IDLE EQUITY:

Put Your Home’s Equity To Work

With Six Savvy Strategies

Do you have idle equity sitting in your home that could be building wealth instead? One of the great aspects of homeownership is that you increase your wealth every month by building equity in your home and reducing your tax bill at the same time.

After you’ve been in your home a few years, you may have some equity that you could put to work for you. Even if the property has appreciated by just a few percentage points per year, significant equity can build up fairly quickly. Just be sure you retain enough equity that you’ll be able to pay a real estate agent’s commission when you sell the home.

Home equity loans are the most common means of tapping a home’s value. In states where home equity loans are not allowed, however, you can still put your home’s value to work by refinancing it for more than you currently owe–a “cash out” refinancing.

The first way most homeowners think of using their equity is to pay off high-interest debt. That’s one popular option, but you could also invest that equity in other ways. Here are six more ways to put your equity to work for you.

1. Trade Up

Using your equity as a down payment for a larger home could make financial sense. If you’re in a $200,000 home now and it appreciates by 5% each year, your gain is $10,000 for the first year. In five years, that home would be worth $255,256. But in a $275,000 home, that same 5% growth would be $13,750 for the first year. After five years, the more-expensive home would be worth $350,977 — nearly $100,000 more than the less-expensive home.

Of course, you may not be able to count on 5% appreciation every year. It could be higher or lower, depending on the state of the economy and market conditions. Not to worry, though. Even 2% appreciation will still add up over time.

Using additional equity to trade up will allow you to put a significant amount of money down on your next home. That could allow you to own a home you never could afford before.

2. Downsize

Another way to use your equity is to scale down. With the recent changes in tax laws, homeowners may sell a home every two years and walk away with tax-free profits up to $250,000 (for singles) and $500,000 (for married couples). By scaling down, you can purchase a smaller, less-expensive primary dwelling, and use the extra cash for investments, debt reduction or even purchasing an investment property.

3. Second Home

The real estate market has been fueled during the past few years by retiring baby boomers purchasing second homes. Maybe now is the time to purchase that home on the beach, at the lake or in the mountains. We can refer you to a knowledgeable agent in a resort area to help you with this move.

If you know you’re retiring to a particular area in the next few years, study that market now. You may want to buy the home now while prices are still affordable. If you do, you could rent the home during the peak vacation season. Many second homeowners discover they can just about cover their annual property expenses by renting out during peak season.

4. Investment Property

While the stock market often bounces up and down, many investors feel comfortable with the security of real estate. Not everyone has extra money to play the stock market profitably, but landlords can enjoy income every month. The secret is selecting the right property and finding expert property management if you don’t want to manage the property yourself. We can help with both these issues.

Some buyers have found it beneficial to purchase a property in the area where their college-age children are going to school. Their child can help manage the units and share the housing with other students to defray costs. The young adults learn responsibility and property management skills, and you have a live-in manager to watch over your investment.

5. Shared Equity

Another way to put your idle equity to work is to lend it to an adult child as a down payment for his or her first home. Some parents maintain a co-ownership interest while the young adult makes the mortgage payments. At the time of the sale, the equity is then split between the two. This is called a shared-equity arrangement.

6. Remodel

If you really like where you’re living, but desire a few more amenities, consider taking cash out for remodeling or adding to your current home. The interest paid on some home equity loans is tax deductible, just as it is with your first trust. Give us a call to find out what financing options suit your situation best.

Call us, we are the experts with expert partners in mortgage and everything real estate related. 800-497-7325-3607 or kaybaker@ec.rr.com . Sign up for our newsletters and our weekly TGIF Scoop on everything Wilmington NC!

jimrlong.us

September 11, 2001 will stay in our minds and hearts forever.  We have not forgotten.  Take time this weekend to reflect on the 10 year anniversary, either quietly by yourself or with others in your community.   Reach out to those that were directly affected by the events.  Keep in your thoughts the first responders who help keep us safe, and the service men and women who are continuing to fight to keep our freedom.  If you would like to know where events are in our area these are some of the memorial services in Wilmington NC on Saturday September 11, 2011 to recognize the 10th anniversary of 9/11/01.

9/11 “We Remember” Commemorative Service

 Sun, September 11th 2011 – Candlelight Vigil    7 pm – 8pm
Wilmington Convention Center

9/11 Memorial  Service

- Cape Fear Community College - \ Safety Training Center at the North Campus in Castle Hayne beginning at 8:30 a.m

http://cfcc.edu/blogs/news/

9/11 Rememberance Ceremony

UNCW Kenan Auditorium – 6: 00 pm – Mayor Bill Saffo and other speakers.  Music by UNCW Dept. of Music

Theater Performance: Remembrance Monologues, 7:30 p.m., Kenan Auditorium

9/11 10th Anniversary Memorial Sunday

9 a.m. near the POW Memorial at 30 Government Center Dr., Bolivia

9/11 Memorial Cruise

Wilmington Water Tours – Downtown Wilmington (910)338-3134

1:30pm – Live music featuring Lindsay Bennet and a complimentary toast to remember those we have lost.

4:00pm – Live music featuring Jamie Michelle and a memorial Wreath laying to Honor those we have lost.

Pray for peace.

The survey is in and there are some low cost renovations that you can do to your home that will bring you more money back at the closing table.  Before you start,  go around your house and your yard and take pictures that you think would look good when the house is listed.  Take a good look at these pictures and you can pick out the things that need to be changed.  Like they say: a picture is worth a 1000 words.  You will see things that you walk by everyday and do not even catch your eye…. but they will catch a potential buyers eye.  The results are interesting and can help you prepare your home for sale.  We can help you with each of these steps.

The marketing company surveyed nearly 600 real estate professionals to discover which DIY home improvement projects give sellers the biggest return for their buck. Here are six projects under $1,000 (amounts are estimated) that made the list.

1. Cleaning and decluttering.Remove any personal items, unclutter countertops, organize closets and shelves, and make the home sparkling clean.
   • $290 Cost
   • $1,990 Return
2. Brightening.Clean all windows inside and out, replace old curtains, update lighting fixtures, and remove anything that blocks light from the windows.
   • $375 Cost
   •  $1,550 Return
3. Smart staging.Rearrange furniture, bring in new accessories and furnishings to enhance rooms, incorporate artwork, and play soft music in the background.
   • $550 Cost
   • $2,194 Return
4. Landscaping enhancements.Punch up the home’s curb appeal in the front and back yards by adding bark mulch, bushes, and flowers and ensuring current plants and grass are well-cared for and manicured.
   • $540 Cost
   • $1,932 return
5. Repairing electrical or plumbing.Fix leaks under the sinks, remove any mildew stains, and ensure all plumbing is in good working condition. Update the home’s electrical with new wiring for modern appliances, fix any lights or outlets that don’t work, and replace old plug points with new safety fixtures.
   • $535 Cost
   • $1,505 Return
6. Replacing or shampooing dirty carpets.Steam-clean carpets, replace any worn carpets, and repair any floor creaks.
   • $647 Cost
   • $1,739 Return

Realtor Magazine : Excerpted from HomeGain’s 2011 Home Sale Maximizer Survey: www.homesalemaximizer.com.

Let us know if you would like help getting your home ready for the market.  That is our expertise and we love “before and after” photos!  www.cbbaker.com for all your Wilmington NC real estate needs.

Realtor.com announced that Wilmington NC was the 69th most searched market for real estate.  Realtor.com has it’s own statistics for searches performed.  The median price of homes were 239,900 which is a bit lower than 2010 but still a healthy average compared to the national average of 189,900.  Inventory levels are down from 2010 which could be in part to all the foreclosures that flooded the market last year. 

Kay Baker & Associates uses Realtor.com in their marketing plans by  showcasing our listings and we have 12 featured home  spots that will showcase our homes when someone types in the search criteria of “Wilmington NC”.  We feel that this increases the exposure of our listings tremendously.  If you are thinking about selling your home, let us show you our aggressive marketing plan.  Search all the Wilmington NC real estate listings on realtor.com and on www.cbbaker.com

This weekend is the time to buy tax free items.  August 5 – 7th 2011.

August Sales Tax Holiday

Studebaker John

The 16th annual Blues Festival is this weekend.  Everywhere around town, the Blues shall be heard… The kick off party is on the Henrietta III at 7:30pm Friday July 29.  There will be music on the dock by Rick Toby.  Catered heavy appetizer buffet, cash bar and a 2-hour sunset cruise along the historic Cape Fear River.  Tickets are available at Wilmingtontickets. Three different Blues Bands will perform on the cruise.  Post Cruise party at Rusty Nail.   For a full list of events and bands please visit www. capefearblues.org.  The weekend will be fun and eventful. Talent everywhere.

Studebaker John and the Hawks… listen here….

While you are in town, if you see real estate that interests you, let us know.  On your phone text 14059 to 44133 to search Wilmington NC real estate or go to www.cbbaker.com.  Have fun!

Safe At Home For The Summer

The song says that living is easy in the summertime, but don’t let the lazy days of summer lead to accidents. Keeping you and your family safe is just a matter of following simple precautions. Here are some tips for ensuring your family’s good times and good heath:

• Beware of the cutting edge. Lawnmowers and other power tools can cause serious injuries. When you’re mowing your lawn, keep children out of the area, and don’t allow children to ride on a mower.

• Before mowing, take the time to move outdoor furniture, toys, sticks or other obstacles out of the way. Especially if you have children or pets, you don’t want to turn your back on an idling mower to move objects.

• If your older child will be helping you out this summer by mowing the lawn, make sure he or she understands how to safely operate the equipment. Read all instructions and warning information together.

• Always turn a mower off before attempting to unclog debris from the blade.

• Tend to the fire. Grilling food outside is a wonderful way to escape the heat of the kitchen. Keep children away from grills or open fires. You should always have water on hand in case a fire gets out of control.

• Lighter fluid should be off-limits for children.

• Be safe about food handling. Never return cooked meat to a container that has held raw meat. Keep coolers in the shade and add ice to them as needed. Keeping drinks and food in separate coolers will cut down on the number of times the food cooler is opened.

• Watch out for other living things. Insect bites and bee stings can be reduced by dressing children in shoes and clothing that is light in color. Make sure you know what is growing in your yard. Teach children about poisonous plants and berries so they know what plants not to touch, pick or eat.

• Beat the heat. The dog days can be deadly. When the temperature tops 90 degrees, fans alone will not be able to cool a home. If you don’t have air conditioning, get out of the house and head for air-conditioned public places, such as libraries or shopping malls. Taking a bath or shower in tepid water will help you keep your cool. Stay well-hydrated, and make a point to check on elderly friends or neighbors who may be especially susceptible to heat-related illness.

Best wishes for a safe and happy summer!

We’ve all thought about it while lying on the beach or inhaling the fresh mountain air: “Why don’t we buy a vacation home?” Owning a vacation home can be a good decision if you buy smart.

They provide another investment that includes a mortgage-interest tax deduction.

Whether you rent it out or not, you can deduct the mortgage interest as long as you use the home more than 14 days or more than 10% of the number of days the home is rented annually at a fair rental, whichever is longer.

Qualified second homes include houses, condominiums, cooperatives, mobile homes, house trailers, boats or similar properties that have sleeping, cooking and toilet facilities.

Here’s an interesting twist on the mortgage interest deduction: If you take out a home equity loan on your first home and use the funds to acquire your second home, the interest on the home equity loan is also deductible. That’s three mortgage interest deductions off your tax return!

Consult IRS Publication 936 for a complete discussion of how mortgage interest for a second home is deductible.

You can purchase your future retirement home in Wilmington NC now, at today’s prices.

Though your second home may be a vacation home now, if you buy right you can convert it into your principal residence later.

They can produce their own income.

Renting out a second home occasionally or often can help you pay for the property with OPM (other people’s money). Check with your tax advisor about how much of the upkeep and management expenses are deductible against your income.

Buying Tips From The Experts

Buy something within a reasonable distance.

Be sure you can get to your vacation home in a short amount of time. Before you make a final decision, travel the distance on a typical Friday afternoon to see whether the drive will be too much to deal with after a long work week.

Rent in the area several times before you buy.

If you really like a particular area, check it out during different seasons. This way you get to know the climate, people, pests, traffic patterns and other regional particulars first-hand.

Consult other owners.

Check with owners of nearby properties about public and private facilities, special maintenance required due to location or weather, the social climate, local development plans and prevalence of crime. Learning about the lifestyle of the area may help you narrow down your choices.

Think home first, investment second.

Although you may be able to generate rental income from your vacation home, it may not cover your ownership costs. (If you want to try real estate investments, give us a call to look at properties in the Wilmington NC  local area.)

Consider different styles of properties in a vacation area.

To minimize upkeep and have a more secure environment, a condo may be preferable to a single-family home. If you plan on converting it to a retirement home, consider what type of home you’ll want as a full-time residence.

Here are some of the current Wilmington NC real waterfront/waterview real estate  in our area.

Priced from 100,000 – 200,000  Click here

Priced from 200,000- 400,000  Click here

Priced from 400,00 -600,000  Click here

Priced from 600,000 – Click here

To search all properties please visit www.cbbaker.com

Masonboro Island NC on July 4th

The efforts of Masonboro.org in educating people who visited Masonboro Island on the weekend of the 4th was successful.  The volunteers went around in red shirts and handed out trash bags so the people could take their trash with them.  Richard Johnson the founder of Masonboro.org says “that we do not need any more rules.”  The crowds and the trash from prior years celebrations caught the eyes of lawyers looking to make rules for the Island Reserve.  The Masonboro.org group stepped up and helped police the island.  The crowds were smaller and well behaved this year, so their efforts seemed to have worked.  Thank you for your dedication.

Masonboro Island is an 8 mile long uninhabited island on the southern North Carolina coast between Wrightsville Beach and Carolina Beach and is part of the National Estuarine Research Reserve. Masonboro Island, only accessible by boat, is enjoyed by campers, surfers, anglers, and bird-watchers alike. The reserve consists of about 5000 acres, which about 4400 acres are tidal marsh and mud flats.  The most northern end at Masonboro Inlet is the most popular area with its sandy beaches and protected waters. Any summer weekend you will see many boaters and campers prepared for a few days on the beach with tents, grills and water toys in to  Masonboro Island, normally calm and peaceful, has recently seen a little too much partying and alchohol consumption on big Holiday weekends such as July 4th and Labor Day. Boaters from all over the Southeast join in on a big party weekend.  So, if you plan to visit the island, be sure to keep your alcohol consumption to a minimum and take your garbage with you.

Masonboro Island is also located only minutes from the mainland where you will see prestigious waterfront communities with private docks, marinas, and boat ramps for homeowners. One of the most conveniently located communities to Masonboro Island is Shinn Point, located straight across from Masonboro Inlet, which is one of the most protected inlets on the East coast. From Shinn Point, you can be in the ocean in just minutes for a day of deep sea fishing or just cruise over to Masonboro Island and relax in the sun.

For complete details on all waterfront communities in Wilmington, NC or Wilmington, NC real estate, please feel free to contact me or go to my website at www.cbbaker.com.

Realty Trac Inc. has stated that the forclosure rate in North Carolina fell 38.3 percent from May 2010 to May 2011.  That is good news for North Carolina as we try to slowly get out of the recession levels.  Some lenders are working with customers in redesigning their loans, but not all companies are letting their customers renegotiate a lower rate and payment plan.  These are some of the current foreclosures in the Wilmington NC market.  Foreclosures Priced from 100,000 – 200,000

Foreclosures Priced from 200,001 – 300,000   Foreclosures priced from 300,001 – 600,000  Foreclosures priced from 600,001 –

These are current listing in New Hanover County.  If you would like a list of properties in Pender or Brunswick Counties, please email me at kaybaker@seaocoastrealty.com