Investing 101 Real Estate Tips
In many local cities, renters outnumber homeowners. With today’s challenging economy, many people now rent or lease homes. Many young people are delaying marriage and home ownership until later in life than previously, and rent in the interim. Some never want to own a home. Empty-nesters often choose to rent because they no longer want the responsibility of owning a home. Those who are saving to buy a home must rent in the meantime.
Low interest rates or returns on investments have convinced growing numbers of investors to invest in rental homes or apartments to increase their income, return on investment, and to take advantage of depreciation allowances which can shelter the property’s income, and also other income of the landlord. The 1031 IRC Tax Deferred Exchange provision of the tax code continues to allow investors to defer paying any income tax on the sale of properties held over one year as long as they exchange their property for another like-kind property for their entire lives. “Like-kind” to the IRS means used for the same purpose. For example, as long as you hold the property as an investment you could exchange a residential rental for a commercial property, raw land, or even an orchard. You can even do an exchange into a property such as a house, and later decide to live in it as your residence.
If you are considering investing for the first time or expanding your portfolio, Jim Mitchell welcomes the opportunity to act as your buyer’s broker or buyer’s agent to help find and negotiate a great deal on the right property for you. Jim and BlackHorseRealty have access to every property for sale in Southern California and beyond. As your broker, he will use software to calculate the cash flow and return on investment using your assumptions for income and expenses, including a 5-year projection before you buy.
There is a perfect storm of opportunity for landlords today! Low prices, record-breaking low interest rates, low vacancy rates, steady rental demand, and a continued attraction to the fantastic beach and coastal area of Los Angeles County. You can even use a self-directed IRA to buy an investment property. And if you lack the down payment to buy now and have sufficient equity in your home, I represent an investor who will give you up to 17.5% of the value of your home without any payments as long as you occupy your home!
Call Jim Mitchell and BlackHorseRealty now for a free, no-obligation consultation to see if we want to work together to find the right investment for you. And if you are concerned that you don’t want the hassle of dealing with tenants or property management, I will happily do that for you as well!