Still, donating real estate comes with several important factors to keep in mind, says Chris Losquadro, senior real estate advisor and principal broker at Quantum Realty Advisors, Inc., who also serves on the foundation’s Philanthropic Advisory Council.
Real estate in Palm Beach and Martin counties has recently appreciated fairly quickly.
“Living in South Florida, if you bought a property five years ago, it’s probably doubled in value,” Losquadro said. “So, there are different ways to carve up that pie where maybe the heirs and beneficiaries get their principal back in the form of an inheritance, and maybe some profit goes to the Community Foundation or other charities.”
Whether it’s the family home, an investment property, or a vacation property, each type of property can be considered donation. For example, Losquadro recently worked with a donor who had arranged years earlier to leave a million-dollar condominium to a charity.
For advisors, helping clients navigate real estate gifts means understanding the many complexities that come with them.
Is the property marketable, easy to sell? Losquadro said.
“The Community Foundation at the end of the day wants the liquidity that’s in the property,” he said.
Are there mortgages or liens to pay off?
“If there’s enough equity, anything can be overcome,” he said.
Is the property vacant so it can be monetized quickly?
“That way, those funds can be put to a productive use, whether it be for a grant, a program, a particular project or just in the Community Foundation general fund,” he said. “Obviously, they’re not earning any interest on the home as it sits there.”
In fact, the opposite can be the problem as real estate comes with ongoing costs like maintenance, property taxes, insurance, and in more than half the homes in Florida, homeowners association fees. Still, if there’s a willing donor, most of these issues are not insurmountable, Losquadro said.
Donating property in advance of death comes with many of the tax benefits others receive for financial gifts. Of course, donors need to consult their tax advisors.
However, with the appreciation of real estate in Florida and many other parts of the country, donating real estate can leave a lasting impact.
“Those are gifts that can be very, very meaningful,” Losquadro said.
