; The Realtor Perspective and The Property Management View. We Welcome Your Feedback!

TRANSFER FEES: REALTOR PERSPECTIVE

It seems there are several new fees cropping up (just like taxes), that affect the value of your real estate. You may not notice them until you sell, but they could lessen the value of the house you live in. The following explains why.

If you’re in the market for a new investment property, why not let Uncle Sam help you pay for it? Sounds too good to be true, right? Well, by taking advantage of the 1031 exchange (also known as the like-kind exchange) when you buy and sell investment properties, you can literally get a little help from the government on your next purchase. This little-known tax provision allows taxpayers to legally defer paying taxes on capital gains from investment property sales when they use the money to purchase another investment property.

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We’ve all seen the commercial: the smug financial wizard warns us, “I’m thinking of a number between 450 and 850; can you guess what it is?” We grit our teeth, we change the channel, but we know, when he tells us that the number is his credit score, and it can help him save a lot of money, that he’s right. Your credit score is one of the most important aspects a lender will take into consideration when defining the terms, rates and parameters of your mortgage.

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The Good, the Bad, and the Ugly.

Spending on home remodeling projects in the United States hit $215 billion in 2005. (According to the CIA World Factbook, the GDP of the country of Argentina was $210 billion at the official exchange rate in 2006.) Home remodeling costs account for approximately 40% of all residential construction spending and makes up nearly 2% of the U.S. economy. That’s a serious amount of coin.

Numbers don’t lie; Americans love investing in their homes, and for good reason. Usually it’s a win-win situation. Not only are homeowners improving their residence, they are increasing the equity – the difference between the value and what is owed – on their home.

Yet, there are certain improvements homeowners can make which give a greater return on investment (ROI) than others. Sometimes narrowing down the good, the bad and the ugly can make all the difference in that showdown between sound investments with outstanding ROI’s, and feelings of skipping through a minefield with your wallet open to the breeze.

Stories of post-Katrina insurance travails should be cautionary for coastal area homeowners. Misunderstanding your coverage and definitions of your coverage can be costly. There are, for example, major differences between “Wind and Hail” deductibles, and that of a “Named Storm,” states Bill Thomas, president of Carswell Insurance Services.

For example: say your home is insured for $300,000. Your roof is damaged by a thunderstorm. If your policy has a Wind and Hail deductible of 2 percent (the usual), your share of whatever the repair cost totals will be $6,000 (2 percent of $300,000).

The seemingly never-ending battle to repeal or reduce the estate tax may continue to frustrate and stall your estate planning decision. How can you make an informed decision when the estate, gift, and generation-skipping tax laws change so frequently? Last year, each individual was entitled to exempt $1.5 million from estate taxation. This year, the exemption rose to $2 million and by 2009 the exemption equivalent amount will be $3.5 million. If all goes according to current plan, there will be an unlimited exemption by 2010. Bill Gates could die in 2010 and not pay a dime in estate tax! Yet, by 2011, under current law, the exemption equivalent amount reverts back to $1 million and untold numbers of families on Hilton Head Island, alone, will be affected.