Want Home Loan

By jamesrk

 If you are just starting to invest in real estate you undoubtedly will hear (if not already) terms generally associated with real estate investment you might not understand. But please don’t apologize because there are many real estate professionals who are not beginners who have no idea what they mean either.

Of course, knowing these real estate terms will not guarantee investing success, but it never hurts any beginner to investment property to learn as much as possible whenever possible. This is not an exhaustive list by any stretch of the imagination, but it does include terms real estate professionals frequently ask to be explained.

1) APOD - An APOD is an acronym for annual property operating data and essentially gives a snapshot of a rental property’s income and expense performance for one year. If you already started looking for rental income property, or previously met with a real estate agent about income properties, you probably have already seen an APOD because it is a popular report that is good at giving a first-glance look at a property’s performance.

2) Gross Scheduled Income - Gross scheduled income (or GSI) is the total annual rental income a property would generate if all the rentable space were occupied and all rent collected. Sometimes called potential gross income, gross scheduled income is an estimate intended to show the maximum potential income without regard to any vacancy or credit losses.

3) Operating Expenses - Operating expenses include those costs associated with keeping a property in service. Among others, operating expenses include costs for routine maintenance and repair, utilities, property taxes, insurance, and management fees. They do not include the mortgage payment (or debt service), income taxes owed by the investor because of owning the subject investment, or allowances for depreciation.

4) Net Operating Income - Net operating income (or NOI) is a property’s income after being reduced by vacancy and credit loss and all operating expenses-think of it as a measure of the property’s productivity. NOI is a valuable measure of cash flow and the return expected from a property for any given annual period as if it was wholly owned (without debt) and before taxes and depreciation are considered.

5) Cash Flow, Before Tax and After Tax - Cash flow before-tax (CFBT) and cash flow after-tax (CFAT) has nothing to do with real estate property tax. Rather, it signifies whether the cash flow available after the debt is before or after consideration of taxes and the effect of tax shelter. CFBT is simply NOI minus debt service. CFAT, on the other hand, requires a separate tax calculation. It subtracts from NOI interest on the loan, an allocation for depreciation (cost recovery), and allocable amortization expense (amortized loan points) to arrive at taxable income which is then multiplied by the investor’s marginal tax bracket and in turn subtracted from CFBT.

James Kobzeff is the developer of ProAPOD - superior real estate investment software since 2000. Create rental property cash flow, rate of return, and profitability analysis presentations in minutes! Easy and affordable. Go to => www.proapod.com

Your Online Source For Home Loans

The Top Five Reasons Why San Antonio Real Estate Market is Looking Up

By Richard Soto

 For everyone still reeling from the tough San Antonio real estate market in 2010, its now time to get up, dust yourself off, and look forward to a more promising 2010.

Dont expect the market to surge ahead quickly, though, as regrouping from the last years national recession is going to take time. However, many real estate professionals are quite optimistic that 2010 will be a better year for anyone involved in the San Antonio real estate industry.

The San Antonio Board of Realtors, in fact, has projected not only an increase in the number of home sales, but also price appreciation for San Antonio real estate. In other words, for everyone who has managed to survive last years hit, its going to be a much better year ahead.

There are some sticking points in the San Antonio real estate market, make no doubt. For example, home builders are still finding it difficult to get financing to complete projects. And on the other side of the loan process, many would-be homeowners are still being turned down by banks for home loans. Short sales and foreclosures have no doubt had a negative impact on the lending industry over the past year, so it only makes sense that lending will continue to remain fairly tight during the upcoming year.

1. However, the San Antonio real estate market for homes priced under $200,000 are sure to experience the biggest jump, both in sales and real estate appreciation. There is currently a 5.9-month supply of homes priced under $200,000 on the market; a six-month inventory is generally considered to a balanced market.

2. Combine that with low interest rates and the extension of the federal homebuyer tax credit, and there appears to be plenty of interested buyers entering the real estate market in 2010.

Homes priced over $1 million are still struggling, though, and will likely to continue to struggle throughout the upcoming year. In fact, this market is now inundated with a 61 month inventory of homes.

3. Many analysts see the upswing in the San Antonio real estate market to continue, as demand for homes usually coincides with consumer confidence, which has continued to improve over the last few months.

4. San Antonio is also expected to see an increase in its real estate market because job losses continue to decline. As San Antonio starts creating new jobs in the upcoming year, San Antonio real estate demand will certainly follow suit. San Antonio recently announced the addition of thousands of new jobs in the military and private sector, which means that there will be an influx of workers looking for homes.

5. A recent study conducted by Metrostudy found that builders in San Antonio are expected to build about 8,000 homes this year, a nearly 12 percent increase from 2008. The sales incentives and discounts being offered by builders are sure to spur the growth of new homes sales throughout San Antonio, and are sure to help rebuild San Antonios bruised housing market.

Whether you are a buyer or renter, make the right residential choices by reading VIP Realtys informative analysis, which encompasses the San Antonio real estate and San Antonio condos markets.

Real Estate Investing: Are You Aware of the Recapture Tax?

By jamesrk

 You were probably already aware of the capital gains tax when you started real estate investing and long before you purchased your first rental property investment. That is, that you might be required to pay a capital gains tax to the Feds in the year when you outright sold your investment property unless you involved a Section 1031 tax deferred exchange.

You might not know, however, about the depreciation recapture tax you will also have to pay the Feds. Many real estate investors do not, and subsequently are in for an unpleasant surprise when they sell their investment real estate and discover that their sales proceeds are lower than anticipated by virtue of a higher federal obligation.

What is depreciation recapture tax?

First, understand that capital gains tax and recapture tax occur only when investment real estate is sold after one year of ownership. Profits on an investment property sold one year or less is classified as a short-term gain and taxed as ordinary income. Capital gains and the recapture tax apply only to investment property held for more than one year. In real life, here is how it works.

When you sell an investment property you have held for more than one year and have a recognized gain, the IRS, in addition to charging you a capital gains tax, will also tax you for the accumulated depreciation you took during the years you owned the property.

Say, for instance, you sell an office complex after ten years of ownership and make a taxable profit (or gain) of $300,000 and during that time took $30,000 in depreciation. The result is that you must pay two taxes: First, the recapture tax on the depreciation, and then the capital gains tax on the remainder.

Here is where it gets ugly.

The rate for recapture tax is currently higher than the capital gains tax rate (25% compared to 15%). As a result, you pay 10% more on the depreciation then you do if the recapture tax did not exist and your full profit was simply taxed as capital gains. This might be acceptable if you plan ahead for it, but extremely disappointing when you discover at tax time that you owe the IRS $3,000 more then you anticipated.

If you are engaged in real estate investing, and were not aware of the depreciation recapture tax, you better consult your tax attorney or accountant for more information. You certainly don’t want to sell your investment real estate and learn about it the hard way.

Article Source : Article King Pro - Free Reprints and Distribution

James Kobzeff is the developer of ProAPOD - leading real estate investment software since 2000. Create rental property cash flow, rate of return, and profitability analysis presentations in minutes! Easy and affordable. Go to => www.proapod.com

mobile home loans

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.