Beginner’s Guide to Property Tax in Pennsylvania

Buying a home may be the biggest investment many people will ever make. In the United States, achieving home ownership represents success and an improved quality of life for many people. Owning a home, or any property, however, comes with the added costs of a mortgage, insurance, maintenance and property taxes.

When calculating the total cost of home ownership, it’s important to account for the expense of property and other local taxes, and to know you are getting the best services for the amount you pay. Property taxes pay for public education, libraries, transportation, road construction and maintenance, emergency services, parks and recreational facilities. While low taxes are appealing, excellent services are also important for maintaining quality of life and preserving real estate values.

Property taxes in Pennsylvania, as in most states, are determined county by county, and include county, municipal, and school district taxes. In Pennsylvania, homeowners are assessed property taxes that range from 1 to 2 percent of the assessed value of their residence, with an average effective tax rate of 1.55%. Tax assessors determine the tax burden for each property by assessing the value of the land and any buildings on the property. Pennsylvania uses a system called the mill levy for calculating property taxes, which assesses $1 in taxes for each $1,000 of property value.

For my full blog, please see http://jasoncohenpittsburgh.org/a-guide-to-property-tax-in-pennsylvania/.

 

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Are Digitally Altered Real Estate Photos Always Ethical?

By now, most everyone knows how to “photoshop” a basic photo, using a wide variety of programs. In most cases, doing so is harmless and can even result in more stunning photos. In other cases, however, digitally manipulating photos can cause scandal and even ruin to some. A new trend is on the rise in real estate which can run from the harmless and helpful to the costly and potentially downright fraudulent.

Photos and videos have long been a basic staple in online real estate listings, including 360-degree tours. While ordinarily, these can be incredibly helpful to home buyers, many of these images are now being digitally manipulated. In one sense, digital manipulation can be no different than staging a home in the first place. A professional photographer might help make a somewhat less-than-spectacular pool appear to be a crown jewel in a backyard oasis. Photographing your house at the peak of spring when the trees are in full blossom is preferable to the dead of winter when the grass is brown and the trees look dead and lifeless, but isn’t inherently misleading.

A number of virtual staging services are on the rise, however, that could create a problem…

Please see my blog at http://jasoncohenpittsburgh.org/danger-in-the-rise-of-digitally-altered-real-estate-photos/ for my full article.

REI Strategies for the Hands-Off Investor

Investing in real estate doesn’t have to be a dirty job. Here are three strategies to help hands-off investors make money from real estate.

Real Estate Notes

A real estate note is a type of promissory note such as a mortgage or deed of trust, which is secured by a real estate asset like a house. The borrower promises to repay the lender a certain portion of the debt at regularly scheduled intervals. While the original lender may be an individual note investor, usually the first lender is an institution such as a bank. Individual note investors also can purchase existing notes from banks, hedge funds, or other individual investors.

One way investors make money from real estate notes is to collect the debt payments with interest. Existing real estate notes are classified as performing or nonperforming. A performing note means the borrower is current on the note payments. With a nonperforming note, the borrower usually is at least 90 days behind in payments. A hands-off investor who is buying an existing note should purchase a performing note. Nonperforming notes are labor-intensive.

For more on publicly traded real estate investment trusts and utilizing property managers, see my full blog at http://jasoncohenpittsburgh.net/real-estate-investment-strategies-for-the-hands-off-investor/.

Should You Rent or Own in Pittsburgh, Pennsylvania?

Part of the American dream is to own a home. Unfortunately, the dream can quickly turn to a nightmare if a person invests in a “money pit.” Whether new to the area or a long-time resident of Pittsburgh, many wonder if they should rent or buy their abode. Those who want to build wealth and give their credit score a significant boost should take on the role of a homeowner. However, it all comes down to lifestyle and finances.

Pittsburgh is Rental Territory

recent study was conducted that looked at 23 cities across America. Pittsburgh was one of the 16 that fell into what was called rent territory. Being in “rent territory” means that renting is wiser and will help with wealth creation. Though the entire country has shifted to ownership territory, it wasn’t always this way. Back in 1999, the rental market was booming. People who wanted to make long term commitments by purchasing a home, however, plummeted.

Home Ownership Demands Drive Prices Up

The demand for ownership has decreased in some major cities throughout the United States. Places like Atlanta, Houston, Kansas City, and Miami have all seen a decrease in home sales and an increase in rentals. As more people look to rentals for their housing needs, it puts pressure on the housing prices to decrease. Part of the reason why rentals are up in some areas is that prices hit all-time highs and the inventory selection was low.

During the first part of 2018, homes on the market in the Pittsburgh area took an eight percent increase in price. Additionally, there was a ten percent increase in home volume sales. The cost of a home has a significant impact on shifting a market from a renting territory to an ownership one. If homes are affordable, then many people want to invest in something that they can own. However, if the home prices are inflated, many feel that renting is a great way to save money before making such a commitment as homeownership.

The Final Decision

As with any area, the decision to rent or own in Pittsburgh often comes down to financial comforts for each individual person. For some, it’s more attractive to have a landlord pay for repairs, taxes and insurance, while also avoiding the large initial down payment. Others are ready to make the financial commitment to have a place that’s all their own.

A financial advisor or real estate professional can be a great resource for people who are on the fence between renting and owning.

I originally discussed this topic at JasonCohenPittsburgh.org.