California Prop 19 At A Glance

This article and update from our own Kelly Vincelette, at Cornerstone Title.

Should you rely on Prop.19 for your own real estate transaction, be sure to double check your own tax situation and talk to a qualified real estate and tax attorney.  

If you like my updates, subscribe to my Blog!  Thank you for reading,

Francis

Silicon Valley real estate
Trends: Local prices and graphs.
How much is your home worth?

Investing in Real Estate - Where is it best?

Investor clients often ask me where it is best to invest in real estate, in the U.S.

This is a tough question, and there is no easy answer: it depends partly on the circumstances and needs of the client, whether the investor wishes to manage himself/herself, where you believe the best prospects for appreciation are, opportunity, future family needs?...

RealtyTrac puts out a good study on their web site (see "RealtyTrac study on rental condition") showing that the best performing markets for rental returns are:

Baltimore, Maryland:  24.82%, followed by:
Clayton, GA with 24.26%,
Wayne, MI: 21.08%,
Pasco, FL: 19.2% .....

The markets with the lowest return on investment are:

New York County, NY, with 2.34%, followed by:
San Francisco County, CA: 3.2%,
then Kings County/Brooklyn, NY: 3.63%,
Marin County, and close behind San Mateo County and Santa Clara County, at 4.31%
... and Santa Cruz County at 4.54%

Return on investment is defined in this study as gross return: rental price divided into the purchase price.  There is a lot more that goes into a more real "net" return: you have to take into account expenses, which include such costs as: - management company, - repairs, - vacancy, - taxes & insurance, - wear and tear on the house etc ...  More on this subject with this "net operating income" link, noted above.

This study does not look at the rental market from the point of view of someone who has owned a place there for a long time, just someone who would be buying right now, in the market as it is currently.  What I mean is that it does not take into account the appreciation of the asset in that location over time.  This can be a strong factor in the buying decision, and an unknown in the future.

Thank you for reading,
Francis

Silicon Valley real estate

Trends: Local prices and graphs.
A noteworthy local non-profit event:  Coalition on Homelessness, SF - ArtAuction15

Property tax increase.

Property taxes, as levied by the Counties, cannot go up more than 2% per year, right?

Well, not really.  It is true that Proposition 13 capped the increase of property values at 2% per year, but there is another Proposition, - Proposition 8,  which passed the same year as Proposition 13, which allows the property value to go down if the market tanks.

When the market goes back up, though, that same Proposition allows then the reassessment of the properties by the County to go back up by more than 2%, until it reaches the value that it would have been if it had not gone down in the first place.

A little hard to follow?  Just imagine what would be the potential value of your property, after you bought it, if it had increased by 2% per year (assuming the market was going up).  This is the value that it could be reassessed by the County if the market does go back to that value...

The request for re-evaluation of an assessment by the County can be done electronically now through their revamped web site, which provides easier ways to search for comparables and maps.
Santa Clara County assessor's web site.
and: contesting your assessed value.

If you wish, I can also assist you by providing a study of the recent sales through the MLS - which has saved quite a bit of money to some of my clients in the past few years.

Francis

Silicon Valley Real Estate

useful links

Rates are super low right now! Mortgage rates

Like art?  Participate in the art auction of the Coalition on Homelessness.