Minnesota
Twin Cities Foreclosures for Q1 are Up 22%
According to the Metropolitan Foreclosure Report by RealtyTrac, Inc, the Twin Cities real estate market saw an increase of new foreclosures filings by 22%. This is a 2% decline actually from the last quarter of 2009.
Before you investors start salivating….Keep in mind that even though a foreclosure filing happens on a property, several things can [...]
According to the Metropolitan Foreclosure Report by RealtyTrac, Inc, the Twin Cities real estate market saw an increase of new foreclosures filings by 22%. This is a 2% decline actually from the last quarter of 2009.
Before you investors start salivating….Keep in mind that even though a foreclosure filing happens on a property, several things can happen. The owner can pay the past due amount and fix the problem. They can sell it in a short sale. If neither of those happen, we need to wait 6 months for the end of the redemption period for the properties to hit the market.
The staggering numbers from the report show that one in every 162 houses in the Twin Cities (only .62%) has at least one foreclosure filing in the database. This is slightly lower than the .72% national average. The Twin Cities ranked 80th on the list of large cities (over 200k people) in number of foreclosures. Of the top 10 cities with the worst foreclosure rates (like cities in California, Florida, Arizona), eight of them reported improvement in foreclosure filings over last year.
HOUSE DFL TAX BILL BLASTS HOMEOWNERS
Homeowners in Minnesota have been battling a through a tough real estate market for the last few years. Foreclosures, short sales and falling prices have made the American Dream sometimes appear to be a nightmare. Luckily, as with all markets, Minnesota’s residential market will recover. How fast and stable the recovery will [...]
Homeowners in Minnesota have been battling a through a tough real estate market for the last few years. Foreclosures, short sales and falling prices have made the American Dream sometimes appear to be a nightmare. Luckily, as with all markets, Minnesota’s residential market will recover. How fast and stable the recovery will be is something that government can either hinder or help, depending on the tax policies it adopts.
That is why the Minnesota Association of REALTORS® was shocked by provisions in the House DFL Tax Bill that hammers homeowners. Two of the most significant changes are the elimination of major income tax deductions – property taxes paid and mortgage interest. These two provisions have been part of Minnesota tax law since 1933 and are readily utilized by homeowners to help offset the annual expense of owning and maintaining a home.
Studies show that ninety-seven percent (97%) of the tax benefits from these deductions go to Minnesotans with household incomes starting at $30,952. In many cases, these are young families who have recently purchased and are struggling during this recession. Not every taxpayer utilizes these deductions; however, 75% of homeowners use these deductions when filling out their taxes. Other homeowners have paid down their mortgage over the years and now claim the standard deduction. More significant is that homeowners understand the overwhelming public policy benefits these deductions provide and realize their children and grandchildren will need these deductions so they can own a piece of the American Dream.
Home ownership has been widely recognized as good public policy for stabilizing families, neighborhoods and communities. Altering these widely accepted tax deductions at a time when the residential real estate marketplace has been struggling seems to be the wrong solution at the wrong time. You can access the House Tax Bill at: https://www.revisor.leg.state.mn.us/bin/getbill.php?session=ls86&number=HF2323&session_number=0&session_year=2009&version=list
Update Sale of TJ Waconia Properties
It is funny how this is really a small real estate world, especially in North Minneapolis. Johnny Northside wrote a new post about the North Minneapolis T.J. Waconia houses where he actually made a mention of my post about one of my customers wanting to buy a T.J. Waconia House in North Minneapolis.
Here is where [...]
It is funny how this is really a small real estate world, especially in North Minneapolis. Johnny Northside wrote a new post about the North Minneapolis T.J. Waconia houses where he actually made a mention of my post about one of my customers wanting to buy a T.J. Waconia House in North Minneapolis.
Here is where it get’s circular. Jeannie Hoholik, from Keller Williams, comments on this blog. In fact, she commented about my above post. She is also the main character in Johnny Northside’s post. Got all that?
I encourage you to check out those other posts.
Scott
New Investment Property Search Site Launches
Are you looking for Minnesota Investment Properties, but just can’t find a site that has MLS tools and features designed for investment properties? There really are no other websites in cyberspace dedicated to browsing the Minnesota MLS for just investment real estate.
I have recently just launched such a site at www.mnirea.com. The search capabilities are [...]
Are you looking for Minnesota Investment Properties, but just can’t find a site that has MLS tools and features designed for investment properties? There really are no other websites in cyberspace dedicated to browsing the Minnesota MLS for just investment real estate.
I have recently just launched such a site at www.mnirea.com. The search capabilities are top notch and comparable to any that you will find on other real estate sites. The best part is that I have pre-loaded some common searches. Go ahead and browse the Minnesota MLS here.
Returning the Pre-Lease Deposit
Many landlords take a deposit from a prospective tenant to hold an apartment prior to move-in. I require a deposit when there is more than 1 week before the start of the new lease. State law is very clear on how this process must be executed when renting Investment Property in Minnesota:
The agreement must be [...]
Many landlords take a deposit from a prospective tenant to hold an apartment prior to move-in. I require a deposit when there is more than 1 week before the start of the new lease. State law is very clear on
how this process must be executed when renting Investment Property in Minnesota:
- The agreement must be in writing and signed by both the landlord and prospective tenant.
- That agreement must specify under what circumstances the deposit will be returned to the prospective tenant.
- If the above circumstances occur, the landlord must return the deposit within 7 days.
- Once the landlord and tenant enter into a lease agreement, the money must be applied toward the tenant’s rent or security deposit. Any payments for tenant screening are not included in this requirement.
If the landlord violates any of these requirements, s/he is liable to the prospective tenant for 150% of the deposit amount. Once the landlord and tenant sign a lease and the landlord complies with #4 above, this law no longer applies. The moral of the story is: make sure everything is in writing!
See Minnesota Statute 504B.175 for more information
Minnesota Certificate of Rent Paid
**2009 Update: The new Minnesota Certificate of Rent Paid is here.** This is just a reminder to all the Minnesota Investment Property Landlords in the audience. You are required to send a Minnesota Certificate of Rent Paid to your tenants by January 31, 2008.
This is a simple form that your tenant can use when [...]
**2009 Update: The new Minnesota Certificate of Rent Paid is here.** This is just a reminder to all the Minnesota Investment Property Landlords in the audience. You are required to send a Minnesota Certificate of Rent Paid to your tenants by January 31, 2008.
This is a simple form that your tenant can use when submitting their taxes. Depending upon their income, they may be eligible for a tax deduction for a portion of the rent they paid for 2007. Although you must send your tenant this form, this does not affect any taxes you pay or anything else. It is simply for their tax purposes.
The instructions are rather lengthy (and like any other government form, rather confusing). Without going into great detail, here are some of the tips and tricks that I have figured out over the years:
- Only rent paid by the tenants is used in the calculation (any Section 8 or other rent subsidies are not included). In my accounting system, I mark each subsidy payment in the memo field to make this easier at the end of the year.
- Do not include any damage deposits, late fees, or other non-rent payments.
- I typically only include actual rent paid, not rent billed (or accounts receivable).
- Fill in a copy of the form with your business information and make copies to save yourself time when completing many of them. With almost 30 rental units, you can imagine how much time this saves me!
- I do not try and track down past tenants and send them these forms. If they are interested, I let them call me (again, there is no penalty for not sending these forms of for them being late).
- You must divide the rent paid by the total number of adults (married couples are considered 1 person) in the unit regardless of how much rent each paid. You should then send a form to each adult.
- To save on postage, I send their monthly statement in the same envelope.
You can purchase software packages or services to do this work for you, but I have always found they are expensive. The easiest way I found to get these done is do a couple each night until you have them all finished. Turn the music on and just fill them out!
