Niman @TReXGlobal.com

1 out of every 5 buyers is an investor!!!

This was again confirmed by NAR in their latest annual study on second homes and investment purchases. They found that purchases for investment purposes accounted for more than one out of five home sales in 2008. Second homes and vacation property purchases dropped last year to 9 percent of the total market, down from 14 percent in 2006.

Here are some other interesting findings:

• 66% of what investors purchased last year was detached single family units, 22% were condos or duplexes, and only 8% of purchases were multi-units, attached townhouses, or rowhouses.
  (investors buy mostly single family homes, not strip malls and commercial property)
• 54% percent of all investment properties are located within 20 miles of the investor's primary residence, and roughly two out of three were within 50 miles.
  (need more proof why you should market to absentee owners in your area?)
• 42% of investors paid all cash for their purchases, versus 15 % for buyers of primary residences, and 31% for buyers of vacation homes.
  (These folks have money, financing is not an issue)
• Investors are not wealthier than other buyers. Second and vacation home buyers had higher median household incomes ($97,000) compared to real estate investors ($85,000).
  (Joe the hard-working plumber is your target customer, not Joe the millionaire)

You have what it takes to work with real estate investors, so get out of your shell and market to them! Jump start your skills by signing up for the FREE real estate marketing tools at TReXGlobal.com. You can also find out more by attending our 25 minute webinar on Friday at 11AM PST.

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Last Minute Tax Tip - Making Health Insurance a Rental Expense

Costs to insure rental property are deductible, so depending on how you structure your rental business, you may be able to cover your life and medical insurance as part of the rental business.

Structuring your rental property as a Limited Liability Company (LLC) may permit you to deduct these costs for you and your family, but you should talk to a tax advisor to find out more. Everyone's tax situation is different, and this information should not substitute professional advice. Taxpayers should always consult with their tax advisors to consider specific factors that might affect their situation.

You can also refer to IRS Publication 535 to learn more about business expenses.

Click here for the other tips. To learn more about saving money on taxes, try the property management software and other money saving real estate software from TReXGlobal.com.

Last Minute Tax Tip - Giving Gifts and Lowering Taxes

If you give gifts in the course of your business, you can deduct all or part of the cost, but you cannot deduct more than $25 for each business gift that you gave away during the tax year.

A gift that is intended for the eventual personal use or benefit of a particular person or class of people will be considered a gift to that person or class of people. If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. This rule does not apply if you have an independent business connection with that family member and the gift is not intended for the customer's eventual use.

Incidental costs, like gift wrapping, packaging, insuring, and mailing, are generally not included in determining the cost of the gift. You cannot deduct gift items that cost less than $4 if they have your name clearly and permanently imprinted on the gift, or if the gift is one of many identical items that you widely distribute, like pens and cases. Signs, display racks, and other promotional materials also cannot be deducted as gifts.

Everyone's tax situation is different, and this information should not substitute professional advice. Taxpayers should always consult with their tax advisors to consider specific factors that might affect their situation.

Click here for the other tips. To learn more about saving money on taxes, try the property management software and other money saving real estate software from TReXGlobal.com.

Last Minute Tax Tip - Pay your Kids and Open their IRAs

If it looks like you will have a large taxable liability at the end of the year, it's not a bad idea to hire your kids to landscape your rentals.

You can pay your kids to do work on your properties, and put the money in IRA accounts for them. This is especially a good idea if you’ve already maxed out on your and your spouse’s IRA contribution for the year. You’re better off avoiding the taxes on your extra income, and the money will be safe in a tax free shelter.

And of course, it's a great way to help your kids prepare for their first property!

Everyone's tax situation is different, and this information should not substitute professional advice. Taxpayers should always consult with their tax advisors to consider specific factors that might affect their situation.

Click here for the other tips. To learn more about saving money on taxes, try the property management software and other money saving real estate software from TReXGlobal.com.

Last Minute Tax Tip - Sell Property to Yourself

Selling property to your own S-Corporation may be beneficial in some specific situations, like if you are trying to meet requirements for the two year rule ($250/500k exclusion), or if you are trying to take advantage of depreciation on appreciated property.

For example, say you lived in a property for three years, and rented it out for the next seven years - since you haven't lived there for two out of the last five years, you cannot sell the property as a primary residence to avoid the capital gain. However, after moving out of the property, you sell it to your own S-Corporation, which allows you to exclude capital gain (up to $250k, $500k if married filing jointly) because requirements for the two-year rule have been met. The other advantage is you can have a new basis for depreciation on your appreciated property.

Selling to your S-Corp isn't for everyone though. You should avoid using this strategy if you cannot take advantage of the exclusion amount.

Everyone's tax situation is different, and this information should not substitute professional advice. Taxpayers should always consult with their tax advisors to consider specific factors that might affect their situation.

Click here for the other tips. To learn more about saving money on taxes, try the property management software and other money saving real estate software from TReXGlobal.com.