Tag Archives: tax breaks

Should I Rent or Should I Buy Now?

The real estate market has been dynamic over the last few years to say the least. The dramatic highs and lows have left many wondering if they should rent an apartment or buy a home. Each option has its own merits and drawbacks and it is important to figure out what is the best option for you right now. Consider these arguments during your internal rent vs buy debate.

 

Should I Rent?

 

Renting is a great option for those that are still trying to figure out what their plan is. Many cities have wonderful neighborhoods with distinct flavors and personalities. Renting gives someone the option to try out different neighborhoods and find which is the best fit for his or her lifestyle. Buying is an investment synonymous with putting down roots and many people want to know their surroundings before choosing where to settle.

Renting offers short-term commitment. The most common lease contract is for a year-long commitment and there are also short-term leases that can be from 3 months to 6 months and Tenancy-at-Will contracts which are just month-to-month commitments.

The ability to test out an area with little commitment makes renting seem ideal until you realize renting also means you are throwing your money away. Renting does not build credit or equity. In fact, by paying your rent, you are paying someone else’s mortgage and building someone else’s equity and credit.

The tax breaks for renters are limited. In Massachusetts, renters can only deduct 50% of the rent they paid in a calendar year with the maximum deduction for rent being $3000. Meaning if your rent is more than $500, you are not going to see any difference.

Another drawback is rent is always going up! Especially in high demand cities with low vacancy rates. What you could spend to get a one bed in the suburbs could maybe get you a closet in the city. Then there are also the upfront costs.  Unless you are moving into a rental complex that only wants first month’s rent, most owners want at least first and last month’s rent. Some will ask for a security deposit and if you are using a broker you will need to pay for a fee. To rent an apartment, you need to have 2-4 months rent saved at lease signing. Then there is the expense of actually moving: the boxes, the moving truck, movers, etc.

After you have an apartment, the landlord can be an issue. With thousands of landlords and even more tenants, each with a unique personality, it’s not possible for every tenant to get along with every landlord. Some will be great and others not so great and there is no way to tell which one you are going to get until after you are already in your lease. In the worst case scenario, this can make for a very long year.

 

Rent vs Buy: Which Best Fits My Lifestyle?

 

Should I Buy?

 

Buying a home can be scary at first. With all the horror stories throughout the nation (foreclosures, short sales, underwater mortgages, money pits, the inability to sell, etc.), it is easy to think that renting is safer than buying. Buying can be scary because it brings responsibility and commitment. Basically, it means becoming a grown-up.

Fortunately there are more reasons to buy than there are not to!

Sales prices have fallen and mortgage rates are at an all time low. The combination makes housing affordability as low as we have seen in a decade and possibly as low as we will see for the next decade.

There are more tax deductions for homeowners than renters. Homeowners can deduct their mortgage interest, property taxes, and certain home improvements also qualify for deductions.

When you are paying for your own property, you are putting your money toward building your own equity and credit. You are paying off your own mortgage rather than seeing your money go to someone else’s pocket.

If you buy your property as a long term investment, it is like putting money into the bank. The more equity you build, the more you can borrow for future purchases, such as renovations  to your home or your child’s college tuition.

If it is the responsibility and commitment that is scary, then buy a condo. The size won’t be overwhelming. Plenty of condos are located in professionally-managed buildings or buildings that have property managers to handle repairs and maintenance. In a few years, if you decide to move onto something bigger, you can sell the property but you could also rent it out and have someone else pay the mortgage and build your equity.

To learn more about buying or renting property, contact the Realtors of Matthew and Alisa Group Real Estate.

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Lights, Camera, Action! Filming in Boston

Boston has been captured on film for decades and as a Realtor and film junky, I find it fascinating to see how the city has changed over the years. In fact, one thing I like to do on a rainy day is watch movies filmed in Boston over time. First I watch a film from the 1960’s such as Boston Strangler with Tony Curtis or The Thomas Crown Affair with Steve McQueen and Faye Dunaway. Then I watch a movie filmed in Boston from the last few years like Knight & Day with Tom Cruise and Cameron Diaz or What’s Your Number? with Anna Faris. It’s amazing to see how much the city has changed, particularly Back Bay and Downtown, or how little Beacon Hill has changed. Many other movies filmed in Boston have the same effect, but I can watch the movies I mentioned and pay attention to the city instead of the plot.

Filming Knight & Day in South End BostonBoston has been the backdrop to Oscar-winning movies, blockbuster classics, Emmy-winning T.V. shows, and reality television such as MTV’s The Real World. Boston has a variety of architectural styles that make it a great location for filming any time period. For example, Boston’s well preserved historic architecture offers ideal locations for historic period pieces like Glory or Amistad. Boston’s continuous modern development also makes this city an ideal setting for films set in the future like Surrogates.

Along with it’s blend of historic and modern architecture Massachusetts lures filmmakers with tax incentives packages including a 25% production credit, a 25% payroll credit, and a sales tax exemption. To qualify for the payroll credit and sales tax exemption a project must spend $50,000 in Massachusetts. Spending over half of total budget or filming at least half of the principal photography days in Massachusetts makes a project eligible for the production credit. The program requirements are straightforward, have no annual or project caps, no residency requirements, and no extended schedule of credit payouts. Judging by the number of films shot in Boston over the last few years, it is safe to say Boston offers a favorable tax break.

From the architecture to the tax breaks, it’s no wonder Shonda Rhimes, creator of Grey’s Anatomy, chose Boston as the location to film the pilot of her new project “Gilded Lily’s.” The show will be a romantic period drama set in 1895 about the opening of the first luxury hotel in New York City. Filming in Boston will begin March 2012. According to the announcement made by the Patrick-Murray Administration’s Massachusetts Film Office (MFO) many people in Boston are very excited about the project, even though the show’s setting will be New York.

“This is a very exciting project for the Commonwealth. Massachusetts is the perfect place to set a story from the Gilded Age, an impressive and well-preserved period in the Commonwealth’s history,” said Lisa Strout, the Director of the Massachusetts Film Office.

“This is a great opportunity to showcase Massachusetts’ historical richness and the incredibly talented workforce that exists in the Commonwealth,” said Greg Bialecki, Secretary of Housing and Economic Development. “Our competitive tax credit program continues to bring top industry producers and filmmakers to the Bay State, creating significant job opportunities.”

To learn more about historic or modern real estate for sale in Boston, contact the Realtors of Matthew and Alisa Group Real Estate.

For more information about the Patrick-Murray Administration’s Massachusetts Film Office and it’s tax incentives, visit www.mafilm.org.

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