Real Estate Investing

Here are three great real estate-related gift ideas that also happen to be tax write-offs. These are kind of different, and may not be for everyone, but they’re worth a look at least.

Make It Right donation: This campaign, spearheaded by Brad Pitt, aims to build eco-friendly homes in New Orleans’ Lower 9th Ward, the area hardest hit by Hurricane Katrina. You could “adopt” an entire house, or only a piece of a house, as a gift to someone who needs nothing and who values such initiatives. And it’s a donation, so it is a tax write-off!

Give Your House Away: OK, so when you give your house away to a charitable organization like House Angel or Real Estate With Causes, you might not actually get to see the recipient’s response. But you’ll feel better having done some good. You’ll also get a tax deduction equal to the home’s current market value, not what its value was when originally purchased.

Buy a house for your college student: This is the ultimate gift for a college student. You can sign them up as co-owner and help build their credit as well, an added bonus. There are, however, pros and cons to this scenario. Consider it carefully before deciding one way or the other. But of course, it is well known that real estate ownership has tremendous tax benefits.

For those who have missed the Larry King special, missed the plethora of other media coverage, or who have generally been living under a rock, Brad Pitt is in New Orleans. He is spearheading the ‘Make It Right’ campaign to build 150 affordable, eco-friendly homes in New Orleans’ Lower 9th Ward, the area hit hardest by Hurricane Katrina. The effort is similar to one Pitt launched in August in partnership with the Global Green environmental organization. He points out the long-term money-saving power of “green” construction.

Pitt is saying $150,000 will get a family into a new home. He is actively seeking donations - even the “adoption” of a piece of the home, like a solar panel, a low-flush toilet or even low-volatility wall paint that improves air quality. The project enables people to “adopt” anything from $5 faucet aerators that reduce water use to $1,500 tankless water heaters that reduce water heating costs. The availability of nearby resources like wind, water and sun should make outside energy sources a thing of the past, according to Pitt.

“The idea that we pay utility bills is absolutely unnecessary,” Pitt said. “…We can integrate ourselves into that ecosystem and not only power our houses but actually produce energy for other parts of the city.”

Negative appreciation is a bummer and can make it seem like you will never sell your home. However, homeowners in 10 cities fortunate enough to make it on a recent list will see a brighter day if they can only hold on a little longer. These are the cities that, in terms of median single-family home prices, have “just about hit rock bottom and are on the way up,” according to The Creative Investor blog. In two years or less, it should be easy to sell your home in these markets and realize a profit. The list also might act as a cue to investors.

Not surprisingly, Texas is mentioned three times on the list - Austin, Houston and Dallas-Fort Worth. Texas real estate has been extremely affordable, though the market has been relatively liquid - particularly in Austin. There, tremendous population growth has kept home prices slightly above that of other Texas towns. At any rate, it is small wonder that home prices are expected to rise in Texas. You can hardly sell your home for less than current market conditions dictate. Prices have to go up in Texas!

The following list of projected median prices for single-family homes in 10 markets was compiled by Business 2.0 and Moody’s Economy.com:

Dallas-Fort Worth

Q1 2008: $151,930

Q4 2009: $161,690

Growth rate: 6.4 percent

Indianapolis

Projected median price of single-family homes:

Q1 2008: $122,940

Q4 2009: $130,630

Growth rate: 6.3 percent

New Orleans

Projected median price of single-family homes:

Q1 2008: $153,850

Q4 2009: $162,600

Growth rate: 5.7 percent

Atlanta

Projected median price of single-family homes:

Q1 2008: $177,750

Q4 2009: $187,640

Growth: 5.6 percent

Montgomery

Q1 2008: $140,020

Q4 2009: $147,690

Growth rate: 5.5 percent

Memphis

Projected median price of single-family homes:

Q1 2008: $143,550

Q4 2009: $150,730

Growth rate: 5.0 percent

Mobile

Q1 2008: $134,580

Q4 2009: $140,920

Growth rate: 4.7 percent

Austin

Q1 2008: $186,350

Q4 2009: $195,060

Growth rate: 4.7 percent

Houston

Q1 2008: $154,850

Q4 2009: $161,910

Growth rate: 4.6 percent

St. Louis

Q1 2008: $143,920

Q4 2009: $149,710

Growth rate: 4.0 percent