If you're a renter, your rent is going down next year. Here's why:
In 2023, Arizona passed a law that abolished rental tax. The law is not set to take place until January 1, 2025, to allow cities and towns to adjust to the loss of income. Because this is such a hotly contested issue and because it relies on landlord passing this savings on to residents, both tenant advocates and news media will be watching landlords closely to ensure compliance with the law and that residents actually receive the reduction in their rent. Here are the things you need to know. This doesn't take effect until January 1, 2025. However, you must plan now and stop all rental tax on that date. On January 1, 2025, landlords are prohibited from charging the rental tax. In other words, landlords should actually decrease the amount they are charging residents at that time. Its not just the tax on rent that is decreased. All previous charges that had taxes on them, should also be decreased. For example, if late fees were $5.00 plus $. 09 in tax, that part that is tax, should be removed in 2025. Late fees would only be $5.00. For all new residential leases starting on January 1, 2025 or later, the lease should not include rental taxes. Landlords should start to notify tenants of the reduction in the amount owed, and advertise it publicly. This should be promoted as a good thing for residents. Under ARS 33-1314 a landlord is required to serve a formal, legal 30 day notice to change the tax rate.When you are increasing the tax, you absolutely have to do so. However, since you are abolishing the tax pursuant to state law, and because the tenant is saving money, it's not clear whether a formal 30 day notice is required, or you can simply send notices via community communications and via email. Its unclear what damage a tenant would have, if no formal notice is sent. This ban does not apply to commercial rentals (meaning cities can charge a rental tax). This ban does not apply to "health care facilities, long-term care facilities or hotel, motel or other transient lodging business." ADOH has already come out and said this only applies to long term residential dwellings. Therefore, short term rentals will still have to pay the applicable tax. You must know this if you operate a hybrid model, and must tax accordingly. This elimination of rental tax will cost the cities a lot of money and there was a lot of press about how landlords are not going to change and were just going to keep the extra funds. It is critically important that this not happen. Landlords must be compliant starting on January 1, 2025. All residents should see a decrease in their rent and related charges when the tax is stopped. If you do not separately line item this tax on monthly rental statements, you may need to consult your tax accountant to determine what impact, if any, this may have on the billings to the tenants.
The Importance of Home Inspections: Protecting Your Investment in a New Home
What's a Home Inspection? Think of it as a thorough check-up for your potential new home. We hire a professional inspector to examine the property from top to bottom, looking for any structural or safety issues. This usually happens after you've made an offer but before closing the deal. Why it's a smart move: While it's not mandatory, a home inspection can save you from costly surprises down the road. It's all about making sure your dream home doesn't turn into a nightmare of repairs. The Cost Factor Now, I know what you're thinking - "How much is this going to set me back?" Well, for an average-sized home (about 2,000 square feet), you're looking at around $300 to $500. Larger or older homes might push that up to $700 or more. But trust me, it's money well spent. Think of it as an investment in your peace of mind. What Does the Inspector Look At? These pros are thorough. They'll check out: The foundation Roofing Electrical systems Plumbing and drainage Walls and ceilings Windows and doors HVAC systems They're not concerned with cosmetic issues, but they're laser-focused on anything that could affect the home's safety or structure. Common Issues They Find In my experience, here are some frequent flyers: Water intrusion (hello, mold!) Electrical problems (safety hazard alert!) Roof damage Foundation issues Pest infestations (nobody wants roommates they didn't invite) After the Inspection Once the inspection's done, you'll get a detailed report. If everything looks good, great! We move forward. If not, we've got options: We can negotiate repairs with the seller Ask for a credit towards closing costs Try to lower the purchase price Remember, we're looking for major issues here, not a squeaky door or a chipped tile. My Top Tips for You Be there for the inspection: It's a great chance to learn about your potential new home. Ask questions: If something looks off, speak up! Consider specialized inspections: Sometimes we need experts for things like pests or asbestos. Know you can walk away: If the inspection uncovers deal-breakers, you're not obligated to buy. Finding a Good Inspector I can recommend some great inspectors, but feel free to do your own research too. Look for certifications from organizations like the American Society of Home Inspectors or the International Association of Certified Home Inspectors. Remember, a home inspection is your safeguard against buying a money pit. It might seem like an extra expense now, but it can save you thousands in the long run. Plus, you'll sleep better knowing your new home is safe and sound. Any questions? I'm here to help!
Unlocking Homeownership: Your Essential Guide to Mortgage Pre-Approval
What's a Mortgage Pre-Approval? Think of it as a sneak peek into your home-buying power. It's when a lender gives you a conditional thumbs-up, saying, "Based on what we know about your finances, here's how much we'd be willing to lend you." They'll also give you an estimated interest rate. Why it matters: Most sellers want to see this before they'll take your offer seriously. It shows you're a serious buyer and you've got financial backing. Pre-Approval vs. Pre-Qualification Don't confuse these two! Pre-qualification is just a quick estimate based on a brief look at your finances. Pre-approval, on the other hand, is much more thorough: It involves a full mortgage application The lender does a hard credit check They'll dig deep into your income, assets, and debts Trust me, pre-approval carries much more weight when you're making an offer on a home. When Should You Get Pre-Approved? I usually recommend starting this process about 6 months to a year before you plan to buy. It gives you time to address any credit issues that might pop up. Keep in mind, these approvals typically expire after 2-3 months, so timing is key. What You'll Need Getting pre-approved isn't complicated, but you'll need to gather some documents: Proof of income: W-2s, recent pay stubs, 1099s if you're self-employed Proof of assets: Bank statements, retirement accounts, investments Good credit score: Typically, you'll need at least 620 for most conventional loans Employment verification: They'll probably call your employer Other documents: Driver's license, social security card, etc. Choosing a Lender You've got options here. You can go directly to a bank or work with a mortgage broker. Brokers can help you compare offers from different lenders, which can be really helpful if you don't want to do all the legwork yourself. After Pre-Approval Remember, pre-approval doesn't guarantee you'll get the loan. Things can change if your financial situation shifts. My advice? Once you're pre-approved, avoid making big purchases, changing jobs, or doing anything that could impact your finances. And here's a pro tip: You're not obligated to get your loan through the lender that pre-approved you. Feel free to shop around for the best rates and terms. Getting pre-approved is a big step towards homeownership. It gives you a clear picture of what you can afford and shows sellers you mean business. If you have any questions about the process, I'm here to help!
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