The 10 Best Places to Retire – Topretirements Editor Picks   

Your Editor Picks: How We Rank the 10 Best Places to Retire – And Why
Category: Best Retirement Towns and States

February 28, 2012 — Last week we announced the list of the 100 Most Popular Retirement Towns, our annual list of the places that our visitors and members seem the most intrigued with. This week we decided to take that idea a little further by analyzing that list against 12 important retirement criteria. The result is a top 10 that looks very different, with 4 towns from the top 20 moving up to the top 10. Here are your editor’s selections for the “10 Best Places to Retire” – (the # in ( ) was its ranking on the popularity list).

The 10 Best Places to Retire – Topretirements Editor Picks

1. Sarasota, Florida (#2). Our top pick on Florida’s Gulf Coast has so many things going for it. The economics are very attractive: median home prices well below the national average, no income tax, low property taxes. Culturally it has unbelievable resources for a small city of this size, thanks to the largesse of the Ringling Brothers, who had their winter headquarters here. The downtown is exciting and so is the nearby St. Armond’s Circle shopping area across the causeway on the barrier island. Siesta Key and Longboat Key are nearby.

2. San Antonio, Texas (#16). This Texas town was actually tied on points with Sarasota. We broke the tie based on Sarasota’s higher rank with our visitors. Texas has no state income tax, although its property taxes are higher than average. The city’s River Walk section is a major tourist attraction. There are many active communities to choose from. Retired military personnel will particularly like this area since they have access to many medical and shopping resources. On the negative side San Antonio has a higher than average crime rate (albeit probably more concentrated in certain areas), and its “walkability” average not as high as some communities on this list.

3. Naples, Florida (#11 ). Along with Sarasota, Naples is a place for people who want to live in a more affluent, upscale community. There is a wealthy aura to it, with a downtown featuring high-end shops, luxury hotels, great restaurants, and a a vibrant arts scene. You can easily walk from downtown to the beach through lovely neighborhoods. Home prices are higher than the national average (at about $250,000), although they cost about half what they did 5 years ago. On the negative side of the ledger there is no college.

4. Tucson, Arizona (#17). Our highest ranking retirement town in the west, Tucson is a great college town with the University of Arizona a big presence. There is the beautiful desert for outdoor recreation and scenery, along with the warmest winters in Arizona. Housing is well below average at $131,000. There are ample and very sophisticated health care choices. Crime rates, walkability, and income taxes for seniors are worse than average.

5. Asheville, NC (#1). This town in western NC is always the overwhelming favorite retirement destination at Topretirements. There are plenty of good reasons for that, including its mild, 4 season climate, the UNC Center for Creative Retirement, interesting downtown, and large number of communities and neighborhoods to choose from. After being evaluated against all 12 of our criteria, however, it slid to #5 on our list. It’s still a great place to retire, but compared to the competition it was outranked for reasons including: NC is not as friendly a tax state for retirees, walkability, above average cost of housing, and the city’s above average crime rate.

6. Beaufort, South Carolina (#7). 304 acres of this charming town in South Carolina’s Low Country have been designated a National Historic Landmark. It has a diverse economy, low taxes, and a very strong reputation as a retirement destination. The University of SC has a branch here. Retirees looking to continue working might find it hard to get a suitable job in Beaufort. For health care you might want to go to Savannah or Charleston; housing costs slightly above average. People looking for urban excitement might find this golf and boating oriented area boring after a while.

7. St. Augustine, Florida. (#18). This historic town is one of the oldest in the new world, dating back to 1565. It has beaches, historical museums, Flagler College, proximity to Jacksonville for healthcare and culture, and inexpensive housing at a median cost of $120,000. On the other hand it is a relatively small town with few retirement job or adult education opportunities.

8. Fort Myers, Florida (#6). If you like golf, boating, and fishing Fort Myers might be for you. The area has barrier islands like Fort Myers Beach, Sanibel, and Captiva for great beaching. It also has some very inexpensive housing with a median home price of $108,000 in late 2011. There is no FL income tax; property taxes are low. There is plenty of culture with theaters downtown and the Barbara B. Mann Performing Arts Hall. Every medical specialty is well represented. Negatives include intense traffic in season, a depressed economy, suburban sprawl, and above average crime rate.

9. Venice, Florida (#4). Venice was one of the original planned retirement communities, built in 1925 by the Brotherhood of Locomotive Engineers. Walk from the charming downtown past a huge library and parks to beautiful white and uncrowded beaches. There are an extensive number of active adult communities, many of them built around golf courses. Median home price was $135,000 in late 2011. Taxes are low. Drawbacks are walkability if you don’t live downtown, and the fact that the older population might be off-putting to younger retirees. This is not a college town, unlike some others on our list.

10. Prescott, Arizona (#5). Prescott is an old western town that has managed to propel itself to being a top retirement destination. There are a couple of small colleges and adult education opportunities. Housing prices are above average. There is an interesting downtown. Negatives are the tax situation, limited health care choices and employment opportunities compared to the larger cities on this list.

Our Methodology and Criteria
To develop this “best of the best” list we considered the top 20 towns from our 100 best retirement towns list. Then we analyzed and compared those towns for 12 different retirement criteria, applying 1 point if they were above average for that characteristic, and deducting 1 point or slightly more if they were below average (for example, housing prices in San Diego and Sedona are more than twice as expensive as the national average – therefore we penalized those towns -2 points). These are the 12 criteria we used:
- Wow Factor
- College town
- Large # of active adult communities
- Adult education/Cultural opportunities
- Healthcare options
- Employment opportunities
- Income tax for retirees
- Property tax
- Climate
- Cost of housing
- Crime
-Walkability/Attractiveness of downtown

Please continue to post your Comments about where you intend to retire and why. To keep all of those in one place, please post them to our “Tell Us Where Are You Going to Retire” article.

For further reference:
We are proud to report that we collaborated with Robert Powell of WSJ Marketwatch to produce this article plus a slideshow on that site. See “Slideshow: 10 Best Places to Retire“.

SOURCE

Some more helpful Tips from my favorite listener ANONYMOUS...
THANKS from Deb at The IQD Team...


TIPS YOU MUST KNOW BEFORE BUYING INVESTMENT REAL ESTATE
   by Anonymous

Hello again friends, recently I was asked by a fellow Dinarian who knew that I have been in the Real Estate Industry for over 20 years some questions about buying investment properties after the RV.  I figured I would relay some of his questions over to you as well, I hope this helps, but remember your situation is different and please be sure to always consult several other local to your State and area professionals for their assistance.

Q: Should I buy Residential Housing (i.e. Apartment Building) or should I buy Commercial?

A: The answer primarily depends on your preference, both have positives and negatives, here are some things to keep in mind.

    RESIDENTIAL:
       1)  Renters tend to come and go much more frequently, causing higher costs to 'refresh' the unit (clean carpets, paint, repairs, etc.) a typical rental contract is 1 to 2 years.

       2)  Renters tend to be more 'destructive' as they have no sense of ownership.

       3)  Renters tend to be "high-maintenance" needing their toilets repaired at 3:00 am, etc.

       4)  Renters may not be as consistent with making their monthly rent payments.

       5)  You will be responsible for all property taxes and other potential liens (i.e. Trash/Water & Sewer).

       6)  Management services will need to be employed to manage points 1, 2, 3 and 4 - costing you extra.

       7)  Consists of 1 to 4 units (single family residence (sfr), Townhouse/Condo, or 2,3 or 4 unit building (duplex, triplex or 4-Plex).


    COMMERCIAL:

       1)  Desirable Premium Types:  
               a) Major Chain Restaurants (i.e. Applebees, McDonalds, Starbucks)
               b) Consumer Stores (i.e. Grocery, Electronics, CVS, Rite-Aid, etc.)
               c) Professional Business (i.e. Dental, Legal)
               d) Senior Retirement Homes

       2)  Commercial Tenants tend to be much more stable and not move.  
               a) They want to lease long-term (i.e. 5, 10, 20+ years) from you because of the tax deductions
               b) They want to lease because your property's location is more desirable to anything they can currently purchase.

       3)  Tenants typically lease with a "Triple-Net" Lease - in very short "plain English" that means that they pay you a monthly amount and they are responsible to pay all other costs including, maintenance, repairs, and property taxes.

       4)  Tenants mail you a monthly check, many times you would not need a Management Company, saving you money.

       5)  Consists of 5+ units, or undeveloped land, or Farm/Ranch land.


Q:  Should I just pay cash for the property?
A:  If it was up to me, I would use "OPM" (other people's money) and only pay the minimum cash required.  With commercial / investment type properties, many banks will want to see a sizable deposit, such as around 50% deposit cash!


TIP & TRICK:  An old "loophole" - this loophole may have already been "plugged up" with the new lending laws, however it may still be open, so listen to this which was taught to me many years ago by an old Mortgage Pro....  Every year he purchased a few 4-Plex Rental Units.  He would officially "occupy" one of those units as his "Primary Residence" and then rent out the other Three Units.  He did this to get around the classification of Investment Property which required a 50% deposit of cash.  Since he was buying this 4-Plex as his Primary residence he only put down 10% cash.  He had the utilities, cable, phone all in his name for one of the four units.  Then several months later he would "decide to move" to another 4-Plex unit which he was purchasing as his new "Primary Residence".  Last time I heard, he had purchased over 20 of these 4-plex units this way!  Again, the lending laws may have plugged up this loophole, but it is worth checking in to, just be sure to ask the right people, or you may get yourself into trouble.  

Q:  The real estate saleswoman told me that with the rents collected on this one property, I will easily cover my mortgage, expenses and my property taxes - does that sound like a good property to buy?
A:  Be careful of real estate sales people's "fuzzy math"!!!  After looking at her Estimate she left off the most obvious, but most frequently (and conveniently) overlooked aspect of the investment!!!  


This "overlooked" (ooops!) aspect is when they conveniently forget to factor in YOUR "Cost of (YOUR) Money" more importantly the COST of using your CASH Money Deposit!  The 10% to 50% Cash paid to purchase that property!  They never factor that you could take that money and invest it in other safe investments that will often pay 4%, 5% up to 10% (or more) annually.  So, if that is not included, you had better factor that in!!!  It is not enough that the rents cover the Mortgage, Expenses and Taxes, it MUST cover the cost of using your own money which could have been invested somewhere else!  This is an OLD TRICK, so don't let them fool you!!!


TIP & TRICK:  Watch out for the Cost Estimate Sheets that also don't factor in the true costs of Vacancy!  The cost of Vacancy is not just the lost monthly rent income, but it is the cost of keeping electricity on in that vacant unit, the advertising costs, the vandalism costs, and lastly the profits that would have been earned you would have invested those profits on other investments that may be paying you 4%, 5%, 10% or ???%! 

Watch Out Especially if you are purchasing a Residential Income Property (i.e. Apartment Building) - You must account for the vacancy factor!!!  Even if all the units are rented out "today" that does not factor for the reality of "tomorrow". 

Watch out also with Commercial Property and the Vacancy Rates.  The property may be a "dud" even though it is located in a "hot" area, so be sure to look in to that as well.  And, that reminds me, go look at the property and the neighborhood before you commit yourself to buying it!  I'm sure you, like me, have driven by that one "prime building location" for the last 5 years, and it is STILL "empty" - ask yourself, if that location is just so "good" then why is that unit always "empty"???  Probably because it isn't as great as we think!


Q:  The real estate person told me I had to put my offer in today, or else I'll lose my chance to buy it!

A:  Great, then you in most all cases just "lost" the chance of being RIPPED OFF!!!  If you have not yet had a chance to go tour the property and look around the neighborhood then DON'T BUY the property!  The harder a salesperson pushes you, the more reason you need to walk away from that deal AND also that salesperson!  As my dad always told me growing up: "Haste Makes Waste".

IN CONCLUSION....
There will be many more questions to cover in the future, especially after the RV and The IQD Team has said they will host calls after the RV to provide Professional Help and Advice to you, so in the inter-rum, hopefully these few tips and tricks and answers will get your creative juices flowing and help guide you on starting to think about what you will want to buy (or not buy) in terms of real estate.

Thanks to "Anonymous" Again for sharing with us and our listeners

_

Changing State Residency
 
RV enthusiasts who spend a considerable time away from their home state may come to ponder if another state would be a better place to call home. This page gives an overview of the things to consider before and after deciding to change your legal state of residence, or state of domicile, in legalese.
 
Changing state residency in the United States is a right we enjoy and there is nothing sinister about one's desire to live in a state most inline with his goals, as long as no state is defrauded in the process.
 
Among recreational vehicle dwellers, the primary reasons to change home state are:
Moving from one state to another
Fulltimer or snowbird changing residency to take advantage of state benefits, often relating to taxation (see States With No Income Tax)

What is a Resident and a Domiciliary?
 
The word resident is well understood, but domiciliary is rarely used outside legal circles, so let's take a brief look at both.
 
Resident
A state resident is a person living within the boundaries of a state, meeting certain criteria as defined by the state for receiving benefits and being subject to various forms of taxation. A resident may or may not consider the state his legal state of residence.
 
Domiciliary
A domiciliary is a person claiming the state as the location of his fixed and permanent legal residence (domicile), and meeting certain criteria as defined by the state for the recognition of this status.
 
The difference between the two was explained well by the State of New York Court of Appeals:
 
Residence means living in a particular locality, but domicile means living in that locality with intent to make it a fixed and permanent home. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile.
 
It is important to know the difference between the two terms because you will see them in various contexts when dealing with states and other legal proceedings.
 
However, in informal conversations "resident" is used to mean either term. As such, the remainder of this page and most of this web site will use resident to refer to both cases, except where the difference is worth pointing out.
 
Common State Residency Qualifications
States, and even agencies within the same state, have different residency qualifications. Below is a list of the most common qualifications, but check with your new state to be certain.
 
Intent to make the state one's permanent and legal residence
When absent from the state, intent to return
Resided within the state for at least 30 days
Have a fixed and permanent address within the state
 
Addresses provided by mail forwarding services qualify in some states, but not in others; check with the mail forwarding service.
 
Obtained driver's license from state
Registered vehicles with state (including recreational vehicles)
Became gainfully employed within state
 
The above is not a recipe on how to become a state resident. In certain cases a single item above may be sufficient for residency status; in other cases completing all may still not meet all requirements.
 
State Residency Qualifications Vary
An important point to remember is that what you consider your home state may be different from a state's view of your residency status.
 
A state will be eager to classify you as a resident to levy taxes and other fees upon you. For example, states that collect a considerable income from vehicle registrations will want you to re-register with them as quickly as possible.
 
On the other hand, it is in the state's interest to classify you as a nonresident in order to deny you a tax-funded benefit. A good example are states that provide free or low-cost vehicle registration subsidized by other taxes, where you must meet more stringent requirements to be allowed to register a vehicle as a resident.
 
Keep the following points in mind:
 
Agencies within the same state may have different residency qualifications
If you maintain ties with more than one state, you may qualify for taxation in all
It is considered fraud to avoid taxes or to gain benefits by claiming residency in multiple states
Best way to avoid problems is by doing a clean break from your old state
 
Here is a great illustration of varying residency criteria, as seen on the Alaska election web site (August 2005):
 
You are a resident for voting purposes if you are in Alaska with the intent to remain here and have the intent to return when you leave, and are not registered to vote in another state or are willing to cancel that registration. This does not mean that you meet residency requirements for other state agencies and programs. Other agencies or organizations can have different criteria to define Alaska residency.
 
Clean Break
 
To avoid residency issues, do a clean break from your previous state, preferably at the end of a calendar year to avoid income tax complications.
 
What is a clean break? It is the intention to change state residency and severing all relevant official ties with the previous state. This action is feasible for people completely moving out of the state and fulltimers.
 
To sever relevant official ties with a state, you:
Sell the primary residence in the old state
Buy or rent a home in the new state
Move all belongings to the new state
If still working, become employed in the new state
Get a driver's license in the new state
Register all vehicles in the new state
Register to vote in the new state
 
Ties to Multiple States
For many RV operators a clean break is not feasible and ties to multiple states must be maintained. This in itself is not a problem as long as you take care not to defraud the states. Multiple ties may also complicate other aspects of your life, such as paying taxes, so be prepared to dedicate time to the proper handling of these responsibilities.
 
Below are some points to consider by those who wish to change home state, but need to maintain significant ties with the old state. These lists are intended as guides to help you avoid charges of fraud; however, they are by no means comprehensive.
 
Things to Do
Recognize that the new state is now your domicile and conduct your life accordingly
Acquire new licenses in the new state (driver's license, etc.)
 
If the new state does not offer certain licenses, re-apply in the old state for nonresident licenses, if available (handgun permit, etc.)
 
Change mailing address on all official and financial documents to the new state
 
Register all vehicles with the new state
 
Pay nonresident fees in the old state when participating in activities such as fishing, hunting, etc.
 
If still employed in the old state or receiving other income, file income taxes as a nonresident
 
Things to Avoid
Stop participating in programs available only to residents of the old state (reduced school tuition, welfare programs, tax breaks, reduced fishing and hunting license fees, etc.)
 
Stop voting in old state
 
Stop providing address in old state to gain financial benefits for insurance, etc.
 
A Case to Consider
 
For those who plan on maintaining residences in the old and new states, it would be worth a few minutes of your time to review the case of a snowbird couple transitioning from New York to Florida, who have been denied their petition for property tax refund based on residency status. There is no indication that a recreational vehicle was involved, but it is still relevant to the topic at hand.
 
The official document can be found here: State of NY, Determination No. 817952
 
Our interest in the above determination is not the legal aspects of the case, rather the items considered for determining residency. A few points of interest from the determination:
 
The issue: "Whether the Division of Taxation properly determined that petitioners were domiciliaries of New York State for the year at issue and were, therefore, taxable as resident individuals."
 
From our layman perspective, it appears that the action which started the trouble was the inconsistent filing of official documents—initially filed as New York residents and subsequently as Florida residents.
 
The State of New York considered the following in determining the couple's residency status:
 
"Existing domicile continues until a new one is acquired and the burden of proof to show a change in domicile rests upon the party alleging the change."
 
To test intent with regards to a new domicile, sentiment may also be considered.
 
"Moves to other locations in which permanent residences are established do not necessarily provide clear and convincing evidence of an intent to change one's domicile."
 
Taxpayer's general habits of living demonstrate a change of domicile, or in this case the retention of domicile.
 
The couple retained a permanent place of abode in New York.
 
The couple continued business activity in New York.
 
The couple maintained social and family ties in New York.
 
The couple continued to spend a significant amount of time in New York.
 
The couple did not take any of their furniture from their New York house to Florida.
 
"There is no indication in the record that petitioners intended to sever their New York ties or that they possessed the requisite intent to make Florida their fixed and permanent home."
 
Even though the couple took formal actions to declare Florida as their new domicile, New York found their formal declarations "less persuasive than the informal acts of an individual's general habit of life".
 
Could this case have been overturned on appeal? Perhaps, but it provides lessons to the RV community in how to avoid common pitfalls while maintaining ties with more than one state.
 
DISCLAIMER: While we believe that all information on this web site is accurate, we can not guarantee that it is applicable to You specifically or to Your situation.

http://changingears.com/rv-sec-state-residency.shtml

_The Real Estate Crash: Worse Than We Thought?
Posted on December 16, 2011 by Zack Miller

Real Estate Crash
Remember the story of Red Riding Hood? The drama climaxes at the moment Red realizes the bearded, razor-toothed beast she thought was Granny actually wasn’t.

We were all “Red Riding Hooded” this week by an announcement that the real estate market—bad as it’s been since late 2006—wasn’t what we thought. Things are actually worse. Maybe way worse.

But, as our caped, optimistic little friend found out, things might still work out OK.
What Happened

According to an announcement this week, the dismal number of home sales reported during the recession was actually too high. On Tuesday, the National Association of Realtors (NAR) announced that it has been overstating the number of home sales for as long as the past five years–and this trade group is responsible for the most widely-watched data about the housing market.

According to Time Magazine: “As of last month, NAR said that nearly 4.2 million existing homes … had been sold in the U.S so far this year. By CoreLogic’s estimate, though, only 2.4 million homes had changed hands in 2011.” This discrepancy was masked by faulty bean counting, in which the NAR used outdated benchmarks to estimate home sales.

This matters because one way to check the health of the real estate market is to track how many homes are sold every month. Could the scary numbers we’ve been seeing since 2006, when every housing indicator from home sales to housing prices plummeted, actually be even worse than we thought? According to NAR data, sales of existing homes fell 4.1% in July of 2006 alone, but now even that data itself is in question.
Bad News Freak-Out

While the extent of how “off” the numbers have been isn’t clear yet—that will be reported on December 21st—it is clear that the real estate crash was worse than was reported.

Cue the requisite hand-wringing.

With this additional bad news, people feel that the rug has been pulled out from them (again) just as things appeared to turn around.
What It All Means

While this new revelation is disappointing, in a sense, it doesn’t matter today. It’s like the disclaimer on commercials about investments: Past results aren’t indicative of future performance. In other words, the fact that the real estate market was worse than we thought doesn’t say much about what will happen in the future. In fact, it just makes housing cheaper for those looking to buy a home.

So, before anyone dives into a proverbial bunker, let’s put this new information into perspective.

Is housing improving, or isn’t it? 
Real Estate Past, Present and Future

There are some signs that the housing market is actually making a recovery. Borrowing to buy a home has rarely been cheaper, with many record low mortgage rates; many are still under 4%. (By contrast, at the end of 2002, a typical 30-year mortgage rate hovered around 6%.) In addition to rates, actual prices are low: Houses haven’t been this affordable for most Americans since before 1980.

Fortunately, affordable housing, financing and low down payments seem to be spurring demand for homes. In October, home sales were up over 10%, led by the Northeast, which saw an increase of almost 20%. All good signs.
How This Impacts More Than Just the Real Estate Market

The performance of the housing market has a resounding impact that extends to the broader economy. This is because real estate is a proxy for understanding how well the general economy is doing, and because it influences employment.

When lots of houses are being built, the construction projects provide jobs for lots of people. But, when there’s bad unemployment, fewer people want to buy homes, which further reduces the available job opportunities. The proof is in the numerical pudding: During the bubble expansion years, housing accounted for about 30% of employment growth. But now, post-crash, U.S. joblessness is at a 2.5-year low.
So, Where Do We Go From Here?

The full report comes out on December 21, so don’t be surprised when the media begins crying that the sky is falling. If you own a home, be patient. The market appears to be recovering. If you’re considering buying a home, it’s unlikely that you’ll get a much better opportunity to buy, and finance, so cheaply. Same goes if you’re thinking about refinancing your mortgage–now’s a great time.

The revised home sales numbers will surely demonstrate that one of the worst real estate markets was actually worse than we reckoned. But that’s history. The current data on the housing market shows a better, more optimistic picture.

So, while the upcoming news may have everyone crying wolf, remember, Little Red Riding Hood got to her home safe and sound in the end.
Dive Deeper Into The Market

The real estate market is slowly recovering, but not as many people are buying houses as you might expect. Why? Here are seven factors that affect the housing market.

One word we hear a lot in news reports and cocktail chatter is “leverage”—so we bring you a crash course on what leverage is and why it’s important.

http://www.learnvest.com/2011/12/real-estate-worse-than-we-thought-219/

_Building Bargains: Why REITs Look Attractive

Low rates and excellent rents bode well for these property trusts that trade like stocks.

Link

How to Gift a Vacation Home
SmartMoney
THE TAX BLOG // MAY 12, 2011, 9:27 AM
By Arden Dale
 
Lower real estate prices and higher gift tax limits are making this the perfect time for some wealthy individuals to gift vacation homes. An individual can give up to $5 million during his or her lifetime without paying a gift tax, and for couples that threshold is $10 million. Before, the limit was $3.5 million per person.

The higher limit only applies until 2013, and clients aren’t waiting, says Jay D. Waxenberg, chairman of the personal planning department at law firm Proskauer in New York. “We don’t know what’s going to happen,” he says.
 
Another consideration is the low price of real estate. When a cottage on the coast of Maine or a cabin on a lake in northern Wisconsin is worth less, the potential tax impact is smaller.
 
But some things need to be weighed carefully before making a gift of a vacation place, tax advisers say. Once ownership is transferred, parents or grandparents lose the legal right to decide who gets to use the place and when, whether it can be rented out and who is in charge of upkeep.
 
To retain some control or for tax purposes, owners typically use a trust. One health-care executive, for example, plans to pass a $4 million Jersey shore house in two trusts to his children, who are in their 20s. One trust will be in the man’s name, the other in his wife’s.
 
The trusts, a popular kind known as a Qualified Personal Residence Trust, or QPRT (pronounced “KYOO-pert”), transfer ownership over time and get the property out of the grantor’s estate for estate tax purposes. The couple still has to decide how long to make the trusts last. They may set a 20-year term for the man, who is in his late 50s, and a 25-year term for the wife, who is a bit younger. If they die too soon, the property goes back into their estate, and heirs owe tax on it.
 
A Massachusetts couple in their 60s, retired from the real estate business they owned, are using a different kind of trust to give away a place on Cape Cod to their three children, who range in age from 20 to 30.
 
The two will sign a deed to make the trust the new owner of the place outright. That way, they will no longer own an interest in it, as they would had they used a QPRT, according to Perry Ganz, a partner at Boston law firm Tarlow Breed Hart & Rodgers, who is working with them. They will still use the place sometimes, but pay rent to the trust when they do.
 
The couple is also doing what many people who give away a home to kids like to do: making another gift to the trust to pay for property taxes, insurance and maintenance on the place. That can help prevent squabbling among siblings later on.
 
Readers, are you thinking about gifting real estate to your children? If so, how?
 
SOURCE

Investors Show Interest in Foreclosure Plan

Published: Thursday, 27 Oct 2011 | 3:03 AM ET Text Size 
By: Reuters

Big investors are showing interest in an evolving Obama administration plan to sell off foreclosed homes, although the government will have to make the offer sweet enough to coax private funds.

Reed Saxon / AP
A home is advertised for sale at a foreclosure auction in Pasadena, California.

The White House is assessing how best to encourage private companies and investors to snap up foreclosed properties held by the government and convert them into rentals.

Officials want private partners to take over as much as $30 billion in single-family properties that are currently on the books of government-run Fannie Mae, Freddie Mac and the Federal Housing Administration.

Several money managers with large fixed income funds are interested, according to sources, and a request for ideas on how to construct a program received nearly 4,000 responses.

A glut of foreclosures has weighed on home prices and the overall economy. An effort to get some of that inventory off the market could help stabilize it, while providing affordable rental options to Americans unable to obtain a mortgage.

The foreclosure conversion program would come as the next step to complement other government supports for housing, including an expanded refinance program announced on Monday.

The main question for prospective investors, which include broker-dealers and firms already overseeing similar rental programs, is the type of financing the government will make available—an issue officials are still struggling with.

"In order to get a better bid, there has to be some incentive involved to get qualified investors involved," said Ron D'Vari, co-founder and chief executive of NewOak Capital. "The reality is not a lack of interest, but so far it looks like a lack of financing."

Incentives could include low interest rates, tax benefits or some type of rental assistance, said D'Vari, a portfolio adviser who has been involved in mini-bulk auctions of real estate-owned properties, or REOs, in California.

REO properties are those acquired by a lender, whether a bank or the government, after an unsuccessful auction attempt. Fannie Mae, Freddie Mac and the FHA own about 250,000 properties, close to a third of the country's REO pool.

Looking at Options

One key challenge would be finding big enough blocks of properties in specific geographic areas that could be sold at one time. Analysts say this is what it would take to make the program attractive to large institutional investors.


More on CNBC.com
A Foreclosure Snapshot from ChicagoUS Mortgage Applications Bounced Last Week
The transaction and liability costs property managers will face as they try to bring deserted units back up to code also pose a hurdle.

The government also needs to determine how it will protect taxpayers, and it might explore ways to pair up with investors and allow Fannie Mae, Freddie Mac and FHA to keep some type of an ownership stake in the rental properties.

A public-private partnership, somewhat along the lines of a program the Treasury tried to use to soak up toxic bank assets during the financial crisis, would allow the government to gain from the sales.

"The submissions are a source of ideas, some of which may be incorporated in transactions, and they supplement work that has already been done," a spokesperson at the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, said of the suggestions from private investors.

"We don't believe there is any 'best' program. For any given locality, market conditions may dictate one or another type of transaction," the spokesperson said, without elaborating.

Fannie Mae, Freddie Mac and the FHA have already undertaken some small efforts to reduce the backlog of foreclosed homes. They have donated a few vacant properties for demolition and have held some small auctions.

Having already received $141 billion in taxpayer support since being seized by the government in 2008, Fannie Mae and Freddie are under enormous pressure to make sure they maximize the returns from the properties they hold.

"This has got to be thought out. Fannie and Freddie would need to assess if they are getting the return they need from a rental," said Ken H. Johnson, a real estate professor at Florida International University. Johnson said one way to get over the hurdle would be for the two agencies to be given an explicit mission of market stabilization.

Copyright 2011 Thomson Reuters. Click for restrictions.

http://www.cnbc.com//id/45056823