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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Real Estate Investment Strategies for 2019

The rules of real estate investing are rapidly changing. With the rise of the digital era, investors must quickly adapt to new technology and new rules. In 2019, investors must remain flexible and be willing to adopt change in their investment strategies. What worked five years ago may not work today. Here are some tips to help make 2019 a banner year for real estate investors.

Study Real Estate Market Data

Investors should study real estate market data every year, not just in 2019. Data tells a story about neighborhoods and the climate of the housing market. Interest rates, construction costs and neighborhood trends are a short list of data points that investors should carefully study. Real estate apps and the internet make this easier than ever before.

Think of Market Slowdowns as an Opportunity

Many real estate experts suggest the market will experience a cooling trend in 2019. The deals that did not make sense last year or the year before might make sense this year. If rents stay strong and values start to decline, it could present a solid opportunity to invest in multifamily real estate.

Pay Attention to First-Time Homebuyers

With rising interest rates and tight inventories, most homeowners are staying put. However, there is always demand from first-time homebuyers. Experts suggest that flipping starter homes in 2019 could lead to nice profits, while the rest of the housing segment sits on the sidelines until the market stabilizes.

Focus on Equity

Some experts predict that housing prices will start to peak mid-year. If the predictions are true, it could be the right time to extract some equity. Cash in hand gives investors the flexibility they need to secure deals with a proven rate of return. Cash also helps investors transition into other classes of real estate.

Invest In Low-Income Communities

Congress created Opportunity Zones as part of the tax bill in 2017. These zones provide investors with tax breaks and incentives if they invest in distressed communities. Every state in the U.S. has locations designated as Opportunity Zones by Congress, and most real estate websites offer maps of the specific zones.

2019 could be a tricky year for real estate investors. Some experts say interest rates will continue to rise, while others suggest they will fall. What remains a constant in the industry is a sound investment strategy always delivers in any market conditions.

(I originally discussed this topic at JasonCohenPittsburgh.com.)

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.

Pittsburgh Real Estate: The Market in 2018

Those looking to make a savvy investment may want to look towards Pittsburgh. George Hackett, president of Coldwell Banker Real Estate Services in Pittsburgh, remarks that home sales have been “extraordinary” for 2018, citing a ten percent increase in home sale closings over the past year.

Pittsburgh, Pennsylvania isn’t the most booming market in the United States. It’s currently rated as the twenty-second most populous city in the country, but that can be seen as a positive given the long-term history of the city. The collapse of the city’s reputation as the steel manufacturing capital of the country presaged a nosedive for Pittsburgh’s economy, but today it’s seen as undergoing something of a renaissance.

Pittsburgh has been drawing in national tech companies like Uber and Apple, and with that comes both an influx of new residents and a higher standard of living. The sudden growth of industry in the city brings with it new investments in luxury boutiques and an aggressive push to make more appealing and livable spaces in the once-floundering metropolis.

Further bolstering this economic boom is a new initiative by the University of Pittsburgh Medical Center. They’ve recently announced plans to build a $200 million immunology center that could draw in scientists and medical professionals from around the world.

And while it’s easy to speak in anecdotes about a city’s health, these particular anecdotes come backed by some respectable numbers. Home prices have increased on average by almost eleven percent in the past year, putting the new median home price at $142,800. While that’s a significant increase, it still puts pricing well below the national median of $216,700. That leaves prospective homeowners in a promising position.

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I originally discussed this topic on my blog at JasonCohenPittsburgh.com.