Easements 101

EasementsAn easement is a legal agreement between the property owner and a non-owner to utilize the property in some fashion and an important concept to understand when buying investment land.  Two examples would be a shared driveway easement or a utility easement. Your name is on the deed, but your neighbor or utility company has the right to use a portion of your land as the easement states.  It is important to be aware of the easements that affect your property or property you are about to purchase.

So how do you go about finding easements?

Easements are typically recorded at the county recorder’s office and they are public record if you would like to research easements for yourself.  Searching for easements can be difficult, especially if parcels have changed owners multiple times.  Some easements can go back over 100 years and require some extensive legwork to find.  Ordering a title report with your local title company or the services of a real-estate attorney would be well advised.

What are the different types of easements?

The most common are utility easements and private or right-of-way easements.  Utility easements may include the use of power, either underground or overhead, phone/data, gas lines, well/public water and sewer lines.  Private easements could include driveways, walkways or paths and access to bodies of water.  Some of these easements require some sort of service agreement to be recorded with the easement.  One example would be a shared driveway.  The service agreement would state who is responsible for proper maintenance of the driveway and how often service is to occur.  It would also include any costs associated with servicing the driveway and who is responsible for them.

How does one gain, remove or adjust an easement?

Easements are typically granted or removed by a binding written document between the parties involved in the home sites or property.  Some examples would be a shared well that is no longer in service or a shared driveway that is no longer in use.  If the original easement was recorded, it is required for the removal or adjusted easement to be recorded, as well.  Typically, some form of compensation is given to the property owner that is allowing the easement.

Easements can be difficult to find and are often overlooked. This can sometimes be costly in cases of adding to a home or pouring a concrete driveway. To learn more about easements contact an expert member of the Land Wealth team.

 

 

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Popular Rotonda West- The 9 Core Realty Featured Lot of the Week

33 Kingfisher Drive Rotonda West, FL 33946The popular Rotonda West development in SWFL, is the site of this week’s 9 Core Realty Featured Lot of the Week!  The property is located at 33 Kingfisher Drive Rotonda West, FL 33946 is listed at only $4,500.

Rotonda West contains 8,000 home sites with over 5,000 homes completed and is experiencing rapid growth and features the hottest Florida land sales.  Residents are predominantly full-time homeowners and their families, as well as tenants and those who winter in the community.  Many investors have found common ground in the city, building up portfolios through many great deals.

Thirty miles of picturesque canals, lakes and ponds wind through the community and offer fishing and boating opportunities for its residents.  Many exotic and beautiful birds call Rotonda West home, as it is a designated Bird Sanctuary.  Nearby recreation facilities, beaches, theaters, sporting events, and fine restaurants are keep residents of Rotonda West busy!

To learn more about this priced to sell 9 Core Realty Featured Lot of the Week and how to purchase land, contact a member of the 9 Core Realty team at (239) 333-2221.

SWFL- A Popular Choice Among International Real Estate Investors

SWFL Home

Naples was the 10th most popular city in April for searches by international real estate for investors, according to a survey recently released by Realtor.com International. With a population of 20,000, the city is David vs. Goliath on the list, which except for Naples consists of large metro areas: No. 1 is New York, followed by Los Angeles, Miami, Orlando and Las Vegas.

Among Canadians, Naples is even higher on the wish list: fifth, after Fort Lauderdale, Las Vegas, Los Angeles and Miami. Naples and the rest of Southwest Florida have always been favored destinations for Canadians who want to escape that country’s brutal winters. Naples’ high prices and elite reputation may play a role in the popularity of that city in particular.

Among foreigners who actually buy Florida land investments and homes , Canadians are by far the largest group: 8 percent of Lee County’s properties sold each year are bought by foreigners – three-quarters of them Canadian. In Collier, of the 6 percent of homes foreign owned, Canadians make up two-thirds.

Canada’s the only country that has Naples in its top five, but Miami is on most of the other countries surveyed by Realtor.com. That’s especially true of South American and Caribbean buyers. With volatile economies in their homelands, South Florida investment real estate is considered a secure place to invest one’s money.

To learn more about the SWFL real estate scene or to view any of our SWFL land investments, contact a member of the 9 Core Realty Team at (239) 333-2221.

Port Charlotte-Just Listed- The 9 Core Realty Featured Lot of the Week

1112 WELDON TER PORT CHARLOTTE FL 33953

A perfect Port Charlotte land lot with tons of room is this week’s 9 Core Realty Featured Lot of the Week. Just listed, this lot is located at 1112 Weldon Terrace in sunny Port Charlotte, FL 33953. This rare double lot, with plenty of space is listed for $13,900.

The zone on the Gulf of Mexico from Venice to Port Charlotte is world famous for its fishing, beaches and beautiful climate. Now it is also one of the best places in the US to find profitable land and waterfront property investment opportunities. The real estate market meltdown is over and land prices have started to rise quickly after reaching bargain levels across the board, usually down 60% to 90% since August 2005. Port Charlotte land prices are moving up and home inventories very low, at seller’s market levels.

To learn more about the 9 Core Realty Featured Lot of the Week, contact an expert member of the 9 Core Realty team at (239) 333-2221.

Using your Self-Directed IRA to Invest in Land and Real Estate

Self-Directed-IRA

When using a Self-Directed IRA for buying investment land there are a number of ways you can structure the transaction:

  1. Use your Self-Directed IRA funds to make 100% of the investment

If you have enough funds in your Self-Directed IRA to cover the entire land investment purchase, including closing costs, taxes, fees, insurance, you may make the purchase outright using your Self-Directed IRA.  All ongoing expenses relating to the real estate investment must be paid out of your Self-Directed IRA bank account.  In addition, all income or gains relating to your real estate investment must be returned to your Self-Directed IRA bank account.

  1. Partner with Family, Friends, Colleagues

If you don’t have sufficient funds in your Self-Directed IRA to make a real estate purchase outright, your Self-Directed IRA can purchase an interest in the property along with a family member (non-disqualified person – any family member other than a parent, child, spouse, daughter-in-law, son-in–law), friend, or colleague.  The investment would not be made into an entity owned by the IRA owner, but instead would be invested directly into the property.

For example, your Self-Directed IRA could partner with a family member (non disqualified person – any family member other than a parent, child, spouse, daughter-in-law, son-in–law), friend, or colleague to purchase a piece of property for $150,000.  Your Self-Directed IRA could purchase an interest in the property (i.e. 50% for $75,000) and your family member, friend, or colleague could purchase the remaining interest (i.e. 50% for $75,000).

All income or gain from the property would be allocated to the parties in relation to their percentage of ownership in the property.  Likewise, all property expenses must be paid in relation to the parties’ percentage of ownership in the property.  Based on the above example, for a $2,000 property tax bill, the Self-Directed IRA would be responsible for 50% of the bill ($1000) and the family member, friend, or colleague would be responsible for the remaining $1000 (50%).

  1. Borrow Money for your Self-Directed IRA

You may obtain financing through a loan or mortgage to finance a real estate purchase using a Self-Directed IRA.  However, two important points must be considered when selecting this option:

Loan must be non-recourse – A “prohibited transaction” is a transaction that, directly or indirectly involves the loan of money or other extension of credit between a plan and a disqualified person. Normally, when an individual purchases real estate with a mortgage, the traditional loan provides for recourse against the borrower (i.e., personal liability for the mortgage).  However, if the IRA purchases real estate and secures a mortgage for the purchase, the loan must be non-recourse; otherwise there will be a prohibited transaction.  A non-recourse loan only uses the property for collateral.  In the event of default, the lender can collect only the property and cannot go after the IRA itself.

Tax is due on profits from leveraged real estate – Pursuant to Code Section 514, if your Self-Directed IRA uses non-recourse debt financing (i.e., a loan) on a real estate investment, some portion of each item of gross income from the property are subject to Unrelated Business Income Tax (UBTI).  “Debt-financed property” refers to borrowing money to purchase the real estate (i.e., a leveraged asset that is held to produce income).  In such cases, only the income attributable to the financed portion of the property is taxed; gain on the profit from the sale of the leveraged assets is also UDFI (unless the debt is paid off more than 12 months before the property is sold).  There are some important exceptions from UBTI: those exclusions relate to the central importance of investment in real estate – dividends, interest, annuities, royalties, most rentals from real estate, and gains/losses from the sale of real estate. However, rental income generated from real estate that is “debt financed” loses the exclusion, and that portion of the income becomes subject to UBTI.  Thus, if the IRA borrows money to finance the purchase of real estate, the portion of the rental income attributable to that debt will be taxable as UBTI.

For example, if the average acquisition indebtedness is $50 and the average adjusted basis is $100, 50 percent of each item of gross income from the property is included in UBTI.

To learn more about land investment and purchasing land through a Self-Directed IRA, contact a member of the 9 Core Realty Team at (239) 333-2221.

Southwest Florida home prices outpaced annual national growth in February

9 Core RealtyResale prices of Southwest Florida’s existing single-family homes continued to rise in January, outpacing annual growth nationwide, according to a closely watched market barometer. But the rate of growth is slowing down, signaling a more stable market, analysts said.

Housing prices in Collier, Lee and Charlotte counties grew 8.3 percent year-over-year, according to the S&P/Case-Shiller Home Price Indices. That was the second highest annualized rate of growth in the nation, after the Denver area, where prices grew 8.4 percent.

Nationally, home prices were up 4.5 percent compared to January 2014.

Southwest Florida had seen double-digit annual pricing growth in 2013 and 2014 as the real estate market recovered from the recession. But monthly growth slowed down in the latter part of the year and that trend appears to be continuing into 2015.
Local housing prices grew by .9 percent from January to February, putting Southwest Florida in the middle of the pack of the 20 metro areas surveyed nationwide by Case-Shiller.

That was the same as the rate of growth between December and January. (The numbers have been adjusted to account for seasonal changes in the market).

South Florida’s growth over the last year had been driven in part by low inventory for single-family homes and an influx of foreign cash. If you are an investor looking for the perfect Florida real estate investment or a buyer looking for an ideal home or home site, contact an expert member of the 9 Core Realty team at (239) 333-2221.

Port Charlotte Plot: The 9 Core Realty Featured Lot of the Week

Port Charlotte Land for Sale

This week 9 Core Realty, SWFL’s all access land investment firm, has released a newly listed Featured Lot of the Week. This plot located in picturesque Port Charlotte, FL is a wonderful addition to any investment portfolio or the perfect SWFL home site for your family or retirement dream home. The Featured lot of Port Charlotte Land is located at 2095 Meetze Street, Port Charlotte, Fl 33953 is a steal listed at only $3500.00. Plots of equal comparison in the area are selling for double these prices.

Found along Florida’s welcoming Gulf Coast, Port Charlotte is located about halfway between Sarasota and Fort Myers, perfectly positioned to offer every manner of water activities. It has more than 165 miles of waterways, providing access to Charlotte Harbor and the Gulf of Mexico and many more miles of natural shoreline bordering Charlotte Harbor and the Peace and Myakka rivers. But that’s not all. Seven of the 21 golf courses located in Charlotte County are found in Port Charlotte. Charlotte Sports Park is home to spring training for the Tampa Bay Rays. Tippecanoe Environmental Park offers hiking trails and wildlife viewing through 380 acres of scrub and pine flat-woods.

To learn more about this plot or any of The 9 Core Realty’s large inventories of Cape Coral, North Port and Port Charlotte land lots, contact a member of our qualified team at (239) 333-2221.