When you invest in real estate, you have to have a long term vision and patience. Unlike buying stock which can be readily purchased and sold, investing in real estate does not afford a quick sale. While it is true that in years past, people were able to flip properties and make fast money in real estate, for most real estate investors the idea is to buy and hold real estate. Some investors in real estate will benefit from federal income tax breaks and other investors in real estate can hold a piece of property and later sell it and buy other property while deferring the payment of any federal income taxes until the real estate is cashed out. Real estate is not a liquid investment and you may need to consider a long term strategy or option even if you are considering a shorter term investment in real estate. Read our articles on investing in real estate and learn about problem tenants and how to handle them. Learn about finding the right team to help you navigate the world of real estate investing. And, finally, learn about how to structure your investments, insure your real estate investments and minimize your federal income taxes.
An investor asks about buying a real estate investment. The investor has calculated the return on investment for the real estate investment properties he's considering. But has he considered other real estate investment issues such as tenant demands and property maintenance? Taking those costs into account may change the investor's mind about buying a real estate investment.
Homes used as rental property are considered investment property by the IRS. As an investment property, you can either pay the taxes owed upon sale of the property, or defer the payment of real estate taxes due upon the sale. If you choose to defer the taxes you owe, you'd utilize Section 1031 of the Internal Revenue Code.
Before you start investing in real estate, you should put together an expert team. Should you include an appraiser in your real estate investment team? Often a real estate appraiser's conclusion is the same as reached by real estate agents who create comparative market analyses.
Financing options for owners of multiple investment properties are limited because of the amount of debt they usually possess. Traditional lenders are not comfortable with the high debt ratio, which limits the financing options they are willing give the owners of multiple investment properties. One of the financing options available to multiple investment property owners is working with commercial lenders.
A couple owned rental property and had asked the tenant to pay the Homeowner Association fees, and because of non-payment, the property owners have bad credit. Because the tenant did not pay the bill, a settlement was placed against the property owner that cause the owner a credit problem. Ilyce explains how this owner can rebuild her credit rating after the tenant did not pay Homeowner Association fees.
A rental property owner is ready to sell but the current tenants will not allow the landlord access to the home to show potential buyers. Many leases specifically allow a landlord access to a rental property to re-rent or sell it. Forcing tenants to give access to the rental property is a double-edged sword.
Siblings have inherited property and now face several decisions on what to do with it. If everyone agrees to sell the inherited property, finding an agent who specializes in this type of property will help. If everyone agrees to keep the inherited property, someone will need to manage it, handle the finances and necessary repairs.
What should you do when you were into flipping real estate and it's no longer profitable? Flipping real estate is less profitable when home market values go down. When the real estate market declines you should do your best to continue making mortgage payments so your credit doesn't get damaged.
Selling investments property successfully is possible. In this column, Ilyce profiles Frank McKinney a successful high-end real estate developer. McKinney came from modest roots to successfully selling multi-million dollar investment properties and starting a foundation to provide food, housing, and medical support to the poor and homeless around the world.
A homeowner is wondering if now is a good time to take his profit out of the townhome and buy a single family home. While property has appreciated dramatically over the years in some markets, we've seen the residential real estate market soften quite a bit in some areas. Now might be a good time to evaluate options and find out where profit can be found in real estate.