As you probably know, Congress extended the buyer credit last month to help ensure that the home buying activities continue to gain momentum through the winter and spring seasons. The credit is 10% of the home price, not exceeding $8,000 for first-time buyers and $6,500 for non-first-time home buyers. It’s only valid for principle residences – not investment properties.
If you’re thinking of unloading an investment property that no longer fits into your financial goals, consider doing so soon now because homes are selling and buyers are out there.
Here are some tips to making the sale from CorporateHousingbyOwner.com:
1) Price your home right. You want it to sell before the tax credit disappears. Most experts predict that the home buyer credit will not be extended past April 30th, so this is your chance.
2) Sell when you’re ready. While now is a great time to sell your non-producing properties, if you have a great renter in place and your property fits within your current financial goals, then stay put. There will be other opportunities to sell as market conditions improve, so stick with your plan and don’t feel pressured to sell just because of the home buyer credit.
3) Beware of capital gains. Because capital gains taxes will likely only go up, consider selling those unwanted, low producing real estate investments now since there are more buyers looking for homes. Always keep your eye towards achieving your long- and short-term goals – but seize the opportunity when the time is right for you.
Two other items of note:
Be cautious about buying a short-sale property. They are notorious for delays… which means you may miss the June 30th close deadline and thereby disqualify for the tax credit.
Work with trusted advisers. If buying or selling is in the cards with you, always surround yourself with good real estate and financial advisers to help you structure a deal that works best for you.
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