BiggerPockets Daily

It’s common to have questions about your property taxes, but one is more important than all the others combined: Why did my property taxes increase? There’s no individual answer to this question, as it can depend on a variety of factors. Here are 19 frequently asked questions (FAQs) to help you understand property taxes as a whole, and with that, determine why your taxes have increased. Learn more about your ad choices. Visit megaphone.fm/adchoices

Working for a company is the most common way people in the United States earn their living. As an employee, your earnings are reported on IRS Form W-2, and federal, state, Medicare, and Social Security taxes are withheld every time you are paid. Although there are benefits to being an employee—like simplified tax preparation—you may pay more in taxes than self-employed individuals or business owners because you can’t claim certain deductions. That doesn’t mean you don’t have options, however. You may be able to supplement your income, grow your net worth, and reduce your tax obligation by investing in real estate. Learn more about your ad choices. Visit megaphone.fm/adchoices

Setting up an emergency fund is one of the fundamental pillars of financial well-being. And yes, saving can be hard, especially in 2024. According to a recent poll by Bankrate, many of us are saving less, with the majority (63%) saying that recent high inflation means they’re able to save less than before. As of 2024, only 44% of Americans could pay for an emergency expense of $1,000 or more from their savings. The majority would rely on credit cards, payment plans, or cutting spending elsewhere. However, not everyone’s situation is quite as dire. About a third of us (30%) report having more savings this year than last year. And millennials are not doing so badly, with 35% of this generational group saying that they have more savings than they did a year ago. So, some of us are on the right track. Learn more about your ad choices. Visit megaphone.fm/adchoices

Denver’s housing market is on fire—at least according to a U.S. News analysis of December 2023 data from the U.S. News Housing Market Index, which includes multiple indicators of housing supply and demand, along with financial health measures. A healthy job market, low rental vacancy rates, and a low housing supply that keeps rents from falling may make Denver an attractive market to investors as well, U.S. News reports, despite its high home prices relative to the national median. Several more of the top 20 housing markets ranked by U.S. News were also located in Colorado, and three were located in North Carolina. Multiple markets in Texas and Florida also made the list, consistent with recent migration trends into these states. Learn more about your ad choices. Visit megaphone.fm/adchoices

When buying rental real estate, where you buy now matters just as much as getting a great deal. Matt Myre, managing editor of the BiggerPockets Blog , shares today’s Headlines about states that are becoming unapproachable for investors due to their politics and what you should look for when trying to avoid bad policies. There are really two main points that contribute to the issue with these states.high taxes and stringent regulations. Meanwhile, other markets are looking to improve zoning, making a big difference in how cities have developed, and how they are currently priced.When choosing a market to invest in, these are major considerations for new and experienced investors. Learn more about your ad choices. Visit megaphone.fm/adchoices

Berkshire Hathaway CEO Warren Buffett’s much-anticipated annual letter to investors is out. As is customary for the maverick investor, it’s peppered with headline-grabbing statements about Buffett’s disdain for investment advisors and unearned wealth. But setting the flashy statements aside, Buffett’s latest letter contains some very valuable information. It’s worth paying attention to, even if you are at the very beginning of your investment journey because it concerns the future of one of the biggest, traditionally most profitable segments of the investment market. Learn more about your ad choices. Visit megaphone.fm/adchoices

Purchasing a home is an extraordinarily expensive process, especially once you add up the down payment, closing costs, and potential relocation expenses. And once you’ve acquired the home, you still need to consider the ongoing taxes, mortgage payments, and associated costs like HOA fees, insurance, and home maintenance costs. Many people understandably wonder what costs and expenses could be tax-deductible and what additional taxes they may need to pay as part of the homebuying and ownership process. Learn more about your ad choices. Visit megaphone.fm/adchoices

I love telling people that I have been a Brandon Turner copycat when it comes to my real estate investing career. While our backgrounds in finding real estate are a bit different, our stories are quite similar because I followed what Brandon coined the “stack method.” The stack method is self-explanatory: First, you buy one property, then two, four, six, and eight more, but you start small and scale up gradually over time. In the hopes that you can avoid (or at least laugh at) some of the mistakes I made, here is how I utilized the stack method and my biggest failures along the way. Learn more about your ad choices. Visit megaphone.fm/adchoices

There’s a lot that goes into house flipping. You need to choose the right market, negotiate a competitive price, work with the best contractors, and get an agent to help you sell for a profit. On top of that, a defined accounting strategy for house flipping is critical to your long-term success. Here’s how to create one. On top of that, a defined accounting strategy for house flipping is critical to your long-term success. Here’s how to create one. Learn more about your ad choices. Visit megaphone.fm/adchoices

Subleasing was frowned upon for a long time, but in today’s era of Airbnb popularity, it’s making a solid comeback and can be a great real estate investment strategy. Airbnb arbitrage allows you to rent properties to tenants that you rent from a landlord. You act as the middleman between the owner and tenants and take a piece of the pie without the need to own physical real estate yourself. Learn more about your ad choices. Visit megaphone.fm/adchoices

A home inspection doesn’t take long, and understanding the process means it won’t take longer than necessary. But why is a professional home inspection so vital in real estate investment? Here, we’ll explain the home inspection process and answers the essential question: How long should a home inspection take? As the adage goes, you cannot judge a book by its cover. Successful real estate investors know why it’s wise to avoid judging a property by its paint job. Below the seemingly pristine surface is an incredible array of risks and potential issues. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’re looking to elevate your real estate investing knowledge, expand your contact list, and gain powerful insight into 2024 real estate trends, then you need to be at the places that can make it happen. Real estate conferences are the top resource for meeting like-minded people who share your goals. You’ll walk away feeling empowered to make your dreams a reality. While we know there are tons of amazing real estate investing conferences going on in 2024, these are the ones we think you’ll want to attend. Learn more about your ad choices. Visit megaphone.fm/adchoices

Real estate investments are available in many shapes and sizes, including industrial real estate investing. This is not the most common form of real estate investing, but it has a lot of potential when done right, and can be a great opportunity to diversify your investments. Understanding Industrial Real Estate Investing in industrial real estate involves purchasing, managing, and eventually selling properties. Like residential real estate investing, the goal is a great ROI, but you’ll cater to industrial tenants versus people looking for a place to live.Many renters looking for industrial space need distribution space, but not all do. The key is understanding the demographic where you plan to invest and their pain points. Learn more about your ad choices. Visit megaphone.fm/adchoices

HBO’s seminal series The Wire put Baltimore’s plight on the map, with crime and urban blight running amok. Now, 16 years after that show ended, it seems little has changed from the city it depicted. The situation has become so desperate that the city is selling off dilapidated buildings for f $1. However, before you dig out the loose change in your pocket to snag a townhouse, remember there are caveats. There were almost 15,000 abandoned homes in Baltimore as of 2022, blighting the landscape, and Mayor Brandon Scott—as first reported in Bloomberg—is offering up 200 of them virtually free to encourage investors to help transform the beleaguered city. It echoes an initiative that helped change Baltimore in the 1970s. Learn more about your ad choices. Visit megaphone.fm/adchoices

Why rent when you can buy? Luxury retailers are booming and using their extra cash to buy up highly coveted retail spaces across the U.S. and Europe. Prada bought the building where its Fifth Avenue store is located for $425 million, while LVMH is said to be in talks to purchase the building where Bergdorf Goodman, a men’s store, is located. Meanwhile, Gucci and Balenciaga’s parent company, Kering, bought a property on Fifth Avenue for $963 million, expanding its real estate portfolio, which already includes landmark properties in Paris and Tokyo. Learn more about your ad choices. Visit megaphone.fm/adchoices

Home foreclosures are on the rise. Is this the start of a housing collapse and the buying bonanza for real estate investors touted for the last two years, or a mere blip? Foreclosure rates have steadily risen since interest rates increased in conjunction with the home affordability crisis. According to Redfin, only 15.5% of U.S. home listings were accessible financially to U.S. households in 2023. This has led to an 8% increase in foreclosure filings, according to a new report by data company ATTOM. Learn more about your ad choices. Visit megaphone.fm/adchoices

On any given day, depending on who you ask, we are either years away from the faintest possibility of a recession or about to enter one. Economists have made several dizzying U-turns in their predictions over the past couple of years, with the latest narrative claiming a recession is highly unlikely in 2024 and subsequent years. That’s a stark change in tone from only a year ago. A poll of 70 economists by The Wall Street Journal in January 2023 put the odds of a recession at 61%. Yet at least one independent economist, James F. Smith, dissented and put the odds of a recession at a minuscule 1%. We already know who was right in 2023, but what was the reasoning behind the confident 1% prognosis? Learn more about your ad choices. Visit megaphone.fm/adchoices

The location (city) where you invest is your most important investment decision, not the properties themselves. Why? The goal of real estate investing is financial independence. But financial independence isn’t just replacing your current income. It’s about having the necessary funds to maintain your present lifestyle throughout your lifetime. Learn more about your ad choices. Visit megaphone.fm/adchoices

After multiple lawsuits, the National Association of Realtors (NAR) has agreed to a settlement with home sellers amounting to a payment of $418 million and a few monumental rule changes for multiple listing services (MLS) and how real estate agents conduct business. The changes will go into effect in July. This has led to an array of responses within the real estate industry, from panic and complete reworking of real estate practices to others claiming it’s no big deal and business as usual. Learn more about your ad choices. Visit megaphone.fm/adchoices

After multiple lawsuits, the National Association of Realtors (NAR) has agreed to a settlement with home sellers amounting to a payment of $418 million and a few monumental rule changes for multiple listing services (MLS) and how real estate agents conduct business. The changes will go into effect in July. This has led to an array of responses within the real estate industry, from panic and complete reworking of real estate practices to others claiming it’s no big deal and business as usual. Learn more about your ad choices. Visit megaphone.fm/adchoices

According to ATTOM Data’s latest Q1 2024 Single-Family Rental Market report, average gross rental yields on three-bedroom single-family homes are projected to rise by 7.55% this year. As ever, though, the devil is in the regional details. While some markets are offering landlords great rental margins—over 10% in some areas—others offer lackluster and/or declining returns. Let’s dive a little deeper into which markets the report identifies as hot—and which ones should give investors pause, based on their projected 2024 performance. Learn more about your ad choices. Visit megaphone.fm/adchoices

This week’s headlines cover the recent Federal Reserve meeting that ended with Fed Chairman Jerome Powell announcing that rates would be higher for longer. Bond yields rose in response, sending mortgage rates back into the 7-8% rage. Meanwhile, Matt assesses whether the pandemic ever recovered from the pandemic by looking at prices, rates, and inventory. https://www.biggerpockets.com/blog/why-the-housing-market-still-has-not-recovered-from-the-pandemic https://www.bloomberg.com/news/articles/2024-04-16/powell-signals-high-rates-for-longer-due-to-persistent-inflation?srnd=economics-v2 Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’ve ever dipped your toes into the world of personal finance, chances are you’ve heard of Dave Ramsey. He’s a household name in the realm of financial advice, known for his no-nonsense approach to getting out of debt and building wealth. One of the cornerstones of Ramsey’s philosophy is cutting expenses to the bone, often focusing on small, everyday luxuries like coffee and dining out. While slashing these expenses can certainly free up some cash in the short term, I’m here to tell you that it’s not the path to true wealth. Learn more about your ad choices. Visit megaphone.fm/adchoices

Real estate and franchising are two popular investment options offering significant financial returns. Both allow you to earn passive income, enjoy tax benefits, and benefit from regular cash flow. However, a real estate franchise and real estate investing each have pros and cons to consider. If you are considering investing in the housing market, which business model is best for you? Long-term wealth through property appreciation and regular rental income that real estate offers? Or the opportunity to own a tried-and-tested business model with instant brand recognition? We’ll discuss whether investing in real estate or starting a franchise is best for your financial goals. Learn more about your ad choices. Visit megaphone.fm/adchoices

Real estate investors accounted for 26.1% of low-priced home purchases in the U.S. during the fourth quarter of 2023, a record-high share, according to a new report from Redfin. Investors bought only 13.6% of mid-priced homes and 15.9% of high-priced homes sold during the same period. Redfin defined low-priced homes as falling into the bottom third of local sales prices. The median price investors paid for homes in the fourth quarter was $453,271, above the national median, according to Redfin data. That may be due to an increase in investor home purchases in several California cities, where many expensive homes fall into the low-priced tier relative to local prices. Learn more about your ad choices. Visit megaphone.fm/adchoices

2024 will be a crucial year for the U.S. economy, particularly around what the Fed will do with interest rates. But for the Fed to lower rates, they have to see signs of slowing growth. What reliable signs are there that the economy is moving in either the recessionary or the growth direction? There has to be a better way to tell than using the Super Bowl Indicator (it doesn’t work, folks). Learn more about your ad choices. Visit megaphone.fm/adchoices

Disability benefits provide important lifelines to those who are unable to work due to various medical conditions. Although your ability to work while on disability will be limited, you may still be able to earn income from certain passive investments. Whether flipping houses while on disability will affect your benefits depends on your degree of involvement in your properties. Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing in forest land can be a great way to diversify your portfolio. Because tree growth doesn’t rely on economic factors, consistent biological growth can create more stable returns than other financial investments. When you invest in forestry, you invest in a lower-risk asset that provides environmental benefits. This is often opposite what’s true for residential and commercial land, which is more prone to market disruptions and other market risks. Learn more about your ad choices. Visit megaphone.fm/adchoices

Yes, many pundits are still warning about a recession in 2024. Here’s one example. Richard Duncan did a Macro Watch fourth-quarter update. He pointed out that between 1952 and 2009, all nine times total credit (adjusted for inflation) grew by less than 2%, and the economy went into a recession. Learn more about your ad choices. Visit megaphone.fm/adchoices

Last week, Realtor.com published another version of its ‘‘magic number’’ forecast. The number in question is the mortgage rate number low enough to ‘‘unfreeze’’ the real estate market. We know that the market has been in something of a gridlock for over a year now: Home prices are very high and keep rising. Mortgage rates are high and aren’t showing much of a downward trend. There aren’t enough homes to go around, especially those that are remotely affordable. Something has to give. Learn more about your ad choices. Visit megaphone.fm/adchoices

I moved around a lot when I was younger. And I’m not talking from state to state or city to city—I moved a few doors down from wherever I was living. I never knew why, and frankly, I never asked my parents. All I knew was that I was with my family, so I went wherever they went. It wasn’t until years later that I realized my parents were fixers and flippers. Learn more about your ad choices. Visit megaphone.fm/adchoices

This week’s headlines cover the erosion of landlord rights as squatters racked up a series of victories in recent months, culminating in the arrest of a landlord in New York City who attempted to evict a person living in her vacant home without a right to. We’ll also cover why recession predictions are always wrong, and if they even matter to real estate investors in particular. Learn more about your ad choices. Visit megaphone.fm/adchoices

In simple terms, a mobile home—also known as a manufactured home—is a dwelling built in a factory. While these homes are used as primary residences by many, they can also make for a good investment. So, Are Mobile Homes a Good Investment for Rental Property? Yes, mobile homes can be a good investment for rental property when approached correctly. While there’s no defined strategy for success, key considerations include understanding the unique market demand for mobile homes, analyzing location benefits, assessing the condition and age of the mobile home, and understanding the legal and zoning regulations that apply. Learn more about your ad choices. Visit megaphone.fm/adchoices

Real estate investors seem to be taking it from all sides these days. Not only are interest rates, property taxes, and construction costs up significantly from a few years ago, but more and more legislation is being passed to make investing in and managing real estate more difficult, arduous, and expensive. And, of course, it should come as no surprise that most of this legislation will not only hurt real estate investors but will make the problems that need solving all the worse. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’re looking to break into real estate investing but need to figure out what it takes, consider house hacking. You might wonder, though: Is house hacking legal? Is House Hacking Legal? House hacking is legal when you do it right. For example, renting a spare room in a single-family home or a unit in a multifamily home is legal. However, renting a garage space not meant for living isn’t considered legal. Follow your city’s zoning laws, and house hacking can be legal. Learn more about your ad choices. Visit megaphone.fm/adchoices

When it comes to maximizing profit on your investment property, you’ve likely considered quite a few rental strategies. If long-term doesn’t pencil out, you could always consider revenue from medium-term or short-term tenants if your market supports it. But there is another successful, profitable rental strategy you should add to your arsenal: renting your property “by the room.” Also referred to as a boarding or rooming house strategy, renting by room is not a new concept. But these kinds of arrangements are not as common as they were at the turn of the 20th century. Renting by room fills an important market gap, though, creating opportunities for renters who may not be able to afford an entire apartment on their own in a time of extreme housing shortages. In aggregate, you also stand to make a ton more money than if you just housed a single tenant. Learn more about your ad choices. Visit megaphone.fm/adchoices

In the ever-shifting world of real estate, you find yourself at a crossroads: Do you buy now or wait for more favorable market conditions? The housing market witnessed unprecedented shifts during the pandemic, with home prices soaring and mortgage rates experiencing volatility in 2022 and 2023 due to the Federal Reserve’s attempts to curb inflation through rate hikes. The combination of these two situations leaves aspiring investors grappling with the decision of whether to lock in stable leverage today or wait for “the next cycle.” Learn more about your ad choices. Visit megaphone.fm/adchoices

If you’re a real estate investor in 2024 or planning to be, your list of investment property criteria probably has the qualifier ‘‘affordable’’ right at the top. And you’re certainly not alone. The latest Redfin investor home purchases report shows that investors snapped up 26.1% of low-priced homes sold in the U.S. during the fourth quarter of 2023. That’s the largest share of such purchases ever recorded, up from 24% in the fourth quarter of 2022. Learn more about your ad choices. Visit megaphone.fm/adchoices

There are plenty of different financing options to consider when you’re ready to invest in real estate. You can leverage your own funds, for example, or receive loans from established organizations or private lenders. There are even options to partner up with someone with the funds to help you carry out your vision. Learn more about your ad choices. Visit megaphone.fm/adchoices

In recent years, a sizeable amount of criticism has been leveled against what many see as endless sprawl and “lifeless” suburbia that surrounds many American cities. In fact, it happens so often that I’m actually a bit surprised that while the difficulty and opportunity of rural investing comes up fairly often, there isn’t a large amount of discussion regarding the merits and challenges of urban versus suburban investing (although there is certainly some in the BiggerPockets forums). Learn more about your ad choices. Visit megaphone.fm/adchoices

The year-round sunshine, the convenience of direct flights, the incredible food and culture—there’s a lot to love about Puerto Rico. As an American citizen, all the same rules apply for buying investment property in this balmy, seaside U.S. territory as they do on the mainland. The Market Details According to short-term rental tracking company AirDNA, it should come as no surprise that Puerto Rico is a booming and profitable short-term rental market. The capital city of San Juan gets AirDNA’s top score of 100, with average occupancy rates of over 60%, average nightly rates of over $200, and average annual revenue of over $45,000 (up almost 10% YOY). Learn more about your ad choices. Visit megaphone.fm/adchoices

The year 2024 can feel like a confusing space to inhabit for rookie investors. You have the cash, you have the plan, and you’ve done your research. There remains one big issue: Interest rates that are currently much higher than the historically low rates we had pre-2022. If you’ve done your research into investment financing, you know that investors pay even higher mortgage interest than regular homebuyers (typically between 0.75% and 1.5% higher). Right now, that is a daunting prospect, with regular mortgage rates still hovering just under 7%. Learn more about your ad choices. Visit megaphone.fm/adchoices

There are plenty of hedge funds investing in real estate in 2024. As an investor, you can learn a lot about the real estate market—including where to invest—by closely following these hedge funds and their performance. Now, let’s examine the hedge funds investing in real estate this year (and likely beyond). Learn more about your ad choices. Visit megaphone.fm/adchoices

Imagine one day living in a luxurious, spacious house with everything you could possibly want in life. Now contrast that with red and blue lights filling your home, with officers yelling and sirens blaring. Then, envision a SWAT team ripping you away from your parents. Although it seems far-fetched, this actually happened. By all accounts, John was living a charmed “trust fund” life, but that was quickly all taken away from him. At age 10, that left John Mansor a ward of the state—orphaned and alone, with only his brother, David, alongside him. He’s spent the last 15-plus years climbing back to the top. Learn more about your ad choices. Visit megaphone.fm/adchoices

As insurance premiums climb, property owners need to grasp how economic conditions and natural disasters affect the insurance market. These insights provide practical guidance for real estate investors navigating a dynamic, unpredictable market. Learn more about your ad choices. Visit megaphone.fm/adchoices

Love it or hate it, the financial independence, retire early (FIRE) movement has changed the conversation around financial planning. And any change that provokes new discussion and a fresh perspective is a good change—even if you ultimately side with the traditionalists. Today, I’ll convince you that you don’t actually need or even want to retire early. You want the freedom, flexibility, and intentionally designed life that financial independence offers. The best part? You don’t even need to reach financial independence to achieve all that. Open your mind for a fresh way to look at FIRE. Learn more about your ad choices. Visit megaphone.fm/adchoices

After a winter slump, the real estate market is starting to look a little brighter in time for spring. More homes are entering the market, and buyers are starting to consider buying again after staying on the sidelines, according to the latest numbers from Redfin. For the four weeks ending March 3, new listings were up 13%, the biggest increase in three years. That uptick helped bring the total number of homes for sale up 1.7%, marking the first time in eight months that supply has increased. Meanwhile, asking prices had their smallest increase in two months, with around 5.5% of home sellers dropping their asking price. Learn more about your ad choices. Visit megaphone.fm/adchoices

Poor air quality has been in the headlines about U.S. climate change, especially on the West Coast and in Southern states. Increasingly devastating wildfires are becoming a sad fact of life in California, Texas, and Arizona, with many states added to the list of those impacted or at high risk of fire damage each year. But one specific wildfire-related factor is affecting the West more than in any other region in the country: smoke pollution. According to recent research from First Street Foundation, the West now has nearly double the maroon air days than it did 20 years ago. The maroon classification is the worst air quality grade there is, defined as ‘‘hazardous’’ to the general population by the EPA. Learn more about your ad choices. Visit megaphone.fm/adchoices

When people start investing in residential real estate, one of the biggest mistakes is neglecting the importance of solid property management. We’ve said it before: Your property management team is your first line of defense. They are the best tool for maximizing your property’s performance and value. Without them, even a good investment can turn sour. Learn more about your ad choices. Visit megaphone.fm/adchoices

The National Association of Realtors (NAR) announced Friday that it finally reached a settlement with the various homeowner groups that had been suing the trade group since 2019. The NAR will pay $418 million in damages and end some of its practices, including the language around commission sharing. https://www.biggerpockets.com/blog/national-association-of-realtors-to-pay-418-million-and-remove-commission-standards-as-part-of-settlement https://www.biggerpockets.com/blog/the-housing-shortage-will-get-worse-in-2024 Learn more about your ad choices. Visit megaphone.fm/adchoices