Advantages to Home Ownership

Have you thought about how much money you throw away when you rent? When you buy a home, you can live in your investment as you build equity.

Like most first-time buyers, you’ve probably listened to advice from friends, family and coworkers encouraging you to buy property. Regardless, you may still feel apprehensive about such a big decision, but having reservations is normal. The more educated you become about home buying, the less daunting the process becomes. Here are a few good reasons to buy an apartment.

Pride of Ownership
Pride of ownership is probably the most significant reason people want to own their home. It means you can paint the walls any color you desire, knock a wall down, attach permanent fixtures and decorate your home according to your own taste. As a renter, how often do you simply say, “well, my lease runs out soon, so there’s no point in painting that wall or hanging that mirror.” As a homeowner, you are improving YOUR OWN SPACE, not a temporary one. Be truly proud of your home.

Owning vs. Renting
You’re left with empty pockets and a headache when you rent. You might also have a sore back from moving frequently in order to avoid your escalating monthly payments. The value of your home will only increase when you buy. Why pay your landlord’s mortgage when you can pay your own?  I have found this interactive chart from the NYTimes very handy!

The Tax Advantage – Mortgage Interest
Home ownership is a superb tax shelter, as our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, the mortgage interest is fully deductible on your tax return. Keep in mind that interest is the largest component of your mortgage payment. Review my Case Study and Tax Deductions Explained.

Property Tax Deductions
IRS Publication 530 contains tax information for first-time homebuyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes.

Although real estate markets fluctuate, property value consistently appreciates. Many people view their home investment as a hedge against inflation. You can benefit significantly from building equity in your home.

Mortgage Reduction Builds Equity
Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works is that the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500.

Capital Gain Exclusion
If you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the “over 55” rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit–subject to limitation–free from taxation. See IRS tax tip

Equity Loans
Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many homeowners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home’s equity for a variety of reasons, such as home improvement, college, medical or starting a new business. However, do not fall victim to using your home equity and falling deep into debt. Always use credit wisely.

CONTINUE READING… Real Estate Myths Explained

Contact Joseph R DeLorenzo – or 646-244-8555

The Skyline is Changing Again came out with some great coverage on the ever-changing skyline!

The Extell-Vornado catfight over 220 Central Park South finally ended last year, paving the way for Vornano’s long-talked about plan to tear down the structure and erect condos in its place—and oh, what condos they will be. An angel tipster spotted renderings and a detailed video of the future Robert A.M. Stern More

Outside its Cold (-5°); at least the Market is Hot. Q4 Report came out today

Q4 Report thumbnail.2Today it was -5°, with the wind factor in NYC; but at least the NYC Real Estate Market is Hot. Again, my apologies for such a cheesy headline, but how could I resist?

Regardless, our Q4 New York City Real Estate Market Report just came out, and here are the key takeaways:

  • Low inventory: available residences in Manhattan decreased in number for the twelfth straight quarter (three years).
  • Demand is aggressive and on the rise: more contracts are being executed now than at the same time a year ago, a trend that has been ongoing for eight quarters (two years).
  • Short supply and high demand meant higher prices: the price per square foot in Manhattan reached $1197, a five-year high (just 5% off the all-time high of $1261 in Q2 08)
  • New development sales are pumping up luxury sales and resulting in dramatic price gains at the high end.

Q2 Corcoran Report

Q2 2013 Market Report schreenshot

Q2 Corcoran Market Report just came out and the key findings are:

1. Market activity continues at six-year high.  More closings and signed contracts took place than in any other quarter since 2007.

2.Inventory continues to decline.  There have been nine consecutive quarters of diminishing inventory – a 52% drop since the Q1 09 peak.

3. Prices increased by 5% (ppsf) over a year ago, thanks largely to increasing value in the condominium market.




My recent Loft Sale with Tin Ceilings Featured on CNN Gallery

middletonMy recent Loft Sale at 108 Reade Street in Tribeca was featured on a CNN Gallery highlighting home decor. The Blue Tin Ceilings were some of the most unique I have seen!


If you forget your keys, now you can simply go to 7-11 and have a digital copy made!

Can’t wait to see these start sprouting up… What a crazy idea and what will they think of next! – JD

In olden times, people actually knew their neighbors, interacted with them on a regular basis, and stored spare keys with them. This never happens anymore now that human relationships are passé. Which is why, starting this week, KeyMe kiosks — which keep a digital file of your key and can cut you a new one when you get locked out — will begin popping up at 7-Elevens around Manhattan.