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What Is Real Estate? A Definition And A Guide

What Is Real Estate? A Definition And A Guide

Interested in buying a home so you no longer have to send rent checks to your landlord each month? This thought isn’t surprising: real estate is attractive to both investors and those who want to swap renting for owning.

But while real estate is an attractive alternative or addition to stocks, bonds and mutual funds, it does come with risks and challenges.

Here’s a look at how real estate works, what makes it an attractive investment and the steps and research you need to take whether you’re buying a home for you and your family or making an investment to boost your bottom line.

Real Estate Definition

When you boil it down to the basics, real estate has a simple meaning. It’s a piece of land and the property – such as a house, office building, apartment, strip center or warehouse – that sits on it. These structures can be both above and under the ground. For instance, if you own a strip center with an underground parking lot, that parking lot would be part of your property.

Real Property Definition

If you’re buying real estate, you should also understand what the term real property means. Real property is the land and any structures affixed to it that are factored into the value of the property. For instance, if you own a home, its garage would be considered part of its real property. A movable picnic table in your backyard, though, wouldn’t. Real property also gives you the right to use your property, including selling it or leasing out space in it, as you wish.

Multiple types of real estate are available – whether you’re buying a home for yourself or to rent out to others. No matter what type of real estate you purchase, the hope is that it appreciates with time so that when you do sell, you earn a profit. Be careful, though: While real estate can be a sound investment over time, appreciation isn’t always guaranteed.

Residential Real Estate

As its name suggests, residential real estate is any type of real estate where people can live, including single-family homes, townhouses, condominiums and multifamily homes.

Many people purchase residential real estate as a place to live. But you can treat residential real estate as an investment, too. You might buy a single-family home, renovate it and then sell it for a higher price. You can also buy a single-family home and rent it to tenants, collecting monthly payments to pay off the mortgage.

Even if you buy residential real estate primarily as a place to live, your home might still turn out to be a solid investment if it’s worth more when you sell than when you purchased it.

Commercial Real Estate

Commercial real estate is any property that provides a business service and isn’t used as a living space. This kind of property includes everything from office buildings and shopping malls to restaurants, clothing stores, movie theaters, gyms and gas stations.

You can earn money by holding onto the commercial property until it increases in value, then selling for a profit. Or you can earn money by leasing space in your property to business tenants. For example, if you owned a retail strip center, you’d charge that pizza restaurant monthly rent to lease space in it. If you owned an office building, you’d charge companies to lease space in the building.

You can also use commercial real estate as a home base for your own business. You might own an office storefront if you run an insurance business, for example.

Land

You can also buy land, which can be defined as real estate that has no buildings or structures on it. If you purchase land, you can then develop or build whatever you want on it, as long as you follow the local zoning codes and regulations for that lot.

Industrial Real Estate

Industrial real estate is any structure or piece of land primarily used for manufacturing facilities, warehouses, distribution centers and factories. This type of real estate can be pricey, but it’s also valuable.

As people spend more time shopping online, and as they expect the products they buy to show up at their doors in less time, the demand for industrial real estate has only grown. This makes this property type especially valuable since the odds of it appreciating in value are high.

Make Your Offer Stand Out!

If you’re ready to buy real estate – whether as a primary residence or an investment – it’s important to understand the basics of how this business works from start to finish.

Development And Construction

New buildings – everything from homes and office buildings to apartment towers, distribution centers and shopping malls – get their start during the development and construction phase of real estate. This is when development companies, municipal officials, architects, contractors, engineers and builders work together to create a new real estate project.

If you want to buy a home, it’s usually easier to purchase one already built. Buying land and building a new home on the site, though, can leave you with a home that more closely meets your housing needs. After all, you can tell your architects and builders exactly what you want.

Working With Brokerages And Real Estate Agents

You can purchase or sell real estate on your own. But navigating this process – finding the right property, qualifying potential buyers, signing documents and handling negotiations – can be time-consuming and confusing. So, this is where real estate brokerages, real estate agents and REALTORSⓇ come in.

Real Estate Agents And REALTORS®

Real estate agents are professionals who work with both buyers and sellers. Real estate agents who are members of the National Association of REALTORSⓇ are known as REALTORSⓇ.

Real estate agents help market properties, handle the buyer and seller negotiations and make sure all the right paperwork is signed during a real estate transaction. They don’t do this for free; they usually get paid a percentage of a property’s sale.

Real Estate Brokers

All real estate agents must work under a real estate broker. A real estate broker holds a real estate license and has extensive knowledge of the real estate industry. The term “brokerage” and “broker” often get confused with one another, but a broker is a real estate professional, and a brokerage is a real estate firm.

Property Management

If you buy real estate as an investment, you might opt to pay for a property management service. As the name suggests, such services manage rental properties that you purchase but don’t live in. They handle everything from maintenance and rent collection to emergency calls from renters at 2 a.m.

Let’s say you own an apartment complex in another state. You might hire a property management company to handle the maintenance of that property. This company would hire a landscaping service, cleaning service and security service. Your property management company might also screen potential tenants, market units when they come up for rent, and handle evictions if tenants stop paying their monthly rent. If a renter’s furnace conks out, one of your property managers would take the call and send out a repair service.

Working With Mortgage Lenders

Few people can purchase real estate with cash. Most people will have to take out a mortgage loan. This is where mortgage lenders come in.

If you want to buy a single-family home for a primary residence but lack the cash to make this purchase, you’ll work with a mortgage lender. You’ll provide this lender with income-verifying documents such as your most recent paycheck stubs, bank account statements and tax returns. Your mortgage lender will also check your three-digit credit score and your three credit reports, all to make sure you can pay back the money you borrow.

If you’re approved for a loan, your lender will pay the sellers of the property you’re buying. You then pay back your lender every month with a mortgage payment. You’ll have to pay interest on these payments, which is how lenders make a profit.

Lenders don’t originate loans for free but charge a range of fees to close your mortgage loan. Fees vary, but you can expect to pay 3% – 6% of your home’s purchase price in closing costs. On a home costing $200,000, then, you may expect to pay $6,000 – $12,000 in closing costs.

Investing In Real Estate

Ready to tackle real estate investing? Be prepared to do your research.

The key to maximizing your real estate investment is to study your local market. If you want to purchase a single-family home, for instance, you should study housing market indicators such as the median sales price of homes in your neighborhood, how long it takes homes to sell and whether home values are on the rise.

The same is true if you want to invest in commercial real estate such as a warehouse, office building or strip mall. You’ll need to research how much other owners are charging tenants for rents, how much traffic pours through retail areas and how high the vacancy rates are for neighboring office buildings or strip centers.

The more research you do, the better your odds of investing in a property that’ll increase in value over time and bring in a steady stream of rental income.

Ways To Invest In Real Estate

Of course, you can employ different strategies for investing in real estate. Let’s take a look at a few:

House Flipping

When some investors purchase single-family homes for a low price, they then flip these properties and sell them for a higher price. The key is to purchase a home for a low enough price and avoid overspending on improvements so you make a solid profit when you sell.

Rental Properties

You can buy a rental property and rent out apartment buildings, single-family homes, condo buildings and commercial properties. Your monthly rent collections might cover part or all of your mortgage payment, offsetting the costs of holding onto real estate while you wait for its value to rise. If you collect enough rent, you might make a monthly profit without having to sell your investment.

REITs

Buying into REITs – real estate investment trusts – is an easier way to invest in real estate. REITs are companies that own real estate, both residential and commercial. When you buy into a REIT, you purchase a share of these properties. It’s like investing in mutual funds, but instead of stocks and bonds, you’re investing in real estate. You earn money from REITs through regular dividend payments and when the value of a REIT increases. If the value goes up, you’ll earn a profit when you sell.

Real Estate Crowdfunding

In real estate crowdfunding, investors pool their money and then use it to invest in REITs, giving people who might struggle to come up with enough money to invest on their own a chance to invest in real estate.

The Pros And Cons Of Real Estate Investing

It’s easy to look at the advantages of investing when a big payout could be waiting in the end. But before you make an investment, let’s take a look at both the advantages and disadvantages of real estate investing.

The Pros Of Investing In Real Estate

Investing in real estate has plenty of potential advantages. By investing, you can:

  • Expand your investment portfolio
  • Bring in passive income
  • Live in your real estate investment
  • Get tax breaks

The Cons Of Investing In Real Estate

While investing in real estate can prove profitable, it can also:

  • Be expensive to start
  • Require selling property to gain funds
  • Lack guaranteed profits

Real Estate FAQs

Keep reading below for answers to some frequently asked real estate questions.

What is a real estate broker?

As mentioned above, a real estate broker is essentially a step above a traditional real estate agent. They have additional education and have passed the broker license exam, allowing them to employ other real estate agents under their license.

How can I finance a real estate purchase?

Real estate is most often financed through a mortgage. There are many different types of mortgages and lenders, so if you’re thinking about purchasing real estate, be sure to research your options and find the ones that best fit your situation.

What is digital real estate?

Digital real estate is any website or other online asset. This internet property can be bought and sold similarly to traditional real estate.

The Bottom Line

Real estate involves many terms that are important to understand, and investing is one of them. Investing in real estate can be a smart financial move if you understand your market, are willing to take on the risks, and borrow only what you can afford to pay back.

Source: rocketmortgage.com ~ By: Dan Rafter ~ Image: Canva

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PENDING SALE – 2701 Big Tree Ave. Denair, 4bd/2bth/1729sqft/7514sf lot

2701 Big Tree Ave, Denair

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$585,000 – One of a Kind!! Single Story, 4 Bedrooms, Built-in POOL, and 3 Car Garage. There’s LOVE put into this Home; Newer Quartz Counters, Replastered Pool with Abalone Flake, Newer Ceramic Wood-looking Floors, Newer Paint, Newer Light Fixtures, New Plumbing Fixtures, New Water heater, and Stainless Steel Appliances. Approx. 1729sf with an Open Floor Plan, Separate Living and Family Rooms with High Ceilings. The kitchen has a very Nice Island to Complement the Custom Cabinetry. Over 7500sf Lot with 2 Tuff Sheds Storage. Inside Laundry with Sink. Around the Corner for the Neighborhood PARK. A Must See! 

Property Features

Bedrooms

  • Bedrooms: 4

Appliances

  • Equipment: Free Standing Gas Range, Dishwasher, Disposal
  • Laundry Facilities: Cabinets, Sink

Other Rooms

  • Family Room, Living Room
  • Living Room Features: Great Room

Heating and Cooling

  • Cooling Features: Ceiling Fan(s), Central
  • Fireplace Features: Family Room
  • Heating Features: Central
  • Number of Fireplaces: 1

Bathrooms

  • Full Bathrooms: 2
  • Primary Bathroom Features: Walk-In Closet
  • Bathroom 1 Features: Double Sinks, Tile, Tub w/Shower Over

Interior Features

  • Interior Amenities: Main Level : Bedroom(s), Living Room, Dining Room, Family Room, Master Bedroom, Full Bath(s), Garage, Kitchen
  • Flooring: Laminate, Tile
  • Window Features: Dual Pane Full

Kitchen and Dining

  • Dining Room Description: Dining Bar, Dining/Family Combo, Formal Area
  • Kitchen Features: Quartz Counter, Kitchen/Family Combo

Pool and Spa

  • Pool Features: Pool Type: Built-In

Exterior and Lot Features

  • Fencing: Fenced

Land Info

  • Lot Description: Auto Sprinkler F&R
  • Lot Size Acres: 0.1725
  • Lot Size Dimensions: Approx. 7500sf lot
  • Lot Size Square Feet: 7514

Garage and Parking

  • Garage Spaces: 3
  • Garage Description: Garage Door Opener, Garage Facing Front
  • Open Parking Spaces: 3

Home Features

  • View: City
  • Security Features: Carbon Mon Detector, Double Strapped Water Heater, Smoke Detector

Homeowners Association

  • Association: No
  • Calculated Total Monthly Association Fees: 0

School Information

  • Elementary School District: Denair Unified
  • High School District: Denair Unified
  • Middle or Junior School District: Denair Unified

Other Property Info

  • Source Listing Status: Pending
  • County: Stanislaus
  • Cross Street: McCauly or Pimentel
  • Directions: Tuolumne to Deborah Drive to Pimnetal to Big Tree.
  • Source Property Type: Residential
  • Home Warranty: No
  • Area: Denair
  • Source Neighborhood: 20307
  • Parcel Number: 024-058-046-000
  • Postal Code Plus 4: 8582
  • Zoning: RES
  • Property Subtype: Single Family Residence
  • Source System Name: C2C

Utilities

  • Electric: 220 Volts
  • Sewer: In & Connected
  • Public
  • Water Source: Public

Building and Construction

  • Year Built: 2005
  • Construction Materials: Frame, Wood
  • Direction Faces: East
  • Foundation Details: Concrete
  • Living Area Source: Assessor Auto-Fill
  • Property Age: 19
  • Property Condition: Updated/Remodeled
  • Roof: Roof Description: Tile
  • Levels or Stories: 1
  • Structure Type: Detached
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PENDING SALE – Saint Andrews Ct. Oakdale, 4bd/3bth/4113sf/0.59ac lot

10417 Saint Andrews Ct,, Oakdale

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$1,175,000, This CASTLE of a HOME in Oakdale!! From the Courtyard Entrance with the Ivy Grown Dressing, Exceptional Anderson Windows with Views, to the beautiful Picture-Perfect Wood Work throughout. Over 4113sf with 4 bedrooms, 3 full baths, 3 Car Garage with its own AC unit. Many Custom Features throughout; Wood Beams on the Ceiling & Posts, Wood Floors, Wood Sliding Decorated Doors, Wooden Window Sills, Wood Mantel, Solar is Owned, Custom Appliances, and Kitchen has Multiple Islands. A Separate Outside 300sf Casita/Office. Furthermore, a huge RV Storage Area, Boat Storage, Dead-End Court, Pool, Spa, and Seclusion in the backyard with Many Trees and Areas to Play. Great Floor Plan with Large Areas throughout to Feel its Space and Coziness. A Must See!!

Property Features

Bedrooms

  • Bedrooms: 4
  • Bedrooms Possible: 5
  • Primary Bedroom Features: Walk-In Closet, Outside Access

Appliances

  • Equipment: Built-In Gas Range, Dishwasher, Disposal, Microwave
  • Laundry Facilities: Cabinets, Inside Room

Heating and Cooling

  • Cooling Features: Ceiling Fan(s), Central
  • Fireplace Features: Master Bedroom, Family Room
  • Heating Features: Central
  • Number of Fireplaces: 2

Bathrooms

  • Full Bathrooms: 3
  • Primary Bathroom Features: Shower Stall(s), Double Sinks, Sitting Area, Granite, Sunken Tub
  • Bathroom 1 Features: Shower Stall(s), Double Sinks, Granite

Interior Features

  • Interior Amenities: Main Level: Bedroom(s), Dining Room, Family Room, Master Bedroom, Full Bath(s), Garage, Kitchen
  • Flooring: Carpet, Laminate, Tile

Kitchen and Dining

  • Dining Room Description: Dining Bar, Dining/Family Combo, Formal Area
  • Kitchen Features: Breakfast Area, Granite Counter, Island, Island w/Sink, Kitchen/Family Combo

Other Rooms

  • Living Room Features: Great Room, Open Beam Ceiling

Pool and Spa

  • Pool Features: Pool Type: Built-In
  • Spa Features: Spa/Hot Tub Built-In
  • Spa: Yes

Exterior and Lot Features

  • Other Structures: Guest House

Land Info

  • Lot Description: Auto Sprinkler F&R, Court, Dead End
  • Lot Size Acres: 0.59
  • Lot Size Dimensions: Approx. 0.59 of an Acre
  • Lot Size Square Feet: 25700

Garage and Parking

  • Driveway: Paved Driveway
  • Garage Spaces: 3
  • Garage Description: Boat Storage, RV Storage, Garage Door Opener, Garage Facing Side
  • Open Parking Spaces: 6

Home Features

  • View: City
  • Security Features: Smoke Detector

Homeowners Association

  • Association: No
  • Calculated Total Monthly Association Fees: 0

School Information

  • Elementary School District: Oakdale Joint
  • High School District: Oakdale Joint
  • Middle or Junior School District: Oakdale Joint

Other Property Info

  • Source Listing Status: Active
  • County: Stanislaus
  • Cross Street: Rio Sombra
  • Directions: On Hwy 120 turn left on Atlas, turn right on Saint Andrews Dr. follow around to Saint Andrews Ct., house is the last house on the right.
  • Source Property Type: Residential
  • Area: NE County Rural
  • Source Neighborhood: 20203
  • Parcel Number: 010-064-024-000
  • Postal Code Plus 4: 7602
  • Zoning: RES
  • Property Subtype: Single Family Residence
  • Source System Name: C2C

Utilities

  • Electric: 220 Volts
  • Sewer: Septic System
  • Public
  • Solar
  • Water Source: Well

Building and Construction

  • Year Built: 2003
  • Construction Materials: Frame, Wood
  • Direction Faces: Southeast
  • Foundation Details: Slab
  • Levels: One
  • Living Area Source: Assessor Auto-Fill
  • Property Age: 21
  • Roof: Roof Description: Tile
  • Levels or Stories: 1
  • Structure Type: Custom
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22241 Silver Ridge Rd. Denair, 91.61acre lot

22241 Silver Ridge Rd. Denair, 91.61acre lot

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$2,061,225 – 91.61 Acres of Almonds and a Hilltop-Home Site to Build your Dream Home. A Panorama Setting overlooking the Pond, the Orchard, the Landscaping, and the Sierra Foothills. Almond Trees were planted in 2011. There are Two Parcels, 2 Separate Well Systems with Micro Sprinklers, and Varieties of Nonpareil & Price. A Separate 2 bay Shop with a 1200sf studio. 

Property Features

Land Info

  • Lot Description: Pond Seasonal
  • Lot Size Acres: 91.61
  • Lot Size Dimensions: Approx. 91.61 Acres
  • Topography: Rolling, Hilltop, Trees
  • Vegetation: Orchard
  • Lot Size Square Feet: 3990532

Exterior and Lot Features

  • Road Frontage Type: County Road

Homeowners Association

  • Association: No
  • Calculated Total Monthly Association Fees: 0

School Information

  • Elementary School District: Denair Unified
  • High School District: Denair Unified
  • Middle or Junior School District: Denair Unified

Rental Info

  • Income Includes: Crop(s)

Amenities and Community Features

  • Horse Amenities: Horse Amenities: 1-4 Stalls

Commercial Info

  • Business Type: Agricultural, Orchard

Other Property Info

  • Source Listing Status: Active
  • County: Stanislaus
  • Cross Street: Keyes Road
  • Development Status: Farm Land
  • Directions: Highway 99 To Keyes Road-East. Left on Silver Ridge. at the end of Silver Ridge.
  • Disclaimer: All measurements and calculations of area are approximate. Information provided by Seller/Other sources, not verified by Broker. All interested persons should independently verify accuracy of information. Provided properties may or may not be listed by the office/agent presenting the information. Copyright © 2024, MetroList Services, Inc. Any offer of compensation in the real estate content on this site is made exclusively to Broker Participants of the MetroList® MLS & Broker Participants of any
  • Source Property Type: Land
  • Possible Use: Agricultural
  • Area: Rural E County S of Tuolumne Riv
  • Source Neighborhood: 20205
  • Parcel Number: 020-011-005-000
  • Postal Code Plus 4: 9672
  • Zoning: AG
  • Zoning Description: Agricultural, Agricultural/Residential, Farm/Ranch
  • Property Subtype: Agriculture
  • Source System Name: C2C

Farm Info

  • Irrigation Source: Deep Water Turbine, Micro Sprinklers

Utilities

  • Sewer: Standard Septic
  • Public
  • Water Source: Domestic Well With Pump

Building and Construction

  • Other Buildings: Pole Barn, Shop
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How to Sell Your Home Super Fast

Sell Your Home Super Fast

The more work you do before you tell the world you have a house to sell, the faster it will likely happen.

Experts say one home improvement that can really help is a new paint job.

Key Takeaways:

  • You may be able to sell your house fast, but you can’t close fast. Expect that to take at least a month.
  • The more work you do before you tell the world you have a house to sell, the faster it will likely happen.
  • There are some corners you can’t cut, even if you try to sell quickly. You have to be upfront about any needed home improvements.

Some people need to sell their home, like, now. Maybe you are moving yourself, or you need money quickly. Perhaps there’s been a death in the family, a divorce, or you found your dream house, but you can’t move forward unless you sell your current home first. Whatever the reason, you’ve got to sell your home now, and there’s simply no time to upgrade, fix up the home or add curb appeal.

How do you sell your home super fast – and still get a reasonable deal?

Those two goals are sometimes incompatible. It’s also important to realize that due to the laws in your state and how your lender works, you may make a sale in a day or less, but you won’t be able to actually close on a the deal for weeks or even months – generally about 30 to 45 days, according to Rocket Mortgage. But if you’re looking to make a quick sale, here’s a roadmap.

Do a Lot of Work Beforehand

This advice doesn’t help somebody who found out yesterday they need to sell their home, and they’d like to do it today. But if you’re buying and selling a home in the same window, and you have some time before you start this game of musical houses, it will go faster and more smoothly if you can do some work beforehand.

The more prepared you are, the faster your home should sell. In theory.

Adie Kriegstein, a licensed real estate salesperson at Compass in New York City, has some suggestions for any home seller who wants to sell their home fast:

  • Make home improvements before you even list your home. You want your home “in the best possible condition for both marketing purposes and for those who will come to view it in person,” Kriegstein says. One home improvement that can really help is a new paint job, she says. You should consider painting the rooms white, she adds, if the walls aren’t already “naturally colored.”
  • Clean. Scrub everything, including the windows. “Make sure to declutter,” Kriegstein says. It’s hard for a buyer to imagine living in your house if your stuff, including your old CD collection and a pile of laundry, is everywhere.
  • Think about how you’re going to market your home. “You want to win the beauty contest,” Kriegstein says. She suggests hiring a professional photographer, possibly someone who can also shoot video. “In this digital age, marketing is a must,” she says. “People will start their search online, so it’s important to have a floor plan, stunning photos and a video.”

San Francisco real estate agent Ying He agrees that preparation is the best way to sell a home fast.
“All the painting, landscaping, and staging need to be finished before we go alive to best present the property,” she says. “Also, on the paperwork front, we need to make sure all the disclosures are ready to go.”

Pricing Is Vital

As insight goes, this is about as obvious as it gets. Still, you want to be smart about how you choose your price. You could slash the price of your home by 50% to try to sell it in a hurry, but your goal isn’t to sell your home fast and also go broke fast.

“You’ll need to price your property at what we refer to as the compelling price point or even slightly under that – depending on how fast you need or want to sell,” says Sabrina Conti Erangey, a real estate broker associate with Baird & Warner who is based near Chicago in Elmhurst, Illinois.

The “compelling price point,” Erangey says, “is slightly below the market value pricing but just enough to ramp up demand and drive up the sales price.”

This is the sweet spot where buyers spot a good deal, and they descend upon your home to take advantage of the deal and begin offering bids. This drives the price up, so you still end up doing well.

Timing Is Crucial

“Timing is extremely important. We don’t want to waste a single day on the market,” He says. “When it comes to timing, there are several layers. The first is seasonality. In San Francisco, the best time for sellers to go on market is actually the very beginning of the year. Spring and fall are good. Summer and winter are less ideal due to a smaller buyer pool.”

You also want to think about other factors, like holidays, the weather or an election. You can start selling your home in the dead of winter or during the rainy season, but “weather can be extremely important, especially for houses with a view,” He points out.

She suggests that the best day to have your property go live is on a Thursday to maximize weekend open house traffic.

Decide What Matters More – a Fast Sale or the Best Price?

You can sell a house fast and get an excellent price, real estate agents say. But if your house needs a lot of work and you won’t budge on selling as soon as possible, you may not get the best price. One way or another, you’ll need to bow to reality.

That includes trying to fix some of the issues with your home, Erangey says.

“In a fast sale, you want to do your due diligence as a seller and do what we refer to as a pre-listing walkthrough,” she says. “During this walkthrough, we will bring up factors that could be raised during the inspection and connect our clients with our vendors to make appropriate adjustments and changes to avoid concerning buyers.”

That might mean something simple, like digging up recent receipts showing that you had your heating, ventilation, and air-conditioning system fixed, Erangey says. If those need replacing or fixing, Erangey would encourage the seller to do that. You’ll sell your house faster and take less of a hit on the price, she says, if the worst of your home improvement projects are addressed.

“Price and condition determine everything,” Erangey says.

He puts it this way: If you try to sell your home quickly and cut corners, such as not fixing obvious problems or making subtle but critical repairs, you could defeat your own purpose. You may find yourself with a ready-to-sign contract and then realize, thanks to issues your buyer or the buyer’s home inspector has discovered, your interested party is now less keen and wants to negotiate your price downward – or even back out of the sale altogether.

If you have to start over, you won’t sell your home super fast, but possibly super slow.

Source: realestate.usnews.com ~ By: Geoff Williams ~ Image: Canva Pro

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These Are the Tax Breaks You Can Get When You Buy a House

Tax Breaks You Can Get When You Buy a House

Buying a home is expensive, but these tax credits and deductions can help you recoup some costs.

Key Takeaways:

  • There are several tax breaks for homebuyers that can help make homeownership more affordable.
  • Tax credits apply to the tax owed, while tax deductions reduce taxable income.
  • Some tax benefits extend beyond the initial purchase of a home.

One of the biggest benefits of homeownership is tax breaks. If you’re a homeowner, tax credits and deductions could save you thousands of dollars per year. But are there tax credits for buying a house? And what about deductions?

To help you come next tax season, here are tax credits and deductions you can get when you buy a house, and additional tax breaks that come with homeownership.

Both tax credits and deductions can help a homeowner save money on their tax bill, but they work differently. “Both lower one’s taxes, but a credit applies to the tax owed, while a deduction applies to one’s income that is subject to tax,” says Asher Rubinstein, partner and tax, asset protection and trusts and estates attorney at Gallet Dreyer & Berkey in New York City. “In other words, it’s a matter of timing and when the tax discount is applied.”

There are also refundable and nonrefundable tax credits. According to the IRS, if your tax bill is less than the refundable credit, then you get the difference back in your refund.

Credits are typically much more valuable than deductions. “For example, someone with a $1,000 tax credit in the 20% tax bracket will see their tax bill reduced by $1,000. Someone with a $1,000 tax deduction will only see $200 in tax savings,” explains Eric Presogna, founder and CEO of One-Up Financial and a certified financial planner public accountant.

There are two types of deductions available to all taxpayers: standard deduction and itemized deduction. If you take the standard deduction, you reduce your taxable income by a set amount. For the 2024 tax year, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. “There is no need for the taxpayer to keep records of individual tax deductions if the taxpayer takes the standard deduction,” Rubinstein says. Itemized deductions are individual tax deductions that could potentially add up to more than the standard deduction.

According to Presogna, homeowners should only take the standard deduction when they don’t have enough itemized deductions to exceed the standard. “With the SALT deduction (state, local, real estate taxes) currently limited to $10,000, a married couple would need more than $19,200 in mortgage interest, charitable donations and other qualifying deductions in order to warrant itemizing,” Presogna says.

The IRS has specific rules regarding how homebuyers qualify for certain tax credits. There are also credits that are only available to first-time buyers. You generally qualify as a first-time homebuyer if you’re purchasing your first home. However, you may still qualify if you’ve not owned a home for three years prior to the date of purchasing the new home for which the credit is claimed, according to the IRS. That home must be your principal residence.

One federal tax credit available to first-time buyers is through the Mortgage Credit Certificate (MCC) program. This program was designed to help lower-income families afford a home. The MCC program allows buyers to claim a dollar-for-dollar tax credit for a portion of the mortgage interest paid per year, up to $2,000. Eligible individuals must be first-time homebuyers, use the house as their primary residence and meet the program’s income and purchase price requirements.

There may also be tax credits available through your state. These buyer programs vary from state to state. You can research what may be available in your local area or look through the U.S. Department of Housing and Urban Development’s directory of local homebuying programs.

There are more tax deductions available to homebuyers and homeowners than there are tax credits, but Presogna says it depends on whether you itemize your deductions or take the standard deduction. Regarding homeownership, “If you have enough deductions to itemize, real estate taxes, home equity loan and mortgage interest are some of the larger deductible costs,” Presogna adds.

Keep in mind that not everything is deductible. According to Rubinstein, most costs associated with homeownership do not qualify for any tax benefits, including cosmetic upgrades, homeowners insurance and your mortgage principal, to name a few.

Here are several tax deductions buyers may qualify for after purchasing a home:

First-time homebuyer savings account (FHSA). Some states offer tax benefits to first-time homebuyers to open an FHSA. This is a specific type of savings account that helps first-time buyers save up to $15,000 or $30,000 per year for a down payment, closing costs and other expenses related to their home purchase. You can deduct the annual savings from your state-taxable income, but limits vary by state.

Mortgage interest deduction. This is a deduction for interest paid on mortgage debt, but you will need to itemize your deductions to qualify for this tax break. “Under current law, this applies to loans up to $750,000,” Rubinstein says.

Property tax deduction. Through 2025, taxpayers who itemize their tax deductions can claim a deduction on their federal tax return up to $10,000 each year for local property taxes paid, according to Rubinstein. “When the tax law changed in 2017, this was very controversial, because taxpayers previously had an unlimited deduction,” he says. “The $10,000 limit is significant for taxpayers in high-tax states like New York and California.”

Mortgage points deduction. Per IRS guidelines, mortgage points are fees paid to take out a mortgage. This also includes origination fees or discount points purchased in order to reduce the interest rate.

Home office deduction. “If you’re a business owner or self-employed and work from home, you may be entitled to a deduction for the portion of your home used for business,” Presogna says. However, Rubinstein warns that this is the most audited deduction due to the amount of taxpayers who try to claim this deduction. “The IRS has specific rules to follow. For instance, you can’t work from home for an employer. You have to use a dedicated room and you have to use it regularly. And there are square footage limitations,” Rubinstein explains.

Many tax benefits extend beyond the initial purchase of a home. The IRS offers some tax benefits for certain capital improvements, such as renovating your home office, making energy-efficient improvements or making changes due to a medical condition. If you take out a home equity loan to buy, build or improve your home, you could qualify for the home equity loan interest deduction. The IRS would classify the interest you pay on the borrowed funds as home acquisition debt, which may be deductible.

First-time homebuyers could also potentially qualify for a traditional or Roth IRA penalty waiver. If you meet IRS qualifications as a first-time buyer and take out $10,000 or less, you can use those funds toward a down payment without a 10% tax penalty if you close within 120 days. However, the actual withdrawal may still be considered taxable income.

One of the biggest tax breaks for a homeowner is the exclusion of capital gains when they sell their home. Capital gains are the profit from the sale of the home. For married couples, the first $500,000 in capital gains are not subject to tax. For individuals, the first $250,000 in capital gains are not subject to tax. “However, the home has to be used as one’s personal residence for two out of the last five years in order to get this tax break,” Rubinstein says.

Source: realestate.usnews.com ~ By Josephine Nesbit ~ Image: Canva Pro

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964 Woodland Dr. Turlock, 3bed/2.5bath/2,634sf/7,379sqft lot

964 Woodland Dr, Turlock

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$639,900 – North Turlock Home!! Great Family Style Home with 2634sf of Living Space. A Resort in the Backyard with Privacy Fencing and Beachfront Built-In POOL. Hardwood Floors throughout, Granite Counters In Kitchen With Elegant Cabinets. High Ceilings in the Family Room with a Formal Dining Area. An Extra Study Room off the Family. The Master Suite has a Walk-in Closet, Wall-to-Wall Closets, Double Sinks, a Tub, and a Shower Stall. The Potential 4th Bedroom is currently a retreat for the 3rd Bedroom. Walking Distance to All Schools, Churches, Parks, Shopping, and More! A Must See!!

Property Features

Bedrooms

  • Bedrooms: 3
  • Bedrooms Possible: 4

Appliances

  • Equipment: Free Standing Gas Range, Dishwasher, Disposal, Microwave
  • Laundry Facilities: Inside Room

Heating and Cooling

  • Cooling Features: Ceiling Fan(s), Central
  • Fireplace Features: Family Room
  • Heating Features: Central
  • Number of Fireplaces: 1

Bathrooms

  • Full Bathrooms: 2
  • 1/2 Bathrooms: 1
  • Bathroom 1 Features: Double Sinks, Tub w/Shower Over

Interior Features

  • Interior Amenities: Main Level: Living Room, Dining Room, Family Room, Garage, Kitchen, Street Entrance, Upper Level: Bedroom(s), Full Bath(s)
  • Flooring: Wood

Kitchen and Dining

  • Dining Room Description: Breakfast Nook, Dining Bar, Formal Area
  • Kitchen Features: Pantry Cabinet, Granite Counter, Island, Kitchen/Family Combo

Pool and Spa

  • Pool Features: Pool Type: Built-In

Land Info

  • Lot Description: Auto Sprinkler F&R
  • Lot Size Acres: 0.1694
  • Lot Size Square Feet: 7379

Garage and Parking

  • Garage Spaces: 2
  • Garage Description: Attached, Garage Door Opener, Garage Facing Front
  • Open Parking Spaces: 2

Home Features

  • View: City
  • Security Features: Carbon Mon Detector, Double Strapped Water Heater, Smoke Detector

Homeowners Association

  • Association: No
  • Calculated Total Monthly Association Fees: 0

School Information

  • Elementary School District: Turlock Unified
  • High School District: Turlock Unified
  • Middle or Junior School District: Turlock Unified

Other Property Info

  • Source Listing Status: Active
  • County: Stanislaus
  • Cross Street: Crowell
  • Directions: Taylor-East off Highway 99. Right on Walnut. Left on Springer. Left on Crowell. Right on Woodland. Right on the Side.
  • Source Property Type: Residential
  • Area: Turlock NW, No of Canal, W of Ge
  • Source Neighborhood: 20301
  • Parcel Number: 071-056-083-000
  • Postal Code Plus 4: 7281
  • Zoning: RES
  • Property Subtype: Single Family Residence
  • Source System Name: C2C

Utilities

  • Electric: 220 Volts
  • Sewer: Sewer in Street, In & Connected
  • Public
  • Water Source: Public

Building and Construction

  • Year Built: 1999
  • Construction Materials: Stucco, Wood
  • Direction Faces: North
  • Foundation Details: Concrete
  • Levels: Two
  • Living Area Source: Assessor Auto-Fill
  • Property Age: 25
  • Roof: Roof Description: Tile
  • Levels or Stories: 2
  • Structure Type: Detached
  • House Style: Contemporary
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585 N Hopper Rd. Modesto, 3bd/2bth/2664sf/4.43acre lot

585 N Hopper Rd, Modesto

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$1,299,900 – A Breath-Taking & Stunning Ranchette Near the Modesto Fruit Yard!! This Remodeled 2264sf Home is Custom w/Added 400sf Game Room/4th Bedroom Basement. There’s a Large 40×50 Metal Shop w/approx. 480sf ADU Unit in Shop. Park-like setting w/ Pool, Spa, Fire Pits, & Garden Areas. A Magical House w/ Fancy Landscaping that feeds off the Remarkable Hardwood Floors onto the Elegant Outdoor Patio Area. Gourmet Kitchen w/ Everything that makes A Happy-Wife; Big Island, Commercial Grade SS Appliances, Spacious Pantry, and A Ton Of High-End Cabinets. Centered Fireplace in this Great Room Concept w/ an Enormous Living Area, Dining Bar, Nook, Study Desk, & Large Formal Dining Area. Newer Stucco, Newer Roof, Newer HVAC, Newer Cabinetry, Newer Stone Kitchen Counters, Newer Bathrooms, & Newer Windows/Doors. Master Bedroom w/ Two Walk-in Closets, Spacious Walk-in Shower, & Double Sinks with Quartz Counters. Grand Entrance with Large Wood Decking, Private, and Secluded. Flood Water from the Modesto Irrigation District (MID) w/ separate Ag well to supply the 2-acre Superb Almond Orchard & the Completely Fenced Pasture. This has a Former 4 Stall Horse Barn which are currently used for Crafts & Hobbies. Hard to find a property that shows this Elegant & Turn-key!! A Must See!!

Property Features

Bedrooms

  • Bedrooms: 3
  • Bedrooms Possible: 4
  • Primary Bedroom Features: Walk-In Closet 2+

Appliances

  • Equipment: Free Standing Gas Range, Gas Cook Top, Built-In Refrigerator, Dishwasher, Disposal, Microwave, Double Oven
  • Laundry Facilities: Cabinets, In Garage, Inside Room

Other Rooms

  • Master Bedroom, Bonus Room, Game Room, Great Room, In Law Apartment
  • Living Room Features: Cathedral/Vaulted, Great Room
  • Basement Description: Partial

Heating and Cooling

  • Cooling Features: Ceiling Fan(s), Central
  • Fireplace Features: Living Room
  • Heating Features: Propane, Central, Gas
  • Number of Fireplaces: 1

Bathrooms

  • Full Bathrooms: 2
  • Primary Bathroom Features: Shower Stall(s), Double Sinks
  • Bathroom 1 Features: Shower Stall(s), Double Sinks, Quartz

Interior Features

  • Interior Amenities: Main Level: Bedroom(s), Dining Room, Family Room, Master Bedroom, Full Bath(s), Garage, Kitchen, Street Entrance
  • Flooring: Carpet, Laminate, Tile
  • Window Features: Dual Pane Full

Kitchen and Dining

  • Dining Room Description: Breakfast Nook, Dining Bar, Dining/Family Combo, Dining/Living Combo
  • Kitchen Features: Breakfast Area, Butlers Pantry, Pantry Cabinet, Granite Counter, Stone Counter, Island w/Sink, Kitchen/Family Combo

Pool and Spa

  • Pool Features: Pool Type: Built-In
  • Spa Features: Spa/Hot Tub Personal
  • Spa: Yes

Garage and Parking

  • Carport Spaces: 4
  • Garage Spaces: 2
  • Garage Description: 24’+ Deep Garage, Attached, RV Garage Detached, Garage Door Opener, Garage Facing Front
  • Open Parking Spaces: 4

Exterior and Lot Features

  • Other Structures: Barn(s), Pergola, Workshop, Outbuilding

Land Info

  • Lot Description: Auto Sprinkler F&R, Garden
  • Lot Size Acres: 4.43
  • Lot Size Dimensions: 4.43 Acres
  • Lot Size Square Feet: 192971

Home Features

  • View: Orchard, Panoramic, City
  • Other Equipment: Water Cond Equipment Owned
  • Security Features: Carbon Mon Detector, Double Strapped Water Heater, Smoke Detector

Homeowners Association

  • Association: No
  • Calculated Total Monthly Association Fees: 0

School Information

  • Elementary School District: Empire Union
  • High School District: Modesto City
  • Middle or Junior School District: Modesto City

Amenities and Community Features

  • Horse Amenities: 1-6 Stalls, Fenced, Irrigated Pasture

Other Property Info

  • Source Listing Status: Active
  • County: Stanislaus
  • Cross Street: Yosemite Blvd/Hwy 132
  • Directions: Highway 132 (Yosemite Blvd). East of Albers. Left on Hopper. on the Left Side.
  • Source Property Type: Residential
  • Area: Rural E County N of Tuolumne Riv
  • Source Neighborhood: 20204
  • Parcel Number: 009-015-036-000
  • Postal Code Plus 4: 1817
  • Zoning: RES
  • Property Subtype: Single Family Residence
  • Source System Name: C2C

Farm Info

  • Irrigation Source: Agricultural Well, Irrigation District

Utilities

  • Electric: 220 Volts
  • Sewer: In & Connected, Septic System
  • Cable Connected
  • Water Source: Well

Building and Construction

  • Year Built: 1975
  • Construction Materials: Stucco, Frame, Wood
  • Direction Faces: East
  • Foundation Details: Raised, Concrete
  • Living Area Source: Owner
  • Property Age: 49
  • Roof: Roof Description: Composition
  • Levels or Stories: 1
  • Structure Type: Custom, Ranchette/Country
  • House Style: Ranch, Craftsman
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734 E Fir Ave. Atwater, 3bd/2bth/1292sf/5998sf lot

734 E Fir Ave. Atwater

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$399,900 – A Beautiful Beginning!! Great Home with Great Floor Plan!! High-Vaulted Ceilings with Great Room to Accommodate Living, Dining, and Kitchen Areas. Newer Laminate Flooring Throughout with Newer Roof, Newer HVAC, Windows, French Door, and Remodeled Bathroom. Approx. 1292sf with 3 Bedrooms and 2 Full Baths. The kitchen has Granite Counters, Lots of Counter Space, and Many Cabinets. Inside Laundry. Good Size Backyard. A Must See. 

Property Features

Bedrooms

  • Bedrooms: 3

Appliances

  • Equipment: Free Standing Gas Range, Dishwasher, Disposal, Microwave
  • Laundry Facilities: Cabinets, Inside Room

Heating and Cooling

  • Cooling Features: Ceiling Fan(s), Central
  • Fireplace Features: Living Room
  • Heating Features: Central
  • Number of Fireplaces: 1

Bathrooms

  • Full Bathrooms: 2
  • Bathroom 1 Features: Tub w/Shower Over

Interior Features

  • Interior Amenities: Main Level: Bedroom(s), Dining Room, Family Room, Master Bedroom, Full Bath(s), Garage, Kitchen, Street Entrance
  • Flooring: Carpet, Laminate, Tile

Kitchen and Dining

  • Dining Room Description: Dining Bar, Dining/Living Combo
  • Kitchen Features: Granite Counter

Other Rooms

  • Living Room Features: Cathedral/Vaulted

Land Info

  • Lot Description: Auto Sprinkler F&R
  • Lot Size Acres: 0.1377
  • Lot Size Dimensions: Approx. 6000sf
  • Lot Size Square Feet: 5998

Garage and Parking

  • Garage Spaces: 2
  • Garage Description: Attached Garage Door Opener, Garage Facing Front

Home Features

  • View: City
  • Security Features: Carbon Mon Detector, Double Strapped Water Heater, Smoke Detector

Homeowners Association

  • Association: No
  • Calculated Total Monthly Association Fees: 0

School Information

  • Elementary School District: Atwater Elementary
  • High School District: Merced Union High
  • Middle or Junior School District: Atwater Elementary

Other Property Info

  • Source Listing Status: Active
  • County: Merced
  • Cross Street: Valley
  • Directions: Shaffer to Clinton-East. left on Valley. Left on Fir Street.
  • Source Property Type: Residential
  • Area: Atwater
  • Source Neighborhood: 20405
  • Parcel Number: 004-161-030-000
  • Postal Code Plus 4: 4544
  • Zoning: RES
  • Property Subtype: Single Family Residence
  • Source System Name: C2C

Utilities

  • Electric: 220 Volts
  • Sewer: In & Connected, Public Sewer
  • Cable Connected
  • Water Source: Public

Building and Construction

  • Year Built: 1983
  • Construction Materials: Stucco, Frame, Wood
  • Direction Faces: North
  • Foundation Details: Concrete
  • Living Area Source: Assessor Auto-Fill
  • Property Age: 41
  • Roof: Roof Description: Composition
  • Levels or Stories: 1
  • Structure Type: Detached
  • House Style: Ranch
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15 questions to ask before purchasing farmland

questions to ask before purchasing farmland

Record land values are making buying decisions tougher. Here are 15 questions to ask before purchasing farmland.

Growing demand for farmland has driven land values to record highs in many areas. Whether you’re considering using cash or borrowing money to purchase new farmland, the buying process should include a well-researched financial plan.

“Farmers should consult their banker throughout the land buying process, to ensure decisions made today best position them to prosper and obtain credit in the future,” said John Blanchfield, senior vice president of agricultural and rural banking at the American Bankers Association. “When it comes to buying land, you cannot spend too much time researching all of the contingencies.”

ABA’s Agricultural and Rural Bankers Committee has developed the following recommendations for buying farmland:

  1. What is your business’s financial condition? Consider needed investments, expected expenditures, and crop conditions to determine if buying land is the best use of your cash. Are there other opportunities that can provide a better return?

  2. Have you created a pro forma cash flow? Research sales trends and expected revenue of a potential plot of land to determine how well the purchase fits within your plan. Does the potential return meet your objectives? Your banker can help you develop this essential planning tool.

  3. Given your revenue forecast, are you overpaying? If you are paying a premium, how long will it take you to recoup? Determine how much your business should prudently spend on a land purchase and the revenue needed to justify your purchase and stay within those targets.

  4. Have you thought long and hard about it? Never be rushed by a broker and never confide your best price or financial goals with a party working for the seller. Don’t buy impulsively or make a deal before visiting the property numerous times. Rework the standard broker’s purchase contract with your lawyer, deleting what you don’t like and adding what you want, before presenting the offer.

  5. Does it make more financial sense to rent the land rather than owning it? Rental rates are high but renting frees your cash for other activities. What will be your total land payment per tillable acre owned and how does this compare to cash rents in your area?

  6. Should you go all in with your cash? Talk to your banker about alternatives to using all cash in the transaction. Land is an illiquid asset and purchasing it will impact your farm’s liquidity. Your banker can work with you to structure a loan that will enable you to acquire the land you need while preserving some of your working capital for necessary expenditures.

  7. How much land are you acquiring? Sounds simple, but many times there is confusion about how much land is actually being purchased. Know exactly what you’re getting before making a bid. See if the land has been surveyed and make sure it matches the details of the offer. If the land has not been surveyed, work with your attorney to determine the acreage based on the legal description, or consider having the land surveyed and determine who will pay for it. Make sure that there are no special easements tied to the land. If there are, make sure you spend time studying them and understanding them completely.

  8. What does the land appraise for? Are there some comparable sales in the area? Appraisals are expensive, but they are the best way to establish value. Even if you do not get a full appraisal, attempt to find some comparable sales to determine if the purchase price is reasonable.

  9. What is the soil story? What is the capability of the soil you are buying and how does this impact your revenue forecast? Good soil is paramount. Know the type of soil you’re buying and the history of annual crop rotation. Any seller should be more than happy to provide you with a soil’s profile and information about past farming practices.

  10. What is the water source? Is the property irrigated? Do the water rights convey with the property? Adequate water is essential to establishing the value of the property. Account for water costs in your financial plan to ensure this cost doesn’t negatively impact your return. Make sure all water wells are registered with the appropriate authorities. Each state has its own water laws so make sure you are familiar with the state that you are doing business in.

  11. What do you know about the gas, mineral, and wind rights for the property? Do these rights convey to you as the purchaser? Have they been surveyed or severed from the surface rights? Are they currently under lease? If so, under what terms? Have a thorough knowledge of property rights, as mining and drilling can have an impact on surface and water quality, access to the property, and the viability of the farm or ranch.

  12. How is the property zoned? Will your plans for the property conflict with existing zoning restrictions? Are there conservation easements that could restrict the use of the property? This factor has a significant impact on your valuation of the property, particularly if your plans conflict with current zoning restrictions. Make sure that you understand the assured leases that may go with the property — many of the states in the west have a large percentage of their ground that falls into this category (Bureau of Land Management, Forest Service, state land, national grassland).

  13. How will you hold the deed to the property? Will you own it individually, jointly with a spouse, in a family-owned entity (corp., LLC, LLP), or in a trust? The pros and cons of how you own the land will depend on your long-term goals.

  14. Are there any environmental problems? The last thing you want to buy is a costly environmental problem. Paying for an onsite environmental audit before you buy the land may be worth the cost and will help ensure you are not buying into an expensive cleanup.

  15. How long will you actively farm?  Make sure your financing plan matches the rest of your intended career as an active producer. Will you fully retire all debt from the acquisition before you retire? Do you have sufficient life and disability insurance?

    Source: farmprogress.com ~ Image: Canva Pro

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