Tag: property taxes

Benefits of Owning A Vacation Rental Property

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Investing in a vacation rental property is one of the best ways to diversify your portfolio and income streams. While it might cost some money and take some work upfront, vacation rentals have many benefits and can work well for you in the long run.

Let’s dive into some of the personal and financial benefits of vacation rental properties and see if they’re the right choice for you.

Long-Term Wealth

We all strive to build long-term wealth, right? One of the most effective ways to build long-term wealth is through real estate, and vacation rentals typically don’t require a large cash outflow. Many investors opt to leverage mortgage financing, and over time, your guests help you pay down the mortgage and grow your short-term rental property’s equity.

Home Equity

Speaking of equity, vacation rental properties can help you build even more equity that can be used on down payments for more properties, home improvements, and more. While the housing market and home values can fluctuate, depending on where you decide to purchase your vacation rental property, the likelihood of your home value increasing is high, meaning more equity in your rental.

Tax Benefits

Owning a vacation rental property comes with many tax benefits and write-offs. If you utilize the property as a true second home, your mortgage interest and property taxes may be tax deductible. In addition, many of your expenses for things like maintenance, repairs, and improvements can be written off. Consult with a tax professional to learn all the ins and outs of tax benefits. 

Dual Usage

There’s more to vacation rental properties than just business and financial benefits. You can also use your vacation rental property when you need to take a little getaway from reality. This provides a great home away from home to create memories, host family and friends, or just have some much-needed relaxation time.

Vacation rental properties come with many perks and can be an excellent option for your next investment! If you have any questions or want to learn more, we would love to provide our expertise and help in any way we can! 

Benefits of Buying An Investment Property Before Your First Home

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Purchasing your first home is an exhilarating moment and a huge life milestone, but with all the excitement comes the financial side. Homes are expensive and require monthly mortgage payments, property taxes, unexpected repairs, home updates, and more. 

Many people consider purchasing an investment property before buying their first home to help with their financial commitment. Let’s dive into a few benefits below.

Cash Flow

The biggest benefit to buying an investment property before your first home is the monthly cash flow they provide. Purchasing an investment property and finding tenants to rent it out can provide a steady stream of income that can help you save up for future investments, like your first home. 

Build Equity

Another huge benefit is building equity. Investment properties allow you to get your foot in the door and build equity until you can afford to purchase a home in the neighborhood you want. As a property owner, you can eventually leverage enough cash for the home you want and have more opportunities for mortgage loans. 

Tax Benefits

Owning a rental property also comes with many tax benefits. One of the biggest tax deductibles for property owners is interest, including on your mortgage loan or if you use a credit card. 

Other tax benefits include:

  • Operating expenses
  • Cost of repair
  • Use of personal property
  • Travel expenses
  • Legal services

Increase Your Wealth

While real estate investments can require a lot of dedication and patience to be successful, they can increase your overall wealth. Real estate investments appreciate over time, which is excellent for your future wealth when you sell the home.

If you have any questions about purchasing an investment property before your first home, reach out to us! We are always here to help.

Common Mistakes For First-Time Home Flippers

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Flipping a home is one of the most common ways to get started in real estate investing, but if it’s not done correctly, it could cause more time and money than it’s worth. You wrote a strong offer, the sellers have accepted the offer, and now you have to decide what to do next while avoiding major mistakes or setbacks.

Let’s look at three of the most common mistakes for first-time home flippers.

Not Doing Proper Research/Developing A Plan

Many assume flipping a home is easy; the most challenging part is finding the home, right? Wrong. You need to do a lot of research upfront to ensure everything runs as smoothly as possible. Take some time to develop a plan so you know exactly what projects you want to complete and the estimated timelines for each one. Remember, there will be some setbacks, but having a plan from the beginning will help with your overall expectations. 

Underestimating The Amount Of Time It Will Take

Flipping a home can be very time-consuming, and it’s not something you can do as a part-time job. Finding a home can take months, and renovating the property can take longer, depending on potential delays. After that, you must complete inspections before selling it to ensure everything is up to code. Once it’s on the market, it could take months to sell again. Don’t think this will happen overnight; it takes a lot of time if done correctly.

Not Having Enough Money

There’s more to flipping a home than just having money for the home and the renovations; you will need to make mortgage payments, pay property taxes, and often pay homeowner’s association fees, depending on the location. Keep in mind, you will also need to pay for utilities and any additional maintenance that’s needed while you’re renovating the property. Not to mention, if you have delays or setbacks, that could mean additional money out of your pocket to fix the mistakes. Make sure you have enough money saved up before getting started, or you could have major issues down the road.

Rental properties can be great investments to add to your portfolio if done correctly. If you have any questions or need recommendations on how to get started, reach out to us! We are always here to help.

A Guide to Disputing Your Property Taxes

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As a property owner, residential and investment alike, taxes are inevitable. On top of that, as Austin area home prices continue rising, it only seems likely that Central Texas homeowners will also see an increase in their property taxes. But, that doesn’t mean the value of your home determined for tax purposes is correct or you should be subject to pay exactly what the appraisal district says you owe. Lucky for you, there is a way to remedy potential mistakes: disputing your property taxes. Here’s a brief overview of the property tax dispute process:

Appraisal > Appraisal District Sends Notice of Home Value > File a “Notice of Protest” Form with Your County Tax Assessor’s Office > Informal Meeting > Hearing (if necessary) > Arbitration

home property tax concept illustration design

Now, let’s dive in deeper…

January 1st – The Appraisal
An appraiser determines the value of your home by looking at its condition and current market value – on this particular date.

Late April/Early May – The Appraisal District Sends Notice of Home Value
By late April or early May, the county appraisal district will send you a form telling you the value of your home for tax purposes. When you receive this form, look over it carefully to make sure there are no errors. In the event you find errors or the value appears way too high, you can begin the process to dispute. If you did not receive this notice, contact your respective County Tax Assessor’s office as they may have the incorrect mailing address on file. While this is not likely for your residential property, it may be the case for any investment properties.

May 31 – File a “Notice of Protest” Form with Your County Tax Assessor’s Office
The deadline to file a “Notice of Protest” form with your County Tax Assessor’s office is May 31. If this date falls on a weekend, you have until the next business day (the Monday after the weekend) to file. As this date is around a month after the notices were sent, you need to make the decision to protest in a short amount of time – so don’t waste any time! How do you file? There are several options here. One, use the form on the back of the “Notice of Appraised Value” form that you receive from the appraisal district. Two, file your protest online: Hays, Travis or Williamson County. Once on your respective website, click on “Online Protests” and follow the directions. Pay special attention to the section where you check the box stating the reason for your protest. Why? The box you check affects the evidence you can present.

June 1 – Meet with the Appraiser: “The Informal Meeting”
After you’ve filed, the Central Appraisal District will send you a letter with two dates: an informal meeting with a member of the appraisal staff and a formal hearing date with the ARB. During the informal meeting, the staffer will review the numbers with you. Make sure to bring all the documentation you have compiled: information on comparable homes (you can find this information on the appraisal district’s website), perhaps an independent appraisal if you recently refinanced your house, or photos, repair estimates and other records showing damage that may reduce the value of your home. Once you and a staffer have talked things out, the district may offer to reduce your value by a certain amount. If you’re satisfied, you can accept it. If not, you can keep your date with the ARB.

The Formal Hearing
The formal hearing takes around 15 to 30 minutes. During that time, you are placed under oath and given a chance to present any evidence or witnesses supporting your case. The hearing concludes when you state the figure you believe your property is worth. The three-member panel will discuss the case and reach a recommended value. You’ll get a certified letter in the mail with the decision.

Do you have any questions regarding disputing your property taxes? Consider TALK Property Management a resource! We are available to help anytime.