Retirement Alternatives


Rental property has distinct advantages for retirement whether you're in the planning or enjoyment phase.

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Why Keep Track of Home Improvements

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Homeowners receive a generous exclusion on the gain of their principal residence up to $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly.   Most people probably consider the gain or profit in a home to be the difference between the purchase price and the sales price. IRS allows a taxpayer to lower the sales price by the selling expenses before calculating gain.   Normal expenses like real estate commission, title policy, attorney fees, and other sales expenses may be included if they are normal and customary. Another significant adjustment is that capital improvements made during the holding period can be added to the cost basis.   Normal maintenance like repairs are not considered improvements.   IRS says that if the expenditure materially adds value (features) to the property, or appreciably prolongs the useful life of the property, or adapts a portion of the property to a new use, it can be considered a capital improvement. Exam...
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When will the market turn?

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Housing affordability has declined dramatically in 2022 due to continued rising home prices and a three-percentage point jump in mortgage rates.   Based on the popularity of Google searches for "housing bust" or "housing bubble", it could be surmised that buyers are anticipating relief, but they are probably not going to see it anytime soon. Home price appreciation is moderating and is down from the 20% level experienced in 2021.   Some of the major industry prognosticators are estimating anywhere from 9% to 14% for 2022.   Interest rates are expected to continue to rise through the end of 2022 and could be at 7%.   Freddie Mac 30-year fixed-rate mortgage was 6.66% on October 6, 2022. Even though homes currently for sale increased to 3.2 months in August 2022, it isn't that much more than it was for the same month in 2021 when it was at 2.6 months.   Most markets are still entrenched in favor of sellers because a balanced market ...
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Understanding Normal Settling vs. Foundation Problems

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Every home experiences some degree of movement over time, often called settling . It's a natural part of the aging process for any structure, especially in areas with varying soil conditions, temperature swings, or after the first few years of construction. While minor signs of settling are usually no cause for alarm, some changes can hint at serious foundation issues that deserve immediate attention. Knowing the difference between normal settling and foundation trouble can save homeowners and buyers from costly surprises and protect the value of the property. Common Signs of Normal Settling Minor cracks or imperfections often develop as homes adjust to their environment. These signs are usually cosmetic and not indicative of major structural problems: Small, hairline cracks in drywall, particularly around windows, doors, and at the corners of rooms. Doors or interior windows that stick slightly during humid months but operate normally as seasons change. T...
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