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/.

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.)