Ann Delaney Beach Blog

Category: Seashore Real Estate

  • 2018 Tax Law Seminar

    I attended an informative seminar this morning.

    Thomas Fitzpatrick, CPA, from the local accounting firm of Fitzpatrick, Bongiovanni, and Kelly provided an overview of the laws (both new and unchanged) applicable to the shore real estate market.

    A few key points:

    1) The exclusion of gain on the sale of a principal residence did not change ($500,000/$250,000 depending on filing status). Must be owner occupied 2 of the past 5 years.

    2) Mortgage interest deduction is now capped at $750,000 of debt.  Current loans secured prior to 12/14/17 are grandfathered under the prior cap of $1,000,000. Home equity interest is no longer deductible.

    3) Deduction for state and local property taxes is capped at $10,000 for primary and secondary homes.  If a property is held as a rental, the property taxes are treated as an expense on schedule C of your tax return.

    4) Capital gains rates remain the same. Depending on your income, the rate is 15% to 20% (plus 3.8% investment income tax).

    5) The rules for a 1031 Tax Deferred Exchange (also called Like-Kind Exchanges) remain the same.  An investment property (a rental) can be sold and replaced with another investment property; allowing the seller to defer the capital gains tax due to the IRS and State of New Jersey.

    I am happy to help with additional information, or direct you to the appropriate tax professional.

    UnderContractSign

     

     

     

     

     

     

     

     

  • Rental Property Owners

    Every season, the first tenants in a property discover the forgotten maintenance items.

    Check before your first guest arrives:

    1) Outside shower clean and water on

    2) Outside hoses connected

    3) Trash cans and lids accounted for (they often “escape” in the winter months)

    4) Air conditioning units ready (breakers on, units uncovered, clean filters, etc.)

    5) Hot water heater ready (breaker on, or dial turned from vacation mode to appropriate temperature)

    6) Cable and Wi-fi functioning

    7) Appliances clean and ready (run the washer and dishwasher through a cycle)

    8) Screens in windows -check for needed repairs

    9) Pillows and mattress pads clean (or replaced)

    Happy summer!

  • Vacation Time!

    Yes, there is still time to find a vacation rental for a week (or more!) this summer.

    Search availability on our web site:  Tim Kerr Sotheby’s International Realty   and then contact me to discuss.

    I am familiar with the inventory and locations, and happy to help you select the best home for your needs.

    ann.delaney@timkerrsir.com

    609-967-7950

    Thank you for your interest!

    RentSign

  • An Agent’s Perspective As A Tenant

    Even a vacation can be a work related experience.

    I was a tenant last week in Naples, Florida. And although rental practices vary by location, many expectations and behaviors are the same.

    For example, the owner warned us in advance about major road construction in the neighborhood.  She forwarded notices from the city, with an apology for the unavoidable inconvenience.   I’m glad that we were not caught off guard as we drove up the house- and I really believe it was less of a hassle because we were mentally prepared.

    Lesson? Owners and rental agents hate to be the bearer of bad news, yet it makes sense to disclose issues that will ultimately impact the tenant’s use of the property.  The property owner may not have any control over the situation (road work, beach replenishment, nearby construction, etc.) but after a long day of travel, those issues will seem even worse from the tenant’s perspective.

    Another observation: we didn’t look through the owner’s welcome book until mid-week when we needed information regarding an appliance.

    Thankfully, there were laminated instructions next to all of the TVs (and as with most homes, each TV had a different set up).  The Wi-fi password was prominently posted on the refrigerator.  There was a label on the thermostat to specify the settings for AC.  And there was another laminated note with detailed trash and recycling instructions (although the recycling can was FULL, so obviously the last tenant missed the pick up day).  Does any of this sound familiar?

    I sincerely believe tenants want to follow owner’s wishes,  yet the “house rules” should be easy to find.

    Notes in the utility room and kitchen will be seen by most guests.  Stickers on a wall of switches may avoid the back yard spot light burning all week.  Anything quirky should be labeled/explained.

    We appreciated that the house was clean and well stocked.  The furniture and bedding were all newer. And, there were brooms and cleaning supplies for the crazy sister who cleans on vacation (that would be me).

    Overall, a fun week with my sisters…and the bonus of a fresh perspective for the summer rental season ahead.

    trashinfoNaplesNaplesSisters

     

     

     

  • Tim Kerr Sotheby’s International Realty

    UnderContractSignHave you checked out our web site recently?

    Sales

    Vacation Rentals

    Beautiful Drone Videos

    https://www.timkerrsir.com

  • Bunks Beds in Rental Homes

    BunksRecently, I posted a picture of built in bunk beds on Twitter.  Bunk rooms have become a popular addition in many new construction homes.

    The post prompted a few questions about what’s permitted under the rental license guidelines.

    Bedroom occupancy is based on fire codes, and requires 50 square feet per person.

    If a bedroom measures 100 square feet (a 10′ x 10′ room)- occupancy limit of 2

    150 square feet – occupancy limit of 3

    200 square feet- occupancy limit of 4

    If you are thinking about changing beds in a particular room and/or adding bunk beds, make sure the dimensions will allow the additional sleeping spaces.

    Also, be sure the beds do not obstruct the egress windows.

     

     

     

  • Rental License and Inspections

    smokeDetecYes, complying with the regulations for the required annual rental license can be time consuming.

    Yet the recent tragedy at a rental house in Mexico reinforces the need to ensure the safety of our guests.

    Avalon and Stone Harbor inspect for fire and safety violations, including smoke and carbon monoxide detectors (detectors must be less than 10 years old).

    All properties offered for rent (even privately) must be inspected and licensed every year.

     

  • Vacation Rentals for Summer 2018

    RentSignTired of the cold weather?

    Think summer!

    Single family home? Condo? Townhouse? Whatever your vacation rental home preference, we have availability for prime summer weeks.

    Search our web site:  timkerrsir.com   for a quick overview, and then contact me for more details: 609-967-7950

    I am familiar with the properties and locations, and happy to help you find the best option for your family.

    Thank you for the opportunity to assist with your Avalon or Stone Harbor NJ plans!

    ann.delaney@timkerrsir.com

  • Important Info For Bay Front Property Owners

    This subject was discussed last week with a bay front property owner planning to sell:

    Original post June 2016. 

    I attended a seminar this morning with important information regarding bay front ownership.

    Some Riparian Grants issued between the late 1980s through the early 2000s have the following language:

    “This grant is made upon the condition and limitation that there shall be no further filling of the presently flowed tidelands.  If any filling does occur within the presently flowed tidelands herein granted, the title to the lands conveyed herein shall immediately and automatically revert to the ownership of the State of New Jersey, but without any diminution in the consideration paid upon the delivery of this instrument.”

    When a property owner installs a new bulkhead (which typically extends 24″ out from the existing bulkhead based on current zoning), the State defines the added 24″ as “filling”.  And YES, even if the required Borough, DEP and/or CAFRA permits were obtained.

    The Department of Tidelands has a new regime, and this enforcement is viewed by attorneys and title company representatives as a method to generate revenue.  A true “money grab”.  Frustrating to say the least!

    Bottom line: the State of New Jersey expects the land owner to “buy back” this filled area, even though a large sum of money was paid for the original Riparian Grant.  

    Unfortunately, the issue will not go away.  Even if a bay front owner has no plans to sell, their heirs will eventually face the problem.  And because the cost to resolve is based on the value of the land, it makes sense to remove the lien sooner rather than later.

    Practical steps if you own a property on the bay:

    1) Find your original title work (settlement papers).  If a Riparian Grant was issued on the property, it will be attached. Look on the Riparian survey for the “claimed area”. Is it adjacent to, or crossing over the bulkhead area?

    2) Read the language in the grant- checking specially for the reverter clause referenced above (not necessarily in all grants).

    3) If the reverter clause is in the grant and you have installed a new bulkhead that sits beyond the original bulkhead, it’s important to determine if  any action is required.  A current survey will be needed to show the exact measurements of the new bulkhead, too.

    A local title company and land use attorney can help you apply for a Statement of Non-Interest or a Confirmatory Grant from the State of New Jersey.

    I am here to provide recommendations for experienced professionals, and answer any questions to the best of my ability.

    Docks

     

  • Disclosure- Flood Insurance

    A home was recently listed for sale in Avalon with all new interior finishes on the 1st floor. Because I know the area, I asked the agent if the house was flooded during Sandy (2012) and/or Jonas (winter storm in 2016).

    The agent confirmed that the home was damaged and repaired using flood insurance funds after both storms.

    Why is this important? Other than fundamental disclosure rules, a buyer should be aware of the history because flood insurance claims remain on the property even after a sale.  Basically a permanent record .

    The flood insurance rate charged to the new owner will be based on the elevation of the structure and past claims.

    If the structure is elevated or demolished (and replaced with a new home), the owner will request a re-evaluation of their flood policy and benefit from a lower rate.

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