Why buying a Vacation Home in Virginia is a Great Investment

access_timeJuly 19, 2019personPatricia Licata

Thinking about investing in property, or how nice it would be to vacation at your own lake house instead of renting one? Recently, the economy has led to an increase in second-home purchases, nationwide. Especially in the state of Virginia. When buying a vacation home in Virginia, you’re making one of the few investments that offer both financial and personal rewards. The best thing when purchasing a vacation home is that you don’t have to be rich to pull it off. This investment allows you to diversify your income, plan for retirement, take a vacation without extra costs, and maybe even build wealth. You need to set your goals before buying a second home. Weigh out the pros and cons, and once you’re clear on why you want to buy it, you can focus your search and match it with your priorities.

Advantages of buying a vacation home in Virginia

No matter which part of society you belong to, whether you are a retiree who is seeking to escape city life or a lake lover who wants to live in Lake of the Woods, you have the option of buying a home. Whether you’re looking to buy a property as a vacation home for summers or winters or just looking for an investment property to rent out, there are homes that can meet a wide range of budgets.

Long-term profits

Today, people are starting to value short term over long term profit, because earnings are more significant when repeated many times over a short period. Luckily for you, vacation properties have retained their value because they are located in areas which are still popular. Because the mountains and shorelines are limited, there is a finite number of houses which can be built. That holds the price when it comes to vacation properties.

Real estate has always had its ups and downs, and will likely continue to have them in the future. Therefore, keep in mind that there is no guarantee that your second home will sell for a higher price in the future.

Vacation properties have retained their value, so renting it is a good choice

Taxes

When buying a vacation home in Virginia, think about tax deductions and how you want to use your property. Will that be a home for rent, or will it only be for personal enjoyment? Many people prefer not to rent their second home because if they did, the interest on the mortgage and the property taxes would be fully deductible from the gross income. This mortgage can be treated the same way you are treating the mortgage on your primary residence.

Income

A great thing about buying a vacation home in Virginia is that you can decide to rent it out. You can always use it yourself. Whether you are renting it or just personally using the property, you are going to have to invest in it. Furnishing a house requests a certain amount of money, but renting afterward can help you return at least a part of it. You have the option to move things from your family home to a vacation home, this way you can redesign your home. Moving your household with professional help is your best option for a stress-free move. Once you have furnished your vacation home, you can start renting it out.

Rental fees differ from season to season. Another important factor is the popularity of the resort location. For most resorts, weekly rental fees are equal to or greater than the monthly mortgage payment.

Convenience

Buying a vacation home in Virginia can be really convenient. You have the option to keep the items that you exclusively use there in your vacation home, which simplifies travel and packing. If you and your family like to ski, you can store some of your winter clothes and ski equipment in your vacation home. This allows you to easily make spontaneous trips for a weekend of skiing without having to worry about packing.

Retirement

The goal most retirees strive for is to have a place of retreat for the times of the year they dislike spending in the primary residence. Buying a vacation home in Virginia is a great investment for those people. You would be one of the lucky ones if you buy a second home before retirement. You then have the time to experience the benefits of a refuge. If it turns out that wasn’t your dream, you also have time to correct the mistake and maybe sell it.

Gathering location

Memories are the one thing no one can take away from us, and places stir memories in people. Both big and small families enjoy annual gatherings. Building a tradition keeps families strong and in some way obligates them to see each other, even for one day. Buying a vacation home in Virginia will not only be an investment for your future, but also an investment for the beautiful memories you’ve created in the past. The annual gatherings keep families close, especially if people are all over the country.

You can’t put a price on the memories – especially a home that has been a site of many happy gatherings.

Some people struggle whether to buy a vacation home or not, even when the finances are acceptable. Some of the questions they encounter are:

· Do I want to vacation in the same place every year?

· Will this make me happy?

· Can I handle renting the property to a stranger?

· Will I come as often as I hope?

· Will my kids and grandkids use this property once I am gone?

Some people struggle to decide whether to buy a vacation home or not

Buying a vacation home in Virginia is a long-term commitment. You need to be prepared if your dreams don’t come true because you could be stuck with high costs and responsibilities for years. For many buyers, dreams do come true, and the payoff is well worth it. Sometimes, you have to risk money to make money.

Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by home owners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.

To see available Lake of the Woods properties, please visit our site.

The Top Tax Deductions & Credits for Homeowners in 2019

access_timeMay 1, 2019personPatricia Licata

Taxes are confusing, which is why many people in the U.S. choose to hire an expert to do their taxes for them. After all, there are so many numbers to know, forms to have ready, records of income and expenses, W-4s, 1099s, 380-Ts—we could’ve just made that last one up, and there’s no way of knowing!

Even though taxes might be complicated, they (sometimes) have a few perks. And if you own a home, those perks could mean a major bonus on your return. If you’re thinking of buying a home before next year’s taxes are due, here’s everything you need to know about how making a home purchase can affect your returns.

Deductions vs. Credit

Before we kick off the fun stuff, it’s important to know a little jargon—namely, the difference between a deduction and a credit.

When it comes to credits, think of them like tax-related coupons that reduce your dollar-for-dollar total. A few major tax credits include child tax credits, adoption credits, education or retirement credits, or credits for energy efficient homes and cars. Depending on the credits you qualify for, you could get anywhere from a few hundred to a few thousand dollars taken off of your tax liability.

Deductions are a little different: they reduce your taxable income, which can then adjust the total that you owe. Claiming certain deductions means that that part of your income is exempt from being taxed. Knowing which deductions to claim is key when filing, especially for homeowners.

Tax Benefits for Homeowners

Buying a home is expensive, but when it comes to tax time, here are the ways you can make some of that money back.

Mortgage Interest

One of the reasons that taxes for homeowners are so confusing is because they tend to change based on federal standards. Over the past few years, the federal Tax Cuts and Jobs Act pretty drastically altered the tax benefits for home ownership.

The most important change to know this year has to do with mortgage-related deductions. Previously, the tax deduction for home mortgages was limited to interest paid on $1 million debt for jointly filing married couples and single filers and $500,000 for married couples filing separately. Now, the numbers look more like $750,000 for the former and $500,000 for the latter. Additionally, interest paid during closing can also be counted towards this number.

Property & State Taxes

Did you know that the amount you pay in property taxes, state income taxes, and local sales tax is also deductible? If you pay property taxes through escrow, your lender will need to get the amount for you on your 1098 form, otherwise you should be able to find it in your personal records. The latest tax laws have instituted a cap at $10,000, but every little bit counts!

Private Mortgage Insurance (PMI)

Believe it or not, tax deductions on PMI are a hotly contested subject. Until recently, buyers were able to deduct the payments they made on Private Mortgage Insurance, but as of 2017, that ability expired. If you did buy your home before 2017, then your yearly income will determine how much you can deduct.

There’s no timeline on when deductions for PMI could return, but, unfortunately, if you’re a more recent home-buyer with these payments, those perks aren’t currently available.

Credits

We talked a little bit earlier about the difference between deductions and credits, so what sort of credits can you get as a homeowner? One of the biggest tax credits that homeowners can cash in on is having energy-efficient homes. In fact, if you installed geothermal heat or solar energy, you could be entitled to credit for up to 30% of the installation fee.

Other energy-efficient features, like storm doors and added insulation, can net you a few hundred dollars in credit, as well.

A person holding several one hundred dollar bills.

Tax-Free Profits

While many parts of the tax law have changed in the past few years, one aspect has stayed the same: tax-free profits. Selling your home not only means a big profit after the sale, but a large portion of the money you make won’t even get taxed—meaning you get to pocket more.

Married homeowners who sell their homes won’t have to pay capital gain taxes on up to $500,000 from the sale, while single filers can keep half of that as non-taxable income.

While there are some guidelines—like the home must have been a primary residence for at least two of the past five years—it’s a big plus when it comes to selling.

Want to Explore More of the Benefits of Home-Owning?

Believe it or not, there are a lot more benefits to owning a home than tax deductions. If you need help navigating the ins and outs of the home-buying and home-owning process, our team is here to help. With years of local experience and real estate know-how, we have the skills and resources necessary for home-buying and selling success.

Ready to learn more? Just give us a call. 540-388-2541

Fredericksburg to Increase Real Estate Taxes

access_timeMay 10, 2017personPatricia Licata

Starting July 1 of this year, residents of Fredericksburg will see an increase of their real estate taxes along with their water and sewer bills.
On Tuesday, City Council unanimously voted to increase the tax rate from 77 cents to 80 cents per $100 of assessed value of real estate for fiscal year 2018. They also unanimously approved a 2% increase in the water rate and 4% sewer rate increase.
This tax raise is predicated to bring in about $1,185,000 in additional revenue which $790,00 of the increase will go towards the general fund for use by the city & city school system. The remaining $395,000 will go towards the city’s stormwater-management programs.
For more information please visit: Fredericksburg.com