Archive for August, 2010
New Orleans Condos have had little appreciation in the last couple of years! But there are other advantages to owning !
August 29th, 2010 categories: Condo Knowledge, Julie's Mortgage Tips
The yesterday, today and tomorrow flowers is much like the Condo Market in New Orleans. We know what has happened in the past. We know what is happening now even though we may all have a different take on it. None of us know what the future may hold. We do know a couple of things about buying a condo in today’s market. Here are a couple of things we tend to forget when financing a condo in today’s condo market.
Low Interest Rates of 4.5% mean….Lower notes monthly. You borrow 200k and your principal and Interest are $1013.37 per month. One of the things many forget is that you are paying your principal down quicker and building equity faster. In month one you will pay your principal down by $263.37, in the first year it will decrease by$ 3226.44. At the end of five years you would have increased your equity by $17, 684 leaving a loan balance of $182,313. Your total note in not just interest but principle as well.
Tax benefits of owning puts money in your pocket…. In year one you will pay $8934 in interest and that is deductible on your state and federal Income tax. If you are paying 25% income tax rate as an example this saving is 25% of $8934 or $2233.50. On a monthly basis the savings are 186.12 per month in year one. One thing we are certain about is that taxes are not going down from here.
Sweat Equity is also something that can work in your favor…. You may buy a condo that needs some updating or areas where you can improve on the value of the condo. Many of the things you can do yourself to improve the price of the condo. This sweat equity is sweet. It is all yours to keep if you live in the condo for more than two years. No capital gains taxes if this was your home.
Adding thes numbers up in the first year will give you over $400 in tax saving and in equity. Its almost $450 in the first month and actually increases after this point as the loan balance gets smaller as each month passes. At the 36 month the mortgage payment you are paying the loan down at $300 per month. That is the good news about the lower rates………
The largest reason to own is that it is your place to do with what you wish. You can enjoy it and treat it like its your own place. You own it and when yous sell you have a good chance of leaving with something. You rent and you certainly will walk away with nothing. Paying rent for 60 months at $1300 per month is $78,000 that you will not see again. That is certain……….
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Commodore Condos on St. Charles Ave. The Studio Condo #4 stands out for location and price ! A winner for Sale !
August 21st, 2010 categories: Condo Listings, Uptown NOLA
Studio Condos in the New Orleans condo market are not the norm. Very few exist and even fewer exist that have great locations. This studio that I have just listed for $121,000 on one of the most prestigious Avenue’s in all of New Orleans does have the location. Its located at 3300 St. Charles Ave. in the Commodore condos. Add the location to the historic building on the St. Charles Ave. street car line and you have a winner.
Studio condos are generally small units or basically rooms with everything being in one room. They are generally going to be smaller cheaper than a standard one bedroom unit. The space may be leftover and this is the best use. Rarely do they have separate kitchens.
Another unique feature is that it has a separate kitchen, living-bedroom area and a very large bathroom for a studio. The natural light and windows make the unit feel larger than it really is. Being right under 400 sq. ft. the condo is small. Being small it is very energy efficient.
The Commodore Condos is next door to the new Borders Book store. The courtyard is right outside your door. The secure entrance and secure entry to the building give you a great deal of privacy. Walk out the side door to an Uptown New Orleans park. You can park on the street with ease. The present owner rents a spot from one of the other owners for $75 per month in a gated parking lot behind the condos. You really do not need to use your car that often living here.
The condo #4 features wood floors, nine foot ceilings, crown molding, granite counters, stainless steel appliances, tile floors and is tastefully painted and decorated for a small condo. The present owner set an office in the kitchen which could be used as a breakfast area. This is a great place for a student, second home or someone just starting out. The present owner will sell the furniture at a bargain price with a sale. The building is pet friendly and secure.
With interest rates at 4.5 percent your principle and interest would be less than $600 per month. Add your modest condo fees and taxes and you have another winner in a great location at a great price. This could be the best studio in the City of New Orleans at this price.
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Low Interest rates of 4.25% begin to bring more buyers into the market?
August 8th, 2010 categories: Market Trends
The interest rates are the lowest they have been since the 1950’s having hit 4.25% in the last couple of weeks. This is causing people who have been sitting on the sidelines to again think about buying as a primary residence or second home. Prices have actually been fairly steady with a slight downtrend in the last year for the better properties. More if the properties needed some work.
This means if you borrow 100k your principle and interest are $491.94 per month. You would add taxes and condo fees to this and you will get an idea of the total note. Do not forget the value of the tax deduction for interest. Do not forget in year one you actually reduce the principle by $1686 and this figures grows each month.
Second homes get this low rate as long as you have only one second home. There are no third homes as it then becomes investment property at a much higher rate. Second homes will require 20% down in all most all cases. You avoid PMI with 20% down and this is a huge savings.
Buying a condo as primary residence would mean putting 10% down. You can ask the seller to pay the majority of the closing cost if you want to preserve cash. This is more and more common in all transactions.
Two bedroom units have been the strength of the market year to date. I do see the one bedrooms making a comeback with the low rates in the very near future. These are the units that are currently some of the best buys. These are going to be your first time buyers and second home people that do not need a lot of room. Many sellers have had their units on the market all Summer and are ready to make a deal as the seasons change.
Condos that need updating are still out of favor as prices have not been adjusted for the things that need to be done. The majority of the sales have been in the premium units. Meaning you buy and almost nothing needs to be done except you own taste.
Sellers may be better to make their condos into premium units rather than reducing the price. This is working for me. Get all the things done before putting it on the market. Today’s market is a beauty contest with only best looking units winning the sales. The buyers today are very stern judges.
I have seen some of the nicer things having been sold in the last couple of weeks. They were their one day and gone the next. There are several good buys that I have seen and bet those will begin to vanish as well. The good news about the oil spill being capped is good news for everybody and the real estate market. Psychology of markets works like a clock as fewer people buy at the bottom but now may be the bottom.
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