July, 2021 — Real
estate has long functioned as a store of equity value that owners can exchange for
money, loans and lines of credit. Yet the typical real estate transaction is associated
with a cumbersome, bureaucratic, and fee-heavy process that every homeowner is
greatly relieved to finish.
There are other ways to invest in real estate that do not
take the same level of personal involvement and work as direct purchases of real
estate do. In other words, investments in buildings and land can be more
liquid. In addition to investing in and financing one’s own property, it’s
possible to invest in real estate exchange-traded funds (ETFs) and real estate
investment trusts (REITs) through stock brokerage accounts, including
individual retirement accounts.
In 2021, FHA home loans are once again attainable for hundreds
of thousands of young beneficiaries of Deferred Action for Childhood Arrivals
(DACA). Brought to the country as young children, DACA recipients are called Dreamers
because they received temporary conditional residency, Social Security numbers,
and work permission under the Development, Relief, and Education for Alien
Minors (DREAM) Act.
Dreamers have grown up in the United States. They consider
it home. To be DACA-eligible, they’ve studied for a diploma or G.E.D., or
performed military service. Under DACA, they may continue to study and hold
jobs without deportation fears.
Most Dreamers are now in their 20s and 30s — a time in life
when many young adults consider buying houses. And now, many more can.
It’s a sign of the coming times. Hawaii’s Senate Bill 474 has
amended the state’s flood hazard disclosure rules for residential real estate.
Disclosures now must include sea level rise exposure, in alignment with hydraulic
and hydrological data from the Hawaii Climate Change Mitigation and
Adaptation Commission.
Gov. David Ige signed the bill on July 2, 2021. One of the
other bills signed on the same day was House Bill 243, which directs state
agencies to take sea level rise into account in infrastructure plans.
These bills are among the latest steps Hawaii has taken to
meet the goals of its 2050 Sustainability Plan and the capacity of future
generations to thrive.
Thinking of buying a house with your partner? Many unmarried
couples decide to live together, often co-owning their homes. Here are some questions
to consider if you’re thinking of making a similar commitment.
Will One Partner Take Out the Mortgage? Or Will You Be Co-Borrowers?
When unmarried couples apply for a mortgage, the partner
with stronger credit may opt to be the sole buyer. This can lead to the best
possible loan terms and rates.
Alternatively, the couple can apply for a mortgage in both
names and pay it off from a joint bank account. Buying a home together, as co-borrowers,
may seem to strengthen the couple’s borrowing power. Yet it can do the opposite.
A lender will look at the lower of the two credit scores to make approval
decisions.
Moreover, co-borrowers need to refinance the loan if they
later stop co-owning and put the title into only one of their names. Handling a
home loan jointly can complicate the couple’s future if the relationship
changes.
You’re financially ready. You’re excited to be shopping for
your new home. But you’re getting slammed by the competition! Now, how do you make
offers with confidence and get your home purchase goal back on track?
There are three key parts of this home-buying adventure. You
can break them down into:
1. Preparing your finances.
2. Choosing homes you’d like to buy, assessing
their value and appropriate pricing.
3. Negotiating with sellers.
When the going gets tough, a few competitive tips might help
strengthen your hand in each of these three stages. Then we offer a few
lesser-known ideas. What follows is a range of possible strategies to work
with, so you can choose what resonates with you.
In the $1.8 trillion American Families Plan, Joe Biden is
looking at tightening up the tax code to move more funding into families and
education. What tax provisions could be changed?
The 1031 exchange (like-kind exchange) tax-deferrals
for business or rental properties.
The stepped-up cost basis for heirs after the
homeowner dies.
The current estate tax exemption.
Gift tax provisions.
Congress would have to approve any changes, so none of these
will be enacted immediately. If and when they are enacted, their bite may be
less than their bark. Let’s take a look.
Real estate is known as an illiquid asset. Turning real
estate assets into cash is a complex, costly process. This is so, whether the
owner is selling, or seeking profit from steady rental income. Returns on an
initial investment are typically slow, cumbersome, dependent on intermediaries,
and reliant on other people’s reliability and performance.
Blockchain technology is being applied to lessen the
administrative friction. Were real estate easier to transfer, proponents say, new
investment choices could be developed.
Readers may have noted a marked rise in discussions of DeFi — decentralized finance — as a way to bringing tangible assets into digital, accessible form. Real estate, with a global market approaching $300 trillion in total value, is an impressive use case. According to Paul Tostevin, director of the Savills World Research team:
By any measure, real estate is
by far the most significant store of wealth, representing more than 3.5 times
the total global GDP.
And no wonder. Territory is a good we cannot live without.
And real estate is finite.
In the United States, real estate investment opportunities
abound. International real estate buyers can earn profits and bolster the U.S.
economy at the same time. Some people invest from outside the borders. Some investors
hope to live in the United States.
If you wish to invest in U.S. real estate from a distance,
or to learn about mortgages for international buyers, check out our guide for Foreign
Nationals Buying U.S. Real Estate.
If you are thinking of purchasing U.S. real estate and
gaining residence as well, read on. We’ll start with a broad-brush Q&A. Then
we’ll get into the investment visa and the eligibility rules as of 2021.
Buying a home is a major challenge for a large segment of our
population, and many people can’t afford homes near the workplaces that need
them. With the travel and hospitality sectors reopening for business, the
problem is growing more obvious. There’s a home affordability crisis calling
for remedies.
Where there’s a will, there’s a way. Or several. Some counties
and towns are addressing the issue by dropping
their single-family-only zoning rules. Another response is a flurry
of permissions for homeowners to build accessory dwelling units (a.k.a. “in-law
cottages)” on their properties.
In this article, we’ll explore yet another partial solution:
dedicated workforce housing. Counties can create deed restrictions that
allocate homes to employees of local businesses. A deed restriction, recorded with
the property deed, can limiting the ways a home can be held or conveyed to
someone else.
June, 2021 — As Deeds.com readers know, we’ve
been watching the steady emergence of blockchain for real estate applications.
Blockchain, which was introduced to the world through Bitcoin in 2009, is here
to stay. How can we say so? It’s increasingly viewed as a change agent in the
way business is done.
Case in Point: El Salvador, June 2021
Cryptocurrency has just reached a new milestone, becoming a legal tender in El Salvador. To underscore the intent to make bitcoins more like a currency than a taxable asset, President Nayib Bukele said transactions could occur without being subject to capital gains tax. On the 9th of June, 2021, the president tweeted about the country’s official recognition of Bitcoin:
The #BitcoinLaw has been
approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes!
History! #Btc
Bukele has replied to concerns that cryptoassets can be used by criminals, observing that criminals trade in U.S. dollars and other assets as well. The president also tweeted a rebuttal to the objection that cryptocurrency relies on coal-based electricity:
I’ve just instructed the president of LaGeo (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos. This is going to evolve fast!
El Salvador will offer citizenship to those who have
invested in at least three bitcoins.
Note: Bitcoin with a capital B is usually
reserved to mean the platform, whereas a bitcoin with a small b is the
cryptoasset itself. BTC is the abbreviation for bitcoin traded on an exchange.
