Property Tax Funding Blog

Dirty Truths About Property Taxes

Matt Longhofer — Sat, 25 Mar 2023 16:55:46 GMT

Property taxes can be a contentious topic because they are a significant source of revenue for local governments and can represent a significant expense for property owners. Here are some potential "dirty truths" about property taxes:

Property taxes can be regressive: Property taxes are typically based on the value of a property, so owners of more expensive properties pay more taxes. However, property values do not always reflect the owner's ability to pay. For example, a retired person living on a fixed income may own valuable property but have difficulty paying high property taxes.
Property taxes can be unpredictable: Property values can fluctuate significantly from year to year, which means that property taxes can also fluctuate. This unpredictability can make it difficult for property owners to budget expenses.
Property taxes can be used for purposes that don't benefit property owners: Property taxes are often used to fund a wide range of government services, including schools, roads, and public safety. While these services are essential, property owners may not always see a direct benefit from them, especially if they don't have children in the local school system.
Property taxes can be difficult to challenge: If a property owner believes their property has been overvalued for tax purposes, they may be able to challenge the assessment. However, this can be difficult and time-consuming, and there is no guarantee of success.

Property taxes can be complicated and controversial, with potential implications for property owners and local governments. Fortunately, some relief may be in sight as Texas considers property tax cuts this legislative session, which would pump billions of state dollars into public schools and give bigger tax breaks for homeowners and business owners.

If you need assistance with your property tax bill, Property Tax Funding offers affordable property tax loans for Texas property owners.

What is a Property Tax Loan?

J. Keller — Sat, 18 Mar 2023 15:40:03 GMT

Property tax loans are an option for homeowners struggling to pay their property taxes. In many cases, property taxes can be a significant expense, especially for those who are living on a fixed income or who have experienced financial difficulties. If you find yourself in this situation, a property tax loan might be the solution you need to keep your property from going into foreclosure.

A property tax loan is a loan that is specifically designed to help homeowners pay their property taxes. The loan is typically provided by a private lender and is secured by a lien on the property.

One of the benefits of a property tax loan is that it can help homeowners avoid the penalties and interest associated with unpaid property taxes. When property taxes go unpaid, the tax assessor will impose penalties and interest charges that can quickly add up over time. Homeowners can pay off their property taxes and avoid these additional charges by taking out a property tax loan.

Another benefit of a property tax loan is that it can help homeowners avoid foreclosure. If property taxes go unpaid, the tax assessor places a lien on the property, which can eventually lead to foreclosure. By taking out a property tax loan, homeowners can pay off their property taxes and avoid the risk of losing their property.

Property tax loans are typically easy to qualify for, even if you have bad credit. This means that even if you have a low credit score or a history of financial difficulties, you may still be able to qualify for a property tax loan.

If you are considering a property tax loan, it is important to understand the costs associated with the loan. Property tax loans typically have higher interest rates than mortgage loans, and additional fees may be associated with the loan. Before you take out a property tax loan, make sure you understand the total cost of the loan, including any fees and interest charges.

Overall, property tax loans can be a valuable tool for homeowners struggling to pay their property taxes. By taking out a property tax loan, homeowners can avoid penalties and interest charges, avoid foreclosure, and keep their property.

How Fast Can I Get a Property Tax Loan?

Matt Longhofer — Tue, 24 Aug 2021 20:13:29 GMT

Past due property taxes are a serious issue. If left unpaid, your property tax bill can skyrocket by 48% in the first year alone. Additionally, suppose your taxes remain delinquent past July. If that happens, you may be sued by the tax assessor's attorney resulting in additional legal fees tacked on to your bill, and ultimately you may lose your property in a tax foreclosure sale. With all these reasons to avoid past due property taxes, it's a wonder that thousands of Texas property owners are still past due on their property tax bills.

Property Tax Funding helps Texas property owners pay their property taxes and avoid the penalties, interest, attorney fees, and worry that comes with past-due taxes. Since 2008, we've been solving property tax problems, and in that time, we've developed a reputation for paying property taxes quickly with our fast and easy process.

What is the Process?

Loan Application - You complete a short application online or over the phone.
Loan Review - We conduct a title search to confirm ownership, verify the tax amount due, and prepare the final documents.
Closing - We will schedule a convenient time for closing. We can even send our closing agent to you to sign the final documents.
We Pay Your Taxes - Property Tax Funding will pay your property taxes and send you a paid receipt from your taxing authority.

How Quick Can you Get a Property Tax Loan?

Unlike mortgage loans that can take months to close, you can complete our loan process the same day. With thousands of loans closed, we've developed an integrated end-to-end process from application to closing. We can take your application, complete the loan review, and draft the final loan documents within the same day. We do not require a credit check, and we only need a valid government-issued ID to validate your identity.

We Pay Your Property Taxes Quickly

Our loans are simple, we pay your past-due property taxes, and you pay us back over time. With your property tax bill increasing every month, it only costs you more to delay. Property Tax Funding's licensed and experienced loan officers will guide you through the process and customize a repayment plan that fits your budget. We will pay your property tax bill quickly and take this stress away while you regain your financial footing.

First-Time Homebuyer’s Guide: Everything You Should Know Before Buying Your First Home

Matt Longhofer — Mon, 09 Aug 2021 17:20:30 GMT

Buying your first home is undoubtedly an exciting experience, but it can also be intimidating because of all the potential pitfalls. Though homeownership allows you to build equity, it also requires a significant financial commitment. This puts pressure on you to find the right home at the right price and ensure that you cover every facet of the process so that there are no issues later.

Here is a closer look at the process and requirements of purchasing your first home.

Know What You Can Afford

The first step is to figure out how much you can spend on a home. This step is essential because it focuses your search and helps you make an offer when you find a property you like.

The process of figuring out what you can afford involves auditing your finances to see if you’ll be able to handle both the cost of buying the home and the ongoing expenses you will incur while living in it. Ideally, you would also have an emergency savings account to cover repairs or mortgage payments for up to six months.

It is also helpful to look at your credit score to see if you can qualify for a mortgage.

Here are some of the questions that you can ask yourself to assess your ability to buy a home.

How is your current financial status?
What does your savings account look like?
How can you improve your current spending habits?
What type of home will best fit your needs?
What type of home can you afford?

The good news is that first-time homeowners can access programs that offer assistance with some of the costs.

First-Time Homebuyer Programs

As a first-time homebuyer, you are eligible for several programs that provide financial support in one way or another. Here are some of the most accessible:

FHA: The Federal Housing Administration insures loans to first-time homebuyers. These mortgages require as little as 3.5% for the down payment and generally have favorable interest rates.
VA loans: The Department of Veterans Affairs guarantees mortgages for current and former military service personnel. Applicants may need to meet credit score requirements.
USDA: The U.S. Department of Agriculture guarantees loans for rural first-time homebuyers, typically with no down payment required.
State programs: Many states assist homebuyers with down payments, closing costs, and other expenses associated with owning a home. Washington, Ohio, and Illinois are examples of states with these programs. In many cases, buyers can combine state and federal programs.

n also opt for a conventional mortgage. Though the government does not guarantee such mortgages, some lenders offer first-time homebuyers special deals with down payment requirements as low as 3%.

Understand the Buying Process

Buying a home requires different steps. First-time property shoppers may overlook some aspects of the process. Here is what you can expect once you have decided that you are ready to purchase your first home.

Shop for a home: You should use all the available options to search for a home. This may include driving around neighborhoods that you would like to live in, asking your contacts, and checking for listings online. You can also enlist the help of a realtor to locate homes within your price range that meet your specifications.
Organize your financing: Once you find something you like, the next step is to secure financing using a first-time homebuyer program or a conventional home loan. You can ask a lender to do an initial assessment and “pre-qualify” you for a mortgage. Some sellers may require pre-qualification before you make an offer.
Make an offer for the home: After finding a home you want to purchase, you decide on the price you are willing to pay, and you make an offer to the selling agent. They can then send you a counteroffer and engage in negotiations until you agree on a price.
Inspect the home: Once you have reached a deal, you make an initial deposit in an escrow account to show that you plan to buy. The seller will give you time to inspect the house before you decide whether to finalize the deal. You can hire your own inspector, and your lender will likely have their expert look at the house, as well.
Close the deal: If you’re satisfied with the home, you can close the deal. During closing, the ownership of the property legally transfers from the seller to you.

A good real estate agent can help you through all the different steps. Choosing the right one is essential, especially for a first-time buyer.

Choose Your Real Estate Agent Carefully

A good real estate agent will help you navigate your way through the buying process without making costly mistakes. You can ask colleagues, friends, and family members for recommendations of realtors they have worked with in the past, or you can look online. It is acceptable to contact a prospective agent and to ask questions about their experience before you decide to work with them.

Work on Your Credit

The health of your credit determines how easily you can get a loan for a home. You can obtain your credit report from the three credit bureaus: TransUnion, Equifax, and Experian. If you need to improve your score, consider paying down credit card balances, avoiding late payments, and taking care of any current penalties.

Pay Attention to the Fees

While the purchase price is the main expense, it isn’t the only cost you have to consider when buying a home. There are other fees and expenses to account for, as well.

Home Buying Fees

In addition to legal fees related to closing, you need to cover other expenses when purchasing a home. Most real estate agents get paid a percentage of the closing price when they help you buy a home. However, depending on the contract you have, you may have to pay them a contractual fee for their services.

Many lenders will also require you to buy homeowner’s insurance before they can approve you for a loan. You may also have to pay inspection costs and title insurance.

Homeownership Expenses

The costs of homeownership go beyond your monthly mortgage payments. Property taxes can be a major expense, as can home insurance. In some developments, you will need to pay Homeowners Association (HOA) fees, as well.

Repair costs are another type of expense to consider. When something goes wrong with the plumbing, HVAC, or electrical wiring, you will be responsible for all repair costs. The insurance policy will cover disasters but not regular repairs to the home systems or appliances.

Familiarize Yourself With Property Taxes

Property taxes vary depending on the value of your home. You typically pay estimated taxes along with your mortgage payment, and the lender forwards the taxes for you at the end of the year.

You must prepare yourself for property taxes by including them in your budget. Delinquency on property taxes can easily take your property into foreclosure. Even a missed payment or two can lead to hefty penalties, so it’s best to find ways to avoid this situation, if possible.

Luckily, there are property tax lenders from which you can get a loan to cover taxes. The state of Texas, for example, allows homeowners to authorize a licensed tax lender to pay their past-due property taxes on their behalf. These lenders have a simple application process with a short approval time, making it possible to qualify for a loan quickly, solve the issue quickly, and avoid the worst penalties.

Think Long Term

You will have to fund upkeep and repairs on your home, but you should also consider your long-term goals. How can you build equity in your home? How long are you planning on living there before you try to sell?

Also, you should consider other ways of building wealth. Retirement accounts, investments, and savings also help you as you approach retirement. There is no need to rely solely on your home to do so.

11 Types of Tax Deductions Homeowners Qualify For

Matt Longhofer — Mon, 09 Aug 2021 17:16:42 GMT

Becoming a homeowner is a major step in life. You’ll be responsible for maintaining your home, making repairs when necessary, and contributing toward your mortgage. At the same time, you’ll have the freedom to paint the walls, plant a garden, and raise a family.

As a homeowner, you’ll also need to pay taxes. Fortunately, you qualify for various tax deductions that can help you keep more cash in your pocket. The various tax deduction types below will provide a break on the total you owe, whether through your mortgage, common household purchases, capital gains, or other avenues.

1. Capital Gains

Whenever you receive money as a result of selling a property, that new income is subject to taxation. This tax is called a capital gains tax. The total amount of capital gains tax you owe is determined by the short- or long-term nature of your capital gains.

As a homeowner, you can claim a portion of the profits earned after you sell your home. Even though this new income is taxed, it’s taxed at a lower rate than your income is. Net capital gains can sometimes even be taxed at 0% if your income is less than $80,000 per year, according to the IRS.

After you sell your residence, you can exclude up to $250,000 of the profits, or up to $500,000 if you file jointly with your spouse.

To qualify for this capital gains exclusion, you’ll need to meet a few requirements. You’ll need to have owned the property — and used it as your primary living space — for at least two years. In addition, you generally are not allowed to claim the exclusion if you’ve also claimed it on another residence within the past two years.

2. Discount Points

Discount points represent prepaid interest toward your lender, which can help reduce the interest rate on your mortgage. Each point that you purchase typically lowers your interest rate by 0.25%. This rate deduction lasts for the duration of your loan and saves you money over time.

In even better news, discount points are often deductible as a legitimate tax break. Points can be deducted as home mortgage interest, as long as you itemize your deductions under Schedule A (Form 1040).

If you purchase discounts points paid to lower your interest rate, or paid on a loan to perform home improvements, you qualify for this tax deduction.

Many homeowners commonly deduct points evenly across the lifetime of their loan. You can also deduct all of your discount points during the year that they are purchased, as long as you meet all home mortgage requirements identified by the IRS.

3. Forgiveness of Debt on a Foreclosure

The Mortgage Forgiveness Debt Relief Act of 2007 paved the way for property-based debt forgiveness. Any mortgage debt associated with a foreclosure is eligible for this deduction, saving you from additional taxes on the money you owe.

This type of tax deduction only applies to individuals who have debt as a result of a foreclosure. If you’ve experienced a foreclosure between 2007 and 2017, you are eligible for this debt-cancellation tax deduction as long as your foreclosure was related to financial hardship.

Once you navigate your home foreclosure and settle your taxes, the next step is to avoid foreclosure in the future. Make smart financial decisions through budgeting and selective spending to avoid losing your home again down the road. If the need arises, you can also talk to a housing counselor, who can help you determine paths forward if your loan becomes unmanageable.

4. Home Equity Loan Interest

Despite recent updates that restrict tax deductions on home mortgages, the IRS still allows deductions on home interest paid against home equity loans. As long as you continue to make legitimate payments toward a home equity loan, you qualify for this deduction.

The Tax Cuts and Jobs Act of 2017 does limit deductions that can be made on home equity loans. However, you can continue to deduct interest on home equity loans as long as you use the money to purchase, renovate, or modify your primary or secondary residence.

5. Home Office Expenses

If you’re one of many homeowners working from home, you’re in luck: in certain cases, the IRS allows you to deduct home office expenses from your taxes.

If you use at least part of your home to run a business, you might qualify to deduct certain home office expenses. To legitimately deduct these home office expenses from your taxes, you must use your home as your primary place of business. If you work on a limited basis out of your home, but you spend more time in a professional office, you likely will not qualify for this deduction.

As long as your home office is where you most regularly perform business, and you operate from a part of the house strictly used for business, you can deduct home office expenses. Claiming home office expenses on your deduction is easy as filling out Schedule C (Form 1040) and submitting it alongside other tax documents.

6. Mortgage Insurance

Mortgage insurance premiums represent one of the easiest deductions you can obtain as a homeowner. The IRS advises that you treat home mortgage insurance the same way you treat interest on your mortgage.

As long as your mortgage insurance agreement was established after 2006, you qualify for a tax deduction on mortgage insurance.

The IRS also makes qualifications for individuals who obtained mortgage insurance through private mortgage insurance companies, or through the Department of Veterans Affairs, Federal Housing Administration, or the Rural Housing Service. All fees associated with these mortgage insurance providers can be fully deducted if the insurance contract was issued in 2020.

7. Mortgage Interest

Unless you paid for your entire property upfront, you are likely making regular payments toward a home mortgage. There’s good news for any homeowner noting the interest on their home mortgage plan: it’s deductible.

As long as you meet the following three qualifications, you should be able to deduct all of your home mortgage interest:

Your mortgage was taken out before October 13, 1987;
Your mortgage of $1,000,000 or less was taken out between October 13, 1987, and December 16, 2017, and was used to purchase, construct, or renovate your home;
Your mortgage of $750,000 or less was taken out after December 16, 2017, and was used to purchase, construct, or renovate your home.

The IRS allows you to deduct interest you pay on your home mortgage, from the first $750,000 of that debt. Even if your property value exceeds that $750,000 threshold, you will not be able to deduct any additional interest past that amount. If your home was purchased before 2017, you may be able to qualify for deductions on home mortgages up to $1,000,000.

8. Necessary Home Improvements

Not all home improvements are tax-deductible. However, home improvements that are medically necessary — and renovations that make a home more eco-friendly — can often be deducted. As long as these expenses don’t exceed 7.5% of your adjusted gross income, you can deduct them by using Schedule A (Form 1040).

The IRS considers some home improvements to be medically necessary expenses. These changes include wheelchair ramps, guidance rails, elevators, and other devices that allow for improved accessibility. If you need to make any of these necessary home renovations, the expenses are tax-deductible as a medical expense.

The IRS also allows deductions on certain eco-friendly home improvements. If you make your home more energy-efficient through the use of solar panels, solar water heaters, wind turbines, or other devices, you can take advantage of these energy incentives.

9. Property Taxes

Property taxes are one of the most popular tax deductions you can take as a homeowner. The term “property taxes” can refer to two different types of taxation: real property taxes and personal property taxes.

Real property taxes: Also known as real estate taxes, this applies to property that is immovable. Real property taxes apply to both the land itself and any property permanently affixed to it (such as buildings).
Personal property taxes: This is levied on property that can be moved, like vehicles or mobile homes.

Individual filers (or married individuals filing separately) can deduct up to $5,000 in state/local property taxes, while married homeowners can deduct up to $10,000.

This limit applies to both of the above types of property taxes. For example, if you spent $7,500 in real property taxes in a year and $5,000 in personal property taxes, you could not deduct the full $12,500. You could only deduct up to $10,000 as a married person filing jointly or $5,000 when filing individually

Note that, even if the tax is collected more than, or less than, once a year, it must be charged yearly to qualify for the deduction.

If you pay property taxes, you can also qualify for residential personal property tax loans that make property tax payments even easier. Property tax loans offer a variety of benefits, helping you avoid delinquency costs and elude foreclosure.

Applicants complete a brief survey and gain approval before taxes are paid in a simple payment process.

10. Rental Expenses

If you are renting your property to tenants, you can qualify for a variety of tax deductions. Any costs associated with the upkeep and general maintenance of your property are eligible for rental expense deduction, as long as those expenses are deemed necessary.

In addition, you can make deductions on repairs and the purchase of individual supplies used to improve the value of your property. If these expenses are covered by your tenant and you reimburse them, they can also qualify for the deduction.

11. Depreciation

Home depreciation occurs when the value of your home is reduced due to obsolescence — the natural aging process your home will experience over time. While house depreciation sounds like a negative trend, it can lead to favorable tax deductions.

Your accountant or a tax-filing software solution can help you take advantage of the property depreciation deduction. You identify how much the value of your house — not the land it sits on — has depreciated over time.

Through primary residence depreciation, you’ll be able to earn back a portion of your home’s value lost over time. However, you can only claim this deduction on areas of your home used for business purposes, or that are rented to tenants.

Depreciation can be applied to your taxes as a legitimate deduction. It helps you earn back a portion of the money you lost to your home’s general use over time.

Costs That Aren’t Tax-Deductible

Some home-related costs aren’t tax-deductible. Although these expenses can help improve the value of your home, or preserve the value of your home as time passes, they do not qualify as legitimate deductions.

Costs that are not tax-deductible include:

Homeowners association (HOA) fees;
Property title insurance;
Home insurance premiums;
Utility and county garbage removal costs;
Principal mortgage payments.

The Ultimate Guide to Starting a Community Garden

Matt Longhofer — Sun, 08 Aug 2021 16:00:00 GMT

A community garden is a shared space where residents come together to care for fruits, vegetables, and other plants. In a community garden, neighbors can socialize and work together while building valuable skills and enjoying time outside.

Community gardens also provide several local benefits. They provide an outlet that brings neighborhoods together, and can easily be used to improve vacant or unsightly spaces. Once finished, community gardens provide much-needed green spaces to residential or industrial areas. Studies also show that community gardens can help reduce violence and feelings of depression in active participants.

This article will walk you through the simple steps necessary to create a community garden, alongside strategies to help your garden achieve long-term success.

Assess Community Interest and Form a Planning Committee

If you’re ready to start a community garden in your neighborhood, you’ll need a little bit of help. A planning committee can help you organize details and identify whether other community members would be interested in a local garden.

To assess local interest in a potential community garden, consider the following six community planning steps:

1. Gather information to understand how community members might respond to your ideas. You might consult federal census information or state-sponsored neighborhood data packets, or figures available at City Hall.
2. Analyze the data you collect to identify specific locations where a garden might resonate well with the community. You’ll need to draw conclusions from the information you’ve gathered. To make this process easier, consult someone who has their finger on the pulse of your community.
3. Set community goals that create an obtainable timeline for your project. Make sure that these goals are actionable and concrete. Include dates, times, dollar amounts, and other numbers that help you quantify how you’re progressing toward your objectives.
4. Identify alternative options for your community garden plan, in case your primary strategy isn’t supported. Try to hold an open forum to accomplish this goal, where community members discuss thoughts in a non-judgmental setting.
5. Put your plan into writing, with details from all of the above steps. Make sure to include the alternative options you considered, the location you’ve chosen, the data you collected, and the reasons why your strategy will result in success.
6. Segment your plan into phases that build confidence as you complete them.

These steps will provide concrete direction for your community garden idea and will help you quickly determine whether or not your opinions are shared by other community members.

Identify Resources

You’ll have at least a few expenses as you start a community garden. The price tag to prepare and fertilize the land, purchase seeds, obtain gardening equipment, and inform the community can quickly become unreasonable. Fortunately, you can take advantage of a wide variety of resources.

Many city councils have funds allocated specifically for community projects. Ask city council and neighborhood association members about the availability of any local funding, or consider pitching the idea of a community garden contingent on their financial help.

If you approach local businesses — especially nurseries or lawn and garden businesses — with a sponsorship opportunity, you may be able to obtain a large portion of the funding you need. During any meeting with local businesses, be sure to identify how much one-time or continual funding you’ll need, how the money will be used, and how the business’s branding will be displayed tastefully at the garden itself.

Don’t be afraid to ask neighbors for help as you start your community garden. Take advantage of the project management skills that community members have to offer to help drive the plan toward success.

Select a Site

It’s not always easy to determine the best place for your community garden. You’ll need to consider several factors when deciding on a central location for your community garden, one that allows individuals to participate without traveling too far.

When selecting a site for your community garden, consider the following factors:

Who, if anyone, currently owns the land;
The price to obtain or rent the land for public use;
How the land is currently zoned by the city;
How the land has been used in past years;
The amount of sunlight that the plot of land receives each day;
The quality of the land’s soil;
The location of local water sources.

These and other characteristics will help you identify the best possible location for your community garden. As long as your preferred plot of land passes sunlight and soil tests and is cleared by the city for public use, it will serve as a suitable space for your community garden.

Prepare all Required Documentation

Before you can break ground on your community garden, the land itself must be released for use by the city. This process often moves at a pace set by the city; don’t be surprised if you spend time waiting for decisions on land zoning, permits, leases, and community agreements.

First, check with the city to determine locations near you that are already zoned for potential community garden use. If you identify suitable land that is zoned for alternative use, you will need to approach the city about rezoning that space.

Depending on your city’s existing land-use laws, you may also need to obtain one or more permits that designate the land for community garden use. These permits typically identify the activities to take place in the community garden and may limit where your fruits and vegetables may be sold.

In other cases, you may need to rent the land — either from the city or from the property’s current owner — to use it as a community garden. Rent for plots of land can be expensive, especially in higher-income neighborhoods, but you can offset these costs through corporate sponsorships and donations.

To help cover the cost of rent, you could also charge residents supplemental fees for the use of particular gardening tools or other onsite resources.

Payment of Property Taxes

You’ll likely also need to pay property taxes on your community garden. Property tax is charged by the government for the continued use of land. As the community garden’s representative, you will be responsible for making regular property tax payments.

Property taxes are traditionally charged as lump sums. As a community garden representative, you’re also eligible to make property tax payments in more comfortable installments.

When outlining your garden’s finances, consider a property tax loan program that can help you avoid tax penalties and frame your property tax payments as monthly installments.

Private Property vs. City Property

Local governments impose limits on how different pieces of land can be used. Private property is regulated through zoning codes, identifying spaces reserved for residential, commercial, or industrial use. Make sure that any private property you consider is zoned for garden maintenance.

The city may also have public land available for your use. To use municipal land for a community garden, you’ll likely need to agree to your city’s leasing terms. There is often less room for per-month lease negotiation with the city than with private landowners.

No matter where your community garden is located, keep an eye on any applicable property taxes. If biyearly property tax payments sound intimidating, property tax loans can help segment higher annual payments into more affordable contributions.

If you create your community garden on land zoned for private use, residential property tax loans can help make the tax repayment process more feasible.

Organize, Budget, and Plan the Garden

With the right planning, your community garden will serve residents for years to come. Before you can open your garden’s gates to the public, you’ll need to satisfy a few important planning steps to ensure the land’s success.

Fairly early in the planning process, you’ll need to develop an estimated budget for your community garden. This budget should include all supplies, labor, and documentation costs necessary to create a thriving garden space. Consider creating an itemized budget for presentation to potential sponsors, public forums, and government meetings.

You’ll also need to pay for any structures inside of your garden. All planter boxes, fencing, seating, and other elements should be installed and tested before your garden opens to the public. These items should be distributed across the garden, to allow for easy foot traffic and plant care.

Don’t overlook your garden’s most essential needs — seeds, soil, and water. You’ll want to coordinate your garden’s layout in a way that allows each planter box and pot equal access to water and sunlight.

A community garden also provides several educational opportunities, for both residents and school groups. Whether you create signage with practical gardening tips or you simply label different plant species, your community garden can help neighbors learn while they work. You can even create an official curriculum of sorts, and give local schools a field-trip opportunity for their students.

Maintain the Program

Even before the community garden opens its gates, you’ll need to identify plans for ongoing maintenance. Whether you’re replacing gardening tools or enforcing property rules, your local garden will require a certain degree of regular upkeep. Unless you delegate that responsibility to another project member, maintenance responsibilities will likely fall on your shoulders.

Don’t forget to celebrate the opening of your community garden! You’ve successfully created a community asset, a public gathering space where neighbors can get together, learn new skills, and spend time socializing.

It isn’t always easy to open a community garden. Between public meetings, funding requests, and legal documentation, starting a community garden can sometimes feel like an uphill battle. However, the result is a positive one: a beautiful, revived piece of land that will benefit the community for years to come.

5 Home-Buying Tips Every Veteran Needs to Know

Matt Longhofer — Fri, 06 Aug 2021 19:00:00 GMT

If you’re a veteran thinking about purchasing a new home, you know that it’s an exciting time. Homeownership gives you the chance to build equity, improve your credit, and create a living space that’s safe for you and your family. You’ll become one of more than 19.2 million veterans who are currently homeowners across the United States.

It’s easy to get confused by the home-buying process. Whether you’re a seasoned property expert or a first-time home buyer in need of direction, your home-buying process should stay exciting and stress-free. Reference the below strategies — specifically for veterans — that can inform confident, productive real estate decisions.

1. Review and Organize Your Finances

If you’re a veteran serious about buying a home, you’ll need to get your finances together first. While there are many valuable resources out there to make the home-buying process straightforward, you’ll still need to manage your financial portfolio as you submit loan applications.

In the weeks and months before applying for a loan, gather your finances in anticipation of some pretty comprehensive application forms. First, be honest about which properties you can afford. After you determine the ideal size and price for yourself and your family, you can quickly collect the remaining financial details you’ll need.

You may need to provide all of the following financial items to a potential lender or loan provider:

Paystubs;
Bank statements to verify continual income;
Proof of other financial assets and investments;
Your living history, including the price and address of any properties you’ve purchased or rented.

If you’re applying for a loan jointly with your spouse, you may also need to present items to represent their financial history.

If you’re pursuing a VA loan, reviewing your finances also means preparing a few duty-specific details. You’ll need to identify your length of service, identify your debt-to-income ratio, and obtain your certificate of eligibility before applying.

2. Consider Costs and Look for Financial Assistance Resources

Unsurprisingly, there are a variety of costs associated with the home-buying process. Fortunately, you can leverage financial assistance programs and other resources to ease the burden of these costs.

A majority of the costs you’ll face when buying a home are from your mortgage, associated fees, and property taxes. These costs should influence the overall price of the home you can afford; you’ll incur them before, during, and after the home-buying process concludes.

Mortgages, Fees, and Taxes

During the financial planning stage of your preparation, consider outlining approximate mortgage fees, home-buying fees, and taxes. Your mortgage is an agreement between you and your lender. You will make lump payments each month, made of both the principal you owe and the interest on the loan itself.

Individual mortgage rates can vary, based on your location, financial history, and other factors. Cash-out and jumbo mortgages might hit slightly higher rates than a conventional mortgage, depending on how they are packaged. The mortgage will include fees such as the origination and appraisal costs, title insurance, as well as the cost of accessing your credit report. Property-related fees include homeowners insurance, prepaid interest, recording fees, and the real estate agent’s commission.

You might also need to pay a VA funding fee — a one-time payment made on your home loan — depending on your loan type and total loan amount.

Even after you complete the purchase of your home, you might have a few more fees to pay. These payments can include a monthly or quarterly homeowners association (HOA) fee, paid by all residents in a neighborhood. An HOA fee can cover a wide variety of shared neighborhood expenses, including landscaping, general maintenance, upkeep of a pool or communal garden, and the removal of trash and snow.

The property you purchase is also subject to property taxes. Based on the estimated value of your home over time, you’ll likely need to pay yearly or biyearly property tax installments. These payments are made in addition to your regular mortgage contributions.

Fortunately, there are a variety of resources that can limit the payments you’ll need to make. Property tax loan plans serve as an alternative to lump payments. A residential property tax loan helps homebuyers avoid foreclosure and delinquency costs.

Home-buying veterans can also qualify for a variety of homeowner-specific tax deductions, to lessen taxes due come April. Some states — including Florida and Texas — offer specific tax exemptions that help active-duty, retired, and disabled veterans afford their next home.

3. VA Home Loan and Lending Options

You’ll have several options available when it comes time to finance your home. Some veterans choose a VA loan, a mortgage program offered through the U.S. Department of Veterans Affairs. Other veterans consider a conventional loan or alternative lending options.

One of the most popular financing options for all home-buying veterans is the VA loan. If you’re an active-duty service member, a retired military member, or a widowed military spouse, you can qualify for a government-sponsored VA loan. These loans are designed to help military members purchase and benefit from property.

VA loans are slightly different from regular loans. Unlike conventional loans, VA loans can only be used to finance a primary residence. In addition, VA loans do not require a down payment. You’ll pay an upfront lending fee, but you won’t need mortgage insurance to qualify.

You can also pursue other lending options when financing a home. These include conventional loans, which are great for individuals with higher credit scores and low debt. For those who may not qualify for a conventional loan, FHA loans — which don’t require a credit score verification — can serve as a viable alternative.

4. Maintain Reliable Income

No matter the home financing option you choose, you’ll need to maintain a reliable source of income through the home-buying process. Your lender will want to see proof of stable income — typically by requesting a number of your recent pay stubs — before your loan is accepted.

Reliable income is especially important for veteran-specific loans. As one of the main factors used when determining the acceptance and amount of your VA loan, stable income should remain a particular priority when you’re looking for your next home.

In order to qualify for many financial assistance programs available for veterans, you’ll also need to prove that you’re capable of earning an income. Even though they do not require any down payment, VA loans are virtually never issued to individuals without a proven salary.

5. Use a Veteran-Friendly Real Estate Agent

Real estate agents can make a huge difference when you’re searching for a home. If you’re like many Americans, you’ll trust an experienced real estate agent to help you identify and close on your preferred home. This agent will schedule home tours, communicate with current residents, and negotiate on your behalf.

No matter where you find yourself in the home-buying process, it’s important to find a real estate agency experienced in dealing specifically with veterans. Veteran-friendly real estate agents will thoroughly understand the terms of a VA loan, sympathize with your situation, and can confidently convey your situation to sellers considering multiple offers.

The Best Investments for Any Age or Income

Matt Longhofer — Tue, 27 Jul 2021 17:00:00 GMT

Investing is the best way to increase your wealth, regardless of your age or economic status. Unfortunately, many people associate investments with Wall Street or other intimidating settings. However, many opportunities are available for individuals who aren't employed by big banks or hedge funds.

This article will give you a close look at the most accessible and convenient investment vehicles. Understanding these choices is essential for finding the right fit for your financial needs and goals. In a recent survey, 76% of Americans wished that they had handled their money differently in 2019. Learning what opportunities are available is your first step toward successful money management and wealth growth.

Here is a look at the most accessible investments available to individuals regardless of age, income, or economic status.

High-Yield Savings Accounts

High-yield savings accounts are the same as regular savings accounts, but they pay more interest. These accounts are available at traditional banks or online-only banks. Opening such an account is typically very easy and requires you to make a deposit and provide identity documents.

Good Investment Option For: People of any age who want to keep extra money or emergency funds in an accessible interest-bearing account should consider seeking out high-yield saving products. Also, you do not have to make any investment decisions after opening the account, so it is a good option for those who want a passive strategy.

Risks and Considerations: A high-yield savings account is a low-risk investment option, but the profits are low compared to riskier investments. Also, bear in mind that some banks will require you to deposit a high amount or maintain a specific balance to earn the best interest rate.

Certificates of Deposit

Certificates of deposit (CDs) reward customers for keeping money untouched in a bank for a pre-specified amount of time. The term can last from one month to several years. After depositing the money, you cannot touch it until the term is up. However, CDs pay a higher interest rate than savings accounts.

Good Investment Option For: A certificate of deposit is a good investment option for people who have extra money they do not plan to use in the near future and want a passive investment option that pays more than a high-yield savings account.

Risks and Considerations: Risks are extremely low with a CD, and interest rates are high compared to a savings account (but lower than other riskier investments). The one consideration is that if you withdraw the money before the term is up, you could have to pay a penalty.

Government Bond Funds

Government bond funds are a pooled investment. Rather than getting individual government bonds, you buy into a fund that holds a diversified debt portfolio. You can purchase these funds through a retail brokerage or a mutual fund provider. Some exchange-traded funds (ETFs) available through online stock brokerages focus on government bonds.

Good Investment Option For: Government bond funds are a step up from savings accounts and CDs. Because they are relatively safe investments, they are typically best for older individuals who want a low-risk way to use the savings they have already built. These funds can also work for anyone who is making a portfolio and intends to balance riskier investments.

Risks and Considerations: Government bonds are low-risk investments because they have federal backing. Being part of a diversified fund instead of purchasing individual bonds further lowers your risk. Some funds, however, charge a management fee to investors.

Real Estate and Rental Housing

Real estate investment involves purchasing property either for eventual resale or earning income from renting. One of the most important things first-time home buyers should know is that their house is an investment. People can also purchase investment properties for rental and resale. Real estate can be lucrative, but it is also complex because of market changes and the need to learn about property tax deductions and other issues.

Good Investment Option For: Investing in real estate by purchasing a primary residence is a viable option for anyone with the income to make mortgage payments. Additional properties are an option for investors with a lot of capital who understand the real estate market.

Risks and Considerations: The real estate market can fluctuate, but a home will generally increase in value over time. In addition to mortgages and maintenance costs, you need to consider property taxes. If you cannot afford these payments, you may need to apply for a property tax loan for your home. Homebuyers can also learn about such loans to ensure that they know the appropriate steps to take should it become necessary.

Cryptocurrencies

Cryptocurrencies, such as Bitcoin and Etherium, are digital assets that fluctuate in value. You can buy and sell them using traditional currency on specialized exchanges. Recently, some mainstream online retail brokerages started to offer these products, as well.

Good Investment Option For: Cryptocurrencies are good investments for individuals with high risk tolerance. Since these are newer investment vehicles, there is no widely accepted strategy for successfully realizing consistent profits.

Risk and Considerations: Cryptocurrency is volatile, and it has experienced violent price fluctuations. These rapid movements can lead to large profits or losses. Also, crypto investors need to carefully research trading platforms because some brokers and exchanges are not regulated.

Corporate Bonds

These bonds represent corporate debt. When you purchase them on an exchange or from a broker, you are purchasing the debt that the company promises to pay back with interest. Corporate bonds can have different maturity dates (dates when they need to be paid back in full), and the cost can also be affected by the company’s financial health and the likelihood of full repayment.

Good Investment Option For: Corporate bonds are best for people who want a predictable return and more potential profit than a government bond. These investments require research, including looking up the company’s credit rating.

Risks and Considerations: Corporate bonds are a relatively low risk if you purchase those with a high rating (Aaa to A). The risk and potential profit both increase when you purchase lower-rated bonds (with a Baa or lower rating).

Dividend Stocks

Stocks can increase or decrease in value depending on market conditions. One way to earn money regardless of the price fluctuations is to get a dividend stock, which pays a portion of company profits to stockholders each quarter depending on how many shares they hold. You can purchase dividend stocks through a brokerage.

Good Investment Option For: People who want to purchase and hold investments for a long time may benefit from dividend stocks. They are also ideal for those who are willing to research and find stocks that they think will increase in value over time.

Risks and Considerations: Dividend stocks may lose value over time, which could cancel out any profits from dividends. Also, the share price can affect the amount of the dividend, so you will not always receive the same payout amount.

Exchange-Traded Funds

Exchange-traded funds (ETFs) are combinations of multiple assets, like a mutual fund, but they trade on an exchange like individual stocks. They are, therefore, more accessible to retail investors. ETFs offer exposure to foreign markets, different asset classes, and industries.

Good Investment Option For: Since there are many different ETFs, any investor with a brokerage account can find and purchase funds that fit their investment goals, needs, and risk tolerance.

Risks and Considerations: Because of how they are traded, ETFs are riskier than more-passive forms of investment. At the same time, they also offer the chance for greater profits. Choosing profitable ETFs usually requires experience and research.

Buying Your First Business Investment Property

Matt Longhofer — Tue, 27 Jul 2021 17:00:00 GMT

Learning about and investing in commercial real estate is an exciting journey, and with so many free educational resources available, it's never been easier for you to get started.

Commercial real estate properties may carry a different opportunity for profits, with longer leases compared to their residential counterparts. You can make money with a commercial real estate property through commercial tenants paying rent under lease, traveling renters, or you could resell the property down the line.

No matter your age or income, there are plenty of business investment opportunities available for you to dig into.

Choose a Niche

Deciding on a niche (in the case of commercial real estate investing, a property type), should be the very first thing you do before you sign any deals. Focusing on a niche will nicely narrow your efforts and make it easier for you to anticipate trends, educate yourself, and maximize your earnings.

Here are some types of commercial real estate to consider when you’re starting to look for your first investment property.

Rental Properties and Multifamily Housing

When you choose to buy a rental property or a multifamily housing unit, you can start with a small property and work your way up to owning a huge complex. These investments can be more challenging to maintain, and you may have to hire outside help to assist you in area maintenance. However, if you buy at the right location, you could see great returns.

Mobile Home Parks

For some individuals, this is a dream investment. Many people who move into a mobile-home park stay for longer periods. There is minimal maintenance and cash flow, as well as low startup fees. If the mobile home park is in a good area, it has the potential to pick up speed and house many tenants.

Hotels

A hotel is a different type of commercial real estate investment that carries many operational logistics. Tenants don't sign leases, but rather "lease" with the hotel on a nightly basis.

However, this means that hotels can respond to negative trends in the market almost instantly, protecting your investment and providing cost flexibility you cannot find with other types of commercial real estate investments.

Retail Buildings

Investing in retail buildings means longer leases, smaller upfront costs, and higher returns on investment. Commercial property tenants are also liable for paying property taxes. This is not the case with residential real estate where the landlord is held responsible for paying property taxes.

However, proceed with caution: commercial real estate investments are usually sensitive to economic downturns. Commercial tenants renting a retail building may have to shut down their business or renegotiate the terms of their lease if the economy crashes.

Office Buildings

Similar to retail buildings, office buildings house commercial tenants. You can get a long-term, more stable flow of income and higher returns on your investment from commercial tenants. But, also similar to retail buildings, office building investments will be sensitive to times of economic stress.

Industrial Sites

Investing in industrial sites can yield a decent return on investment (ROI) and you’ll also help support the global economy. This can be a space for construction crews to work or for other necessities that allow the local population to grow and expand.

When you choose one area you want to be known for, it allows you to become specialized. This builds your specific professional experience and helps others trust in your ability to find and close on good deals. Your specialization becomes well-known, and potential clients and partners will recognize that.

Prepare an Investment Strategy

All good investors have a strategy. Strategies help investors create short-term goals, identify what kind of property they should buy, evaluate long-term goals, and more. There are several kinds of strategies to choose from, and each will fit in with a specific niche. Here are some examples of commercial real estate investing strategies.

Fix & Flip

You may have heard of fixing and flipping a house, but fixing and flipping commercial real estate is also an opportunity to profit by improving a building or space. The steps involved in flipping commercial real estate are similar to flipping residential real estate: you purchase a property, fix it up, and sell it at a higher price.

One of the advantages of flipping commercial real estate is that you can choose to rent the property out instead of simply selling it, which will generate long-term, passive income for you.

Land banking

In many cases, land banking involves purchasing pieces of land that can, later on, be developed. If you know a city is expanding rapidly and there's an area just outside with land to purchase, it could be a valuable investment. Instead of putting cash into a savings account or the stock market, investors purchase land. One of the best things about this is that owning land tends to be cheaper than buying a new property.

There are a few other strategies to consider when purchasing your first investment property. You can look into passive income, development, and wholesale property investments. Remember to always consider the building's classification and condition before purchasing anything. Also, keep in mind what kind of loan you may need for the building.

Build a Budget and Seek Financing Options

Look at what you can reasonably afford to pay each month on a loan, or use the money you already have. Once you determine your budget, you need to seek financing. What you can afford will determine which kind of loan you can get.

You need to think about:

Startup fees;
Maintenance fees;
Monthly fees;
Expected ROI;
Property taxes.

It is important that you have a plan to cover ownership costs even if you experience a gap in occupancy, or if your renters fall behind on paying you. You may need to consider a property tax loan to stay in good standing with the tax assessor while you seek new renters or coordinate a payment plan with tenants. You will also need to have a plan in place to manage ongoing maintenance, including potentially hiring a company to respond to situations requiring emergency repairs as well as seasonal maintenance.

Taking the time to build a budget and seek the proper financing will help you build a healthy investment portfolio.

Create a Team to Assist You

While you can technically embark on your journey to investing in commercial real estate on your own, it's always a good idea to have some help. Consider creating a team to help you sail the (sometimes shark-filled) waters of commercial real estate.

You may want to consider adding the following to your team:

CPA;
Contractor;
Commercial real estate attorney;
Commercial realtor;
Mortgage broker;
Tax attorney.

Putting together a team of professionals will flatten your learning curve and prepare you to solve problems the right way, the first time.

Make an Offer and Review the Terms of the Deal

Before you sign your first deal, ensure that you sit down with a lawyer or someone who can explain to you, in plain English, what you are signing. Be sure to understand what you will owe and keep in mind what your potential returns will look like. At the end of the day, trapping yourself in a bad real estate deal can spoil for you the great adventure of investing in commercial real estate.

What You Need to Know About Taxes if You Work Remotely

Matt Longhofer — Tue, 27 Jul 2021 17:00:00 GMT

According to a survey by Upwork, one in every four Americans worked from home in 2021. In 2025, you can expect to see around 36.2 million Americans working remotely as well, which is 87% above the pre-pandemic average. Are you going to be (or are you currently) one of them?

While there are many benefits of and rewards to be gained from working at home, the experience isn't as run-of-the-mill as, say, your usual office job. Depending on which career path you choose, it can make things, like taxes, a little more complicated. Read on to learn how.

Employment Determination

One of the first things you will notice when looking for remote employment or a "side hustle" is that there are many different types of work. You will need to sit down and figure out what is important to you.

If you want benefits, freelancing as a 1099 contractor may not be the best option for you; however, if you want the freedom to set your own hours and be your own boss, you may enjoy freelancing a lot more.

Defining Telecommuting and Remote Work

Telecommuting and remote work are fairly synonymous, but with a slight difference: telecommuting implies that the worker may be required to show up to a physical work location now and then (or not at all) at the discretion of the employer, whereas "remote work" means the individual is working outside the physical area of the business.

Independent Contractor

Regarding employment, an independent contractor, also known as a 1099 worker, is classified as somebody who is providing a service to a business and receiving compensation rather than somebody who is legally contracted to work in a predetermined role with set hours for that business.

Independent contractors usually work freelance jobs, odd gigs, or side hustles, and usually enjoy the following benefits:

Narrowed niche: As an independent contractor, you can offer something specialized and charge clients based on your experience. There is more room and flexibility for you to use to set your prices.

Freedom: Instead of being stuck behind your home desk working a 9-to-5 job, you have more control over your schedule and when you can provide services.

On the flip side, working as an independent contractor also entails:

Instability: Many people struggle with finding full-time work and running a business when they are 1099 workers, dealing with inconsistent flows of work and periods where there may be no money coming in at all.
No benefits: When you are a W-2 employee, your employer may offer you an attractive benefits package that supplements your income and provides access to group discounts through the organization. This can come in the form of healthcare benefits and retirement account contributions, among other things. A 1099 worker will be entirely responsible for providing themselves with these benefits, which may come at a higher cost than a W-2 employee.

Must save money for taxes: Employers will usually withhold your taxes from your paychecks for you so you don't have to worry about setting aside funds to pay Uncle Sam. As a 1099 worker, no taxes will be automatically withheld from your pay, so you should set aside money to pay taxes yearly or quarterly.

Employee

An employee is also known as a W-2 worker in the eyes of the IRS. Usually, when you think of people who work from home, you may think of independent contractors; however, there are now employers who are hiring at-home W-2 workers. You can snag a job through Indeed.com or Glassdoor under remote work. You will still get all of the same benefits and pay as a traditional worker, except you'll work from home.

Benefits: Employers will often offer a wide variety of benefits for an employee to choose from, which can help cover medical expenses and pay into retirement.

Stability: An advantage of becoming a work-from-home W-2 employee is that there is always work available to you because you're legally contracted to work for that business. You won’t have to search for jobs or spend time negotiating; it's all built into your employment contract or job description.

Taxes withheld: Another significant stress relief is that employers withhold taxes from employee paychecks, leaving their W-2 employees with net income left to spend and without the hassle of managing your taxes.

Some of the drawbacks of becoming a W-2 employee include:

Less freedom: One of the biggest drawbacks of being a W-2 employee is a significant reduction in freedom. You may have less flexibility to set your working hours or choose your clients. You will have to work to acquire vacation time and paid time off as well as adhere to company policy and rules.
Time-consuming: It is still traditional for employees in most industries to commit to a 9-to-5 work schedule, even from home (although this is evolving as remote work challenges traditional work hours). You will need to set aside eight to nine hours a day to be clocked in and working for your company.

Bosses: You will have to listen to your boss and work for someone else. This may not sound like a big deal, but for many people, this is undesirable.

Choose your employment determination wisely: it's easier to transition from an independent contractor to an employee than it is to transition from an employee to an independent contractor.

Determining State Income Taxation

As a 1099 worker, you're entirely responsible for setting aside money for and paying your taxes. Here is what you need to know as a freelancer paying taxes:

You will need to pay state taxes. All states have their own taxes for freelancers, except Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
You will need to file an annual state income tax return within the state you live in, not the state you “work in.” Residency is usually based on where you have registered as a voter, where you have a registered driver’s license, and/or where you own your home.
Independent contractors can still get Social Security and Medicare benefits when they retire.

Convenience vs. Necessity

The Convenience of Employer Test is a tool that determines whether or not work-related or home office expenses incurred by workers are deductible. If these expenses pass the Convenience of Employer Test, they become tax-deductible for the employee; if they do not, the employee will not be able to claim a deduction for the business use of whatever that work-related or home office expense may be.

The goal of this test is to help make necessary business equipment not provided by the employer more affordable for employees to purchase.

Reciprocal Agreements

Reciprocal agreements are agreements between two states that allow an employee to request tax exemption from the other state. This can make filing taxes easier and allow you to avoid the hassles of paying taxes in two states.

Qualifying for Tax Deductions

When you have to do your taxes at the end of the year, you can choose to itemize deductions if you choose to not take the standard deduction. More deductions may present themselves to you based on your fiscal situation, like if you own a home.

If you own a property for your own personal use and if you itemize deductions on your federal tax return, you can claim a deduction on your property taxes. If you're struggling to pay your property taxes, consider taking out a residential property tax loan. Some of the benefits of property tax loans include avoiding delinquency penalties and foreclosure on your home.

Here are some other common tax deductions for 1099 workers:

Home office space: You can deduct a portion of your rent or mortgage for the room space;
Home office supplies: This includes desks, chairs, and computer equipment;
Wi-Fi and utilities: You can deduct a portion of your Wi-Fi expense;
Travel costs: If you travel for work, you can write off your travel expenses;
Marketing services: If you created business cards, flyers, or ran paid advertising, you can deduct those expenses.
Paid professionals: Many freelancers need to hire lawyers for contracts or other professional purposes. This is also a deductible expense.

Keep track of all your business-related expenses, most especially as an independent contractor, so that you may better determine if you should itemize deductions or take the standard deduction on your tax return.