Here's something that you might consider if you're buying to rent out. Section 8 is like our Housing Commission in Australia. Basically, people who qualify for Section 8 housing (low income families) can rent a property and the rental income is guaranteed by the government.
Check it out at http://www.gosection8.com/
Monday, January 31, 2011
Sunday, January 30, 2011
Land - don't get caught with useless plots that aren't buildable!
Assessor Parcels vs buildable lots
The Assessor creates Assessor Parcels for assessment and taxation purposes. These may not be legal, buildable lots. You should always check with the county or city planning departments to verify whether or not a particular Assessor Parcel constitutes a buildable lot.
The Assessor creates Assessor Parcels for assessment and taxation purposes. These may not be legal, buildable lots. You should always check with the county or city planning departments to verify whether or not a particular Assessor Parcel constitutes a buildable lot.
Dirty Deeds
I'm now on the lookout for USA land but the deeds are confusing. Here's what I've found out:
Warranty Deed - this is really the only type of deed I'm interested in, as a buyer. A warranty deed ensures that the person who's selling the property is the actual owner, that the title is fee of encumbrances and that the seller will defend the title, if someone comes along years later, after the sale, claiming that they had rights on the property.
Special Warranty Deed - this is similar, but only has a limited guarantee - the seller guarantees the time-frame that he/she owned the property. Be careful here - remember, some places are being 'flipped' in a very short time frame. A special warranty deed could prove to be fairly worthless if the seller bought the property as a Quit Claim Deed two weeks ago.
Quit Claim Deed - this is the dirtiest deed of all. No warranties - not even one that the seller has any rights to sell the property. TREAD VERY CAREFULLY!!!!
Warranty Deed - this is really the only type of deed I'm interested in, as a buyer. A warranty deed ensures that the person who's selling the property is the actual owner, that the title is fee of encumbrances and that the seller will defend the title, if someone comes along years later, after the sale, claiming that they had rights on the property.
Special Warranty Deed - this is similar, but only has a limited guarantee - the seller guarantees the time-frame that he/she owned the property. Be careful here - remember, some places are being 'flipped' in a very short time frame. A special warranty deed could prove to be fairly worthless if the seller bought the property as a Quit Claim Deed two weeks ago.
Quit Claim Deed - this is the dirtiest deed of all. No warranties - not even one that the seller has any rights to sell the property. TREAD VERY CAREFULLY!!!!
Friday, January 28, 2011
Real Estate - USA Tax
Today, I've been on the hunt for a CPA in Florida. I came across this website for the Florida Institute of Certified Public Accountants - www.ficpa.org - which lists its members.
I've knocked up a spreadsheet of the expenses we incurred in 2010 and have shot it though to a couple of accountants to give me a quote on how much it will cost to prepare and lodge our tax in the States.
For your information, the total closing costs, including attorney, title agent, inspections, government fees, postage, bank fees etc came to a total of just over $5000, so we got through the whole process, walk in, walk out, for under $71,000.
I've knocked up a spreadsheet of the expenses we incurred in 2010 and have shot it though to a couple of accountants to give me a quote on how much it will cost to prepare and lodge our tax in the States.
For your information, the total closing costs, including attorney, title agent, inspections, government fees, postage, bank fees etc came to a total of just over $5000, so we got through the whole process, walk in, walk out, for under $71,000.
Monday, January 24, 2011
USA Property Manager!
Yippee - the property manager is on board! We'll be renting the condo for $950 a month. After our monthly HOA fees ($307) and monthly property management fees (10% - $95), we'll be collecting around $548 per month. I'm also paying my lawyer $30 per month to deal with the bank account and make any payments etc, so that brings us to $518 per month.
Yearly, that's $6216 in income. Then we take off insurance, property tax and miscellaneous maintenance.... let's say we're down to $5000 in our hands. It's not a magnificent cash flow at 7.6% but then we need to consider:
1. The likely capital gain over 5-10 years
2. The likely strengthening of the US dollar over the next 5-10 years
Word of warning: let's say we get $5000 in our hand and we've convinced ourselves it's all good, considering points 1 & 2 above. If you're up against the wall with your repayments, it's not worth the risk. See, here's a few more expenses... accounting fees in USA could be a bit of a shock and what if it goes untenanted for a few months? Suddenly, there's nothing in the hand. If you're relying on positive cash-flow with your investment property, I'd have to advise you to rethink. Positive cash flow should be a bonus, if it happens - please don't do it if you'll have to depend on it, because nothing is ever certain. Remember, that's exactly how the USA got into this mess in the first place.
As with any gamble, don't do it if you can't afford to lose it!
Yearly, that's $6216 in income. Then we take off insurance, property tax and miscellaneous maintenance.... let's say we're down to $5000 in our hands. It's not a magnificent cash flow at 7.6% but then we need to consider:
1. The likely capital gain over 5-10 years
2. The likely strengthening of the US dollar over the next 5-10 years
Word of warning: let's say we get $5000 in our hand and we've convinced ourselves it's all good, considering points 1 & 2 above. If you're up against the wall with your repayments, it's not worth the risk. See, here's a few more expenses... accounting fees in USA could be a bit of a shock and what if it goes untenanted for a few months? Suddenly, there's nothing in the hand. If you're relying on positive cash-flow with your investment property, I'd have to advise you to rethink. Positive cash flow should be a bonus, if it happens - please don't do it if you'll have to depend on it, because nothing is ever certain. Remember, that's exactly how the USA got into this mess in the first place.
As with any gamble, don't do it if you can't afford to lose it!
Thursday, January 13, 2011
Property Management, USA Bank Accounts, Landlord Insurance...
Geez..... and to think I thought I was seeing the light at the end of the tunnel.
Weirdly, the seller still has the key!?? I don't know why. Shouldn't that have been handed over? Anyway, I've got the inspector going back tomorrow and he's going to take it. I'm going to change the locks as well.... just as soon as I can find a property manager!! Who'd have thought it would be so hard?
The bank account is still an issue. Harvey (the lawyer) is going to act as an agent on our behalf and hopefully will be able to set that up for us asap. I have established a Citibank account in Australia and am hoping to get a Citibank account in America - one of very few banks that doesn't charge for moving money across international borders.
With regard to insurance, it doesn't seem that I can get an online quote. I'll be staying up late tonight so that I can phone a few insurance brokers... must be something weird about their laws over there that I can't just sign up for insurance online.
I've listed the property on Trulia. If I get a couple of bites, I can send them on to the property manager.... as soon as I have a property manager, that is....
Lordy!
Weirdly, the seller still has the key!?? I don't know why. Shouldn't that have been handed over? Anyway, I've got the inspector going back tomorrow and he's going to take it. I'm going to change the locks as well.... just as soon as I can find a property manager!! Who'd have thought it would be so hard?
The bank account is still an issue. Harvey (the lawyer) is going to act as an agent on our behalf and hopefully will be able to set that up for us asap. I have established a Citibank account in Australia and am hoping to get a Citibank account in America - one of very few banks that doesn't charge for moving money across international borders.
With regard to insurance, it doesn't seem that I can get an online quote. I'll be staying up late tonight so that I can phone a few insurance brokers... must be something weird about their laws over there that I can't just sign up for insurance online.
I've listed the property on Trulia. If I get a couple of bites, I can send them on to the property manager.... as soon as I have a property manager, that is....
Lordy!
Wednesday, January 5, 2011
Done deal! We're USA property owners!
Well, there you have it - done and dusted!
We are the proud new owners of a Florida condo :)
Now, all there is to do is grab hold of a property manager, get insurance, set up a Citibank account in the US, find a tenant...
And you thought it was all over - it's only just begun.
Clink go the champagne glasses!
We are the proud new owners of a Florida condo :)
Now, all there is to do is grab hold of a property manager, get insurance, set up a Citibank account in the US, find a tenant...
And you thought it was all over - it's only just begun.
Clink go the champagne glasses!
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