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Statistics show Santa Clarita homeowners are getting a very good return on their investment.

It’s been written that the industry standard for return on investment as far as real estate goes is on average between 3 to 5 percent. In the Santa ClaritaHome Warranty Valley, the median price of a single family home rose 12 percent in 2014. Condos, while not faring quite as well, still rose by just a little over 8 percent.

So think about it: Where else can you make an investment with only a small percentage down, and make 12 percent on that investment in as little as 12 months?

When thinking about personal wealth and investments for your future, real estate truly is one of the best investments you can make.

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Now, the past couple of years has seen recovered growth in the Santa Clarita Valley from a few “down” years during the recession. Even taking those negative equity years (Between 2007-2010), on average, single family homes in the Santa Clarita Valley have increased in value by 6.15 percent per year since 1998 (Source: Southland Regional Association of Realtors. 1998 was the first full year they posted median statistics in the Santa Clarita Valley).

Are there other investments out there that may provide you a higher yield in a shorter period of time? Possibly. But you must also consider the amount of risk involved in shorter term, higher yield investments, as they can equally lose your money as fast (or faster) than you’ll gain.

If you’re considering other low risk investment options, think about this: Even the best Certificate of Deposit barely provide a 1 percent return. Savings accounts have an even lower interest rate.

We’re here to help you make your move!

The team at Montemayor & Associates are well trained, experienced, licensed, and provide a full array of real estate services including working with home buyers, sellers, and investors. We are ready to help you realize all of your real estate goals. To find out more about how we can help you make your investment in real estate, contact us at either of the numbers listed at the top of this page, or by using the Quick Response form below.

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How to avoid capital gains tax when investing in another property.

So you’re taking the step forward into investing. You have one property you’d like to sell so that you can purchase another, maybe larger, property Montemayor and Associateswith the proceeds. Under normal conditions:

  • You would sell your home, and receive a check at the close of escrow, minus closing costs and realtor fees.

  • You would be taxed on the capital gains from the sale of your home, thus reducing the amount you can re-invest toward another home.

  • Since you have less to re-invest, you also may not qualify for the size of home you actually want so that you can increase your portfolio and overall net worth.

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So what do you do?

You can use IRC Section 1031, more commonly known as a 1031 Exchange, to sell your investment property in order to purchase another WITHOUT being taxed for capital gains. To wit:

"No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment."

Do I have to find another property right away?

According to regulations set forth by Section 1031, the exchange period begins the date the deed of the sale of your first property records. You have 45 days to identify a new “like kind” property, and 180 days to complete the transaction.

Is the 1031 Exchange only limited to residential property, or can I do an exchange for land or commercial property?

The 1031 Exchange covers undeveloped land and commercial properties as well.

What can I do if I want to perform a 1031 Exchange?

You can contact us so that we can make a preliminary determination as to the best way to approach your real estate goals with regard to improving your property investment portfolio. It is also well advised to speak with a tax professional to insure you are aware of all the options and tax benefits and obligations that may arise prior to making your final decision to enter into a 1031 Exchange.

Either way, we’re here to answer all of your questions, and to help facilitate your exchange once you’re ready. Contact Montemayor and Associates for a no obligation consultation.

Your dream of positive cash flow as a property investor can be marred by what you don’t know about landlord and tenant rights.

As property values begin to rise once again, the thought of “cashing in” on the market crosses many minds. Yes, there is money to be made in property investment and Property management.management, but before you plunk down some hard-earned cash, here are the top things you should know.

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1. You may enter into a verbal lease agreement, although it is always wise to get it in writing.

There is nothing illegal about verbal agreements in property management. That being said, insuring both your rights, and the rights of your tenant, are protected, it is ALWAYS best to enter into an agreement that is spelled out in legal and binding terms.

2. There is no such thing as a “non-refundable” security deposit.

Landlords may collect a security deposit at the time of a lease signing not to exceed 2 months’ rent in the case of an unfurnished apartment, or three months’ rent for a furnished apartment. That being said, you may not use any verbiage or enter into an agreement that states any portion of the security deposit is non-refundable. Here is what the California Department of Real Estate says on the matter:

"In a residential lease, notwithstanding the specific terminology (e.g., “advance payment,” “fee,” or “charge”) or
the purpose designated (e.g., a “cleaning” or “security” deposit) used to describe a tenant’s monetary deposit to
secure performance under the lease, the money deposited is a refundable security deposit. Any purported waiver 134 CHAPTER NINE
by a tenant of the right to a refund of the security deposit (less allowable debits attributable to the tenant’s
defaults as specified in the lease) is null and void."

You may withhold a portion of the security deposit for damage and repairs caused by the tenant while they occupied the property.

3. You have a legal duty to keep the dwelling in a habitable condition.

Your obligation as a landlord includes making sure the property is livable for your tenants. This includes:

  • Providing waterproofing and weather protection of roof and exterior walls, as well as unbroken doors and windows.

  • Plumbing and gas facilities maintained in working order according to current laws and codes.

  • The ability for the tenant to obtain hot and cold running water. The tenant may be responsible for water utilities as prescribed in your lease agreement.

  • Electrical outlets and lighting maintained in good working order.

  • Building and grounds free of debris, garbage, and vermin at time of property delivery.

The tenant is obligated to maintain all of the above and to inform you of any changes or issues that affect their tenancy.

4. You must tenants give notice prior to entering the property.

Landlords of residential property must give “reasonable advance notice” prior to entering a tenant’s property, and only during normal business hours under the following conditions:

  • in case of emergency;

  • to make necessary or agreed repairs, decorations, alterations, or improvements;

  • to supply necessary or agreed services;

  • to show the dwelling to prospective or actual purchasers, mortgagees, tenants, workers, or contractors;

  • where the tenant has abandoned or surrendered the premises; or

  • pursuant to court order.

Landlords may not abuse the right of access to harass a tenant.

5. You must go through proper legal channels to evict a tenant.

Tenant evictions are a civil matter, and you must go through proper procedures to legally notify your tenant that they are to be evicted. In essence, you will be required to serve a three day notice to comply with the terms of the lease. You can learn more about how to define legal reasons for evicting a tenant (In Los Angeles County) by clicking here.

You can learn more about landlord and tenant’s rights according to the California Department of Real Estate by clicking here.

As always, Montemayor & Associates are here to answer all of your real estate questions. Whether you’re buying or selling a residential property, or are considering property as an investment, our team of highly trained, licensed and experienced agents can answer all of your questions. Call us at either of the numbers listed at the top of this page, or by using the Quick Response form below.

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The love triangle between stocks, bonds, and interest rates can make for strange bedfellows.

Mortgage rates dropped this week on good news from both the stock and bond market. Bulls and Bears represent the volatility of the stock market

As industry professionals, we tend to throw these phrases around without considering whether anyone really understands what we’re talking about. In all honesty, what does this have to do with whether you can afford a home or not?

Well, we’ll take this opportunity to explain why news from the financial marketplace can affect your home purchasing power. First, let’s get a few definitions out of the way:

Stock

Basically, a “stock” is an ownership share of a corporation. This mea...

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Many property managers find that going from running a single family residence to a whole apartment complex isn’t as difficult as they might think.

We’ve written in the past about investment properties, but usually we’ve discussed owning a single family residence, or perhaps a condominium complex. Many real estate investors are doing this, and, when done correctly, provide them with some nice positive cash flow.

But what about those who may be considering a bigger investment? Say, an apartment complex or other building that can generate income as well? Is it really that much harder to purchase real estate such as this, compared to investing in single family homes?

What does it take to buy an apartment building?

We’...

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Steady climb in real estate prices second highest levels since 2008.

More good news for the Santa Clarita real estate market: Housing prices have continued to rise to pre-recession levels.

Santa Clarita housing prices on the rise Resale homes jumped nearly 24 percent over November 2012, selling for an average of $445,000 in November of this year, according to the Southland Regional Association of Realtors. Condominiums jumped to an average of $295,000, which is a gain of nearly 50 percent over the average selling price of $197,000 only a year ago.

These market increases are significant for home owners, especially those who purchased earlier this year, as they have already seen a return on their investment. Home sellers have been able to ...

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Median Santa Clarita Valley home sales jump from September to October.

In a report issued by the Southland Regional Association of Realtors, Santa Clarita has once again seen gains in home prices during the month of October. The median sales Santa Clarita home prices on the rise.price for a single family detached residence topped out at $440,000 last month, which is a nearly 3 percent gain over September. Year over year, we’ve seen home prices rise just over 22 percent from October 2012, where home prices averaged $360,000.

Condominiums prices are also rising. This is good news considering their slow start out of the gate once the real estate recovery began in earnest. Homeowner Association regulations regarding FHA financing for t...

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With housing prices on the rise, many formerly upside down homeowners are Drop in negative equity sees rise in real estate valuesonce again seeing equity in their properties.

A recent study conducted by Zillow.com showed that the nation as a whole has seen sharp drops in “Negative Equity” housing; meaning that the the number of homes worth less than their loan amount, has dropped dramatically.

Overall, Negative Equity homes have dropped 21 percent in the third quarter of 2013, with California leading the way at 44.4 percent. Followed by:

Nebraska (38.9 percent)
Minnesota (38.2 percent)
Arizona (38.1 percent)
Utah (37.5 percent)
Texas (35.7 percent)
Nevada (35.6 percent)
Oregon (32.5 percent)
Washington (30.2 percent)

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What this means for home sellers.

Many homeowners who may have previously owed more on their mortgage than their home is worth may now enjoy the opportunities that come with renewed equity in their property. Whether this means they are now able to refinance, or sell at a profit, it has an impact that reaches far and wide. A drop in Negative Equity homes means that other properties may have a better chance at being sold at a higher rate without negative equity properties dragging down values. This also means that homeowners facing the threat of foreclosure may be able to sell at a profit without having to go through the challenges and credit recourse that result from a short sale.

Good news for the 2014 real estate market.

While we usually see a bit of a slowdown in sales during the last quarter of the year, especially around the holidays, overall sales are still way up over last year, especially in the Santa Clarita Valley. Inventory is rising, but still way below the average (Approximately 500 residential homes currently for sale in Santa Clarita vs. an average inventory of around 1200). Even still, this is a great opportunity for both buyers and sellers to plan on making their 2014 real estate goals a reality.

Indicators are showing that, while the economy continues to improve at a slower pace than many would like, the real estate market will continue to see steady gains in both equity and sales volume; once again proving that purchasing real estate is one of the best investments you’ll ever make.

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Brandon speaks with Don Goettling and Gino Fronti, hosts of the Real Estate Santa Clarita Valley Newhall Real Estate UpdateRadio Network on AM 1220 KHTS.

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On Thursday, August 8th, 2013 Brandon was a guest of the Real Estate Radio Network on AM 1220 KHTS located in Santa Clarita, CA.

He spoke in depth about:

  • How home buyers and sellers should focus on success in their real estate objectives.

  • How despite the recent market changes, overall housing prices have remained steady, with a national average between 11 and 12 percent.

  • He also discussed that, while indicators point to a shift in the market, it’s an even better time for buyers with more opportunities to find the home of their dreams.

You can listen to the entire interview with Brandon on the Real Estate Radio Network by clicking the “play” button below.

Brandon Montemayor interview on The Real Estate Radio Network on AM 1220 KHTS by Brandon Montemayor

Santa Clarita real estate agent Brandon Montemayor sits down with Don Goettling and Gino Fronti, hosts of the Real Estate Radio Network on AM 1220 KHTS to talk about his experience, current real estate market trends, and more.

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Are we seeing the perfect storm for Real Estate investment? The prices are right, the interest rates are right, and with the right Real Estate Team at your side, there is no reason you cannot take advantage of this opportunistic market!

Whether your objective is to invest for the future, buy your first investment property, add to your portfolio, or begin to learn how to invest, we are the Team for you! Give us a call TODAY for a FREE and private consultation so we can show you how to build passive wealth and get your money working for you! Direct: 661-510-2789

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