Monthly Archives: January, 2009

Ludlow VT Home Buyers Going Green

Ludlow VT Home Buyers Going Green

Today’s Ludlow VT home buyers are looking for green features in the homes they buy. The green trend is a means of lowering costs, becoming more environmentally friendly, and adopting a healthier lifestyle. 

The average green buyer will shell out an average of$12,400 for green features, according to the National Association of REALTORS. National Association of Home Builders green-building standards program manager Kevin Morrow expects the market share of green-certified homes to rise to 20 percent in 2010 from about 10 percent in 2009 and 2 percent in 2006.

Green features Ludlow VT home buyers are looking for include energy efficiency, water efficiency, resource efficiency, and indoor air quality and include such elements as Energy Star appliances, low-flow shower heads, carpets and paint with low volatile organic compounds, and building materials procured from local suppliers.

Today’s Ludlow VT home buyers benefit from tax credits and other financial incentives. 

Learn more about buying green by visiting ISellVermontRealEstate.com or give us a call anytime. 

Search all Ludlow VT homes for sale.

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Should I Move Up To A Larger Ludlow VT Home?

Should I move up to a larger home is a question many Ludlow VT homeowners are asking.  The questions below will help you decide whether you’re ready for a home that’s larger or in a more desirable location. 

1. Have you built substantial equity in your current home? 

If you have owned your Ludlow VT  home for a number of years you might have built up some equity. Look at your annual mortgage statement or call your lender to determine your loan balance. Then give me a call to determine your home’s market value. The difference between your loan amount and market value is your equity.

2. Has your income or financial situation improved? 

If your income has increased, you may be able to afford a higher mortgage payment. 

3. Have you outgrown your neighborhood? 

Often, the neighborhood or location you bought your first home in may no longer suit your needs. You may want to be closer to work, be in a better school district or have a home on a lake rather than close to it. 

4. Are there reasons why you can’t remodel or add on? 

Sometimes adding on to your current home is the answer. If you will end up over-improving for the neighborhood, moving may be a better option. 

5. Are you comfortable moving in the current housing market? 

In the current Ludlow VT  real estate market, your home may not sell for what it would have a few years ago, but the home you buy will also be less expensive. 

6. Are interest rates attractive?

A low rate not only helps you buy a larger home, but also makes it easier to find a buyer and interest rates are currently at record lows. 

If you answer yes to most of the questions, it’s a sign that you may be ready to move. If so, please visit ISellVermontRealEstate.com to learn more about the Ludlow VT real estate market or give me a call. I’m glad to help!

Buying Okemo Vacation Home

Everyday life can get crazy at times, many people fantasize about running off to their own personal retreat right here at Okemo. But how do you know which Okemo vacation home is best for you?

Choosing a location

Do you want to be in the middle of a all the activity, or enjoy the peace and quiet of a secluded location?  Is a condo at the mountain your cup of tea or a farmhouse tucked away in the woods? Whichever environment you prefer, here are some things you should consider:

  • Popularity.  A house in a hot vacation market will usually cost more than a place off the beaten path.  At the same time, continued popularity may help you profit from appreciation.
  • Proximity to your home.  If you plan to visit regularly, look for a place that’s easy to get to. 
  • Rental possibilities.  If you’re hoping to offset some costs by renting the home for part of the year, find out about seasonal demand for rentals in the area.

Maintaining your getaway

Regular upkeep is more difficult with a vacation home than with your primary residence, but no less important.  The value of the home, both as an investment and as a place you enjoy visiting, depends on good maintenance. 

If your primary residence is not far from Okemo, you may want to make weekly visits to mow the lawn, water the garden, clean the gutters or shovel snow.  If doing it yourself is impractical, consider hiring a vacation property management company to provide maintenance services during the times when you’re not using the home. 

Visit ISellVermontRealEstate.com to learn more about Okemo and buying a vacation home or give me a call for more personal service.

Search all Okemo vacation homes for sale.

Okemo Mountain Second Home Tax Breaks

Okemo Mountain Second Home Tax Breaks

If you are in the market for a second home, congratulations! Not only is Okemo Mountain a great place to ski and relax, you also can garner some tax benefits. Here are some tax breaks as spelled out by Kiplinger.com:

Mortgage interest. If you use the place as a second home — rather than renting it out as a business property — interest on the mortgage is deductible just as interest on the mortgage on your first home is. You can write off 100% of the interest you pay on up to $1.1 million of debt secured by your first and second homes and used to acquire or improve the properties. (That’s a total of $1.1 million of debt, not $1.1 million on each home.) The rules that apply if you rent the place out are discussed later.

Property taxes. You can deduct property taxes on your second home, too. In fact, unlike the mortgage interest rule, you can deduct property taxes paid on any number of homes you own.

If you rent the home. Lots of second-home buyers rent their property part of the year to get others to help pay the bills. Very different tax rules apply depending on the breakdown between personal and rental use.

If you rent the place out for 14 or fewer days during the year, you can pocket the cash tax-free. Even if you’re charging $5,000 a week, the IRS doesn’t want to hear about it. The house is considered a personal residence, so you deduct mortgage interest and property taxes just as you do for your principal home.

Rent for more than 14 days, though, and you must report all rental income. You also get to deduct rental expenses, and that gets complicated because you need to allocate costs between the time the property is used for personal purposes and the time it is rented.

If you and your family use a beach house for 30 days during the year and it’s rented for 120 days, 80% (120 divided by 150) of your mortgage interest and property taxes, insurance premiums, utilities and other costs would be rental expenses. The entire amount you pay a property manager would be deductible, too. And you could claim depreciation deductions based on 80% of the value of the house. If a house is worth $200,000 (not counting the value of the land) and you’re depreciating 80%, a full year’s depreciation deduction would be $5,800.

You can always deduct expenses up to the level of rental income you report. But what if costs exceed what you take in? Whether a loss can shelter other income depends on two things: how much you use the property yourself and how high your income is.

If you use the place more than 14 days, or more than 10% of the number of days it is rented — whichever is more — it is considered a personal residence and the loss can’t be deducted. (But because it is a personal residence, the interest that doesn’t count as a rental expense — 20% in our example — can be deducted as a personal expense.)

If you limit personal use to 14 days or 10%, the vacation home is considered a business and up to $25,000 in losses might be deductible each year. That’s why lots of vacation homeowners hold down leisure use and spend lots of time “maintaining” the property. Fix-up days don’t count as personal use. The tax savings from the loss (up to $7,000 a year if you’re in the 28% tax bracket) help pay for the vacation home. Unfortunately, holding down personal use means forfeiting the write-off for the portion of mortgage interest that fails to qualify as either a rental or personal-residence expense.

We say such losses might be deductible because real estate losses are considered “passive losses” by the tax law. And, passive losses are generally not deductible. But, there’s an exception that might protect you. If your adjusted gross income (AGI) is less than $100,000, up to $25,000 of such losses can be deducted each year to offset income such as your salary. (AGI is basically income before subtracting your exemptions and deductions.) As income rises between $100,000 and $150,000, however, that $25,000 allowance disappears. Passive losses you can’t deduct can be stored up and used to offset taxable profit when you ultimately sell the vacation house.

Tax-free profit.Although the rule that allows home owners to take up to $500,000 of profit tax-free applies only to your principal residence, there is a way to extend the break to your second home: make it you principal residence before you sell. That’s not as wacky as it might sound.

Some retirees, for example, are selling the big family home and moving full time into what had been their vacation home. Once you live in that home for two years, up to $500,000 of profit can be tax free. (Any profit attributable to depreciation while you rented the place, though, would be taxable. Depreciation reduces your tax basis in the property and therefore increases profit dollar for dollar.)

But Congress is clamping down on this break for taxpayers who convert a second home into a principal residence after 2008. A portion of the gain on a subsequent sale of the home will be ineligible for the home-sale exclusion of up to $500,000, even if the seller meets the two-year ownership and use tests. The portion of the profit that’s subject to tax is based on the ratio of the time after 2008 when the house was a second home or a rental unit to the total time you owned it.

So if you have owned a vacation home for 18 years and make it your main residence in 2011 for two years before selling it, only 10% of the gain (two years of non-qualified second home use divided by 20 years of total ownership) is taxed. The rest qualifies for the exclusion of up to $500,000.

Learn more about Okemo Mountain second homes by visiting ISellVermontRealEstate.com or give me a call for more personal service.

Search all Okemo Mountain second homes for sale.