Filed under: Uncategorized
Hello all,
I just wanted to let our followers know that with the development of our new website our blog has become part of the website. Please follow us at our new location: http://www.keithandkinsey.com/category/blog/
We’ve been slacking on blog posting lately. That is because we’ve been swamped! I think the last 6 weeks have been our busiest ever, and in addition to that we started our own real estate brokerage. I (Keith) made the transition to Great Rock Realty 5 or 6 weeks ago in to get things started. Kinsey just transferred her license over on Friday.
Great Rock Realty is now officially open and ready for business! In fact, we’ve already got two properties under contract as Great Rock Realty. Our website isn’t quite done yet, but it should be ready in a couple more weeks.
Our clients probably won’t notice much of a change with this move since we’ve always been fairly independent, even while working other brokers. Our goal with the new business is to provide the same great service, help more buyers and sellers, donate more money to charity, and eventually bring on other quality agents to do the same.
You will continue to see our personal branding as Keith and Kinsey Real Estate. This has become our recognizable personal brand. Great Rock Realty will just replace the roll that Keller Williams had played for us in the past. So, don’t be surprised to see both logos on signs around town.
We will continue our charity program with 10% of our commissions going to the charity of our clients choice. As we add agents and grow our new business, we will also donate 10% of Great Rock Realty profits to charity.
It’s been a lot of work to get things set up, and we are excited and looking forward to this new challenge and adventure. Thanks to all of our clients, family, and friends who have been very supportive in this move.
On a side note… 6 weeks until the baby is expected! 🙂 We’ve got lots to get done!
Filed under: Real Estate, Uncategorized | Tags: real estate market, Realtor, sellers market, Verona
February really started to get active in the Madison area housing markets. It’s a little premature to say, but there are 6 things that lead me to believe the market is shifting.
- Real estate agents, home inspectors, and mortgage lenders all seem to be swamped.
- 4 out of the last 5 deals we’ve worked on have been multiple offer situations.
- Our 2 most recent listings had accepted offers within a week of going on the market.
- Sellers are becoming a little more firm with negotiations because of the amount of showing activity they’ve been getting.
- It’s getting hard to find good inventory in some areas.
- Many properties our buyers request showings on have accepted offers already.
What do you think? Is it becoming a seller’s market? Or is this just spring activity coming early or fear that interest rates will rise?
It’s that time of year again… Tax time. I know, I cringe when I think about it too. Real estate is one of the most tax favored assets in the United States. If you’re a home owner or rental property owner, don’t forget to take advantage of all the tax deductions available to you. The following are real estate related items that are usually deductible.
Home Owner Tax Deductions
- Mortgage Interest: Interest paid on your mortgage is deductible, if the balance is under $1million ($500,000 if married filing separately).
- Points or Loan Origination Fees: If you bought a home in 2011 check your closing statement for points or origination fees, these may be deductible.
- Property Taxes: Real estate taxes excluding itemized charges such as trash collection or improvement assessments are deductible.
- Mortgage Insurance (PMI): If you pay mortgage insurance premiums and your adjusted gross income is less than $109,000 ($54,500 if married filing separately) these premiums are deductible.
- Capital Gains Exclusion: If you sold a property that was your primary residence for 2 out of the last 5 years, your profits are excluded from capital gains taxes (up to $500,000 married filing joint).
Rental Property Deductions
In addition to the items above, income properties offer even more deductions.
- Rental Expenses: There’s a whole slew of things listed on IRS Schedule E that are tax deductable for rental properties. These items are pretty self explanatory and include; advertising, cleaning and maintenance, insurance, legal and other professional fees, management fees, supplies, and utilities.
- Depreciation: Our tax system allows you to claim depreciation on improved portions of your income properties (the building, not the land). This is generally done on a 27.5 year schedule. Note; you do have to reclaim that depreciation when you sell, unless you do a 1031 exchange.
- Auto and Travel: Most small rental property owners use their personal vehicles for business purposes and can claim the standard mileage rate as a deduction for their rental related travels.
- Home Office Expense: If your rental business office is in your home, you may qualify for the home office deduction. This would allow you to deduct a portion of the expenses related to your home (insurance, repairs, utilities).
I hope this information helps you recognize a few ways you could save on your taxes. However, you should always check with your tax adviser before claiming any of these items. I am not a tax professional, and I am not intending to give tax advice.
Filed under: Income Property | Tags: Real estate investing, Realtor, rental properties, Verona, WI
Real Estate Investors are generally optimistic, hardworking, entrepreneurial people. They have the belief that they can do anything, can overcome any challenge, and never give up. These are all great traits to have. Although, there’s one problem with this mindset… Sometimes you don’t realize when a deal has gone bad.
I recommend reviewing the profit and loss of your rental properties monthly or at least once per quarter. If you are in the flip business I hope you’re paying weekly (maybe even daily) attention to your project budget. Last year, after looking at our big picture, we sold our two worst performing rentals. It was a very freeing feeling to ditch the two worst performing properties as they were creating the most stress. It also helped us turn our focus back in the right direction.
The first rental was my former personal residence. It was never intended to be a rental. It just happened to turn into a rental after I met my wife. This property was slightly better than breaking even (the rent covered the mortgage, insurance, and taxes). Although, there wasn’t much left over after paying PITI (principle, interest, taxes, and insurance). This isn’t how I like properties to perform, though. This property was fairly high maintenance. In the long run after factoring in maintenance and rental turn over vacancy, it would have been negative cash flow. So, we sold it. You can read more about this property in our Better Than Renting post.
The second property was our Indianapolis rental house. By the numbers (rent vs payment) it should have been the best performing property we had. However, this one was a nightmare. You can read more about this one in our posts Lesson Learned – No More Long Distance Landlording and Why I Fired My Property Manager. Too make a long story short though… My property manager was horrible, my tenants were horrible. I couldn’t keep a good handle on the place from a distance, it was a daily stress, and I held on too long trying to make it work. So, that one went bye bye too.
My point is if you have properties that aren’t working out the way you would expect, analyze the situation, and seriously think about if they are worth keeping. Look at it from a sunk cost analysis perspective. Ask yourself, if I didn’t already own this property, would I buy it again for what it’s currently worth. If the answer is no, sell it. Consider that getting rid of the non-performers can free up resources, time, energy, and focus for other things that are more important. Sometimes you have to ditch that “I can do it” mentality, swallow your pride, and realize it didn’t work out the way you thought it would. You’ll feel the relief by doing so! You will also regain your focus.
Filed under: Business, Life | Tags: Goals, Madison, New Years, Realtor, Resolutions, Verona
Well, here we are at the end of another year! It’s a great time to look forward to the coming year and think about what you would like to accomplish in 2013. It’s also a great time to look back and see how you did on your 2012 goals.
If you aren’t a goal setter, I encourage you to try it. Goals are a great way to improve your life. The difficulty is most people don’t set goals in a way that force them to stick to them. Most people just have some rough ideas in their head of things they want to accomplish, and most of the time they never follow through. There are 5 key things that will help you follow through with your goals:
- Write it down. Without your goals in writing, they will simply slip away as ideas and dreams.
- Have someone hold you accountable. If you have a friend or family member that knows your goals ask them to check in on you occasionally to see how you are doing.
- Make it measurable. Without a way to measure your goal you don’t know when you achieved it. This is the difference between saying I want to lose weight, and I want to lose 10 lbs. The 10 lbs gives you something to go by.
- Give it a timeline. Without a date to achieve something by, you’re not pushed to make it happen. To add to item 3, you might say, I’m going to lose 10 lbs by the end of March.
- It must be realistic. Make goals that push you a bit, but make them realistic. For example if you are starting up a new side business, maybe making a $30,000 profit in your first year is achievable, but making a million is not. Setting an impossible goal will just end in discouragement.
If you read our year end summary you already know that we had many great accomplishments in 2012 and we met and exceeded most of our 2012 goals. There are only two goals that I failed at. One was running a half marathon, though I got close with an 11 mile run. The other was the number of volunteer or charity events we wanted to participate in. I could make lots of excuses like a foot pain that’s been driving me nuts, or just the simple lack of time due to moving, building a house, and a busy business. …but in reality, it’s more just lack of planning and focus in those two areas, and that I can only blame on myself.
I’ll be honest, I’m having a bit of a hard time coming up with goals for 2013. The main reason for this is because we have a baby on the way. I know this will drastically change our lives and time commitments. My primary goal is to be a great Dad and husband, but that’s a little hard to measure or put a timeline on (if anyone has ideas on that let me know). So, I’m setting some goals in other areas of my life that I think are realistic and achievable, yet challenging with a new baby to come. Here’s a few:
- Get my real estate broker’s license – This is a step above a licensed agent. Every agent must work under a broker’s supervision. Ultimately this could lead to starting our own brokerage, we’ll see.
- Match our sales volume of 2012 – We had a phenomenal 2012 with sales up 149% over 2011 (even though our goal was 25%). So, I’ll be happy just to match last year!
- Stay (get) fit – I’ll admit I was pretty up and down with my workouts in 2012. There were some weeks where I just never made it to the gym and others that I kicked some butt. So, I’m going to allow myself some up and down but shoot for an overall average. So, we’ll say run 200 miles for the year, and workout 100 times a year. That’s an average of 2 workouts a week and 3.8 miles per week.
- Charity events –Whether it’s Salvation Army bell ringing, a day working on a Habitat for Humanity house, or a charity run, our goal is to participate in 8 events that benefit charities. This one we failed at last year (I think we did 5 or 6), but we’ll try to make it happen this year.
Post in the comments a few of your goals, and we’ll try to help hold you accountable! Have a great new year! Bring on 2013!
Filed under: Business, Life, Money | Tags: Charity, Giving, Madison, Realtor, Verona, Wisconsin
I love the Holidays, It’s a time of year when people seem to be happy to give and help others. In fact, we’ve rung bells for the Salvation Army at Millers & Sons Supermarket twice in the recent weeks, and I’ve been amazed at the generosity of people in our small town of Verona! Although, this spirit of giving, doesn’t always seem to continue year round.
At Keith & Kinsey Real Estate we’ve made the commitment to donate 10% of our commissions to the charity of our clients choice. We started the charity program in 2010 after the earthquake in Haiti, and it’s been a hit with our clients. It always makes us and our clients feel good to know that people get help as a result of every closing. Even so, sometimes it’s easy to loose site of the real spirit of things. My wife recently emailed me a picture of another real estate agent’s business card which said, I donate 10% to XYZ. For a split second my reaction was one of spite, thinking she copied us and used it to market herself. However, that initial reaction quickly turned to delight realizing, she copied us and more charities are getting more money! 🙂
I started thinking… What if more businesses did this? What if more individuals did this? Would it every be possible for charities to replace government programs? Could it lead to the cure of certain diseases? Could it help the next generation?
My point here is not to boast or market ourselves based on our charity program. Instead, I’d like to encourage others to make the same commitment in the coming years. I challenge you to commit a portion of your income to charity. Lets see if we can change the world together.
If you need help deciding what is a worth cause to give to, Charity Navigator is a great place to research charities. They have a rating system that is based on the efficiency and performance of each charity, and they show financial information for most charities.
Acts 20:35 It is more blessed to give than to receive.
Luke 6:38 Give, and it will be given to you.
Luke 6:38 For if you give, you will get! Your gift will return to you in full and overflowing measure.
Proverbs 28:27 He who gives to the poor will never want
Related posts:
Making a Difference Through Charity
Filed under: Life
I can’t believe we are a week away from Christmas and approaching the end of 2012 already. Last year I posted a summary of our year for the first time rather than sending out a Christmas letter like many people do. So, we’ll try to keep it an annual tradition. Happy Holidays!
2012 was a great, rather busy, yet absolutely amazing. It seems like so much happened I had to look back at my calendar and past blogs to refresh my memory. It does seem like there was a little too much work and not enough play, but I can’t complain, the hard work has paid off with some relaxation near the end of the year.
In January, we started the year with the sale of my old house in Fitchburg, which had been rented for the previous 2 years. We had been living in Kinsey’s condo, but looking for a house that could be a longer term place to settle.
In February, we made the decision to build a house and we purchased a lot in Verona.
In March our real estate business was exploding. We were working with a bunch of buyers, had several new listings, and we were just trying to keep up with things while planning for our home build and move at the same time.
By April, the builder had broken ground on our house, and construction was in full swing. It was exciting to watching the progress as things went.
- Ground Breaking
May ended up being a record month of real estate closings for us due to all the spring activity in March and April. We were swamped, but thankfully somehow everything fell into place. It was probably good to be this busy though, because it got my mind off some struggles with our rental property in Indy.
June brought a little bit of time for a breather to have some fun time with friends at a car show in Wisconsin Dells, but otherwise it was mostly spent packing, purging, and turning over a rental unit.
In July, our home was complete, and we took a few days off to move in and get settled. We were so excited to be in a new home with a little more space to spread out and grow into. I think I was most excited for the extra garage space, Kinsey was most excited about a larger kitchen and office space, and of course the dogs loved their new yard and freedom to roam.
- Finished House
We also ended up selling the rental property in Indianapolis at the end of July. This was a big financial hit but we managed to make it work. We learned some valuable lessons, and got rid of a big headache that was causing a lot of stress.
Most of August was spent finishing closets, working on landscaping, clearing out our storage unit, and trying to get grass to grow during a drought. Although, the end of august was the most exciting part of our year, we found out that Kinsey is pregnant! It has been very exciting watching the changes develop and planning for the new addition to our family.
In September we got Kinsey’s condo sold, and we almost beat our record month of May in real estate sales (records are made to be broken right). Somehow we managed to get through all of this while Kinsey was fighting the first trimester lack of energy.
- 12 weeks Ultrasound
In October after our 12 week ultrasound, and what seemed like forever, we announced to everyone that we were having a baby. This was a huge relief no longer hide it, and know that they baby was looking healthy so far. We also hosted a client appreciation Halloween party which was a lot of fun.
- Kinsey pumpkin carving (with pliers?)
In Novemeber hmm… I’ve got no clue, It must have been an amazingly rare calm month.
Finally in December we took a vacation to Rivera Maya, Mexico. This was our last real get away before starting a family. We mostly relaxed and enjoyed the beaches and sunshine. However, we did take a day trip to see the Mayan ruins at Chichen Itza. This was quiet amazing if you ask me. How they built that stuff 1000 years ago, is beyond me! We also took a boat ride to Akumal Bay to go snorkeling, and we saw several giant sea turtles.
- Sunrise near Rivera Maya Mexico
- Kinsey sporting the baby bump at the cenotes in Valladolid Mexico
All in all 2012 was great. It seemed like there was a lot going on with all the selling, buying, building, moving, baby, etc. However, for the first time in a long time, I feel settled, relaxed and completely content. I know 2013 will entirely change our life and what’s important. I expect next year’s summary will be more about kids and family rather than business, property, and vacation. I’m ready, and I look forward to the changes!
Happy Holidays!
Filed under: Business
Great service is very important. We have had the opportunity to work with lots of service providers around Madison, Verona, and all of South Central Wisconsin. We’ve built relationships and stayed in touch with quite a few of the great service people who have provided our clients (and us personally) great service. In fact, here’s a quote from an email I recently received thanking us for recommending one of our preferred mortgage lenders:
” He is wonderful to work with.He was so prompt in getting back to us–sometimes he had answers within minutes–truly.”
We will continue to build this list of great people as our business grows. So, if you need help with anything from finding an auto mechanic to a snow removal contractor, check out who we recommend, you won’t be disappointed with their service.
Thank you to everyone who we have worked with over the years!
Keith and Kinsey's Real Estate Update 