Section 1031 of the Internal Revenue Code is most often used in connection with the sale of real property. If you have been in the real estate market looking for a way to invest money and defer taxes, you may have heard about ‘Like-kind exchanges’ or ‘Tax Deferred Exchanges’ as a possible means to accomplish your goals. These are alternate names for what is commonly known as a 1031 Exchange.
This is a simple transaction that allows you to exchange properties of like-kind and defer the taxes. The transaction is simple, but understanding the process may not be! What property qualifies? Here are a couple of examples of what does not qualify:
- 1031(e) livestock of different sexes do not qualify for like kind exchange.
- 1031(h)(1) real property outside the United States and real property in the United States are not of like kind.
I was surprised about 1031(e) and I’m sure you are.
This might be your 1031 “Like-Kind”.
What is the difference between a second home and a vacation home? What taxes are being deferred? How long are taxes deferred? How does this benefit me? As a buyer, should I consider entering into an identified 1031 Exchange? Do qualified exchanges have to be simultaneous? If not, how long do I have to complete a qualified exchange?
There are many more questions depending on each circumstance and it is in your best interest to get correct answers to the questions for your circumstances and not depending on an overview to make your decision. Your professional Realtor® will be able to give information, but a Realtor® is only part of the resources you need. Your Realtor® will identify properties for your consideration. Another team member should be a tax attorney and a CPA who are experienced with 1031 Exchanges. They can give answers to how a 1031 Exchange fits into your portfolio, and how a 1031 Exchange fits into your estate.
If you are interested in a 1031 Exchange in on the Charleston Coast, contact Dunes Properties.
Momentum is going strong for Folly Beach real estate. Many Folly Beach homes and condominiums are trading hands while people take advantage of low prices and low interest rates. The pace of existing home sales has quickened and is returning to normal levels. Below is a summary of activity for July 2010. Contact me for the whole picture of the market.
11 properties sold in July 2010 on Folly Beach, bringing the total sold in 2010 to 61. Through 7 m0nths of 2010, we have sold as many as all of 2009. No tax credit disclaimer here, most buyers on Folly Beach would not qualify for the first time homebuyer credit. So we have legitimate demand for homes, which makes sense at the current average price in July of $331,829. If that sounds good to you, come on down and join us.
There have been a handful of foreclosed properties and great investment deals, but they go quickly and you really have to be in a position to move. they best way is to get educated on the market and be able to pounce when needed. I can help lead the way.
Some of the sales in July were:
A 3 bedroom Charleston Oceanfront Villa for $640,000
A 2nd row lot on East Arctic for $300,000
A condominium in Marsh Winds for $135,000
As prices fall lower, the low hanging fruit is easiest to pick, and that is exactly what is going on here on Folly. People are realizing that the prices are worth pulling the trigger, if you have always wanted the Folly Beach lifestyle. If you have ever considered buying, or are interested in selling your home, let me fill you in on the state of the market.
I remember my first visit to a Baskin-Robbins Ice Cream store when I was a child. There were more flavors than I had ever seen before all at a price my parents were willing to pay! How could I decide which was best? I was used to vanilla, chocolate and strawberry, but now there was mango, peach, caramel and cream, and about 27 other flavors to choose from. What was I to do?
Today’s real estate market is kind of like that. There are so many homes and neighborhoods available at great prices. How can a person decide on what to choose? If you are in the market for a new home, how can you avoid being mesmerized by the 33 flavors of homes available to you? Before you start looking, know what you need! Answer some questions before you go. The first answer you need is to the question of what you can afford. Here are a few others to consider:
- How big of a home do we need?
- Will three bedrooms and two bathrooms work? Or do we need more?
- How many square feet of air-conditioned space do we need?
- What size lot do we need?
- Do we want a large lot?
- Are we interested in a small lot?
- How much yard work am I willing to do?
- Are we interested in a townhome or condominium?
- What schools are nearby?
Once you’ve established your needs and balanced them with your wants, your Realtor® can focus the search on that target. Your Realtor® will preview a selected group of homes before spending your time in actually visiting everything in the mix. You should be able to find your home within 5 to 10 homes that you visit.
Remember Baskin – Robbins? I got sick sampling as many flavors as I could and never bought one scoop. Avoid the stomach-ache in your search by knowing what you want before you go to market.
Folly Beach Real Estate is back in demand! This has been a good year for buying oceanfront and island homes, and people are taking advantage. 8 properties sold in June 2010 bringing the total sold through half of 2010 to 50. Folly Beach sold 59 in all of last year. Is this a a good sign? It depends of if your a buyer or a seller.
The prices are still drastically low and have not come back like the number of sales has, and buyers are recognizing that it makes sense to purchase now. This is a natural occurrence right before prices begin to go back up. Here are some highlights from the last month:
The average oceanfront sale in June was $780k.
You can have a nice (nice!) island home for $500k.
For the second time this year $1 million was spent and the house was a dream home.
Other sales during the month included a townhome with a deepwater Folly River boat slip for $320k and a Mariners Cay condo for under $200k.
There are great deals still out there so if you are looking contact me and start your search today!
Are you be interested in buying a foreclosure property on Folly Beach? Well you better be ready to jump when they come on the market. This week two properties were listed on Folly Beach in the $300,000 range, one was a foreclosure. They both went under contract in less than one week, the foreclosure was under contract in days. This tells me that there are many buyers paying attention to the market.
Your best strategy to take advantage of one of these properties is to work with someone who keeps an eye on the market. I work day in and day out keeping my clients updated on any changes in the market. Let me know what you are looking for and I will contact you when these type of properties come available.
Here is your March 2010 real estate market report for Folly Beach. There were 6 properties sold during March 2010. They included one lot on Little Oak Island, a Mariner’s Cay for $412k and an oceanfront property for $655k. The average sales price for the month was $393,400. This continues the downward trend on prices and it seems like many sales are pushing prices lower. This has resulted in a higher number of transactions, as buyers realize that prices are now within reach and pull the trigger on the island lifestyle they have been dreaming of.
Come on down to the island! The prices are fine!
If you have always thought that living at the beach was too expensive, then think again. In 2009 Q1, the average sales price was $438,000 and that has dropped to $401,000 in 2010 Q1. 22 properties sold in 1st Quarter 2010, compared to 11 in the 1st Quarter of 2009. The lower average sales price explains the reason for the increased number of sales. More people are able to move onto Folly Beach, leaving behind the feeling that it is too expensive to live on the beach. Increased demand typically signals the bottom of the market, so if this trend continues we could see prices rise in the future.
Now is a great time to buy a Folly Beach home because of the combination of low prices and low interest rates. Make sure you are working with someone who is an expert in the market and knows their way around the island. Please contact me here with any questions.
Folly Beach Real Estate – 843-425-6414
I have seen a Folly Beach lot that is available for the cheapest price I have seen in a long time. How much is cheap? Not $500,000. Not $300,000. Not even $200,000. Think lower. Click here to find out.
If you are a builder, or investor, or interested in living on Folly Beach this is a great opportunity. I can help guide you through all the due diligence regarding the property, and can walk you through the permitting and building process on Folly Beach. This is one of the lowest prices for land on Folly Island that I have seen in a long time. Call me for details or click here to contact me.
This Saturday March 13th, 2010, the streets of Folly Beach will turn green to celebrate Saint Patrick’s day, and Folly party-goers will race around Center Street competing for prizes in the annual pub crawl. Everyone please use caution, from what I understand, the open-container law will be lifted, but the streets will be open to traffic! Please be careful “crawling” from one pub to the next. A good time will be had by all, including me, so call me if you want to meet up! I’m buying!
I think all of understand the appeal to living in Historic Charleston, SC. Charleston is considered by many historians to be the second most historic city in the United States only behind Philadelphia. In fact many of the original founders of our country owned property here, and visited our beautiful city regularly. Living in a home built in the 17 & 1800’s has it’s obvious charm, but there are some things one needs to consider before pulling the trigger on an historic home.
In the insurance industry an older home is considered 40+ years old. Yes; only 40 years old. But when you think about it; it makes sense. Insurance is all about risk, and building code changes every few years. So; for a home built 40+ years ago the building codes would have changed many times. Those old codes have resulted in millions of dollars in paid out claims.
When buying a home in a coastal town, insurance should be a very important factor as it can be a very hefty expense. There are many more risks that have to be considered living near or on the coast then living inland. The obvious being wind from hurricanes and the second being flood risk. Buying an older home isn’t out of the question, but there are some things to look for. One; ask your realtor to only show you new homes or ones that have been renovated and brought up to current code recently. This will solve most of the problems of homes 40-80 years old. Remember this; you MUST provide proof that work has been completed by a licensed and bonded professional who will sign a form attesting to the completed work. If you buy or already own a home that is 40+ year old and the work hasn’t been done here are somethings you can do to reduce your premiums.
However, as scary as those perils maybe, the age of construction maybe be even more. The risk of a hurricane only comes a couple times a year, and depending on where you live the risk of flood isn’t something most have to be concerned with very often. But everyday your home’s age is a factor. Old wiring, old plumbing, old roofs, and old foundations get older everyday.
Most insurance providers will not even cover a home over 40 years old. So if you are looking to buy a home 40+ years old one needs to shop insurance and get some quotes first to see if they can even find coverage. When you do find a provider be prepared for it to be most likely more than double what you would expect for a newer home. The cost of your insurance could also make getting a loan approval difficult due to it increasing your debt to income ratio.
If you are buying a historic home, well let’s put it this way your insurance bill each year could be well over $8000+ a year, and finding it will be difficult.
In conclusion, buying a new house can be exciting but just remember it also has to be insured and with the proper knowledge and help hopefully insured afford-ably.