DEAR BOB: What is the best way to change my deed to includemy two sons, ages 21 and 26? How do I find a good real estate attorney whowon’t overcharge me? –Leonardo R.
DEAR LEONARDO: Why would you want to add your sons to yourtitle? That could be a major mistake.
Purchase Bob Bruss reports online.
If you want to avoid probate after you die, you would be farbetter off creating a revocable living trust naming your sons to receive thetitle after you die.
As I often say, “It is usually far better to inheritreal estate than to receive it as a pre-death gift.”
If you give your sons a full or partial interest in yourproperty now, you burden them with your probably low adjusted cost basis, thusdepriving them of a new “stepped-up basis” to market value as of thedate of your death if they instead inherit your property.
Another possible drawback, in many states, is the propertymay be subject to reassessment for property tax purposes if you give them apartial interest now.
Also, you give up full control of your property in case youneed to sell the property to provide cash for your care in the old folk’s home.Please consult your tax adviser and real estate attorney before giving yoursons a partial interest in your property.
OCCUPANCY OF JOINTLY OWNED HOME DOESN’T MATTER
DEAR BOB: My brother and I own a house as joint tenants withright of survivorship. However, I alone will be living in the house for twoyears. If we then sell it, will all the capital gains tax reflect on my SocialSecurity number or his as well? We are both listed on the mortgage and thetitle –Shahram H.
DEAR SHAHRAM: The fact you will be occupying the house alonefor two years has no effect on the title.
When you and your brother sell the house in two years, thecapital gain will be divided equally between you since you are equal co-owners.Both Social Security numbers should appear on the IRS Form 1099, which will beprepared by the attorney or title settlement firm handling the closing.
HOW MUCH RENT SHOULD A FOUR-PLEX PRODUCE?
DEAR BOB: I am considering buying a fourplex rental propertyfor $259,000. How much rent should the four units produce to make thisinvestment pay off? –Jason N.
DEAR JASON: The exact answer depends on the amount of yourcash down payment and the mortgage payments.
As a very general rule, the total monthly rents shouldideally be 1 percent of the property’s market value.
To illustrate, with a $259,000 purchase price (of course,never pay full asking price), the property should produce gross rent of $2,590per month. However, because rents have not kept pace with rising propertyvalues in most cities, don’t be surprised if the attainable rents are not that high.
Check local rents before purchasing the property to see ifit will be a profitable investment for you.
The new Robert Bruss special report, “How to Sell YourHouse or Condo for Top Dollar in a Buyer’s Market,” is now available for$5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at1-800-736-1736 or instant Internet delivery at
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News