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.
What Is the Right Way To Title a Home Purchase to Reduce Capital Gains or Inheritance Taxes?
What is the right way to title a home purchase to reduce future taxes? Should you choose joint tenancy with rights of survivorship or a trust? What impact will the way you hold title have on capital gains or inheritance taxes? Q: My mom sold her property and put all of the proceeds into [...]
Real Estate Development Inheritance Costs Heirs Money
Real estate development inheritance costs heirs money. This reader expected a windfall and is wondering how to turn a money-losing situation into something that's at least breakeven. Q: My husband inherited a private development in West Virginia that his father owned. How does one go about starting a homeowners' association (HOA) for something like that? [...]
Predicting the Future Tax Liability of Inherited Investment Property
While you can’t always predict future tax liability on investment property, here are issues that many real estate investors struggle with when structuring an inheritance. Q: We have a rental property (titled in the name of our trust) which shall pass to our three sons upon our deaths. When our sons sell the property [...]
What Are the Implications of Transferring an Investment Property to an LLC?
Purchasing an investment property as an individual that you plan to transfer to your LLC later can have a ripple effect on your liability and property taxes. Q: I own a limited liability company (LLC) that holds some rental properties free and clear. The commercial lenders I speak with aren’t interested in a loan smaller [...]
Is a Self-Directed IRA for Investing Worth the Hassle?
Using a self-directed IRA for real estate investing can be a complex process involving countless rules and regulations that may not be worth the hassle. Q: I've enjoyed your columns for some time. What is your opinion of self directed IRAs for the purpose of buying real estate within the vehicle? My son is a [...]
What Happens When A Lender Places a Lien on an Investment Property?
Because lenders have the right to place a lien on any investment property you own, it’s important to act quickly or risk losing the property altogether. Q: A bank foreclosed on a property I owned with a business partner. The bank sold the property but the proceeds from the sale weren’t enough to cover the [...]
Should I Outsource To A Property Management Company?
Should I outsource to a property management company? A lot of hard work goes into being a landlord, sometimes it's smarter to outsource property management. Q: I am planning to buy a four-plex and I was planning on using an on-call handyman instead of property management which is typically expensive. Since this is my first [...]
Be Cautious of Risk When Flipping Unfamiliar Property
Even investors experienced in flipping homes should be careful of new kinds of risk that come with flipping unfamiliar property. Q: Here's my dilemma. I've been buying tax foreclosed building lots and flipping them for over a decade. Because I get them at a steep discount, I also sell them at a steep discount. As [...]
What’s the Best Way to Manage a Family Owned Property?
With a family-owned property, the rules can get complicated. Here’s what you need to know. Q: Eight members, cousins and siblings, currently share ownership in a summer cottage in Maine. Our current rules have worked fine for over 80 years but as the family ownership expands, things will ultimately get more difficult. We are considering [...]