Orlando Florida | Short Term Investment Communities

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Terms blared at consumers include Peace of Mind, Security, and Quality of Life. What they do not discuss is the downsides to such a program in the short and long terms.

My personal and professional opinion is that there are situations where the reverse mortgages do fit.  I think that some homeowners have certain goals which can be achieved through a reverse mortgage.  I think that it definitely fits a niche market.

That being said, I do not believe it is meant to work for the masses.  I believe it truthfully DOES NOT FIT most potential borrowers.

If a borrower has:

• good credit,
• some income by which they can repay a mortgage,
• adequate equity,
• minimal debt,
• controlled expenses,
• affordable lifestyle,
• the need to continue growing wealth during retirement,
• the desire to leave an inheritance to their family/friends,

…then I believe that a Conventional Mortgage – a "Forward" mortgage – and proper use of secure, liquid investments can offer the borrower more security and definitely better investment potential over a longer term than a Reverse Mortgage.

With a cash out refinance and funding an annuity, a Conventional Mortgage can create a better financial plan for future needs and emergency funds.

Click on the following link to read about the Pros and Cons of Reverse Mortgages.

Some of the most frequently asked questions by U.S. Nonresident Aliens buying rental homes in Florida.

This list was presented at the Greater Orlando Board of Realtors International Council meeting by by Mia Ferrel of Chastang, Ferrell, Sims and Eiserman LLC.  Certified Public Accountants and Consultants.  Mia has office space in our office building at 215 Celebration Place, Celebration Florida.

Two annual forms are required to be filed on your behalf.  The first , Form 1030NR, U.S. Nonresident Alien Income Tax Return, is the form on which all income and deductions related to your rental property will be reported.  By filing Form 1040NR, you are electing to have income from your rental property deemed to be connected with a U.S. trade or business.  The second, Form W-8ECI, Certificate of Foreign Person’s Claim for Exemption from Withholding of Income Effectively Connected with Conduct of a Trade or Business in the United States, exempts you from withholding of United States income tax through the net basis election.  Without this form, taxes would be withheld based on 30% of Gross rents and no deductions would be allowed.

You may be subject to other filing requirements as follows:

a.  Real property taxes are calculated by the county tax authorities.  Values are assessed annually and the assessment notice will be sent to you (or your mortgage holder if you deposit your taxes monthly with them) in November.  You or your mortgage holder must then return the notice with payment.

b.  If you purchase a house that contains furniture or other personal property that is not attached to the house, Form DR-405, Tangible Personal Property Tax Return, will need to be filed annually on your behalf.  The return, detailing any personal property contained in the rental house, is filed with the county in which your property is located.

c.  If you rent your property for periods less than six months you will be required to collect and pay sales tax to the State of Florida, Dept. of Revenue, on transient rentals.  In addition to the applicable six percent sales tax (seven on properties located in Osceola County), a tourist development tax (four percent on properties located in Polk county and five percent on properties located in Orange and Osceola County) must also be collected and paid monthly to the county in which your property is located.  Please note the sales tax and tourist development tax must be collected on all rental income properties located in Florida regardless of where the rent is collected.  Rental periods longer than six months are not subject to these taxes.

For 2006, if you are single, your first $7,550 of taxable income will be taxed at 10%.  Income over $7,551 and up to $30,650 will be taxed at 15%.  Income over $30,651 and up to $74,200 will be taxed at 25%.  Income over $74,201 and up to $154,800 will be taxed at 28%.  Income over $154,801 and up to $336,550 will be taxed at 33%.  Income over $336,551 will be taxed at 35%

If you are married, your first $7,550 of taxable income will be taxed at 10%.  Income over $7,551 and up to $30,650 will be taxed at 15%.  Income over $30,651 and $61,850 will be taxed at 25%.  Income over $61,851 and $94,225 will be taxed at 28%.  Income over $94,226 and $168,275 will be taxed at 33%.  Income over $168,276 and higher will be taxed at 35%.

Due to depreciation, mortgage interest and other operating deductions (as explained below), your rental property will probably generate a tax loss while being rented.  These losses are accumulated on Form 1040NR and carried froward to reduce future income or gain from the sale of the property.  If a gain on the sale of the proerty exceeds these losses, the net capital gain is taxed at a maximum rate of 15% ( 10% for individuals in a 15% tax bracket) provided the proerty was held for longer than one year.  If the property is sold at a loss, no tax liability results.  However, regardless of whether or not you have a taxable gain, a withholding tax equal to 10% of the Gross sakes price is required to be withheld from seller’s funds at closing.  When you file your subsequent calendar year Form 1040NR and report the sale of our property, the withholding tax is reported as a credit.  This credit is applied to any tax due from the gain on the sale of your property and any excess will be refunded to you.  If you have no gain, all your withheld tax will be refunded to you.  There are certain exceptions to the withholding requirement that are beyond the scope of this blog.  Since this a complex issue, professional advice should be sought.

Deductions include, but are not limited to, advertising, cleaning, maintenance, commissions, insurance, tax return preparation fees, management fees, mortgage interest, repairs, supplies, property taxes, depreciation ( explained below) and utilitities.  Most expenses that are ordinary and necessary in the operation of a rental property are deductible.  If larger expenditures are required i.e. a new air conditioner, these items ar capitalized and depreciated over future years.

Yes.  Since the house (not including the land), furniture and some large repairs have a useful life greater than one year, they must be depreciated.  Under the current laws the cost of the house is "capitalized" and deducted over a period of 27 1/2 years.  Furniture iand repairs usually have a useful life of 5 to 15 years, depending on the specfic item.

If your trip is primarily for business purposes, the airfare and certain related travel expenses are deductible.  These expenses might include car rental, local transportation to and from a meeting with your property manager and a meal over which a business discussion took place.  Only expenses directly related to your United States rental property can be deducted.

Yes.  U.S. Nonresident Aliens may not file a joint U.S. tax return.  Two returns ar prepared and all income and deductions are divided equally on the two returns.  This has very little overall effect on your tax liability, although it will slightly increase the cost to prepare the required returns.

No. An unlimited number of rental homes can be reported on one Form 1040NR.  Each rental property’s revenue and deductions are reported separately on Schedule E, Supplemental Income Schedule.

10.  Can I
take a credit or a deduction for taxes I pay in my home country on my United States tax return?

No.  Because you are not paying tax on your "world-wide income" but only on United States source income, you are not eligible to recieve a credit or a deduction for taxes paid in your home country.

As you can see this is an important issue and seeking the advice of a professional is just as important as finding a great property manager. 

If finding a rental property and or vacation home in Orlando Florida is one of your dreams call the Orlando Top Team to day or e-mail us for more details.  Here is a link to the investment page of website where multiple choices are availble for you to consider.

The Boy Scouts of America is a year long Program for boys ages 10-17 that provides educational programs to build character, to train in the responsibilities of participating citizenship, and to develop personal fitness.

The Boy Scouts of America is a year long Program for boys ages 10-17 that provides educational programs to build character, to train in the responsibilities of participating citizenship, and to develop personal fitness.

The Boy Scouting program provides obstacles & steps in overcoming them through advancements. The Boy Scout plans his advancement and progresses at his own pace as he meets each challenge. The boys are then rewarded for their achievements. There are also many special opportunities that the boys have available to them. Some of them are boardsailing, BSA lifeguard, World Conservation Awards, Scuba, Snorkeling and much more. In summer months you will find the boys participating in International Trips, Northern Tier canoeing expeditions – http://www.ntier.org/, Boy Scout summer camps and Florida Sea Base http://www.bsaseabase.org/.

Seafood | 5101 East Colonial Drive | Orlando FL 32803

Orlando Florida | Just for Fun

Our team spends a lot of time on the Internet marketing our properties and looking for new ways to do things.  Sometimes in our search, we come upon some unique and interesting sites.  Here are a few that we have recently come upon:

• Have a budding Ballerina in the family?  Then you might want to check out the Ballerina Gallery
• Into Fishing?  Here is a great resource for Fly Fishing and another of Fly Fishing Photography
• Ever wonder about all of those Murphy’s Laws we hear about?  Here is a site with all of them organized!
• Eyes of Nye is fun site with The Science Guy
• Inspired by Dancing with the Stars?  Try Bust a Move

Eclectic Cuisine | 8625 International Drive | Orlando Florida 32819

ou have a fully executed contract, all is ready to go. Or is it?

You have a fully executed contract, all is ready to go.  Or is it?  Don’t forget that there are contingencies that may cancel the contract and you find yourself back at square one in the process. 

Understanding the contingencies in a contract up front is one way to be prepared.  Another is to eliminate them from the contract.   Some contracts contingencies that you might encounter in the sales process are:

• Contingent On the Sale of another Property – This means that they sale is dependent on the sale of another property. 
• Home Inspection – The buyer has the right to inspect the home and make a decision to not purchase if there is a significant defect.  (related to this could be lead, radon, mold, termite, well and septic systems.
• Mortgage Approval – If the buyer cannot be approved for a loan the deal can fall through.
• Survey – A survey verifies the property lines and if there are any encroachments on the property.
• Appraisal – Most common reason for contracts to fall apart because the Bank will not finance a home greater than the appraised value.  The buyer might have to bring money to the table to purchase.

Every contract is different, understanding contigencies will ensure that your stress level is managed.  Contingencies are just part of the contract.  Make sure you discuss the contingencies you put in your contracts and what they mean with a trusted Real Estate Professional or Attorney before agreeing to them.

Visit the Orlando Avenue Top Team website for additional helpful information.

And why you need it to help the sale of your Orlando Area Home…

Let’s face it, the market is a Buyers Market!  You need do do something dramatic to gain the buyers attention as there are so many options on the market right now. 

There is something we need to talk about.  Buyers are not able to visualize living in your home if it full of clutter and personal stuff.  Just as they can’t always envision how a vacant house will look with furnishings.

So what can you do?  Stage your home!  Ok we all have heard the term, but what does it mean?  How can it benefit you the Orlando Area Seller?  First off Staging your home is getting it ready for showing to potential buyers.   By Staging your home you will make a better presentation and put your best foot forward in this competitive Orlando Market.

You can hire a professional stager to come in and stage your home, and we would be happy to assist you in finding that professional.  Most homes just need a few things done and we can work through the list together to make your home more appealing to potential buyers.  Things like:

• Removing personal photographs, from walls
• Pretty bedding on beds
• Neutral paint colors
• Less is more! 

Rich Dad Poor Dad a great book for Dad or try the Cashflow games there is still time to find the best gift!

Robert Kiyosaki was blessed to have two fathers, a rich dad and a poor dad.  His birth dad, was a role model, educator and disciplinarian. The second, while not Robert’s birth father, also played a key role in Robert’s life. This “dad” was also a role model, educator and disciplinarian, but in addition, a mentor.

People at Keller Williams Real Estate are also very familiar with the 4 quadrants and raising the financial IQ of our family and friends especially when it comes to real estate.

So you might ask what does this all have to do with Father’s day well there is a great book called Rich Dad Poor Dad that would make a terrific present but if your budget allows the Cashflow 101 game is a real eye opener and fun for the entire family.  There is also Cashflow for Kids that would be fun to play with dad too if you have a younger children.

Last weekend I was in North Carolina visiting my sister and brought a copy of this game to leave.  We had a great time and as usual after playing this game I always hear comments like wow wish I had played this alot earlier in my life!

The book alone Rich Dad Poor Dad is enough to get you asking questions and if you really want to get going I  recommend the game Cashflow 101.  Once you get more advanced there is 202 and you can even play online.  You can also find these games on ebay.

Even if real estate is not your game this can be an exciting widening your eyes experience.   Robert has said the best reason is to see your money work for you not you work for money and what dad wouldn’t like to learn how to do that!