Will a Tax Credit Extension Help the US Housing Market?

In the United States, the GDP recorded 3.5% growth in the third quarter – for the first time in twelve months. Since the end of last year the property market is also showing massive improvements.

Are our counterparts starting to come out of the recession? There is a surplus of 7 months worth of stock on the US property market at this moment in time. There has been great inroads into the excess stock on realtors book's considering this figure was just about double at the start of the year. Eyes of many real estate agents (but also possible buyers) are now on one thing – the first time home-buyers’ tax credit.

With $8,000 in tax credits, or even cash back in some instances, these available tax credits have gone a long way in helping boost the housing market. But as the expiry deadline for this special offer comes nearer, market watchers are becoming nervous. When the tax credits are no longer available what is going to happen to the housing market?

All is not lost as an extension bill for the tax credits is being written which will prolong the deadline for a further year until 2010. Senate has now cleared the path for the law, which may make it to Obama this week or next. With a new cut off date of April 30, and an rise to $225,000 on the couples income threshold, this is a very enticing bill. And that’s not all – a new $6,500 tax credit for move-up homeowners was attached to the bill.

Passing this bill may stoke our southern neighbour’s property market enough to get through the winter, but, the question remains: how will the US federal budget sustain this hit?

Image by Crazyemt.

Thinking about Renting out a Fully Furnished Apartment? Think Twice, It Is Not That Easy

Are you an owner of a small flat or a condo? It may be a perfect idea to rent it out as a fully furnished place. People who usually rent such places mostly need a home ready to be moved into, without the need to purchase anything - depending on their lifestyle. But before you will get any extra cash from renting your fully furnished property, first you will have to make a lot of decisions and think about many details.

How much will it cost you?

Preparing your place and setting everything up will certainly cost you something, and finding out how much is the first step. Examine the listings of other fully furnished properties available in your area. Try to find some properties that are close to yours - in size, location and furnishing. Once you have a pretty good idea of the rent that is commonly charged for a fully furnished place such as yours, list everything that you would have to purchase in order to fall into the category of 'fully furnished'. Not only all furniture, but also utilities such as gas, electricity, water, phone, cable, wireless Internet or security services, and all kitchen ware, plus towels, bed linen and cleaning supplies - all of this is expected from you to take care of nowadays, if you are renting out your flat as fully furnished.

The next step is to make up your mind if you can afford to fully furnish your apartment to the extent described above. Make a list of all the things you will have to purchase so that your place is fully furnished. Also think about the fact that there may be multiple tenants over a number of years, with times of unoccupation between them. If you decide that making your flat fully furnished would be too difficult for you now, there is a possibility to list it as "part-furnished". That would mean a bit less attractive possibility than fully furnished, but at the same time less hassle and an easier life for you.

List all the equipment, set up a deposit

In case you have lived in the flat for some time, start with removing all your personal private things, such as photographs. The next thing to do is to prepare an inventory of all items in the flat. You should go through the inventory together with the tenant, walking through the flat and seeing everything provided by you together. That should include counting individual items such as the amount of spoons, forks, knives towels or linen. As part of good practice, there should also be your rental agent present when doing the inventory, and then when all sides agree on the list, they sign it. When the contract expires, it is time to go through the flat with the list again, noting down all facilities. Anything that has been damaged or lost will have to be replaced and paid for from the deposit which was agreed at the start of the contract.

Now with the winter Olympic games coming soon, the opportunity of renting out a fully furnished place seems like a gold mine for more and more people in Vancouver. But if you don't already own a suitable unit and would have to start from scratch, the whole idea might turn into a nightmare. The return on investment for rental properties should be planned over the long term and not just seen as a 'get-rich-quick' plan.