specials: December 2008

Sunday, December 21, 2008

The Sole Proprietorship

A sole proprietorship is the simplest form of business to start. Ordinarily, all you need to do is start operating as a business under your own name (or a fictitious name - a d/b/a) and Social Security number, obtain any required licenses or permits, and you're in business.

But there are some distinct disadvantages to operating as a sole proprietorship, which you should consider when determining if this business form is right for you.

By definition, a sole proprietorship has only one owner. If you have a business partner, you may be a partnership or choose a different business form, but you cannot operate as a sole proprietorship.

Selecting a Name

In most jurisdictions you may do business under your own name. However, if you wish to use a variation of your name or a completely different business name, you may register a d/b/a ("doing business as..."), such that you may lawfully conduct business under that fictitious name.Usually, d/b/a's are filed at the County level, but in some cases they may be filed at the state level. When you register a d/b/a, the clerk who processes your application will check to make sure that nobody else in their registry is using the same name you have requested. They will also maintain a record of your real identity for anybody who wishes to find out who is operating under the selected business name.

Unlimited Liability

The biggest potential downside of operating as a sole proprietorship is the lack of protection from personal liability. Most businesses can operate under alternate forms, such as corporations or LLC's, which provide considerable protection of your personal assets in the event of litigation or if your creditors are seeking to collect business debts, such that they can ordinarily only reach the assets of the business entity. A sole proprietorship is not legally distinct from its owner. If you operate as a sole proprietorship, your personal assets may be subject to those claims.

If you are engaged in a business which has a significant chance of being the subject of litigation, you will want to make sure that you carry adequate insurance, and will likely wish to choose a business form which shields you from personal liability in the event of a lawsuit. By way of example, if you are giving piano lessons, you probably have a low risk of liability; but if you are giving swimming lessons or horseback riding lessons, a small mistake by you or a student can result in a significant liability to your business.

Taxation

Another potential downside of a sole proprietorship is that any income to the business is treated as income to the business owner, and all income is reported on your individual tax return, and is taxed in the year it is received. With other corporate forms, it may be possible for the business to have its own income (and to file its own income tax return), and it may be possible to defer income to a different tax year. With a sole proprietorship, even the money you leave in your business bank account is taxed in the year it is earned, even if you are saving it to pay for business expenses in the coming year. It is important to consider tax consequences when selecting the form of your business.

The income you earn from your sole proprietorship remains subject to income and "self employment tax" (your Medicare and Social Security contributions), and you will be responsible to pay those taxes at the end of the year. In most cases, you will also be required to make quarterly payments of your estimated tax liability, to both the state and to the federal government.

You may deduct your legitimate business expenses when you calculate your taxes, and you may report losses from your sole proprietorship on your income tax return.

Should You Incorporate?

As previously noted, if the type of business you are operating has the potential for incurring significant liability and you wish to shield your personal assets from lawsuits and creditors, you may wish to consider a business form which protects your assets. The corporation provides a broad shield against personal liability for business debts.

Also, if you do not wish to have all business income treated as your personal income, or would rather have the business pay taxes on its own income than have that income included on your personal tax return, you may wish to incorporate. While ideally this will lower your overall business taxes, you should be aware that incorporation may increase the total tax obligations of a business even with no change in income, and you will want to calculate any effect on your tax liabilities before incorporating your sole proprietorship. Also, even if you have tax savings, you will want to consider the costs and burdens of maintaining a corporation as compared to continuing as a sole proprietorship.

Saturday, December 20, 2008

Waterfront Condos - Tips For Winterizing Your Luxury Condo

Owning a waterfront condo during the winter can become an agonizing fight against the elements to keep the power bill down. Unless your waterfront condo is in sunny Florida, most other condo owners must deal with falling temperatures and rising electric bills as the colder seasons set in.

To prevent spending too much money on the condo heating bill this winter, try some energy saving techniques that will keep more heat in your house and more green in your pocket. Plus, your family will love the extra cash you have to spend on gifts for them this year!

* Dress warmly inside the condo. While it seems almost too obvious, one of the best methods for reducing the heating bill is to dress warmer inside. Instead of 70 degrees and shorts and a tee shirt, try 65 degrees and a sweatshirt.
* Close vents in unused rooms. If your cousin from Vancouver is in for the weekend, by all means turn the heat on for him. But if your spare bedroom is vacant, close the vents to prevent heat from being circulated into areas unnecessarily.
* Make sure your condo is sealed. Extensive drafts around doors and windows are chief culprits of heat loss. Try to find air leaks and use weather-strips or weather caulking to reduce the airflow through these orifices. This is especially important with waterfront condos, as the drafts coming off of the water are often much more intense and cooler during the winter.
* Use venting fans sparingly. Fans that vent air from the inside to the outside are great at moving bathroom steam or kitchen smoke out of the condo. Unfortunately, they are also great at moving heat out of the condo at a rapid pace. Use room fans to circulate air instead of turning these heat thieves on.
* Let the sun in! If you own a waterfront condo, chances are you have some large windows for viewing the beautiful landscape. Take advantage of the sunny day time period to allow sunlight to naturally warm your home through these windows. Make sure to close the blinds and shades in other areas of the condo to keep heat in.

These inexpensive steps can have your waterfront condo feeling warmer in the winter, giving you more time to spend with loved ones instead of fretting over bills.

Beach Condos Keep Investment Opportunities High

Anyone who is interested to invest in real estate should consider checking the Miami Beach market. There are already many individuals who are able to do well in this market and you can also have the chance to do so. You can invest in a Miami Beach condo and enjoy what it has to offer.

Compared to other markets, the Miami Beach has a lot to offer. Starting with the different kinds of properties that are available, you can have the kind that you need. You can also have a good market because the area is always full of tourists. Thus, there are many people who come in and out of the area. You can always target this market and find what they need so that you can cater to them.

The location of the Miami Beach condo that you can choose to invest on is one of the best deals that you can have. The tourists enjoy the area and you can also do so. There are many people who demands for a Miami Beach condo so you can supply it to them. You can even make your condominium more desirable by adjusting it and making it more suitable for the people. You can improve its look so that it would be preferred by the people who are searching for a property that they can live.

You should also know that the Miami market is good both in the residential and commercial sector. Thus, you can always point this out to your prospects and they can always find the area right for their needs.

When you think about the prices, you can also find the lower priced properties. You just have to improve the quality of the Miami Beach condo that you have so that it would also have a higher value when you sell them to other people. This would be your way to tap the market and earn through them. You should know when to buy the properties and when you should sell. Knowing the timing will give you the right way of earning enough money. You should find the right strategies and you should also try to learn more about the market so that you will know what you should do.

You can be sure that the Miami Beach market is a place that can give you good investment and the market is even improving. But as a person engaged in the business, there are risks involved but you have to overcome them and find the ways so that you can make the market in favor of you. This can be done by learning and making yourself more familiar with the market. You can also find that there are many Miami Beach condominiums that you can sell but you will just have to know how to make a deal.

Investment Condos Las Vegas

Striking It Rich - Investing In Las Vegas
Las Vegas has a booming economy and there is no reason why you should not be able to cash in. Everyone knows that real estate is the best investment out there, yet did you know that with the continuous expansion of casinos as well as the burgeoning construction projects that offer bigger and grander luxury resorts and casinos, the rental market is now sizzling hot?

Casino and resort workers usually look for living accommodations off the beaten path yet close enough to work that they will not have to commute for hours on end. Similarly, since so many jobs are becoming available, there is a continuous influx of renters into the area. It is therefore no surprise that Las Vegas just experienced its larges rent increase in a decade! Renters in apartments have to pay out 6.1% more than they had to do last year, and the trend supports the hypothesis that there will be future substantial rent increases on the horizon.

If you are ready to invest in Las Vegas, then an apartment building or two may be the way to go. You will be sure that you will have renters who will be willing to pay extra funds to be close to the downtown area. You know that the job market for casino employees is steady and growing. Imagine yourself capitalizing on this exploding job market as well as on the desirability of rental units, and you know how to strike it rich in Las Vegas!

Real Estate Auction Tips

Understanding the rules of real estate auction will help you win the bid and save money. The spring selling is coming soon. So if you are interested in real estate investment, you must equip yourself with these powerful tips and knowledge.

On the day of auction, you must be there early to make the last minute inspection on your real estate property. Read the contract of sale and auction rules carefully. These contracts should be on the display for at least 30 minutes before the auction begins.

Here is an important tips to remember. If the real estate property is passed in below the reserve price, the agent of the property will first negotiate the highest bidder for the purchase of that real estate property.

The auctioneer may soon announces that the property is going to be passed in. It is a good strategy. The auctioneer want to make sure you are the highest bidder to secure the option to negotiate.

If the property has passed in, the auctioneer can not re-open the auction for the later bid. If you are securing the right to negotiate, how much time do you have with the owner?

It is all depending on whether you want to meet the owner’s price. In case you are not, the owner may end negotiations with you immediately and start negotiating with other people.

If you are not sure about real estate bidding auction, the reputable buyer’s agent may be for you.

United States real estate investment trust

A real estate investment trust, or REIT, is a company that owns, and in most cases, operates income-producing real estate. Some REITs finance real estate. To be a REIT, a company must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.

Qualification

In order to qualify for the advantages of being a pass-through entity for U.S. corporate income tax, a REIT must:

* Be structured as corporation, trust, or association
* Be managed by a board of directors or trustees
* Have transferable shares or transferable certificates of interest
* Otherwise be taxable as a domestic corporation
* Not be a financial institution or an insurance company
* Be jointly owned by 100 persons or more
* Have 95 percent of its income derived from dividends, interest, and property income
* Pay dividends of at least 90% of the REIT's taxable income
* No more than 50% of the shares can be held by five or fewer individuals during the last half of each taxable year (5/50 rule)
* At least 75% of total investment assets must be in real estate
* Derive at least 75% of gross income from rents or mortgage interest
* No more than 20% of its assets may consist of stocks in taxable REIT subsidiaries.

United Kingdom real estate investment trust

The legislation laying out the rules for REITs in the United Kingdom was enacted in the Finance Act 2006 and came into effect in January 2007 when nine UK property companies converted to REIT status, including the five that were FTSE 100 members at that time: British Land, Hammerson, Land Securities, Liberty International and Slough Estates (now known as "SEGRO"). The other four were: Brixton, Great Portland Estates, Primary Health and Workspace Group.

British REITS have to distribute 90% of their income. They must be a close-ended investment trust and be UK resident and publicly listed on a stock exchange recognised by the Financial Services Authority.

To support the introduction of REITs in the UK, the REITs and Quoted Property Group was created by several commercial property and financial services companies. Other key bodies involved are the London Stock Exchange and the British Property Federation. The Reita campaign was launched on 16 August 2006 by the REITs and Quoted Property Group, in order to provide a source of information on REITs, quoted property and related investments funds. Reita's aim is to raise awareness and understanding of REITs and investment in quoted property companies. It does this primarily through its portal www.reita.org, providing knowledge, education and tools for financial advisers and investors.

Doug Naismith, managing director of European Personal Investments for Fidelity International, said: "As existing markets expand and REIT like structures are introduced in more countries, we expect to see the overall market grow by some ten percent per annum over the next five years, taking the market to $1 trillion by 2010."

Singapore real estate investment trust

Commonly referred to as S-REITs. There are currently 20 REITs listed on the SGX. Benefit from tax advantaged status.

Pakistan real estate investment trust

Pakistan's regulatory body Securities and Exchange Commission of Pakistan is in process of implementing REIT regulatory framework that will allow full foreign ownership, free movement of capital and unrestricted repatriation of profits. It will curb speculation in Pakistani real estate markets and gives access to small investors diversifying into real estate as well. The Securities and Exchange Commission of Pakistan following regulatory framework similar to Singapore and Hong Kong REITs.

The Securities and Exchange Commission of Pakistan expects that about six REITs will be licensed within the first year, mainly large assets management companies applying for it. Pakistan is recently seeing a influx of investments by foreign real estate development mostly Malaysian and Dubai based companies.

http://specials-idleshare.blogspot.com/2008/12/pakistan-real-estate-investment-trust.html

Japan real estate investment trust

Japan is one of a handful of countries in Asia with REIT legislation (other countries/markets include Hong Kong, Singapore, Malaysia, Taiwan and Korea), which permitted their establishment in December 2001. J-REIT securities are traded on the Tokyo Stock Exchange, and most participants are Japanese conglomerates and foreign investment banks.

Since the burst of the real estate bubble in 1990, property prices in Japan have seen steady drops through 2004, with some signs of price stabilization and possibly price increase in 2005 and 2006. Some see J-REITs as a way to increase investment in the real estate market, although notable increases in asset values has not yet been realized.

A J-REIT may be structured as an independent corporation or as a contractual relationship through a trust bank.

In addition to REITs, Japanese law also provides for a parallel system of special purpose companies which can be used for the securitization of particular properties, but not for the maintenance of a real estate portfolio.

India real estate investment trust

India is currently in the process of formulating definitive legislation for the introduction and smooth functioning of REITs in the Indian real estate market. Once introduced these Indian REITs (country specific/generic version I-REITs) will help individual investors enjoy the benefits of owning an interest in the securitised real estate market. The best benefit being that of fast and easy liquidation of investments in the real estate market unlike the traditional way of disposing real estate. The government and Securities and Exchange Board of India SEBI through various notifications is in the process of easing the norms of investing in real estate in India directly and indirectly through foreign direct investment, through listed real estate companies, mutual funds etc. With the current real estate boom and the market being flooded with Initial Public Offer of various listed real estate companies in India it will be the best time for investors to own a share of the profiting market economy. Legislative framework, revised investment norms, a favourable investment opportunity, and a clear taxation policy will provide the right kind of investing opportunity in India in the time to come.

Hong Kong real estate investment trust

REITs have been in existence in Hong Kong since 2005, when The Link REIT was launched by the Hong Kong Housing Authority on behalf of the Government. Since 2005, there have been 7 REIT listings as at July 2007, most of which, including Sunlight REIT have not enjoyed success due to low yield. Except for The Link and Regal Real Estate Investment Trust, share prices of all but one are significantly below IPO price. Hong Kong issuers' use of financial engineering (interest rate swaps) to improve initial yields has also been cited as having deterred investors' interest.

Germany real estate investment trust

Germany is also planning to introduce German REITs (short, G-REITs) in order to create a new type of real estate investment vehicle. Government fears that failing to introduce REITs in Germany would result in a significant loss of investment capital to other countries. Nonetheless there still is political resistance to these plans, especially by the social democratic party ('SPD'). As of June 2006 the ministry of finance has announced that they still plan to introduce G-REITs in 2007. The legal details seem to adopt much of UK-REITs regulations (taxation, public listing, etc.), as far as it is possible to tell yet.

A law concerning G-REITs was enacted 1 June, 2007, and is retroactive to 1 January, 2007.

Qualification

* REITs will have to be established as a corporation "REIT-AG" or "REIT-Aktiengesellschaft".
* At least 75% of its assets have to be invested in real-estate.
* At least 75% of the G-REIT's gross revenues must be real-estate related.
* At least 90% of the REIT's taxable income has to be distributed to its shareholders through dividends.
* The corporation is income-tax-exempt, but the shareholders will have to pay individual income tax on the dividends.

Canada real estate investment trust

Canadian REITs were established in 1993. They are required to be configured as trusts and are not taxed if they distribute their net taxable income to shareholders. REITs have been excluded from the income trust tax legislation proposed in the 2007 budget by the Conservative government. Many Canadian REITs have limited liability.

Bulgaria real estate investment trust

REITS were introduced in Bulgaria in 2003 with the so called "Special Purpose Investment Companies Act". They are pass-through entities for corporate income tax purposes (i.e. they are not subject to corporate income tax), but are subject to numerous restrictions.

Australian real estate investment trust

After originating in the United States in 1960, the REIT concept was launched in Australia in 1971. General Property Trust was the first Listed Property Trust (LPT) on the Australian stock exchanges (now the Australian Securities Exchange). REITs which are listed on an exchange were known as Listed Property Trusts (LPTs) until March 2008, distinguishing them from private REITs which are known in Australia as Unlisted Property Trusts. They have since been renamed Australian Real Estate Investment Trusts (A-REITs) in line with international practice.

There are now more than 60 A-REITs listed on the ASX, with market capitalisation in excess of A$100bn.

Australia is also receiving growing recognition as having the world’s largest REITs market outside the United States. More than 12 per cent of global listed property trusts can be found on the ASX.

Real estate investment trust

A Real Estate Investment Trust or REIT (pronounced /ˈriːt/) is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes. In return, REITs are required to distribute 90% of their income, which may be taxable in the hands of the investors. The REIT structure was designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks.

Like other corporations, REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges like shares of common stock in other firms.

REITs can be classified as equity, mortgage or hybrid.

The key statistics to look at in REIT are its NAV (Net Asset Value), AFFO (Adjusted Funds From Operations) and CAD (Cash Available for Distribution). REITs face challenges from both a slowing economy and the global financial crisis, depressing share values by 40 to 70 per cent in some cases.

Private equity real estate

In investment finance, private equity real estate is an asset class consisting of equity and debt investments in property. Investments typically involve an active management strategy ranging from moderate reposition or releasing of properties to development or extensive redevelopment.

Investments are typically made via private equity real estate fund, a collective investment scheme, which pools capital from investors. These funds typically have ten year life span consisting of a 2-3 year investment period during which properties are acquired and a holding period during which active asset management will be carried out and the properties will be sold.

History and evolution

There is a long history of institutional investment in real estate both through direct ownership of property and through pooled investment funds. Initially institutional real estate investments were in core real estate, however, market conditions in the early 1990s led to the emergence of opportunistic funds which aimed to take advantage of falling property prices to acquire assets at significant discounts. Private equity real estate emerged as an independent asset class in the beginning of the 21st century and has experienced huge growth in recent years.

Strategies

Private equity real estate funds generally follow core-plus, value added, or opportunistic strategies when making investments.

Core Plus: This is a moderate risk/moderate return strategy. The fund will generally invest in core properties however some of these properties will require some form of enhancement or value-added element.

Value Added: This is a medium-to-high risk/medium-to-high return strategy. It will involve buying a property, improving it in some way, and selling it at an opportune time for a gain. Properties are considered value added when they exhibit management or operational problems, require physical improvement, and/or suffer from capital constraints.

Opportunistic: This is a high risk/high return strategy. The properties will require a high degree of enhancement. This strategy may also involve investments in development, raw land, and niche property sectors. Investments are tactical.

Features

Considerations for investing in private equity real estate funds relative to other forms of investment include:

* Substantial entry costs, with most funds requiring significant initial investment (usually upwards of $1,000,000) plus further investment for the first few years of the fund.

* Investments in limited partnership interests (which is the dominant legal form of private equity real estate funds) are referred to as "illiquid" investments which should earn a premium over traditional securities, such as stocks and bonds. Once invested, it is very difficult to gain access to your money as it is locked-up in long-term investments which can last for as long as twelve years. Distributions are made only as investments are converted to cash; limited partners typically have no right to demand that sales be made.

* If a private equity real estate firm can't find suitable investment opportunities, it will not draw on an investor's commitment. Given the risks associated with private equity real estate investments, an investor can lose all of its investment if the fund performs badly.

For the above mentioned reasons, private equity fund investment is for those who can afford to have their capital locked in for long periods of time and who are able to risk losing significant amounts of money. This is balanced by the potential benefits of annual returns, which are often excess of 20% for successful opportunistic funds. Investors in private equity real estate funds tend, therefore, to be institutional investors or high net worth individuals.

Size of Industry

The popularity of private equity real estate funds has grown since 2000 as an increasing number of investors commit more capital to the asset class.

Private Equity Real Estate is a global asset class and in 2007, 46% of capital raised was focused on the US, 26% was focused on Europe and 27% was targeting Asia and the rest of the world.

Duplex (building)

A duplex house is a dwelling comprising two units either side-by-side or on two different floors. The former often looks like two houses put together, sharing a wall (compare semi-detached); the latter usually appears as a townhouse, but with two different entrances.

The term "duplex" can also be extended to three-unit and four-unit buildings, or they can be referred to with specific terms such as triplex and fourplex [1]. Because of the flexibility of the term, the line between an apartment building and a duplex is somewhat blurred, with apartment buildings tending to be bigger, while duplexes are usually the size of a normal house.

A duplex may be purchased a single piece of real estate, or there can be separate titles for each unit. The latter is more common with semi-detached buildings where the units only share a common party wall, however it is possible for units of a duplex (or triplex or fourplex) to be owned by different owners.

Especially in dense areas like Manhattan, a duplex apartment refers to a maisonette, a single dwelling unit spread over two floors connected by an indoor staircase. Similarly, a triplex apartment refers to an apartment spread out over three floors. These properties can be quite expensive, and include the most expensive property in Manhattan as of 2006 (according to Forbes Magazine), a triplex atop The Pierre Hotel.

Urban planning

In urban planning, the term duplex is used more specifically. Major Canadian cities sometimes use the term duplex to refer specifically to a building with one unit built above another. Edmonton defines Duplex Housing as "development consisting of a building containing only two Dwellings, with one Dwelling placed over the other in whole or in part with individual and separate access to each Dwelling." Calgary defines Duplex Dwelling as "a building which contains two Dwelling Units, one located above the other, with each having a separate entrance." Toronto proposes in their new Zoning Bylaw to define Duplex Building as a building that has only two dwelling units, and one dwelling unit is entirely or partially on top of the other dwelling unit. Halifax defines Duplex Dwelling as "the whole of a dwelling that is divided horizontally into two separate dwelling units, each of which has an independent entrance."

Other major cities use the term duplex, but do not specify the physical relationship between the two dwelling units. Dallas defines the term duplex as "two dwelling units located on a lot." Philadelphia defines a duplex dwelling as "a dwelling occupied as the home or residence of two (2) families, under one (1) roof, each family occupying a single unit."

Other major cities do not use the term duplex in their zoning or Land Use bylaws. San Francisco and Vancouver use the term Two-family dwelling. Winnipeg uses the term Dwelling, two-family. The definitions of these terms do not specify the physical relationship between the two dwelling units in the building. Chicago uses the term Two-flat and defines it as a "residential building that contains 2 dwelling units located on a single lot. The dwelling units must share a common wall or common floor/ceiling."

Where cities do not define the relationship of the dwelling units to one another, units may be built one on top of the other, or one beside the other. The latter arrangement is more specifically referred to as a semi-detached building.

Condominium

A condominium, or condo, is a form of housing tenure and other real property where a specified part of a piece of real estate (usually of an apartment house) is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole piece. Colloquially, the term is often used to refer to the unit itself in place of the word "apartment". A condominium may be simply defined as an "apartment" that the tenant "owns" as opposed to rents.

Condominium is the legal term used in the United States and in most provinces of Canada. In Australia and the Canadian province of British Columbia it is referred to as strata title. In Quebec the term syndicate of co-ownership is used. In England and Wales the equivalent is commonhold, a form of ownership introduced in 2004 and still uncommon in most places.

Technically, a condominium is a collection of individual home units along with the land upon which they sit. Individual home ownership within a condominium is construed as ownership of only the air space confining the boundaries of the home (Anglo-Saxon law systems; different elsewhere). The boundaries of that space are specified by a legal document known as a Declaration, filed of record with the local governing authority. Typically these boundaries will include the drywall surrounding a room, allowing the homeowner to make some interior modifications without impacting the common area. Anything outside this boundary is held in an undivided ownership interest by a corporation established at the time of the condominium’s creation. The corporation holds this property in trust on behalf of the homeowners as a group–-it may not have ownership itself.

The primary attraction to this type of ownership is the ability to obtain affordable housing in a highly desirable area that typically is beyond economic reach. Additionally, such properties benefit from having restrictions that maintain and enhance value, providing control over blight that plagues some neighborhoods. Big cities, including San Francisco, Chicago, New York City, Los Angeles, Miami, Atlanta, Calgary, Seattle, Mississauga, Edmonton, Vancouver, and Toronto, have much condo development.

Overview

Typically, a condominium consists of multi-unit dwellings (i.e., an apartment or a development) where each unit is individually owned and the common areas, such as hallways and recreational facilities, are jointly owned (usually as "tenants in common") by all the unit owners in the building. It is also possible for condominiums to consist of single family dwellings: so-called "detached condominiums" where homeowners do not maintain the exteriors of the dwellings, yards, etc. or "site condominiums" where the owner has more control and possible ownership (as in a "whole lot" or "lot line" condominium) over the exterior appearance. These structures are preferred by some planned neighborhoods and gated communities.

A homeowners association, consisting of all the members, manages the condominium through a board of directors elected by the membership. The same concept exists under different names depending on the jurisdiction, such as "unit title", "sectional title", "commonhold," "strata council," or "tenant-owner's association", "body corporate", "Owners Corporation", "condominium corporation" or "condominium association." Another variation of this concept is the "time share" although not all time shares are condominiums, and not all time shares involve actual ownership of (i.e., deeded title to) real property. Condominiums may be found in both civil law and common law legal systems as it is purely a creation of statute.

The restrictions for condominium usage are established in a document commonly called a "Declaration of Condominium". Rules of governance are usually covered under a separate set of Bylaws. Finally, a set of Rules and Regulations providing specific details of restrictions and conduct are established by the Board and are more readily amendable than the Declaration or Bylaws. Typical rules include mandatory maintenance fees (perhaps collected monthly), pet restrictions, and color/design choices visible from the exterior of the units. Condominiums are usually owned in fee simple title, but can be owned in ways that other real estate can be owned, such as title held in trust. In some jurisdictions, such as Ontario, Canada or Hawaii USA, there are "leasehold condominiums" where the development is built on leased land.

In general, condominium unit owners can rent their home to tenants, similar to renting out other real estate, although leasing rights may be subject to conditions or restrictions set forth in the declaration (such as a rental cap for the total number of units in a community that can be leased at one time) or otherwise as permitted by local law.

Non-residential condominiums

Condominium ownership is also used, albeit less frequently, for non-residential land uses: offices, hotel rooms, retail shops, group housing facilities (retirement homes or dormitories), and storage. The legal structure is the same, and many of the benefits are similar; for instance, a nonprofit corporation may face a lower tax liability in an office condominium than in an office rented from a taxable, for-profit company. However, the frequent turnover of commercial land uses in particular can make the inflexibility of condominium arrangements problematic.

United States

Aqua waterfront condos in Long Beach, California
The interior of a loft condominium
A historic mansion converted into luxury condominiums in Chicago

The first condominium law passed in the United States was in the Commonwealth of Puerto Rico in 1958.[citation needed] English Common law tradition holds that real property ownership must involve land, whereas the French civil law tradition recognized condominium ownership as early as the 1804 Napoleonic Code; thus, it is notable that condominiums evolved in the United States via a Caribbean government with a hybrid common-civil legal system. In 1960, the first condominium in the Continental United States was built in Salt Lake City, Utah.[citation needed] Initially designed as a housing cooperative (Co-op), the Utah Condominium Act of 1960 made it possible for "Graystone Manor" (2730 S 1200 East) to be built as a condominium. The legal counsel for the project, Keith B. Romney is also credited with authoring the Utah Condominium act of 1960. Romney also played an advisory role in the creation of condominium legislation with every other legislature in the U.S. Business Week hailed Romney as the "Father of Condominiums".[citation needed] He soon after formed a partnership with Don W. Pihl called "Keith Romney Associates", which was widely recognized throughout the 1970s as America's preeminent condominium consulting firm.

Although often mistakenly credited with coining the term "condominium", Romney has always been quick to point out that it harks back to Roman times, and that he merely borrowed it.[citation needed]

Nowadays, the leadership of the industry is dominated by Community Associations Institute or CAI.[citation needed]

Section 234 of the 1961 National Housing Act allowed the Federal Housing Administration to insure mortgages on condominiums, leading to a vast increase in the funds available for condominiums, and to condominium laws in every state by 1969. Many Americans' first widespread awareness of condominium life came not from its largest cities but from south Florida, where developers had imported the condominium concept from Puerto Rico and used it to sell thousands of inexpensive homes to retirees arriving flush with cash from the urban Northern U.S.[citation needed]

In recent years, the residential condominium industry has been booming in all of the major metropolitan areas such as Miami, San Francisco, Seattle, Boston, and New York. It is now in a slowdown phase.[citation needed] According to Richard Swerdlow, CEO of Condo.com, "You're not going to see this giant overbuild again. It's hard to imagine that you'd see in the next decade what we just saw. Real estate brokers and the developers were in almost a ticket-collecting mode. They were processing orders because there was so much business to go around. Now that sort of investor phenomenon has gone away." He added, "That phenomenon has stopped."

An alternative form of ownership, popular in the United States but found also in other common law jurisdictions, is the "cooperative" corporation, also known as "company share" or "co-op", in which the building has an associated legal company and ownership of shares gives the right to a lease for residence of a unit. Another form is leasehold or ground rent in which a single landlord retains ownership of the land on which the building is constructed in which the lease renews in perpetuity or over a very long term such as in a civil law emphyteutic lease. Another form of civil law joint property ownership is undivided co-ownership where the owners own a percentage of the entire property but have exclusive possession of a specific part of the property and joint possession of other parts of the property; distinguished from joint tenancy with right of survivorship or a tenancy in common of common law.

Ontario, Canada

In Ontario, condominiums are governed by the Condominium Act, 1998 with each development establishing a corporation to deal with day-to-day functions (maintenance, repairs, etc.). A board of directors is elected by the owners of units (or, in the case of a common elements condominium corporation, the owners of the common interest in the common elements) in the development on at least a yearly basis. A general meeting is held annually to deal with board elections and the appointment of an auditor (or waiving of audit). Other matters can also be dealt with at the Annual General Meeting, but special meetings of the owners can be called by the board and, in some cases, by the owners themselves, at any time.

In recent years the condo industry has been booming in Canada, with dozens of new condo towers being erected each year. Toronto is the centre of this boom, with 17,000 new units being sold in 2005, more than double second place Miami's 7,500 units.For several years now that city's skyline has had a forest of cranes erecting new towers. Outside of Toronto, the most common forms of condominium have been townhomes rather than highrises, although that trend may be altered as limitations are placed on "Greenfields" (see Greenfield land) developments in those areas (in turn, forcing developers to expand upward rather than outward and to consider more condominium conversions instead of new housing). Particular growth areas are in Kitchener, Waterloo, and London. In fact, after Toronto, the Golden Horseshoe Chapter of the Canadian Condominium Institute is one of that organization's most thriving chapters.

The Ontario Condominium Act, 1998 provides an effectively wide range of development options, including Standard, Phased, Vacant Land, Common Element and Leasehold condominiums. Certain existing condominiums can amalgamate, and existing properties can be converted to condominium (provided municipal requirements for the same are met). Accordingly, the expanded and expanding use of the condominium concept is permitting developers and municipalities to consider newer and more interesting forms of development to meet social needs.[citation needed]

On this issue, Ontario condominium lawyer Michael Clifton writes, "Condominium development has steadily increased in Ontario for several years. While condominiums typically represent attractive lifestyle and home-ownership alternatives for buyers, they also, importantly, introduce a new approach to community planning for home builders and municipal approval authorities in Ontario. ...[There are] opportunities for developers to be both creative and profitable in building, and municipalities more flexible and imaginative in planning and approving, developments that will become sustainable communities." (In, A Comment about Condominiums, Community Planning and Sustainability, Forum Magazine, Dec 06/Jan 07, p. 28.)

India

Condominiums are more commonly known as "flats" in India. This type of housing is very common in big cities like Delhi, Mumbai (Bombay) and Chennai (Madras) but not very popular in rural India. Actually, they are registered as "co-operative housing society" rather than condominiums in that the owners actually have a share of the co-op and not the actual real estate itself. Owners can sell the "share" in the open

The "Living Trust" - An Introduction to Trusts

Introduction

A trust refers to property held by a "trustee", which may be one or more individuals or an institution such as a bank. A living trust does not become effective until you die, so that during your lifetime you may modify or revoke your trust. When you die the trust takes effect and is managed by trustee you chose, pursuant to the instructions you left in the trust instrument. A living trust is a powerful tool to avoid probate, as trust assets are normally distributed independently of the probate court.

The person who creates a trust is known as the "grantor" or "settlor", and the people who receive income or assets under the terms of the "trust agreement" or "declaration" are known as "beneficiaries". Ordinarily, once assets are placed within a trust, the terms of the trust dictate how those assets will ultimately be distributed even if there is a separate will.

Note that every complete estate plan also includes a will. No matter how much property you transfer into your trust, it is possible that you will forget to transfer something in, and your will ensures that it will go to your heirs as you intend. Also, you will have items of personal property, even if just your clothing and personal effects, which will fall into your probate estate.

Terminology

A "grantor", sometimes called a "settlor" or "trustor", is somebody who has created a trust.

The property placed in a trust is known as the principle or "corpus" (a latin word for "body") of the trust.

A testamentary trust is created by a will;

A"living trust" or "inter vivos trust" is created by a person who is still alive.

If the trust can be changed or terminated after it is created, it is a "revocable" trust. If it cannot be changed or terminated, it is an "irrevocable" trust.

A Word of Caution

If you intend to place assets within a living trust while you are alive, make sure that the transfers are made. There have been many cases where people set up detailed living trusts, but neglected to fund them, with the result that they paid for a trust they did not use and their assets passed according to the laws of intestate succession instead of as they intended.

When Trusts Are Particularly Useful

Trusts can be a valuable estate planning tool for parents who are concerned that their children are not sufficiently old or mature to manage a full inheritance. A trust can provide for the inheritance to be passed to them when they are older, even well into adulthood, and can provide for such things as educational expenses. There are also a variety of trusts, including "special needs" trusts, which can be set up to benefit somebody who is dependent upon public assistance due to a disability

A living trust can also provide for the management of your assets while you are alive, and can help prevent the necessity of having a guardian appointed to manage your affairs in the event of incapacity.

With large estates, living trusts can provide a valuable means of avoiding gift and inheritance taxes, and for taking care of even generations of heirs.

Your "Last Will and Testament"

The Simple Will

A will sets forth the manner in which you want your assets to pass to your heirs.

There may be legal restrictions on what you can do in a will under the laws of your jurisdiction, such as restrictions on disinheriting a spouse or, in some cases, children. There are also assets that aren't covered by a will, such as the proceeds of an insurance policy which will pass to the designated beneficiary named in the policy, certain joint property, joint bank and brokerage accounts, and retirement plans and death benefits.

Terminology

A "testator" is a person who has made a valid will.

A "testamentary will" establishes a trust for some or all of the assets in the estate.

A "pour over will" places some or all of the assets of the estate into a trust that is created during your lifetime (an "inter vivos" trust, or "living trust").

A "holographic will" is written, dated, and signed in the handwriting of its author. In some states, a holographic will can be probated once it has been authenticated, even if it isn't witnessed. It is best to have a will properly witnessed, as your jurisdiction may not accept holographic wills, and there may otherwise be unnecessary difficulty authenticating your will.

What A Legal Will Can Do

A properly executed will may:

*Provide for heirs who would not be able to inherit based upon the laws of intestate succession, such as a step-child;
*Provide for contributions to charities, churches, or causes you believe in;
*Designate a guardian for your minor children, and designate custodians or conservators to manage their assets;
*Designate an executor, sometimes called a "personal representative", for your estate, and depending upon the laws of your jurisdiction may permit you to waive the requirement that the executor post a bond, or help you avoid court supervision for the distribution of your estate's assets;
*Designate a successor custodian for assets held for children under the Uniform Gifts to Minors Act, or Uniform Transfers to Minors Act.

Execution of a Will

Wills are ordinarily signed in the presence of witnesses, and sometimes in the presence of a notary. In some states, the proper execution of a will in front of a notary will make the will "self-authenticating", meaning that it will be accepted by a court without any further proof of its authenticity.

An estate planning professional can help you figure out which of your assets and property won't be covered by your will, and help you provide for those assets to pass in accord with your wishes. A professional can also help you determine what taxes will be owed by your estate (including such mundane tax expenses as your last year's income taxes), and what expenses will be associated with the administration of your estate, to help you make sure that you don't end up with any unfunded bequests. Please note that no matter what you put in your will, it will not change the distribution of assets outside of the probate process. For example, if you have an insurance policy or annuity which specifies a beneficiary, that beneficiary will receive the proceeds upon your death even if you designate a different beneficiary in your will.

Why A Will Makes Sense

It makes sense to execute a will even if you believe all of your assets will pass to your heirs through other estate planning vehicles, such as trusts or insurance policies, "just in case". This can be a "pour over" will, which simply ensures that any assets accidentally left out of your estate plan are put into a living trust.

An Introduction to Estate Planning and Administration

The Purposes of Estate Planning

Estate planning has several purposes, which include

1.Having your wealth transferred to your heirs in the manner of your choosing;
2.Planning for Taxation;
3.Providing for the future care and needs of your children; and
4.Planning for business succession.

Estate planning professionals who are familiar with your estate can help you fashion an estate plan which works to effect your wishes and goals. Most estate plans are structured around either a will or a trust, or a combination of the two.

What If You Don't Have A Will or Estate Plan?

If you die intestate, there are laws of "intestate succession" which govern the distribution of your estate. In most states, this means that if you do not have an estate plan your assets will be distributed to your spouse and children, or if none, to other members of your family.

Even if you are young and have few assets, and thus have no real need for a detailed estate plan, it is wise to have a will. This becomes even more true if you marry, or have children. Please note that depending upon the laws of the jurisdiction where you live, your will may become fully or partially invalid upon certain major life events such as divorce or the birth of a child.

Also, most estate plans now include power of attorney forms, which provide for people to attend to your financial and medical needs in the event that you become incapacitated. If you do not execute powers of attorney prior to becoming disabled by accident or illness, it may be necessary for your loved ones to go to court to get permission to manage your finances and health care.

Probate and Estate Administration

In its narrowest sense, probate refers to the determination that your will represents your final testamentary intentions. In its broader sense, probate is the process of putting the terms of your will into effect, including the gathering of all of your assets and the payment of any outstanding debts and taxes, the payment of the expenses associated with the administration of your estate, and the distribution of bequests to your heirs. The executor you named in your will has the responsibility to manage this process. The executor is entitled to a reasonable fee for performing these services.

In a formal probate, the executor's actions are conducted under the oversight of a probate court. In an informal probate, the court may do little more than sign a final order approving the distribution of assets and closing the estate.

There is a popular perception that probate is something to be avoided, and living trusts are often sold with the notion that they will help people avoid probate. As probate laws vary between jurisdictions, the effect of the probate process on your estate will vary depending upon where you live. However most jurisdictions have updated their probate laws and processes to reduce the length and cost of the process, and a will that is properly drafted and executed can remove many of the burdens of that process. Also, avoiding probate will not eliminate some of the more complex or time-consuming aspects of administering an estate, including the preparation and filing of final tax returns. As the cost of probate can vary significantly between jurisdictions, this is something you should discuss with an estate planning professional.

While challenges to wills ("will contests") are rare, they can happen. Some jurisdictions permit an estate plan to include a "no contest" clause, whereby if somebody unsuccessfully challenges a will that person will be excluded as an heir.

Also, while it is typically permissible to disinherit certain people, such as one of your children, a court may modify your will if it appears you accidentally omitted mention of a person to whom you otherwise would have left money, such as a child who was born after you drafted your will (a "pretermitted heir"). Thus, if you do intend to disinherit an heir, you should expressly state that intention in your will.

Most jurisdictions have provisions to protect a spouse, which provide that they can choose between the bequest you have made and a share of your estate as defined by statute. If they determine that their statutory share is larger than the bequest, they may "opt against the will" to take the larger share. Thus, if you intend to give your surviving spouse less than approximately half of your estate, you should consult with an estate planning professional to see if that is permitted in your jurisdiction.

Recall also that the probate process is a public process. It is possible for somebody to examine the court records to determine what assets you had and how they were distributed. If this concerns you, you should consider setting up a trust or implementing other estate planning measures that won't end up as part of a public court file.

Estate Taxes

Despite the hype associated with estate taxes, due to the size of the exemptions for federal estate taxes, few estates will owe taxes to the federal government. Federal estate taxes are scheduled to be phased out over the next few years; however, if you have a large estate you should anticipate the possibility that estate taxes will return in the future, and should plan for that possibility.

Also, every estate may be subject to certain other taxes, including state estate taxes, and state and federal income taxes.

Revising Your Estate Plan

Certain events or changes in your life justify revisiting your estate plan. While an estate plan may anticipate the possibility that you will have children, it often will not contemplate divorce or remarriage. Similarly, as you get older, you may have cause to provide unequal shares of your estate to your children and grandchildren, or to provide for stepchildren. Also, you may acquire assets which are not described in an earlier estate plan.

You should periodically review your estate plan to make sure it is consistent with changes in your estate, and with your present desires.

Sunday, December 14, 2008

Eight Tips On Buying A Vacation Home

1. Many speculators are out of the market, so the playing field is a bit more stable. Vacation home/investment home sales accounted for 40 percent of all existing and new residential transactions. That means part of the equation has fallen—and that part is investment home sales.

"Investment home sales are actually down 28.9 percent since 2005," she notes. "That's good news for vacation home shoppers. Why? Because speculators tend to drive up prices and muddy the water. If you're buying a second home for your personal use, you don't want to compete with speculators. You want to take your time and make a thoughtful purchase you can feel good about."

2. Home prices have dropped slightly. Interestingly, according to NAR, in 2006 the median price of a vacation home was down 2 percent from the previous year—falling from $204,000 to $200,000.

"The significance of this drop is not that you can pick up a bargain, but that the market is normalizing," says Karpinski. "I think it's always best for buyers to have a clear, realistic picture of what a home is worth. I've always viewed real estate as a solid, blue-chip long-term investment, and that means going into a purchase with the right expectations."

3. Sure, you must be financially comfortable to buy a vacation home—but you don't have to be wealthy. The NAR study found that the typical vacation property buyer in 2006 enjoyed a median household income of $102,200. While this is up significantly from the previous year's median income of $82,800, it still falls solidly in the "middle class" range.

"The perception that you have to be rich to own a vacation home has fallen by the wayside," says Karpinski. "Even if you can't comfortably afford two mortgages, it's not difficult at all to offset the cost of your vacation home. Just rent it out part-time and you're set. As I point out in my books, if you rent out your home only seventeen weeks out of the year, you can still break even."

4. No need to put off your purchase until you're older. People are buying vacation homes at younger ages than ever. "The typical vacation home buyer in 2006 was only forty-four years old, according to the NAR survey," says Karpinski. "In 2005, the median age was fifty-two. That is a significant change, and it's interesting to speculate on why more people are exhibiting this 'seize the day' mindset. I do think children of Baby Boomers are more inclined to live for the moment, so maybe that has something to do with it. Or maybe it's a result of the 'nesting' phenomenon Faith Popcorn predicted back in the '80s."

5. Remember that real estate is almost always a good investment. Here's another possible reason why the age of vacation homebuyers has dropped: maybe people in this age bracket view real estate as an alternative to the stock market. Although the NAR report doesn't frame it that way—indeed, it points out that 79 percent of buyers want to use their home "for vacation or as a family retreat" and only 34 percent say it's to "diversify investments"—Karpinski says people in the forty-something generation don't have a lot of faith in Wall Street.

"Look at the stock market's track record over the last decade or so—it's all over the map," points out Karpinski. "I think people of my generation have been burned by bad investments. NAR reports that 25 percent of vacation home buyers paid for their properties with cash. I think that makes a pretty significant statement about what people feel is a 'safe' place for their money."

6. Don't feel that you have to buy close to home. The NAR survey found that the typical vacation home buyer purchased a property that was a median of 215 miles from his or her primary residence. (In 2005 the typical vacation home buyer purchased a property that was a median of 197 miles from his primary residence; however, 47 percent of vacation homes were less than 100 miles and 43 percent were 500 miles or more.)

"Last year's median distance represents a good three-and-a-half-hour drive," notes Karpinski. "This makes sense given the younger ages of buyers; they're not intimidated by a long drive like older buyers would be. But I think it's also indicative of the fact that the whole vacation home 'lifestyle' is becoming more mainstream. Globalization has made a 'mobile' life seem normal. You may be traveling overseas for work, you're connected to the rest of the world via the Internet ... so driving four, five, even six hours to get to your second home seems reasonable."

7. Don't assume you have to dig deep and buy in pricey primary vacation markets. NAR reports that 2006 brought with it a definite shift away from more expensive markets (Florida, Nevada, Arizona) and into more affordable locations (Georgia, Tennessee, the Carolinas). Obviously, houses will cost less in these areas, which means more buying opportunities for less affluent individuals. And if you're worried that you won't be able to rent out homes in these secondary markets, Karpinski says you can relax.

"I personally own several vacation homes in the South, where 38 percent of all vacation homes were purchased in 2006, and I have no trouble keeping them rented," she says. "Buy where you want to buy. Do the right things and the renters will come."

8. If you don't want to rent out your vacation home, you're in good company. (But don't be surprised when you change your mind.) Of course, all this talk of renting out vacation homes assumes you're even interested in going that route—and if you're like most people who answered NAR's survey, that's the last thing on your mind. Only 18 percent identified "to rent to others" as a reason for purchasing their vacation home. But according to Karpinski, you might change your mind later.

"I've found that there's usually a honeymoon period of two to five years between the time people buy a vacation home and the time they decide to rent it to others," says Karpinski. "But I've also found that when people do decide to start renting it out, they are delighted to discover how easy it is and how profitable it can be."

12 Tips for Buying Waterfront Real Estate

You probably already know this, but buying any land can be a significant decision. But what you may not know is that there are a few twists that come with purchasing a waterfront lot that make it very different from buying a lot in any old subdivision. I've put together a few tips that you should keep in mind when you're looking for the perfect waterfront property.

1. Don't buy land without setting foot on it first. You should take the time to look it over closely and inspect it yourself. Locate a copy of the site plan so you can determine exactly where the property lines are.
2. Study the history of the land development for the area. Was the development a friendly undertaking or was there a lot of controversy from the community? What was on this land before?
3. Talk to the neighbors. Ask them what they think of the developer and the area. Are they happy with how their house was built? Were the amenities completed by the developer as promised? If they love living there, they'll tell you - if they hate it, they'll tell you that too.
4. If you're looking at lakefront property, you need to determine if the lake is constant level or not. If it's not a constant level lake, then the water levels could change drastically.
5. Check to see if there are any flood plain restrictions. If you build or buy in a flood zone you may have a tough time getting insurance.
6. Make sure the lot you're looking at will support a house of the size you want.
7. Don't limit your search to a single waterfront development - no matter how "in love" you are with it. If you're not familiar with other developments, ask a local realtor for help.
8. Find our how the property will change in the different seasons or when the weather conditions change. When was the last drought and what happened to the water levels then?
9. If you're interested in building a boat house, make sure that there aren't Restrictive Covenants preventing you from doing so. Many lake areas limit the building of new boat houses and docks.
10. If you're planning on building, make sure that you will have access to electricity, water, sewage and other utilities. Never assume that you can just "hook up".
11. If the property is remote, make sure you know who is responsible for maintaining the road. Many banks require a Road Maintenance Agreement before they will lend on remote property.
12. Lastly, before you make the purchase offer, consider making it conditional on an inspection of the land or on another specific item. For example, if you don't have access to sewage lines, make the offer conditional on your ability to obtain permits for a septic system. Plus, you should always make your offer contingent on your ability to obtain financing.

OK, armed with these tips, you should be ready to start your search for the perfect waterfront lot. Remember, investing in waterfront real estate requires common sense and due diligence, just like any other investment. Go put these tips to work for you!

Wednesday, December 3, 2008

Million Dollar Luxury Homes No Longer An Impossible Dream

Remember the day when just owning your own home seemed like a faraway dream?

Times have changed and so has the city's real estate market. It's no longer unusual for people going house hunting in the G.T.A. to come across places that are selling for more than a million dollars.

And equally surprising is this - many of us are buying them.

According to a survey released Wednesday by Re/Max, sales of so-called luxury homes are up 31 percent from last year. Agents sold 225 high-end residences in Toronto alone in 2005. They've helped to move 289 so far this year, with an average asking price of an eye opening $1.5 million.

Realtor Joy Verde maintains it's a trend that's been emerging for a while. "In the last three years They have sold more luxury homes than in the previous 15 years combined," she relates. "It's been quite unbelievable."

And while you'd think it might be older people with nest eggs buying up all that ritzy real estate, Verde claims most of them are young families looking to invest in the long term with the sure fire item that never really loses its value - property.

What are these modern day yuppie-types looking for? "They love wine cellars, they love pools that they can use and have a cottage in the city," Verde lists. "They love spa baths. They love to entertain, so they're looking for a type of luxury that maybe their parents didn't allow themselves."

Re/Max figures show the most expensive house in the G.T.A. is located in Oakville. It's a waterfront estate worth an astounding $45 million. And even at that price it may not last.

"In a lot of ways it's almost mind-boggling," admits Re/Max's Michael Polzler. "It's very much a product of great economy, low interest rates, combined with great consumer confidence."

And while realtors expect sales to soften a bit, they're sure the demand will continue to exceed the supply, keeping prices high.

"I think that the stock market people are more comfortable cashing out, putting the money in their homes," Polzler contends.

And in their pockets - another new survey out this week shows there are more millionaires in Canada than ever before. And now it's apparent just what they've been spending all that cash on.

Million-dollar luxury homes continue selling well

While South Florida real estate inventories are still high across all price ranges, there is some good news surfacing at the upper end of the market.

According to recent Miami-Dade County MLS data, single-family home and condo inventory priced at $750,000-plus is leveling out. Real estate agents report high-end sales gaining momentum despite an overall declining market.

Case in point: Fortune International. The Key Biscayne-based real estate brokerage and property management firm recently inked two multi-million-dollar penthouse deals on the beach in one week. The projects were valued at $26 million in total.

Meanwhile, Nicole Persley, owner of Homage Real Estate of Florida in Boca Raton, reports the recent sales of an $18 million home in Highland Beach and another $1.5 million home in Boca Raton. From her perspective, "The sale of these properties was completely unaffected by the soft market conditions in 2007."

So why are million- and even multi-million-dollar home sales finding stability in what could be called a roller-coaster market that shot down so hard and fast it made stomachs drop?

There are several factors working together to create the kind of perfect storm that realtors welcome: foreign dollars, the availability of "cheap" money, and the ability of high-net-worth individuals to invest large sums up front.

"With European money, buyers are basically paying 50 cents on the dollar," says Beth Butler, a realtor with Esslinger-Wooten-Maxell Realtors in Miami Beach. "Now is a great time for Europeans to buy a $5 million condo, and many have the wealth to do it."

Robert Marley — a mortgage industry expert who's been in the field for 20 years, 11 of them working for major wholesale lenders such as Countrywide and Bear Stearns — says that upper-end home sales haven't slowed due to the availability of cheap money.

"Most people buying these homes today were not affected by new wealth tied to real estate," says Marley, president of Coral Springs-based Einstein Process, a new company that helps consumers decide what type of financing best meets their needs and how to get it. "Lenders in this Super Jumbo space are very aggressive as they are mostly tied to wealth management and can offer the lending services as a bonus to their clients."

Justin Miller, president of JB Mortgage Services in Coral Springs, credits the net worth of buyers who can afford a million-dollar-plus monthly mortgage for stabilizing the upper-end real estate market. Financing problems don't impact high-net-worth individuals the way they do middle-class Americans.

"If you are looking in the $417,000-or-less range, then you have appraisal, income and asset issues," Miller explains. "In the higher end, it isn't as big of a deal if the appraised value comes in $20,000 less than you thought because the percentage is much smaller than on a $200,000 home."

For all these economic reasons — and for all the reasons Florida attracts buyers of second and third homes — the high-end market is as healthy as it's been in years, Butler says. Meanwhile, inventory at the more affordable bottom end of the market is still swelling.

"I don't expect the market to change for multi-million-dollar homes," she adds. "We haven't seen real price increases in the market, [but] the dollar is unsteady, the value still exists, and we have beautiful winters here."