Louisiana Real Estate

What is bonus depreciation and why should I care?

If you own real estate rentals then the Bonus Depreciation recently approved by Congress for 2008 qualifies as big real estate news!

As part of the national stimulus package, Congress has authorized a "bonus depreciation" plan for qualifying property beginning in 2008. To be eligible for the deduction property must:

• Be eligible for the modified accelerated cost recovery system (MACRS) as indicated by a depreciation period of 20 years or less or other qualified leasehold property.
• Be acquired under a written contract entered into in 2008 or for depreciation periods of ten years or longer, placed into service by December 31, 2009.

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What is Adaptive Re-Use and why should I care?

When hurricanes Katrina and Rita transformed the Louisiana real estate landscape there were some who believed the best was over. The destruction of retail, commercial and office space left few jobs for workers to return to. Combined with the loss of their own homes, many felt the damage was simply too great. Today, naysayers have grown silent in the wake of massive reconstruction efforts.

Much of the reconstruction taking place throughout Louisiana involves "adaptive re-use" of existing structures. For example, Borders Bookstore is renovating an old funeral home located in the Garden District. Other companies are taking note and following suit by grabbing up historically relevant properties that can be saved from destruction at a fraction of the original cost.

Real estate investors and new home buyers should watch the "Adaptive Re-Use" trends carefully. As new businesses, jobs and office space move into the area the demand for real estate rentals and homes will increase – and with it the price of Louisiana real estate.

1. Keep an eye on properties located within a 5 to 10 mile radius of major district renovations.

2. Real estate within 3 to 5 miles of major roadways.

3. Check county permit and zoning offices to learn about proposed projects in advance.

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Are real estate rentals right for me?

Real estate rentals remain one of the most sought after methods of investing in real estate and with good reason! Favorable tax treatment, a physical asset that supplies a basic need (housing/shelter) plus the use of leverage create a unique opportunity for profit among large and small investors alike.

If you have contemplated investing in Louisiana real estate rentals then now may be a better time than you think. Historically low interest rates, dropping home prices and a strong "buyer’s market" could be the ticket for a new career as a Landlord. Take this quick quiz to see if real estate rentals are the right move for you.

Yes / No I am searching for a long term investment to help diversify or supplement my retirement.

Yes / No I would like to include physical assets into my investment portfolio to hedge against inflation.

Yes / No I would like to benefit from additional tax deductions during my high income years.

Yes / No I enjoy dealing with people including property managers, tenants, contractors and repair persons.

Yes / No I have a solid safety net available to make mortgage, tax and other payments in case of long term vacancies due to natural disasters, economic conditions or an eviction process.

Yes / No I would like to leave my children or grandchildren a useful and valuable asset when they go to college or start a life of their own.

The more "Yes" responses to the questions above the greater the likelihood real estate rentals may appeal to you as a long term investment. Begin by researching the area and find a knowledgeable real estate agent willing to work closely with you to buy a profitable first property. Start slowly and learn the ropes before expanding too fast! There is a lot to learn about being a landlord but many find it well worth the time and effort.

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How do I evalute FSBO properties?

When it comes to buying Louisiana real estate sometimes the "perfect property" is not listed on the MLS but rather is listed for sale by the owner of the property. Here are some tips to use when evaluating real estate for sale by owner.

1. Buyer’s Agent. If you are not completely comfortable with the negotiation process or dealing directly with the seller, then consider using a buyer’s agent instead. This provides an added layer of protection and allows you to enjoy the process rather than worrying about the details. Unlike many transactional agents that represent both parties, a buyer’s agent only represents the best interest of the person purchasing the property.

2. Buyers Beware. While the vast majority of FSBO properties won't have major problems, it is always a good idea to ask a few questions before getting too far along in the negotiation process especially if you do not use a buyer’s agent. A few of the most common questions or concerns include:

• Copies of maintenance and repair receipts
• Warranty information
• Itemized list of what is/is not included in the sale including appliances and other stand-alone items
• Current property taxes
• Insurance claims or pending insurance claims
• Liens or pending liens on the property
• Survey

4. Ask Questions. Sellers are often surprisingly open about their reasons for wanting to sell, bottom-line price and other pertinent findings. Questions also provide the seller an opportunity to refresh their own memory about repairs or upgrades to the property and other useful information.

5. Review. Obtain a legal review of the contract before making a final offer and use a reputable title insurance company. Unintentional mistakes are more likely when dealing directly with a FSBO property with costly consequences at the closing or beyond. Everything from a clouded title because the seller forgot the property was left to both sibling in the will (little consolation to the buyer who has already sold their own home!) to failure to mention an illegal apartment in violation of local zoning can be avoided with the use of a title insurance company and solid legal review.

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Is Louisiana proactive for small business owners?

If the warm weather, rich history and friendly people don't leave you yearning for a little spot of Louisiana real estate to call your own, then perhaps these enticements will.

1. Federal Funding. Louisiana is rebuilding in leaps and bounds thanks in part to generous Federal funding of local projects. During 2007, Louisiana received more than $295 million dollars in federal funding.

2. State of Opportunity! Louisiana takes a proactive stance to assist small business owners in relocating to Louisiana to begin a new business through the Louisiana Economic Development council or LED. The "Gulf Opportunity Zone" provides additional federal funds for qualifying small business enterprises. Assistance includes grants, loan guarantees, tax incentives and venture capital investment. To learn more about LED contact the office below:

Louisiana Economic Development

1051 North Third Street, Baton Rouge, LA 70802-5239

P.O. Box 94185, Baton Rouge, LA 70804-9185

(800) 450-8115 | (225) 342-3000

3. Art Opportunities. Not the business type? That's okay because Louisiana loves everything art. From film to writing, the Arts Council supports the work and creative talents of artists throughout the state while providing a venue to showcase important works. Learn more about the art of Louisiana by contacting the Arts Council at:

Arts Council

of New Orleans

818 Howard Ave., Ste. 300

New Orleans, LA 70113

Ph: 504-523-1465

Take Louisiana's state slogan to heart: "Come as you are. Leave Different." No wonder everyone loves Louisiana!

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What fun facts should I know about Louisiana?

If you are relocating or thinking about buying Louisiana real estate for a second home or vacation property then here are some fun facts you probably didn't know.

The Pelican State: Louisiana is often called the "Pelican State" in recognition of the unusual choice for official state bird. While the humble Pelican may not be the picture-perfect bird found on postcards, the subtle beauty of the bird in flight is a lot like Louisiana itself: unassuming.

Louisiana Ruston: No, this isn't a strange potato, but rather the Louisiana state soil type responsible for the sometimes challenging backyard gardening new homebuyers encounter when moving to Louisiana.

Cajuns: Not sure exactly what Cajuns are? Well, it isn't just a spicy flavor although the original Cajuns were certainly in a "hot spot" when they were driven out of Canada for refusing to pledge allegiance to the King of England.

The Crawfish Capital of the World! Visit the small town of Breaux Bridge but think twice before putting your toes in to test the water.

Bayou: No, they are not all blue but they just might make your brown eyes green with envy once you enjoy an afternoon sunset beside these slow moving rivers.

Catahoula Hound: Leave it to Louisiana to adopt a state dog unlike any other hound dog in existence!

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What is there to do in Louisiana?

While looking for Louisiana new homes or pre-existing Louisiana homes for sale spend some time soaking in all that Louisiana has to offer. It is a great way to spend time with the family while getting to know the area before you make your move.

Here to help you live a little in Louisiana is a fun list of out of the ordinary sights and scenery sure to surprise and delight everyone in the family.

1. Mardi Gras Museum: What is more famous than Mardi Gras? Celebrate the fun and festivity any time of the year by taking time to stop in to see the Mardi Gras Museum in Bossier City or Blaine Kern's Mardi Gras World in New Orleans.

2. Bonnie & Clyde: Brush up on a little history with a quick tour of the Bonnie & Clyde Museum in Gibsland.

3. Hot & Spicy: Visit the Tabasco Factory and Jungle Gardens in Avery Island –now that is hot!

4. Grave-Sighting: Tour Louisiana’s most famous "permanent residences" for a sight-seeing opportunity of "grave" proportions.

5. Go Wild! The Global Wildlife Center in Folsom is home to over 3,000 exotic animals from around the world.

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