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A Wabi-Sabi Haven in the North Carolina Mountains
A Wabi-Sabi Haven in the North Carolina Mountains 1600 1934 Ines

Embracing Wabi-Sabi Philosophy

In the serene mountains of North Carolina, interior decorator Betsy Brown, with the help of her friend, architect Paul Bates, has created a true haven of peace and tranquility. This secluded cottage perfectly embodies the wabi-sabi philosophy, celebrating the beauty of imperfection.

Following Instincts to a Dream Home

For those who are bold, trusting your instincts is second nature. Betsy Brown spent many years searching for her dream home, a journey that finally led her to a house near the Green River. This river, named for its striking green color, winds through the lush mountains of North Carolina, a region renowned for its natural beauty. As a nature lover, Betsy was particularly drawn to this idyllic setting.

Inspired by Wabi-Sabi

Betsy found inspiration for this project in wabi-sabi, a Japanese philosophy that embraces the beauty of imperfection. The cottage features a master bedroom and a guest room, both offering stunning views of the surrounding natural landscapes. This design choice reflects the wabi-sabi aesthetic, highlighting the serene, imperfect beauty of nature.

An Instant Connection

Betsy experienced an immediate connection to the property: “When I stumbled upon this house for sale online, I didn’t think twice. I made one of the biggest decisions of my life in the quickest way possible, all while being acutely aware of what I was doing.” Her swift, instinctual decision led her to create a space that is both a personal retreat and a testament to the wabi-sabi philosophy.

A True Mountain Retreat

With Paul Bates’ architectural expertise and Betsy Brown’s keen eye for design, this mountain cottage has been transformed into a sanctuary that exemplifies the tranquil and imperfect beauty of wabi-sabi. The cottage stands as a peaceful retreat where one can truly connect with nature and find solace in simplicity.

In this secluded haven, Betsy Brown has realized her vision of a home that not only provides comfort but also honors the timeless beauty of the natural world and the wabi-sabi philosophy.

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Maximizing Investment Returns by Minimizing Taxes: A Practical Guide
Maximizing Investment Returns by Minimizing Taxes: A Practical Guide 1200 675 Ines

Taxes are an inevitable part of investing, but understanding and managing them can significantly enhance your long-term returns. By focusing on tax efficiency, you can keep more of your investment income working for you, leading to greater growth and compounding over time. Here’s a detailed guide on how to invest tax efficiently and boost your portfolio’s value.

1. Understand When You Will Pay Taxes on Investments

The first step in tax-efficient investing is to grasp the various types of investment taxes and their timing. Investments are generally taxed in two ways: on the cash flow generated (dividends and interest) and on the capital gains from selling the investment.

Dividends and Interest:

  • Interest and Ordinary Dividends: These are taxed at your regular income tax rate, except for income from municipal bonds, which are exempt from federal taxes and possibly state taxes.
  • Qualified Dividends: These meet specific IRS criteria and are taxed at the lower long-term capital gains rate.

Capital Gains:

  • Short-Term Capital Gains: For assets held for less than a year, these gains are taxed at your ordinary income tax rate.
  • Long-Term Capital Gains: For assets held for more than a year, these gains are taxed at reduced rates of 0%, 15%, or 20%, depending on your income level.

2. Invest in Tax-Efficient Assets

Certain assets are more tax-efficient than others. Generally, assets that generate regular interest, dividends, or distributions are less tax-efficient. Examples include:

  • Bonds and Bond Funds
  • Real Estate Investment Trusts (REITs)
  • Actively Managed Stock Funds

On the other hand, more tax-efficient investments include:

  • Municipal Bonds or ETFs
  • Passively Managed Index Funds and ETFs
  • Tax-Efficient Active Mutual Funds

Building a tax-smart portfolio begins with selecting the right mix of assets that align with your investment horizon and risk tolerance while also considering their tax efficiency.

3. Take Advantage of Tax-Advantaged Accounts

Investing through tax-advantaged accounts can further enhance tax efficiency. Consider these options:

Traditional IRAs and Employer-Sponsored 401(k) Plans:

  • Contributions are made pre-tax, lowering your taxable income for the year.
  • Investments grow tax-deferred, meaning you only pay income tax on withdrawals in retirement.

Roth IRAs and Roth 401(k) Plans:

  • Contributions are made with after-tax dollars and are not deductible.
  • Investments grow tax-free, and you won’t pay taxes on distributions in retirement.

Utilizing these accounts can significantly reduce the tax burden on your investments, allowing more of your money to grow over time.

4. Aim to Buy and Hold

A crucial strategy for minimizing taxes is to buy and hold your investments. You are only taxed on realized capital gains when you sell an investment for cash. Thus, as long as you don’t sell, you won’t incur capital gains taxes, which can be substantial.

Even if you plan to sell eventually, holding onto your investments for more than a year can be beneficial. Long-term capital gains tax rates are typically lower than short-term rates, leading to significant tax savings.

Conclusion

By understanding and strategically managing investment taxes, you can maximize your returns and grow your portfolio more efficiently. Paying attention to the types of investments, utilizing tax-advantaged accounts, and adopting a buy-and-hold strategy are all effective ways to reduce your tax burden and enhance your financial outcomes. Remember, the less you pay in taxes, the more you have working for you, leading to greater growth and compounding over time.

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Investing in Real Estate Investment Trusts (REITs): A Comprehensive Guide for May 2024
Investing in Real Estate Investment Trusts (REITs): A Comprehensive Guide for May 2024 639 360 Ines

What is a REIT?

Real Estate Investment Trusts (REITs) are companies that own, operate, or finance income-producing real estate. By investing in REITs, individuals can buy shares in these companies, similar to purchasing stocks. The primary way to earn returns from REITs is through dividends. REITs typically own a variety of property types, such as apartments, warehouses, self-storage facilities, malls, and hotels. You can invest in REITs through a brokerage account, making it an accessible method for diversifying your investment portfolio with real estate.

How Do REITs Work?

REITs were created by Congress in 1960 to allow individual investors to own equity stakes in large-scale real estate enterprises. This structure made it easier to buy and trade a diversified real estate portfolio. REITs must comply with specific IRS regulations, which include:

  • Distributing at least 90% of their taxable income as dividends to shareholders annually.
  • Investing at least 75% of total assets in real estate or cash.
  • Earning at least 75% of gross income from real estate-related sources, such as rents or mortgage interest.
  • Having a minimum of 100 shareholders after the first year.
  • Ensuring that no more than 50% of shares are held by five or fewer individuals during the last half of the taxable year.

These rules allow REITs to avoid paying corporate taxes, enabling them to finance real estate more cost-effectively and return more profits to investors.

How Much Can I Make with REITs?

To assess potential returns, it’s helpful to compare benchmarks. For example, the S&P 500 tracks the performance of 500 major U.S. companies, while the FTSE NAREIT All Equity REITs Index tracks equity REITs. Historically, from 1972 to 2019, REITs provided an average annual return of 11.8%, compared to the S&P 500’s 10.6%. While this doesn’t mean REITs are inherently better than stocks, including REITs in your portfolio can enhance diversification and potentially reduce risk.

Best-Performing REIT Stocks: May 2024

As of May 2024, some of the top-performing publicly listed REITs include:

  • Diversified Healthcare Trust (DHC): With a 1-year total return of 162.86%, the share price is $2.36.
  • SL Green Realty Corp. (SLG): Achieved a 1-year total return of 129.09%, with a share price of $49.83.
  • Uniti Group Inc. (UNIT): Recorded an 88.43% 1-year total return, with shares priced at $5.75.
  • Vornado Realty Trust (VNO): With a 1-year total return of 75.08%, the share price stands at $26.03.
  • Industrial Logistics Properties Trust (ILPT): Reached a 1-year total return of 72.94%, with shares at $3.52.

Best-Performing REIT Mutual Funds: May 2024

For those who prefer mutual funds, some top performers are:

  • Baron Real Estate Income Institutional (BRIIX): With a 1-year return of 5.32% and an expense ratio of 0.80%.
  • JHancock Real Estate Securities R6 (JABIX): Offering a 1-year return of 4.04% and an expense ratio of 0.81%.
  • Cohen & Steers Real Estate Securities (CSDIX): Providing a 1-year return of 2.50% with an expense ratio of 0.84%.
  • BlackRock Real Estate Securities Institutional (BIREX): With a 1-year return of 1.88% and an expense ratio of 0.75%.
  • Guggenheim Risk Managed Real Estate Institutional (GURIX): Recording a 1-year return of 1.86% with an expense ratio of 0.90%.

Best-Performing REIT ETFs: May 2024

Popular REIT ETFs include:

  • Pacer Industrial Real Estate ETF (INDS): With a 5-year return of 6.26% and an expense ratio of 0.55%.
  • Real Estate Select Sector SPDR Fund (XLRE): Offering a 5-year return of 3.48% with an expense ratio of 0.09%.
  • Nuveen Short-Term REIT ETF (NURE): Providing a 5-year return of 3.47% and an expense ratio of 0.35%.
  • iShares Residential and Multisector Real Estate ETF (REZ): With a 5-year return of 3.07% and an expense ratio of 0.48%.
  • iShares Core U.S. REIT ETF (USRT): Recording a 5-year return of 2.59% with an expense ratio of 0.08%.

Types of REITs

REITs are categorized into three main types based on their holdings:

  1. Equity REITs: These own and operate income-generating real estate.
  2. Mortgage REITs: These provide financing for income-producing real estate by purchasing or originating mortgages and mortgage-backed securities.
  3. Hybrid REITs: These combine the investment strategies of both equity REITs and mortgage REITs.

Conclusion

Investing in REITs offers an accessible way to include real estate in your investment portfolio without the need to directly manage properties. With a variety of REIT stocks, mutual funds, and ETFs available, you can tailor your investment strategy to meet your financial goals and risk tolerance. Always consider the specific characteristics and risks associated with different types of REITs before investing.

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From Modest Beginnings to Luxury Estate: The $295 Million Donahue Property
From Modest Beginnings to Luxury Estate: The $295 Million Donahue Property 1600 1199 Ines

The Donahue property in Naples, Florida, stands as a testament to transformation and luxury, now hitting the market for a record-setting $295 million. This remarkable estate, which began as a modest fisherman’s cottage on a 1.7-hectare coastal plot, was purchased by John Donahue and his wife in 1985 for $1 million. Enamored with the land during an aerial tour of the peninsula, the couple gradually acquired additional adjacent properties over the years.

Originally intended as a retreat for their expansive family, comprising 13 children, 84 grandchildren, and 175 great-grandchildren, the estate has grown into a magnificent compound. The main section of the property now includes three houses, a private boating basin, and extends over 3.6 hectares.

If sold at the asking price, this property will surpass the current record for the most expensive home sold in the United States, set by financier Ken Griffin’s $240 million penthouse purchase in Manhattan’s Billionaire’s Row.

The Donahue estate joins an elite group of nine-figure properties recently listed, all vying to break Griffin’s record. For instance, a Central Park Tower penthouse was listed at $250 million in 2022, later reduced to $195 million. Similarly, financier Gary Winnick’s Los Angeles mansion, Casa Encantada, initially listed at $250 million in June 2023, also saw its price drop to $195 million.

Representatives from the Dawn McKenna Group of Coldwell Banker Realty, the Leighton Candler Team of Corcoran, and Rory McMullen of Savills justify the Donahue property’s price with its vast size, prime location, and unique boating basin. According to Redfin, the average home price in Naples is $800,000, while properties in the exclusive Port Royal neighborhood, where the Donahue estate is located, average $9.1 million. The estate boasts 283 meters of waterfront on Gordon Pass and Naples Bay, along with 222 meters on the Gulf of Mexico.

Bill Donahue, John and Rhodora’s son, shared with the Wall Street Journal: “We have all loved spending time at this property, but it’s more or less time to move on.”

The Donahue property not only epitomizes luxury and family legacy but also marks a significant moment in the high-stakes world of real estate. If sold at the listed price, it will establish a new benchmark for luxury estates in the United States.

#RealEstate #LuxuryHomes #FloridaRealEstate #RecordSale #Investment #PropertyMarket #NaplesFL #PortRoyal #LuxuryLiving #FamilyEstate

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Navigating Residential REIT Investments: Stability, Growth, and Considerations”
Navigating Residential REIT Investments: Stability, Growth, and Considerations” 880 586 Ines

Residential Real Estate Investment Trusts (REITs) stand out as steadfast investment options for those seeking long-term stability and steady income. Choosing wisely among these REITs involves identifying properties with growth potential in robust real estate markets.

Understanding Residential REITs
Among the diverse array of Real Estate Investment Trusts (REITs), residential REITs rank as one of the most favored. Their appeal lies in their familiarity and the fundamental need they serve: housing. Operating on gross leases, residential REITs acquire and hold properties, leasing them to tenants. This model often involves periodic property sales to upgrade existing holdings or acquire similar assets, all aimed at enhancing investment returns.

Residential REITs encompass a wide spectrum of rental properties, from single-family homes to multifamily complexes, making real estate investment accessible to a broader investor base by pooling resources for properties that might be otherwise unattainable individually.

Advantages of Investing in Residential REITs
1. Recession-Resilience: Residential REITs typically weather economic downturns well due to the perpetual demand for housing, making them relatively resilient compared to other asset classes.
2. Growing Demand: With a rising population and an increasing preference for renting, residential REITs benefit from a growing pool of potential renters, translating into consistent income streams.
3. Homeownership Challenges: Persistent inventory shortages and escalating home prices have made homeownership elusive for many, driving them towards long-term rental solutions, further bolstering demand for residential REIT properties.

Risks of Residential REIT Investments
1. Market Volatility: Fluctuations in local housing markets can impact the performance of residential REITs, necessitating careful consideration of market dynamics.
2. Debt Burden: Overleveraging poses a significant risk, potentially destabilizing residential REITs, emphasizing the importance of prudent debt management.
3. Oversupply Concerns: Excessive investment in specific markets can lead to oversupply, jeopardizing occupancy rates and rental income.
4. Interest Rate Impact: Rising interest rates can increase the cost of debt for residential REITs, potentially affecting property valuations and rental yields.

Top Residential REIT Picks for 2024
When considering residential REIT investments, thorough market analysis and risk assessment are paramount. Among the top residential REITs for 2024, companies demonstrating robust market understanding and resilience to potential challenges stand out as prime choices for long-term investors.

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Florida Dominates Top 10 U.S. Cities List for Short-Term Rental Investments
Florida Dominates Top 10 U.S. Cities List for Short-Term Rental Investments 2560 2229 Ines

Based on a recent study conducted by Clever Real Estate in collaboration with Rabbu.com, Florida emerges as the hotspot for short-term rental investments in the United States. Topping the list is Tampa, followed closely by Orlando and Jacksonville, solidifying the Sunshine State’s dominance in this lucrative market.

The study, which analyzed various metrics including median home prices, occupancy rates, and changes in property values, highlights Tampa’s exceptional performance with a remarkable 71.6% increase in property values over the past five years. With triple the median number of property listings and a robust Airbnb occupancy rate, Tampa boasts an average annual Airbnb revenue of $52,705.

Here are the top 10 U.S. cities for short-term rental investments:

  1. Tampa, FL
  2. Orlando, FL
  3. Jacksonville, FL
  4. Boston, MA
  5. Miami, FL
  6. Buffalo, NY
  7. Columbus, OH
  8. Chicago, IL
  9. Providence, RI
  10. Kansas City, MO

Conversely, San Jose, California, emerges as the riskiest short-term rental market, with exorbitant median home sale prices and significantly fewer listed properties compared to the median. With just 1,296 listed properties, San Jose presents the lowest return on investment score in the nation.

The 10 worst short-term rental markets in the U.S. include:

  1. San Jose, CA
  2. Birmingham, AL
  3. San Antonio, TX
  4. Houston, TX
  5. Sacramento, CA
  6. Raleigh, NC
  7. Riverside, CA
  8. San Francisco, CA
  9. Oklahoma City, OK
  10. Pittsburgh, PA

Despite the allure of short-term rentals, a survey of 1,000 Americans conducted by Clever reveals concerns regarding misleading property descriptions, lack of on-site assistance, and safety issues. While 76% view Airbnbs positively and perceive them as more comfortable than hotels, only 44% consider them safer, reflecting growing apprehension amidst rising crime rates.

Emir Dukic, founder of Rabbu, notes the sustained interest in short-term rental investments, emphasizing that while returns may be slightly lower than in previous years, prime properties in top markets consistently yield double-digit returns.

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Unlocking Real Estate Investment Potential: 3 Cities to Watch for Future Growth
Unlocking Real Estate Investment Potential: 3 Cities to Watch for Future Growth 2500 1330 Ines

The landscape of real estate investment is constantly evolving, presenting savvy investors with new opportunities for growth. Renowned real estate expert Barbara Corcoran recently shared insights on cities that she believes hold immense potential for increased home values in the near future. Here’s a closer look at these promising locations:

  1. Pittsburgh, Pennsylvania: With an average home value of $227,329, Pittsburgh stands out as a city ripe for investment. Historically known for its steel industry, Pittsburgh has diversified its economy, attracting industries like advanced manufacturing and climate technology. Coupled with a significant presence of colleges and universities, the city’s young and educated population sets the stage for continued growth.

  2. Columbus, Ohio: Columbus boasts an average home value of $243,838 and a vibrant business ecosystem. Home to major corporations such as JPMorgan Chase and Nationwide, the city offers a favorable climate for economic prosperity. With homes selling rapidly, Columbus presents an attractive opportunity for investors seeking high-demand markets.

  3. Indianapolis: Indianapolis, with an average home value of $224,099, emerges as another promising investment destination. The city’s diverse economy, driven by sectors like healthcare and finance, ensures stability and growth potential. Additionally, its status as a sports tourism hub, hosting renowned events like the Indianapolis 500, adds to its allure for investors.

As the real estate landscape continues to evolve, these cities represent key areas to monitor for investment opportunities. By staying informed and strategically positioning themselves in these markets, investors can unlock significant potential for future returns.

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