|
|
|
7 Big Reasons To Invest In Pre-Foreclosures
Looking for an "in" to real estate investing?
Working a nine to five job swapping time for money can be incredibly dispiriting. After the futility of it all hits home, it's all you can do to limit the number of home business opportunities you...
Choosing A Fireplace
The image of the snow gently falling, the air being crisp and a fire gently burning in a fireplace while the entire family sits nearby is lovely. Having a fireplace in your home adds a distinct coziness and also can increase the value...
Florida Real Estate – The Sunshine State
Florida real estate is definitely worth a look if sun and fun is your ticket. Florida real estate, even close to the beach, is a very good deal.
Florida
Florida is a well-known haven for people living through winter storms in the northeast....
Important Tips For Home Buyers
If you are considering buying a home or have spent many years saving in preparation of buying a home, the questions and process involved in buying a home can be extremely stressful. As exciting as it is to begin looking for your new home, there are...
Smart Home Networking
Leviton Integrated Networks takes the concept of structured cabling, as practiced in demanding commercial applications, and combines it with multimedia. This blending accommodates the convergence of telephone communications, computer and Internet...
|
|
| |
|
|
|
|
Need More Income From Your Investment Property?
The goal of every real estate investor is to see their property appreciate in value and to have it generate a positive cash flow. The appreciation normally takes care of itself if the property is of good quality, in a good location, and is held over a long enough period of time. Just like the stock market, real estate has proven to go up way more than it goes down over time.
The positive cash flow component is not always a given though. Ask any seasoned investor, and unless the property is owned free and clear, there have probably been times when he's had to dip into his own pocket to pay for some aspect of his rental. Who hasn't seen a raise in homeowner's fees, property taxes, an outlay of cash for a new roof, plumbing, paint, carpet, appliances, or a length of time supporting it between tenants.
So, what if you're nearing retirement age and see the need for increased and steady income? You may even look forward to taking a permanent break from the "joys" of hands-on property management. We all deserve to reap the rewards of our labors, right?
Basically, to meet these goals, one can do one of two things.
1. Sell the property, pay all the capital gains taxes, recaptured depreciation, etc. and pocket what is left. To receive an income, one would have to either live off whatever interest/gains your proceeds produced, or begin depleting your funds to provide you with the amount of monthly income you deem necessary. Depending on your age and financial needs and whether or not you desire to leave as large a legacy as possible, this approach may or may not work for you.
2. Employ a strategy that will defer the payment of any tax or depreciation. Let all of your gains continue to
work for you throughout the course of your retirement and into the next generation. Yet, you will still get a significant and partially tax deductible monthly income.
What strategy is #2? If your property is over a million and you are not a young retiree, you might consider a Private Annuity Trust. You will get monthly income for the rest of your life, but you will be depleting your asset and only spreading out the repayment of capital gains tax over a longer period of time. That is a simplification of a complex agreement, but that is the gist.
A better option may be a 1031 exchange into a tenant in common (TIC), Basically, you exchange your property for a deeded partial interest in a grade A commercial property. You sign a contract with a property management company, and in turn receive a monthly income (typically 6-7% of your total equity). You never have to deplete your asset, and it can pass to your heirs at the stepped up basis.
The 1031/TIC exchange is a fairly new concept, sanctioned by the IRS in 2002. It is projected that the influx of property assets into this type of exchange will be close to 5 Billion dollars in 2005. That's a lot of equity. Why not let your equity continue to work for you instead of parting with a lot of profits that would take you years to replace.
About the Author: How much would you pay to save thousands in Capital Gains Tax? Paula will share the secrets in a free Teleconference . Sign up now at : http://www.savegainstax.com
Source: www.isnare.com
|
|
|
|
|
|
|