10 Important Tips to Successful Real Estate InvestingWritten by Neda Dabestani-Ryba
10 Important Tips to Successful Real Estate Investing
By Neda Dabestani-Ryba Prudential Carruthers REALTORS
When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know: 1. Compare Property Values and Rents Financial statistics only go so far; best measure of a property's market value is often sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.
2. Be careful - Tax laws may change Don't base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of tax code. The right property with right financing is what you should look for as an investor.
3. Specialize in something you Know Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you'll benefit from experience by specializing in one aspect of investment real estate properties.
4. Know Costs going in! Know financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does cash flow statement look like? These are key issues that must be addressed before making a solid investment.
Preserve Equity, Build for the Future Using a 1031 Tax ExchangeWritten by Neda Dabestani-Ryba
Preserve Equity, Build for Future Using a 1031 Tax Exchange By Neda Dabestani-Ryba
Thinking of trading up on an investment resort property? If so, look into 1031 Tax Exchanges (based on IRS Code Section 1031), which allow taxpayers to defer taxes on capital gains resulting from sale of investment real estate, often a sizable sum since combined Federal and State taxes can run as high as 38 percent. With an exchange, owners are able to preserve equity, while still selling property. The underlying concept is that an exchange of like-kind property for like-kind property does not generate funds, which can be taxed since profits go directly into new or replacement property. To accomplish this, sellers hire a Qualified 1031 Intermediary (QI) to document sale as an exchange and to receive funds from sale. The QI then delivers funds directly to closing agent for replacement property who deeds property to taxpayer. Central to a 1031 Exchange is interpretation of like-kind property. While common assumption is that like-kind implies land for land or a condominium for a condominium swap, interpretation of like kind is actually less literal. Rather, it defines like kind as meaning that both replacement and original property must be used as an investment. So land, condominiums, single-family homes and motels can all be exchanged for one another as long as they are used in exchanger's business or held as an investment. The amount of debt held on replacement property must be same as amount of debt on original.