Investment

Real estate in the Highlands Ranch and Littleton area has consistently appreciated 3-7% per year.  Investing in real estate helps to diversify an investment portfolio.  Real estate does not have the volatility of the stock market and it helps to stabilize a portfolio.  People invest in real estate for any number of reasons but financial benefits tops the list. 

Financial Benefits of Investment Real Estate

• Income.  Investment real estate produces income--hopefully positive income.  This income is referred to as cash flow before tax.
• Principal reduction.  The mortgage is paid down with rent collected from the tenants.
• Tax Savings.  Owners of investment real estate are allowed to depreciate the property and save on income taxes.
• Appreciation.  Real estate appreciates in value.

There are many sources for acquiring investment property.  Some investors look at foreclosure properties for either rental units or to renovate and sell.  One source of foreclosure properties is First Preston.  They have local FHA foreclosures from HUD.  Deby has received training and has experience with the bidding process.

When an investment property is sold income tax is due on the capital gains.  However, you may exchange income-producing real estate for other income-producing real estate and defer income tax on the realized gain.  You may, as an example, sell  three duplexes and invest the proceeds in a twelve unit with a and not have to pay any taxes on the sale.  You may sell rental property here and the proceeds in rental property 1031 exchange  in another part of the country with a 1031 exchange and not have to pay any taxes on the sale.

Did you know you can invest in real estate assets with an IRA?  You can create a new retirement account or rollover an existing account with a special asset trustee.  Special asset trustees can create a fund for you in three to four days.  Once you have funded the account you can direct the trustee to purchase real estate and have it titled in the name of the retirement account.  Your IRA cannot purchase property you already own and it can not purchase your residence.  It can however provide funds to renovate a property it has purchased to sell at a higher price.  Plus, any income or expenses from rental property must go to the retirement account.

A wise real estate investor has a good team of professional resources.  Be sure to consult with your attorney, accountant, and your REALTOR® to maximize the return on your investment.