🙂
Ok, I’m a little off the real estate target here but it is an issue that effects us all. The biggest factor behind the creation of innovative companies like CraigsList, eBay, Amazon.com and even Google is what? The Internet of course. The Internet has been a decisive factor in leveling the playing field between the giant corporations and the startups with great ideas. This provides the environment for real estate related companies like Redfin and Zillow as well as social networking sites such as MySpace.com and YouTube.com.
Apparently many of the telcos (Sprint, Vorizon, AT&T, etc) feel that they should be getting a share of the revenue created by these new ideas. In exchange for creating a faster Internet, their proposal is a toll booths, private express ways and the slow lane for those who don’t want to line the pockets of the telcos. The very same pockets that have already been lined with $200 Billion in tax breaks to create an infrastructure they’ve failed to deliver on already.
So what to the power hitters and luminaries of the industry have to say? Well, on one side we have AT&T CEO Ed Whiteacre who said “that in order to bring America up to speed through fiber-to-the-premises (fttp) wiring, content providers are going to have to pony up to use his “pipes.” I’m far more inclined to believe the likes of Craig Newmark, founder of CraigsList.
‘Imagine if the leaders of 16th century Germany, feeling threatened by the democratizing forces of the printing press, had taken Gutenberg’s invention and limited its use to those they politically agreed with — or if Luther had to pay licensing fees for nailing up his 95 Theses on every church door in Germany,’ writes Craig Newmark in an opinion column in the San Francisco Chronicle.
Sir Tim Berners-Lee, father of the Internet, has characterized this as a US-only problem at present. “In Europe, net neutrality is the rule“ he said. Interestingly enough they are also way ahead of the US in broadband technology and capacity. What else can you say about an issue that has united Microsoft, Google, Yahoo and Moveon.org all on the same side.
Some of the proposed Net Neutrality legislation is seeking to prevent the telcos from charging extra tariffs based upon the type of content delivered. But even with the heavy hitters like Microsoft and Google, this initiative is facing a tough battle. Just last week those companies favoring net-neutrality lost a key vote in Washington DC. The key lobbyists seem to be siding with the telcos and their bread-and-butter lobbying dollars.
On the other hand, is this law really necessary? There are some who advocate letting them put up road blocks — it will spur more market forces to alternative technology like Wi-Max. Others are against the net neutrality laws as they are currently proposed. Andrew Cantor of USA Today’s Cyberspeak column argues that “Network providers need incentive to build faster pipes…But if they(sic) can’t make money by offering a better product, why would they bother building one?”
As much as I’m a free market leaning entrepreneur I lose my trust when it comes to industry big business. We (the American public) already got taken to the cleaners in the great theft called the Telecommunications Act of 1996. I’m not ready to stand by and watch the same thing happen with the Internet. If you want to take a stand for Interent Neutrality, contact your congressman or senator today. The Senate is actually getting ready to vote on a crucial bill, so let them know this week where you stand.
Further reading:
These days when I pass the mirror, I always wonder whose looking back at me cuz it’s sure not the 30 something person I think I am. I guess the answer to that problem, is not look into the mirror!
So, I’m looking for the good things about getting older. Know what the best thing is (given that I have no grandchildren yet)? For me it’s the day when I turn 59.5 and can take money out of my retirement fund and start spending it!
For those of you who can’t even think that far ahead, at least give some thougt to tax planning. Remember a dollar saved in taxes is a dollar you don’t have to earn! Real estate as an investment vehicle works for me, becuase of the leverage involved and the control I have and the great tax incentives. When you combine a good real estate investment with good tax planning, you can grow your wealth faster since you have some great tax free or tax deferred IRS sanctioned programs to take advantage of. Here’s a quick rundown of three of these programs to shelter real estate investment income. I’ve been using two of them for years.
Self Directed IRAs Investing in Real Estate
If you have a retirement account from a job you’ve left, did you know that you can self direct that money and invest it in real estate? Or, if you have IRAs, you can also self direct and invest them in Real Estate. First, you need a custodian to handle the transactions. Simply set up self directed IRA’s and self directed Keogh’s and 401K’s through a custodian such as Entrust or Pensco Trust. I use Pensco Trust out of San Francisco. They’re great at making sure you handle all the details and they can help you through the process. There are tricky issues to work through like needing non recourse debt financing and working through the UBIT taxes can be a challenge.
But for every roadblock there is a solution and if you have a Roth IRA and invest right, then your money can grow tax free! There are lenders willing to finance the necessary non recourse loans, and the UBIT tax is only on the leveraged portion and can be as low at 15%. Be sure to check out your particular situation with a tax professional.
In the next couple of days, I’ll write about the 1031 and the Family Foundations.
So, give it some thought. Don’t be afraid of getting older becuase it’s a blast!
For those agents that are “paying for the privilege of marginalization,” Craigslist expanded to 100 new cities last week. Only selected agents in New York will actually be paying: in tandem with their expansion, they are charging New York City appartment brokers $10 per listing.
Craigslist is a pretty incredible business – they are so focussed on user experience that fees are only implemented when a section gets too many repeat posts or gets too spammy for Craig, now a full time customer service rep, to keep a lid on. There was a great interview with CEO Jim Buckmaster in the WSJ on Saturday. Here’s a choice quote that sums up their business philosophy:
It’s unrealistic to say, but — imagine our entire U.S. workforce deployed in units of 20. Each unit of 20 is running a business that tens of millions of people are getting enormous amounts of value out of each month. What kind of world would that be?”
And despite the fact that we may not have Ardell’s magic open house touch, we are showing it on Sunday between 12 and 3PM as described in the open house listing on Trumba.
Update:
I also created an adword campaign around our home. If you see the following ad while surfing the web, don’t click on it because it costs me money and just takes you to this blog post! 🙂
[photopress:beautiful_ballard_home.jpg,thumb,centered]
Funny side note… I decided to try out Google’s option to target ads at specific websites and noticed that Zillow was on the list for real estate related sites. However, in order to see the ad for my home on Zillow, I had to disable the one-two punch of Adblock and Filter.G on my Firefox browser. By disabling these two extensions, so many websites that I visit on a regular basis looked so much uglier! It was like traveling the web naked! It you’re not using the firefox browser with these two extensions, then you are almost definitely surfing a web that looks much more annoying than mine!
Noah Rosenblatt brings up a timely article (timely for me anyway) on the tax benefits associated with selling a primary residence. Here’s the pertinent info:
To claim the maximum exclusion on the capitol gains on the sale of your home, you MUST first meet the Ownership and Use tests…
- Owned the home for at least 2 years (the ownership test), and
- Lived in the home as your main home for at least 2 years (the use test)
The general idea is that a single person can exclude $250K in capital gains while a married couple filing joint taxes can exclude $500K provided they meet some basic conditions and the meet the two tests above. (Noah includes the conditions on his post!)
Now for my question, is there a timeframe that someone needs to plow this money back into a new residential property in order to reap the capital gains benefits?
Since Noah doesn’t mention this, I’m assuming that the idea of reinvesting within a certain timeframe only applies to investment properties, but I’d sure like to be more confident of this assumption and (horror of horrors) I’d rather not try to read the tax code!
[photopress:hmphoto3.jpg,thumb,alignright]I’m not talking about the steel side or rubber maid monstrosity of ugliness you pick up at Home Depot. Nope, these are modern architecture with designer finishes. I’ve been thinking about writing this article ever since I saw the well designed sheds by Coast Cabins at the home show a year ago. A recent article in Business Week on the same topic spurred me to get around to it. I’ve often thought of adding more space to my existing home (especially since my son came along – he’s 5 months now) but not really in the budget range yet for the massive remodel I’d like to do. So I thought about putting up one of these sheds as an office and/or guest space. No waiting weeks for contractors, off-track budgets and even better – no permits.
[photopress:shed_10_12_image01.gif,thumb,alignleft]If you want to go a little more contemporary, there’s a great system designed by architect Michael Graves for Target (yes, that Target — with the bull’s-eye). Or if you like modern ala The Dwell home, check out modern-shed.com,
To some people this might seem a bit trashy, but as the Business Week article said “just think of it as a backyard room“. Me — I’m thinking of heading to the woodshed. 🙂
Looks like Gates has announced his plans to retire from the Day to Day activity over at Microsoft, between now and 2008.
Will this have any impact on the Company? The stock? The area? Doesn’t sound like good timing for this announcement to me, right after the “no more towels” fiasco. Your thoughts/opinions?
For all you econ majors and those who are cringing as our new Fed Chairman adjust to his new role this is a great little paradogy from the Columbia School of Business.
Every Breath You Take
Dean Glenn Hubbard
Parody: Follies Student Comedy Revue
We are, for the most part, in a “normal market”, meaning that in some segments, it is a Seller’s Market, while in another segment, in the same city and price range, it is a balanced to Buyer’s Market. I used this sample to show how, in a small geographic area and price range, you can have two types of markets going on simultaneously.
What does that mean to you as a buyer? If you find one in the charted area that shows 0 available and 24 sold in six months, you need to act quickly and be less picky about condition and location. If you find one in the area that has 15 available and 149 sold in the last six months (same City and same Price Range, different Zip Code) then you can take your time, be more picky and even wait for a better one.
What does that mean to you as a seller? If you are putting your property on market in the first graph area and price, you can likely push the price based on supply and demand and still sell quickly at full price. If you are a seller in the second market segment noted by the second graph, you will have more competition and should price competitively and put the property in the best showing condition possible.
I have not highlighted the true “Buyer’s Market” segment, which is one where only 3-5 of every 10 homes for sale, will sell at all, meaning the ratio is 10 sellers for every 3-5 buyers. That is occuring in higher price ranges (over $1,500,000) and harder to define market segments, and not necessarily as relevant to the average RCG reader.
Perhaps other agents who work further out, like Sultan, Monroe, Des Moines, etc… can do some stats in those areas for us. Anyone seeing the ratio of buyers to sellers such that there are not enough buyers in the marketplace to absorb current inventory in a reasonable timeframe?