Cary Real Estate Blog

With tax time quickly approaching, one of our Cary area real estate services is to educate our clients with any tax tips that might help you save money.

In some of our established Cary and Morrisville, NC area neighborhoods such as Preston, homes are becoming of age where a few of the household systems are needing replacement. For example, in the heart of the 101 degree August days we had here in the summer of 2007, my AC died. Upon further inspection, we were required to replace our main unit with a newer, more energy efficient model. After a few nights in the heat, it was money well spent. But our original unit was only 10 years old. Some household items are going to fail sooner than others.

Just before the end of the year when LG Real Estate was gathering articles for our newsletter, the Real Estate Market Update, I became aware of a tax credit that I can now use. Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in their primary home can receive a tax credit of up to $500 beginning in January 2006 through December 31, 2007.

For installing my particular type of efficent AC unit, it appears that I will get a credit of $300. However, i will still check with my accountant.

What is nice about a tax credit is that it reduces the tax dollar-for-dollar while a deduction only removes a % of the tax that is owed.

There is more detail on these energy-efficient upgrades on www.energy.gov/taxbreaks.htm.

Do you have any tax breaks that you can pass along to our Cary area real estate clients? If so, please respond.

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Should you rent or buy? This is a question that most of us face at some point.

Anyone currently looking to rent a House, Townhouse or Condo in the Cary area today will be lucky to find anything for under $700 per month with the average rental property in Cary currently being listed at over $1600 per month. Things don’t get much cheaper with apartments as many 1 bedroom units run at $650+ per month and 3 bedroom units at $1100 + per month.

The truth is that there are no hard and fast answers, many will tell you that renting is “dead money” and you would be crazy not to own and that although there may be fluctuations, real estate only goes up in value.

However, it does not always make sense to buy, renting could be the better option. When my wife and I first moved to the Cary area from England we rented an apartment for over 2 years as we pursued our new careers, built our credit (as I did not previously exist in the US credit rating system) and got to know the area.  Then when the time was right for us, we purchased a house.

So, when is the right time?  One of the big determining factors is financial, here is a web based rent vs. buy calculator, that will help you play with different scenarios.  Buying a house takes money, not only in the purchase but also in maintenance, taxes and other expenses so getting your own financial house in order is critical before you make that step to buying your own home.

  Another factor is how long you think you will be living in the same location. If you think this will be for less than 2 years then renting may be a better option.  Even in todays market there are still many benefits to buying a home, the main one being investment potential. Home ownership builds wealth by increasing equity by paying down the mortgage and through appreciation - the rise in the homes value over time.  The Federal Reserve’s Survey of Consumer Finances has consistently found a huge gap between the wealth pile up by homeowners and that accumulated by renters.Other benefits of owning your own homeinclude mortgage interest tax deductions, property tax deductions, capital gain exclusion,  pride of ownership and inflation protection/predictable payments - if you lock in your rate you will know what your monthy payments will be for the next 5, 10 or 20+ years where rent will continue to rise over the same time period. 

At the end of the day, information is key. A renter that is considering buying a home needs to have a game plan, understand their own financial situation and the cost of home ownership, then choose a Realtor to work with who knows their area and can help you find a home in this changing real estate market.

If you have transitioned from renting to owning in the Cary area please comment with any tips or advise that were of use to you.

Mark Lawrence

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