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!

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

Wrightsville Beach is a hidden gem that we treasure for it’s clear crystal clear waters, quaint atmosphere and wonderful people.  With Banks Channel, ICWW and the Altlantic ocean at our fingertips what is there not to like.  Great restaurants, a couple of shops and fishing piers provide entertainment for all.  We are pleased to  share with you our newest waterfront listing just in case you are interested in Wrightsville Beach.

www.WrightsvilleBeachWaterfront.com

Spectacular dream home on Banks Channel with over 4100 sq. ft. of gorgeous living area. 5 bedrooms and 4.5 baths in a well thought out open, floorplan with ELEVATOR. Incredible views await you from most every room including large decks from the owners suite and main living area. Vintage inspired kitchen w/bead board cabinets, Champaign and cream granite counters, kitchen island with built-in gas, downdraft cook top, and 2 raised breakfast bars. And a breakfast room with uninterrupted views of the channel and your private pier with floating dock and 2 boat lifts. One is a 13000 lb. lift for your fishing machine and the other a 3000 lb. lift for smaller pleasure craft. A recently new bulkhead was installed along the beautiful backyard with sod, knockout roses and other indigenous shrubs and bushes. The large owners suite has beautiful Brazilian Cherry floors and a fireplace that is shared with the spa like master bath offering unsurpassed views from the 2 man whirlpool and separate walk shower.

Over 4100 sq. ft. 5 BR, 4.5 bath dream home on Banks Channel with private pier, floating dock/gazebo and 2 boat lifts. Incredible Views. Prepare to stay awhile, because you have just found your new home.

Enjoy.

Wilmington International Airport stretches it’s wings again.  Chicago O’Hare International Airport was just added as a nonstop flight by American Eagle.  Good news for Wilmington.  Business travelers now have the option of flying out in the morning and coming home that  night.  ILM currently services 7 cities nonstop commercially:  New York, Philadelphia, Washington, D.C., Charlotte (ILM’s hub), Atlanta, Chicago and Orlando.  Talk is that Boston might become the next nonstop flight after meetings next month.  The success of these flight patterns will hopefully bring more nonstop flights into our area.  In addition to nonstop, ILM stays busy with flights to where ever you might want to go.  We invite you to fly into our hometown and visit.  If you would like to see what Wilmington NC has to offer, check out www.cbbaker.com for more information and real estate. Fly in | look at real estate | be home that night.  Easy….

Want to know what price homes have sold for recently in your area? Simply complete this  short form here. We will e-mail you regular updates on recent home sales in your area to give you a good idea of your own home’s current value.

To search all Wilmington NC real estate to see what is on the market in your neighborhood now, visit www.cbbaker.com

Rendering by Creative Illustration Media, INC. LS&P Architects

Wilmington NC is going to get it’s own state of the art  Convention Center.  After waiting for approvals and site plans, an opening date has been set for the Historic Downtown Wilmington Convention Center on the Cape Fear River. 

The grand opening is set for Thursday January 13, 2011 at 9:30 am.  The public is invited and there will be a ribbon cutting ceremony with the mayor and other community leaders.  Following the ceremony, there will be a BizTech Expo with technology and business vendors.  On January 15 a black tie event will be held by the Greater Wilmington Chamber of Commerce, with proceeds benefiting the Cape Fear Future initiative.  

A couple of big companies have signed contracts to hold their conventions here for the next couple of years.  This will bring added revenue to Wilmington NC and expose our area and all it’s natural treasures and great Wilmington NC real estate opportunities.  

Please explore our website for the most up to date listings of all Wilmington NC real estate and waterfront properties.  www.cbbaker.com or call us and we will personally select properties that will fit your real estate needs or portfolio.

There are several custom homes  for sale at Figure Eight Island. They range in price from $1,995,000-$4,475,000. Many of these custom homes are located on the beautiful white beaches of Figure 8 Island. There are also homes on the sound front with private boat docks for easy access to the

intracoastalway or the ocean for deep sea fishing. For complete details on Figure Eight Island real estate, please go to www.cbbaker.com or contact me directly at 910-232-0363. You can also text message 44133 textcode 14041 and you will receive mobile virtual tours to your phone!

Figure Eight Island NC real estate is drawing a lot of close attention these days by home buyers and investors, alike for second home opportunities. Figure Eight Island lies just north of Wrightsville Beach, NC on the South East coast. It is only accessible by bridge or boat which accentuates the prime waterfront living community. The pristine beaches, waterways and creeks is a beach goers and boaters dream. Enjoy fishing, surfing, windsurfing, water skiing, or camping at nearby Lee Island. It is all here at Figure 8 Island, NC.

Figure Eight Island homes are some of the finest in the country. Here you will find homes priced from $2,200,000 to $4,475,000. For complete details on all homes for sale at Figure Eight Island, please go to my website www.cbbaker.com contact kay@cbbaker.com.

What a great time to buy the vacation home! You have always dreamed of owning your own cabin in the mountains or an oceanfront home or condo. Well now is the time to invest in this once in a lifetime opportunity. According to the National Association of Realtors the housing market may be already starting a rebound as contracts written in August jumped and home sales are up in popular vacation spots such as Florida and Arizona.

Why Buy A Vacation Home Now?

Prices are very attractive right now; you have an opportunity to make a nice profit when the market rebounds and it always does; there is a wide assortment of homes to choose from in many areas; interest rates remain low; your  income generated by your rental can pay your mortgage. You only need to rent it for less than half the year to pay your mortgage in most cases. Enjoy it yourself the balance of the year! The rental market remains strong for vacation rentals, even in this economy due to availability of homes on websites such as VRBO or Homeaway. Vacation homes are typically more affordable to rent than some hotels; vacationers can take a road trip instead of flying to a near by mountain cabin or oceanfront condo; and executives and their guests would much prefer a vacation home over a much less comfortable hotel room.

Wilmington NC Real Estate

In Wilmington NC and its nearby gorgeous beaches you will find wonderful opportunities to purchase an oceanfront home or condo or maybe one just a few steps away. Just check out these fine homes available in Wrightsville Beach, Carolina Beach, Kure Beach, Figure Eight Island, Bald Head Island, NC or even our historic riverfront area. Just contact me at kaybaker@seacoastrealty.com. I am a lifelong Wilmington NC Realtor and know this area inside and out. If you have any questions, please feel free to ask.

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1. Beautiful Beaches and Waterways

Wilmington NC is situated on the southeast coast of NC and is bordered on the east by the Atlantic Ocean and the west by the Cape Fear River. The beauty and charm of Wilmington and the surrounding beaches equal or surpass any on the east coast. The many pristine beaches that we have to enjoy such as Wrightsville Beach, Carolina Beach, Kure Beach, Topsail Beach, Oak Island and Ocean Isle Beach are sure to captivate your heart.

2. Boating

The area’s many miles of coastline, rivers and sounds offer a variety of  watersports, boating activities, and quite a few harbors, marinas, and yacht clubs.

3. Fishing

Being located within minutes of one of the most protected inlets on the east coast, Wilmington offers bountiful fishing opportunities within minutes. Masonboro Inlet is located between the Southern tip of Wrightsville Beach and Masonboro Island. Also, the many creeks and bays located off banks channel and the waterways are a fisherman’s dream. You will see them fishing for drum, trout, and  flounder in the fall of the year.

3. Masonboro Island

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 tow.

4. Historic Downtown Wilmington NC

Wilmington is blessed with a beautiful and extensive historic district with magnificent and stately oaks, azaleas and oleanders. 230 blocks of downtown are on the The National Register of Historic Districts. The city embraces a lot of history and is fortunate that so much has been preserved.

5. Wilmington NC Real Estate

I cannot speak highly enough about the real estate offered in and around Wilmington NC, from the River to the Sea! Wilmington offers many affordable neighborhoods such as Whitney Pines to move up neighborhoods like Covil Estates with amenities, to luxury gated communities such as Landfall, or golf course neighborhoods like Porters Neck, and waterfront neighborhoods with marinas and boatslips such as Turtle Hall or Shinn Point . The choices are all right here in our great port city of Wilmington NC.

6. Golf

You can truly enjoy golf year round at the many golf courses throughout the Cape Fear Region. Whatever your handicap, there are more than twenty courses in and around Wilmington that are a pleasure to walk. Some of the courses were designed by some of golf’s greatest names including Jack Nicklaus, Tom Fazio, Fred Couples and P.B. Dye, among others.

7. NC Azalea Festival

For more than 50 years, Wilmingtonians have enjoyed the biggest celebration of the year, The NC Azalea Festival. From the parade, artwork, garden tours, street fair, and rich history, there is truly something for everyone to enjoy. This year the Azalea Festival will be held April 1-5th. Come have fun with us!

8. USS Battleship NC

For all the history or military buffs, the USS Battleship NC is located just across the Cape Fear River from downtown Wilmington. You can tour the ship, take a history lesson, visit the museum or the ship’s store.

9. Wilmington NC Attractions

You will certainly never be bored with all the attractions to our area including the Zoo, numerous Museums, Cape Fear Riverboats, Airlie Gardens, Poplar Grove Plantation, Art galleries, live music and performing arts.

10. Churches

Wilmington is known for its many churches and their unique architecture. You will find one on almost every corner from any denomination you prefer.

11. Bald Head Island

Escape to the tropics! That is exactly how a visit to Bald Head Island will make you feel. Bald Head is located right off the Cape Fear River across from Southport, NC and only accessible by ferry or boat. The island is only traveled by golf cart and offers some of the most beautiful beaches and creeks around.

12. Figure Eight Island

Figure Eight Island, NC is located just north of Wrightsville Beach, NC . It is a private island, only accessible by a swing-bridge with a gatehouse and is bordered by the Intracoastal Waterway and the Atlantic Ocean. The island consists of 1300 acres and approximately 441 homes.  Figure Eight Island today is a beautiful coastal community offering the ultimate in privacy and security and just minutes from the conveniences of Wilmington and Wrightsville Beach, NC.

13. Thalian Hall Theater

Thalian Hall in Wilmington NC celebrated its grand opening October 12, 1858! 85 performances were presented that first year.  At the time, it was the largest Theater South of Richmond, Va. Thalian Hall was known by many names in its early days such as “The Wilmington Theater”, “The Opera House” and “The Academy of Music”. Thalian Hall today looks largely the same as it did in 1858, with its rambling ornate architecture.

14. Fort Fisher Aquarium

The NC Aquarium at Fort Fisher not only displays an assortment of waterlife, but also focuses on conservation of aquatic environments. The Aquarium is open to the public and is available for private events.

15. Warm Climate

The mild climate of the Cape fear region is a big bonus for residents and visitors alike. Golfing, watersports and a multitude of outdoor activities can be enjoyed year round. However, there are four seasons and their transitions are usually spectacular.

16. Southern Hospitality

You will always be in amazement of the southern culture and hospitality of the Southeast region of North Carolina. It is commonplace for southerners to stop on the street and ask you “how you are doing”. And, the courtesy of drivers will pleasantly surprise you.

17. Vibrant and Diverse Economy

New Hanover county is a good location for comfortable living and a thriving business environment. In fact, the Wilmington area was just ranked in the 6th position for cities with job and economic growth by Milken Institute.

18. Shopping

Shopping is delightful with the many strip centers, Independence Mall, Cotton Exchange in downtown Wilmington and the new Mayfaire Town Center with all the name brand stores like William & Sonoma, J Crew, Pottery Barn, and more.

19. Schools

The schools in New Hanover county are some of the best in the country. The recent ABC scores and AYP results are indicative of our excellent schools.

20. UNCW Wilmington NC

UNCW has been named numerous times “Best in the Southeast” by the Princeton review and one of the top three ‘Best Values” by Kiplinger’s rankings. Wilmington College opened its doors in 1947 and was granted 4 year status in 1963 after moving to its present location on College Rd.  UNCW presently enrolls nearly 12000 students.

21. Museums

Wilmington, NC is blessed with many museums such as the Cape Fear Museum, Cameron Art Museum, Wilmington’s Children’s Museum, Wilmington Railroad Museum and many more.

22. Nightlife

When the sun goes down in Wilmington, the downtown area lights up with neighborhood bars, pubs and restaurants. Not to mention the many restaurants and the like that have opened at Mayfaire Town center near Wrightsville Beach.

23. Events

The Cape Fear region is rich in happenings around the area. You can choose from annual fishing tournaments, crafts shows, festivals like the Azalea Festival, Jazz Festival or Riverfest and at Christmas, the Holiday flotilla.

24. Film Industry

Wilmington or “Hollywood East” has hosted the production of more than 400 movies, miniseries and TV movies. In fact, more revenue has been generated from Wilmington NC productions than any other US city except Los Angeles and New York. Just to name a few One Tree Hill is filmed here, Sleeping With the Enemy, Divine Secrets of Ya Ya Sisterhood and Forest Gump.

25. Airlie Gardens

Gardens by the sea best describes the lush formal gardens, lakes and magnificent oaks draped with Spanish moss. Airlie Gardens is home to the Azalea Festival garden party with its collection of over 100,000 azaleas. Airlie is also a popular setting for weddings, Airlie concerts, Oyster roasts, and enchanted Airlie during Christmas starting in November.