Archive for December, 2008
New Orleans Condos, The mortgage interest deduction on your taxes is a very big deal!
December 28th, 2008 categories: Condo Knowledge
The interest rate deduction on your taxes is a big deal when considering your total cost of ownership. The interest you paid as well as property taxes are deductible on your federal and state income taxes. Let’s look at an example of someone in the 25% bracket for federal taxes and 3% for state taxes. Most people hate giving the government more of your hard earned money. Renters miss out on this gift and its a very big gift. The gift gets larger as your tax rates gets steeper.
With a $200,000 mortgage your interest and principal is $1076. The interest for the year one in your loan is $9921. If your combined tax rate is 28% you will realize a tax benefit of $2778. If you break this savings down on a per month basis or $232 per month which is savings to you. Your out of pocket cost is lowered by this amount. This is something that a renter does not get. The taxes are also deductible. If you are a renter the landlord works this into your rent so you are paying for his taxes but get no tax benefit. The higher the rate the more you will save.
The other benefit that often forgotten is that during the first year you have increased your equity by $2963 and paid down the principal by that amount. When you sell you will realize your equity tax free plus any gain if you live in your condo for two years.
You can also look for a $7500 tax break as well if you are a buyer for the first time in the last 3 years. All this is great but people do enjoy having their own place with a chance to improve your property with sweat equity. Think what your out of pocket expenses are when thinking about purchasing your place.
Other recent articles Rent versus Buy, New Orleans Interest Rates fall off Cliff, Its a New Orleans Buyer’s Market.
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New Orleans Warehouse District, Looking at Photos gives you a peak at the Neighborhood!
December 23rd, 2008 categories: Warehouse District
Most people chose where they want to live because they like the neighborhood. An Urban neighborhood in a tourist city like New Orleans has a lot to offer and its a big variety. What better way than to have an assortment of photos about the New Orleans Warehouse District. Besides being home to the New Orleans Hornets, New Orleans Saints and various attractions many chose this lifestyle. The residents are relatively new but the buildings are much much older.
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New Orleans French Quarter Sunrise, Wake Up New Orleans !
December 20th, 2008 categories: French Quarter
Sunrise in the New Orleans French Quarter is fairly quiet. You can get some photos since no one is around but it lasts only so long then you have to eat breakfast. Always great to get another view since most will sleep through it.
There is always something to do in New Orleans and that is why its a great destination city for people all over the world. That is why the French Quarter, Warehouse District and Uptown New Orleans are becoming a second home choice for many. Enjoy the Holidays and 2009 will be a better year.
See the latest French Quarter Condos Updates for status of condos under 200k. Many people do not know that the Warehouse District is steps away and the prices drop fairly dramatically. The Warehouse District Condos, Buyer Market will give you some additional insight into the market.
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New Orleans Interest Rates fall to lowest level in 37 years, Time to refinance? Get out you calulator ! Save some Money
December 19th, 2008 categories: Condo Knowledge, Julie's Mortgage Tips
It is certainly time to think about saving money by refinancing your loan on your New Orleans condo. Especially if you plan on owning it for more than a couple of years. The cost to refinance your loan on a 200k mortgage for a condo is about two thousand dollars. The only variable is the title Insurance which varies with the amount of the loan. Make sure you keep your title policy as the reissue rate is a big savings. Its is well worth looking into the numbers. Your condo fees and taxes stay the same.
Lets look at some numbers. If your current rate is 6.25% and you can get 4.75% then your monthly payment per 100k drops from $616 to $521 which saves you $95 per month. This is principal and interest. On a 200k loan your savings would double to about $200 per month. That is $2400 per year which is over the break even point for the closing cost associated with the lower rates. So if you are planning on staying in New Orleans its money in your pocket.
There is no way to know how long these rates will be around but have a feeling it may be a couple of months before heading up again. If you are buying this gives you a larger budget to spend or a much cheaper note. There is still available those seasonal discounts that will be going away once everyone figures this out.
Feel free to call Julie Baudier 504-583-1793 and ask her what you need to do and how it will benefit you. Its not always that easy to get $200 more in your pocket by making a call. If your rate is higher then you save more. You must have good credit, but 95% of my buyers have had excellent over the past 3 years had great credit in my condo markets. Out of last 200 sales I had one sub-prime loan and only a couple of adjustable loans.
The other odd thing when you do the number is with the lower rate of 4.75% your principal is getting paid down $126 per month. At the 6.25% rate the principal is being lowered by only $95 in the first months. I had to do this several times to be a believer. This means you are building equity faster at a lower rate as less goes to interest in the beginning. An equity bonus so to speak!
If you are currently renting then take a look at the rent versus buy numbers and it pushes buying in your favor. Rent Versus Buying, New Orleans Buyers Agent
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Kenner Condos, A Market Update! Stay with the Best for future value!
December 17th, 2008 categories: Jefferson Parish
The Kenner Condo market attractive to condo buyers as the prices are very reasonable and the commute times to Metairie and New Orleans are not bad. There are however two distinct markets with one much much preferred over the other for appreciation and quality of life. The complexes built as condos are the best way to go. The conversions are much more problematic and their future value unknown. The current trend is down!
The Avante Garde Condos, Rue Chardonnay, Cobblestone Village and Bordeaux Village are my favorites over the many recent condo conversions from apartments. This group were built as condos as thus have common areas, gated entry and mature condo associations that add value.
The value trends favors these associations as they are better managed and end up being better maintained with common areas that add value. It is much harder to get financing on many of the conversions. The trend favors the nicer places to live that look like neighborhoods. The group can be financed FHA which gives you a better chance for resale value in the future.
As long as the complexes are well managed and kept up to a top level, the trend will continue. There are several groups of condos on Chateau Blvd. that were built as condos that also seem to do well and the turnover of these town-home style do have have much turnover.
Most of the units are two bedroom units which are preferred along with many 3 bedroom units in Rue Chardonnay. The Kenner Condos are larger than other segments of the New Orleans market as they were built as condos twenty plus years ago. That was when the land was much cheaper and there was plenty available.
Currently there are only 4 units for sale at Avante Garde at prices varying from 118 to 159k. You should be able to get the better floor plans for around 150k that has some updates. This is not that many for a complex of over 200 units. These FHA approved meaning 3% down is possible. Good value for the 140’s. Do not expect something fully updated for less than 150k. Read the rest of this entry »
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Bourdeaux Village Condos-Kenner, Actually fee simple townhomes!
December 14th, 2008 categories: Jefferson Parish
The Bordeaux Village town-homes in Chateau Estates in Kenner are not technically condos but fee simple town-homes. Your fees are very inexpensive since they do not take care of insurance and upkeep of the exterior of the units. You actually own the land as well. We still however think of them as condos.
Bordeaux Village has always been popular for a couple of reasons. The idea that they are in a residential neighborhood and have plenty of space; they do not look like your normal Kenner condo development. The low fees were an attraction but in the end you pay for your own upkeep and insurance.
The units are spread out giving that quiet neighborhood feel. Being 28 years old the tree and scrubs are very mature. Most of the units are two bedroom units with many having loft bedrooms. There are far fewer one bedroom units and some units up to 1600 sq. ft with the extra space going to an office. There is plenty of parking and it is well spread out so each unit is within steps of their reserved parking spots. The homeowners fee is $70 per month which does include grounds upkeep, pool, tennis courts, and termite contracts for the units.
Many of the units have been upgraded while others are in various stages of updates. This is the reason in the pricing ranges that you will see. There are at least 75 units in the complex with two currently being for sale in the 150’s. There are never a lot of listings as people tend to stay here for longer periods of time. Each unit has a small patio, fireplace,vaulted ceiling and galley style kitchen. The floor plans do vary but they are all similiar in look and feel. The recent updates are the difference.
During an inspection you have to treat these units more like a home as you have to keep up the exterior as well. Many of the origional materials are or have reached the end of their expected life so look for rotten wood on the exterior of the town-home.
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Finanacing New Orleans condo’s as a 2nd Home! Rates are very good!
December 14th, 2008 categories: Julie's Mortgage Tips
Rents in the New Orleans Uptown and Warehouse District are approximately $1200-$1800 monthly. Instead of paying rent for the next four years college students parents can buy a condo as a 2nd home and reap the benefits. Some parents will be able to use the interest paid on a 2nd home to lower their tax obligation.
Buying in todays market while values are down should equal appreciation 3-4 years form now. Rates are a an all time low and its nice to be able to take advantage of it. 2nd home rates are as low as your primary residence rates. For more information please give me a call. Julie Baudier 504-583-1793
Julie is correct about the second home market and the deductions and enjoyment that can be had with a second home. I sell several condos a year where people will have a condo as second home and also make it a home for their kids while in school. Having the second homes have had a positive effect giving the market more buyers than other markets.
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French Quarter Market Update! Condos under 200k, yes there are some nice ones!
December 11th, 2008 categories: French Quarter, Market Trends
The New Orleans French Quarter is alive and well. The under 200k condo market is always a small segment of the French Quarter condo market in a couple of ways. The units are very small and many are studios at this price with many under 400 sq. ft. There are currently 36 units for sale in the Quarter under 200k with only four under contract. They are also going to be in varying conditions of not being updated. But some are updated !
With this said there are a number of neat units that would be used as second homes and weekend retreats. There will be no parking with these units and not many will have balconies. Its a buyers market in this segment much more than the higher end units. There is plenty of competition from the Warehouse District which is across Canal Street where the same price units are larger, cheaper, and more updated. They are however not in the Quarter where many people still want to be. Real Estate is still a lot about location, location and location.
I have seen a number of nice unit in the 160-180k price range that anyone would be happy with as a retreat home. I like these since they are larger, have plenty of light and offer some amenities as a courtyard. There are 5-6 that are very nice in either great locations or have that historical feel.
There are not a lot of buyers at this time. Rates are very low and sellers may be willing to part with the units for some good prices for a variety of reasons. Rates hit 5% today which is $538 per 100k that you borrow. Get the seasonal discount from the seller and the lowest rates of the century. The lowest of the Century is correct.
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New Orleans Handi-Man, Where are the good ones when you need One? I call Sal!
December 7th, 2008 categories: New Orleans Origionals
When you deal with real estate you need to know how to get things done with people you can trust to do the job. I use Handy-man on a regular basis when putting units up for sale that need painting, plumbing and general clean up duties done. You must have your condo or piece of real estate in top shape as there is always a lot of competition. You want your unit to shine in comparison to others. I use Sal Cannizaro and have been pleased time and time again. My clients are more than satisfied.
Get the little thing done that you have been putting off. People do take notice and begin to wonder if the owner took care of the place. Make the condo look fresh as you will sell it quicker for more money.
I firmly believe doing the small things will get you a better price in the long run. A lot of times its just doing small things that are broken that need repairing. Painting is always a great return. The things you do vary by neighborhood and how competitive the particular market is.
In dealing with condos the buyers do not want to buy ones that need work. That is one of the reasons the purchaser is looking for a condo. If the purchaser can get a good idea from Sal as to the cost then they can maybe save some money then get Sal to do the times after the purchase. Most of the time you should get more off the price than the fees to upgrade the times you want. This is in essence sweat equity and it does not have to be your sweat.
Sal Cannizaro 504-494-3750 is Handy Man Super Hero, someone I have faith in when it comes to getting the job done large or small with him. The jobs can be small or larger. If they are too large he says so. The estimates are on and he sticks by the numbers. Sal has a full time job and he works nites and weekends. Now that is a hustler. I have really known Sal for over 20 years as we were competitors in the speciality food business and our paths crossed again several years ago. Its to my benefits to have this contact.
| Discussion: 2 Comments »
Rates Have Fallen to an All Time Low this Century! Can that be correct?
December 4th, 2008 categories: Julie's Mortgage Tips, Steps to Purchase
I was talking to Julie Baudier, my favorite lender today about the drop in interest rates and the effect it would have with people looking to purchase a new place. Its never too early to get an idea of what your note will be and what kind of payment you will be comfortable with. Doing this upfront is aways a good idea and great first step. If you are looking in the Spring this is the time to start learning about the market and the lending process. This is especially true of first time buyers but still true for experienced buyers.
Julie says “Six weeks ago a client signed a purchase agreement for $260,000 he was borrowing $208,000. We locked him in at a rate of 6.25% his Principal and interest payment was $1288.00. I lowered his rate today to 5.375% and his interest payment went down to $1174.00. His payment is now $114.00 lower than he originally panned. Lower rates save you money and increase the amount you can afford to but.”
Here are a couple of tid bits that we often forget to figure into the purchasing equation. Your home or condo is an investment and it nice to know some of the numbers.
An easy way to remember is that each quarter of a point will mean a drop of about $16 per every hundred thousand that you are borrowing. Another factor that many forget about $100 of your payment per 100k goes to pay day the balance of the loan in month one. This is building equity that you will not get renting.
The effective rate will be much lower when you add in your interest deductions. The higher the income the bigger savings. For example if you borrow 200k and you are in the 25% income bracket at 5.5% you payment is $1126 without escrows. Your interest is about $930 a month of when 25% or $372 is a tax break.
Your effective payment quickly becomes $1126 minus $372 tax break minus equity $196 or $584 per month. Of course you figure taxes and condo fees into your equation. Any appreciation is going to be tax free for most people.
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