Here are the basics of real estate investing and why it’s beneficial.
Investing in real estate helps you build wealth to create a legacy for you and your family. Buying a duplex, single-family home, condo, townhome, or commercial property provides many benefits. You can write off all expenses against the property, you get to depreciate it, which allows you to maximize profits, and down the road when you’ve built up some equity, you can defer all those taxes.
If you sell the property on the spot, the taxman will come calling; they’ll say you took advantage of all these things, and they want that back. However, if you take advantage of a 1031 tax-deferred exchange, you can defer those taxes and push them into your next property, start the depreciation cycle all over again, and build wealth. With a 1031, you can buy more than one property, as long as it’s a similar kind; there are rules to follow, but it can be done well. You can buy an investment property in other markets that may be easier to get into; the power of purchasing homes gives you plenty of options.
Maybe one day you have kids going off to college and you have to subsidize their housing; you can sell a property you have, buy one where they’re going to school, give them a place to live, and maybe give some of their friends or classmates a place to live too.
If you have questions about investing in real estate or want to learn more about how you can take advantage, please reach out via phone or email. We look forward to hearing from you.