GREAT HOME OR INVESTMENT OPPORTUNITY!

Whether you feel like sipping a beverage on a restaurant patio, taking the dog over to the park, shopping after a trip to Starbucks, or taking a dip in the pool and hot tub, Saddlebrooke has it all! These popular units in the BVSD school district get more rental applications than the landlords can handle, so even when you move out they can continue to be a beneficial part of your financial plan.

1665 Egret Way is for sale, boasting wood floors, gas fireplace, stainless steel appliances, balcony with views of the lake, a new water heater and windows, extra parking - the list goes on! 3 bedrooms, 2 baths and a 1-car attached garage, plus the HOA maintains everything including the buildings and roofs. The HOA also includes a clubhouse, trash and snow removal, water and sewer.

An Open House is scheduled for Sunday, 10/20, 1-3pm. If you can't make that, contact me and I'm happy to schedule a private showing at your convenience.
  

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@elevatedrealestate.com

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Can a 1031 Exchange Help You?

For a lot of people, their home is their most valuable asset.  The long-term appreciation and equity in the property is likely to be their biggest investment, so the IRS allows sellers to exclude $250,000 in gains from the sale of their primary residence from taxes; $500,000 for a couple filing jointly.

For investors who use their properties to generate revenue, this exclusion is not available.  However, the IRS provides another avenue to defer the tax liability for a time by reinvesting the sale proceeds into another like-kind property, called a Section 1031 Exchange.  Business entities can also use this vehicle to protect assets.

The simplest exchange is a simultaneous swap of one property for another.  If the exchange does not happen at the same time, a qualified third party will hold the funds from the sale of the first property until they can be used toward the purchase of another.  Several rules govern this process.

First, the seller must identify, in writing, one to three replacement properties within 45 days of the closing of the sale.  All three properties may be purchased in exchange, or they can be treated as back-up options should one of them become unavailable after identification.  The purchase of the replacement property must be completed within 180 days of the initial sale.

There are other rules related to the value of the replacement homes identified and the percentage of the value that is actually acquired in the final sale.  In addition, if there is still additional money left after the purchase of the replacement property, that gain, or "boot," could be subject to taxation.  It is highly advisable to hire an exchange service to account for all funds and handle this sometimes complex transaction.  These experienced professionals can also help you make long-terms plans regarding the best way to handle or even reduce the deferred tax liability.  If you would like a referral, don't hesitate to contact me.

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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To Renovate or Not To Renovate?

One of the issues I am running into with my Louisville clients who want to upgrade but stay in the city is that they have nowhere to go - the low inventory keeping them from finding a replacement home is also keeping them from listing their own house and perpetuating - yes, the low inventory.  I am not above knocking on stranger's doors and asking them if they are willing to sell, and have created several letter-writing campaigns to ferret out dormant sellers.

At some point in the house search, potential buyers have to decide if it's worth it to keep going or stay where they are.  I always advise my clients to seriously consider their best alternative to the desired solution - if you can't find a new place, what are you really willing to live with instead?  I also give this advice when we are knee-deep in negotiations.  It's easy to get emotional and upset with the other side, sometimes digging into a position.  But if you're alternatives are worse than the offer on the table, it's important to revisit your goals and not cut off your nose to spite your face.

One solution to the low inventory is renovating a current property.  This can make your home meet your family's needs better, even temporarily, and also add sweat equity for when you can finally make that move.  Potential sellers always want to know which improvements will give the most bang for their buck - what makes their home more marketable, and which renovations actually recoup the most for their investment?

Check online or design books for current color trends.

At the inexpensive end, paint can make the biggest impact for the least cost.  While it won't add dollars to the price of the home, it will make it more attractive to buyers.  Replacing hardware on cabinets and doors is another small investment that refreshes the space and gives the impression that the house has been maintained and updated.  Spending a few bucks on the front landscaping is generally a good idea, as well.  Improving the curb appeal doesn't have to be expensive and is important for getting people in the door - they won't buy if they don't go in.

For bigger projects, the answer will depend to some degree on the specifics of the particular house - the location, the price range, the market trends.  For instance, if you have an older home that only has one bathroom, figuring out how to construct even another half bath is a smart investment; many people won't even bother to look at homes with only one bath.  But if you already have three bathrooms, adding a 5-piece luxury master bath may not be the best place to put your bucks.  

An expensive upgrade may be overkill
when a gas insert will do the trick.

There are some guidelines to help you decide which projects are worth tackling.  For a midrange home in the Denver metro area, the renovations that will give you the biggest return for your money are kitchen remodels, basement remodels, deck additions, window replacements and garage door replacements.  Generally speaking, these improvements will recoup 70% or more of their initial investment upon resale, not counting any energy savings that might be realized through replacing low-efficiency materials and appliances with high-efficiency ones.  Again, you need to do your research (or talk to your Realtor® who already has) to determine how far to take the renovation.  Do buyers in your neighborhood expect to see cherrywood floors, triple-glazed windows or media rooms?  You may choose to do these upgrades anyway because you like them, but it's good to know what to expect from the market.

Wood shake shingles are a red flag for buyers,
and some cities are already banning them.

Bathroom remodels, roof and siding replacement, garage additions and front door replacements fall into the next tier, usually recouping 55% or more.  Another consideration when deciding on your renovation priorities - is the current situation functional and adequate or broken and obsolete?  In other words, if the roof is at the end of it's life and buyers are going to request a new one anyway, you might as well get it done before it becomes an inspection and negotiation item.

Projects that are probably best avoided?  Anything too unique or custom that won't appeal to a larger audience.  Wine cellars and hot tubs may be an integral part of your lifestyle, but just as many people will rip them out as keep them when they move in.  Also, large room additions like master suites or family rooms generally prove too costly to pursue.  However, if the homes around you are popping the top and getting top-dollar for it, your home may be an exception to this rule of thumb.  If you'd like a professional contractor to give you estimates and advice on the projects you're considering, give me a shout; I've got several trustworthy recommendations I can give you.

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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A Tour of Downtown Lafayette

Not every city has a downtown area.  While they may have a good location and a lot of housing options, they lack a town center where people can eat, shop and enjoy community events.  Boulder's Pearl Street pedestrian mall is the heart of the city, and Louisville's old town area has undergone some phenomenal improvements over the past decade.  The City of Lafayette does not want to be left behind.

In 1999, the city council established the Lafayette Urban Renewal Authority (LURA).  The mission of LURA is "to encourage revitalization and redevelopment in the Downtown Urban Renewal Area and the South Boulder Road Urban Renewal Area by working in partnership with property owners to improve existing structures, fostering new development, and preventing deterioration of properties within the urban renewal districts."

One of the initiatives is to realize the potential of the downtown area.  The desire is to develop the Old Town identity by enhancing the diversity of it's businesses and pedestrian lifestyle.  That's good news for the local homeowners as well as the business owners and residents.  I thought it might be time to take a look at a few of the properties for sale near the downtown area.

105 W. Cannon Street - $239,900
The description leads with, "Eccentric Artists Welcome!"  Does this speak to the inspirational quality of the home or imply that you must be creative to see potential?  Not even a block off of Public Road, the ability to walk to shops is a plus, but with only 2 beds, 1 bath and 972 finished sqft this ranch may be on the small side for some.

406 E. Emma Street - $248,000
This property is actually two lots, totaling almost a half acre.  Built in 1905, the 2 bed, 1 bath property has a root cellar and alley access to a 1 car detached garage.  Somewhere along the way it's been updated with central air and a sprinkler system.  This may be a great property to subdivide and sell, or live in one house while you build another.

509 E. Simpson Street - $283,900
This listing says the property is zoned for a duplex, so possibly a good investment for someone who wants to take on a renter.  It boasts over 3000 sqft with 5 beds, 2 baths and a 4 car detached garage with shop.  Not many pictures on the internet; I'll be curious to see both what this house and the block its on looks like.

504 E. Geneseo Street - $349,900
This listing is a duplex built in 1943 with a 2 car detached garage plus 4 parking spaces off of the alley.  There's a total of 3014 sqft with 6 beds and 3 baths, but it's hard to tell how those rooms are divided between the two units.  Another opportunity for someone who would like to take on a renter, or perhaps put up their recently returned college graduate.


Depending on your situation, these properties could be a great investment for the future.  Whether you renovate the current houses or start from scratch, the area is on the cusp of some brilliant changes which should positively affect property values.  Take a drive around the downtown area sometime, and give me a call if you want some sales stats and history.

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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It Ain't Easy Bein' Green

As we become more aware of a lack of symbiosis with our environment and educated on sustainable living, we may be finding that it's harder than we thought to be "green."  In real estate, there's more and more attention being paid to using sustainable materials and recycling the old.  Homeowners are building and retrofitting their properties with more efficient systems both to save money and resources and make their homes more desirable upon resale.

The challenge comes when trying to determine which changes and upgrades are going to be the best value.  In a relatively young industry, terms like "environmentally-friendly" and "sustainable" can be confusing in their application.  Even as new regulations are created to govern the use of these labels, consumers may not know the definitions.  For each homeowner, decisions must be made regarding their specific property, needs and budgets.  Is it enough to replace the old refrigerator with a high-efficiency one or do we also install solar panels big enough to bank excess power for our own use later?

Grey water systems allow you to reuse water in your garden

The real estate industry has been doing what it can to keep up with both the incorporation and promotion of new technologies as well as evaluating their effectiveness and popularity among consumers.  It can be difficult to determine how much a specific market will embrace and value a particular green feature.  There is an expectation by homeowners, for example, that the cost of installing a grey water system will be recouped when they once again sell their home.  But unlike renovating a kitchen or basement, we don't have a lot of data to determine the return on investment yet.

Many multiple listing services - the central databases for real estate agents to market properties and contract with other agents - have added fields to their listings to enumerate a property's green features.  There is also an EcoBroker designation that real estate agents can earn to best identify and value these items for their sellers.  Even so, it is still difficult to get a consensus among the majority of buyers, sellers, agents and appraisers.

To help rectify this, the Colorado Energy Office has recently reached an agreement with the Colorado Coalition of Appraisers and the Appraisal Institute to begin developing studies that quantify the market reaction to certain industry trends.  The aim is to provide appraisers, as well as homeowners, with more data regarding which energy-efficient enhancements give the best return on investment, both for the immediate energy savings and the value for future owners.  If you are considering investing in an energy-efficient system for your home, keep an eye on these organizations (or this blog) for updates on what choices may be best for you.

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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Just the Facts, Ma'am

Did you hear about cashiers stealing money from people by initiating cash back requests on their cards?
Did you know your stomach will explode if you eat pop rocks and coke together?
Have you heard Obamacare is going to to cost you thousands of dollars in sales tax when you sell your home?

None of the above statements is true.

Well, okay, the last one is partially true, but there has been a lot of exaggeration and inaccurate information circulating out there.  Let's take a look at the details. 

Code Section 1411 of the Patient Protection Affordable Care Act (PPACA) will impose a 3.8% Medicare tax (not a sales tax or a transfer tax) on "unearned" investment income, starting in 2013, including capital gains, dividends, interest and rents minus expenses.  The tax will also apply to some real estate transactions under certain circumstances:

• The tax will be imposed on individuals with adjusted gross income (AGI) over $200,000, or couples filing jointly over $250,000 (about 3% of all American households).
• The tax will be imposed on profits realized over the capital gains thresholds - $250,000 for an individual or $500,000 for a couple.
• The tax applies to the lesser of two amounts: the profit over the capital gains exclusion, or the amount by which the income (increased by the net profit) now exceeds the threshold allowed.

Example:  A married couple has an AGI of $325,000. They purchased a home many years ago for $350,000 and sell it for $900,000, making a profit of $550,000. After excluding $500,000 from their gain of the sale, they are left with $50,000 investment income.  Their AGI is $75,000 over the married threshold amount of $250,000.  The lesser amount of $50,000 would be subject to taxation – at 3.8 percent they would owe $1,900.

 The revenues generated from the tax will be allocated to the Medicare Trust Fund, which is currently on shaky ground.  The thresholds are not indexed for inflation, so as time goes on more people will be impacted, which is a concern for those of us who make a living helping people buy and sell homes.  Regardless, this tax and the debate around it highlights again the importance of doing your homework and talking to experts in the field.  If you find you need clarification on real estate issues, or need help debunking the current urban legend, give me a call.

image:  samantha celera, anja_johnson

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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