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6 REASONS for Investing in Florida Real Estate Investment Property NOW
I invite you to take the next few minutes to learn the truth about the real estate market, how it compares to other methods of building assets and why it is such a lucrative form of investing. Many potential investors will say, 'I need to get into the Florida Investment Property market', especially taking into account current stock market fluctuations and the HOT market for investment properties, but simply don't know the facts about Orlando property investing and how to use sale and leaseback method of property management.
When is the last time your financial advisor or stockbroker tried to convince you that moving a portion of your assets into the Florida Investment Property market might be a good idea? Never Right? The 'why' is simple. They don't earn commissions when you buy Florida Investment Property. It is also likely that you have probably never had an 'apples to apples' comparison of stocks versus Florida Investment Property quite like the one you will see here.
Let's assume that you have $10,000 to put into some type of investment. If you choose to buy $10,000 worth of stocks, you will own exactly $10,000 worth of stocks. Pretty straight-forward. However, suppose you choose to invest that $10,000 into Florida Investment Property using a 90% mortgage (which in many cases can go up to 95-100% mortgages in today's market), you will own $100,000 worth of Florida Investment Property. If both of your investments were to appreciate by 10%, your actual gain with your stocks would be $1000 where your actual gain with Florida Investment Property would be $10,000. That equates to an actual 10% return on investment vs. a 100% return on investment. That's what we call leverage.
Leverage: Florida Real Estate vs. Stocks
If you take the above statement to be true and compare the REAL numbers, the stock investment gained 10% of the initial $10,000 value (or $1000) and the Orlando Investment Property investment gained 6% of the initial $100,000 value (or $6000). That is still an actual return of 10% versus 60%. It is not hard to see which investment provides a greater immediate return on investment. Additionally. these numbers do not take into account any income from your property during the course of the year, or the substantial tax advantages to owning property, which we will discuss later.
What if you purchased a $100,000 property that happened to be worth $110,000 the day you bought it? Does it happen? The answer is yes, all the time. If you have your eyes open and are willing to 'go through the numbers' to find good deals, they are all around you. You may be asking yourself, why would anybody sell a $110,000 property for $100,000?
Value: Making money when you buy.
You have added $10,000 to your asset column in the form of equity.
You have created additional LEVERAGE for yourself as the value of your property increases (a 6-10% gain on $110,000 is better than a 6-10% gain on $100,000!) Remember, you make money in Orlando Investment Property when you buy, not when you sell.
It is amazing what a cleanup, a little landscaping and a paint job can do to increase the value of a property. Only a few hundred dollars well spent can result in huge value gains in Orlando Investment Property. Your $110,000 property with a little effort could easily be worth $115,000, $120,000 or more virtually overnight! Do you have to do any of this work yourself? Absolutely not! If you like to do that sort of thing then have at it, but if not, simply hire it done and accept a little lower net gain.
Continuing with the above example, let's say that you have completed your 'deal' with the $10,000 invested with a 90% mortgage to purchase the $100,000 property that appraised for $110,000 (because you 'found a good deal'), which you improved to say, $115,000 by spending another $1000 on cleanup etc. Assume that one year passes and the Orlando Investment Property market grew by 6%, your property would now be worth $122,000. So far, so good right? If you are like most people, you may want to spend some of your hard earned money.
Let's do the numbers. You have a mortgage at current rates that started at $90,000 and after a year worth of payments (the majority of which are tax deductible) you still owe approximately $89,000. However, your property is now worth approximately $122,000. If you were to refinance at 90% once again, you would take out a new mortgage of approximately $110,000. This will leave you with approximately $21,000 in cash in your pocket. Now, the BIG question; do you have to pay tax on that money? Absolutely Not! You have not sold the property or realized a 'capital gain'. You have simply borrowed money from yourself. You are able to do what you wish with that money, free from any tax whatsoever. Obviously, a good strategy might be to purchase two more properties just like your first deal!
Also, we have not taken into account the fact that ALL of your interest payments on this property are tax deductible. In addition, you are also able to depreciate the property itself and all of its contents for additional tax advantages if you choose to do so.
Let's be fair and compare the Orlando Investment Property tax position with the stock scenario. Assume that the $10,000 initial stock investment grew by 10% in the first year, creating a gain of $1000 and you wish to access it. If you draw it out, you will pay from 20-28% (or higher) in capital gains tax in order to have access to this money. This reduces your net gain to $800 (actual 8%) or less, depending on your tax situation. Compare that to Orlando Investment Property and you are beginning to get the picture.
This is all not to say that Orlando Investment Property markets don't go down from time to time, however the dips are much less dramatic than that which can take place in the stock market, proven out by the banks' willingness to loan money on property.
Using The Internet In Your Lease Purchase Business
First you need to find a list of For Sale By Owner Sites. You do this by going to one of the major search engines.
Subdividing - But NOT Land!
Many people are familiar with the concept of sub-dividing a large piece of property into smaller lots. The same concept can be very profitable in other areas.
Dealing With Dual Real Estate Agents
Historically, real estate agents have represented the seller of a property. The seller, after all, is usually the one who pays their commission, and agents therefore have a fiduciary relationship with the seller.
How to Achieve Financial Freedom with Your Home
The secret disclosed on how you too could achieve financial freedom through property (and tell the pension companies just where to stick their measly, worthless 'pensions') Geoff Morris is a self-made property millionaire who made it in less than 18 months even with a hectic 'day job'. He has written a series of articles to help people like you achieve the same levels of success - as long as you are willing to 'Go For It!'Many people these days are getting more and more concerned as they approach retirement age.
Seller Financing - Six Safety Tips
Why offer seller financing when you sell? A higher price, a good return on your money, a faster sale and to sell a property that is otherwise difficult to sell. Some good reasons, but how do you do it safely?1.
How to Sell Your Own Home and Save Thousands of Dollars
Most people take the easy way out when selling their home and hand the responsibility over to a real estate agent, when in fact the average homeowner is capable of selling their own home.Apart from the satisfaction of making the sale yourself there is the bonus of saving thousands of dollars in agents fees.
Selling Property - Valuing Your Property
Selling property privately has many advantages over using an estate agent. However estate agents can provide useful local information not available from the internet.
New Homes in Ridgefield
Location:Frequent travelers will absolutely delight in this town! As part of the southwest section of Connecticut, Ridgefield is a convenient town to live in since it is only miles away from both the New Jersey Tri-state area and New York City. It is also close to its neighbor, Danbury, and has a steady population that continues to grow.
Real Estate Investing - Basis Explained
Our complex IRS code requires that your, as a real estate investor, accurately calculate your "basis" in investment property when reporting a gain or loss on a tax return.Your monetary gain or loss when you sell investment property is determined by comparing the sale price to the adjusted basis in the property.
Budgeting Your Log Home - Creating a Checklist
If you've read my first article, BUDGETING YOUR LOG HOME: Where do you start?, you've got a very basic overview of the process. However, there are still a number of questions I'd like to address.
Making it affordable: Nine tips for first time home buyers
It seems that everyone loves a good real estate story. The media is filled with reports about soaring property values and home owners of modest means becoming instant millionaires when they sell.
Do You Need to Download a Landlord Inventory On-Line Today?
Do you need to download a Landlord Inventory on-line now? Why is it so important to have a Landlord Inventory?Firstly, if you are a landlord, you need to be prepared. As much as we all like to think we can trust everyone, it is very important that buy to let landlords protect their investment property as thoroughly as possible.
Using Transformation Psychology to Sell Investment Properties
Satisfying and lucrative real estate investment depends upon your correct assessment of profit potential, of course, but your ultimate success depends on your ability to transform a doghouse into a dollhouse. The renovation process involves physical work and choosing the best supplies, in order to create maximum positive emotional effect and profits.
How Can I Stop Foreclosure on My House?
We understand the being in foreclosure is a scary thing. You are probably wondering how can I stop foreclosure on my house.
Should You Allow Buyer To Rent During Closing?
It's not uncommon for an investor to sell a house and have the buyer request the right to rent and occupy the property while the closing is being completed.You're a bad guy if you refuse and often in hot water of you agree.
Buying Beach Houses in New Zealand: Real Estate and Investment Opportunities
Buying a beach house in New Zealand offers many possibilities.New Zealand is made up of two main islands, North Island and South Island, giving it miles of coastal lands and perfect beaches to live by.
How to Buy Fixers for Profit
Do you dream of becoming a multi-millionaire real estate investor? Here's how to get started: find a bargain "fixer-upper" owned by a worried seller. The hardest house for a homeowner to sell is a "doghouse," "dump," or "fixer-upper.
Property for Sale in Bulgaria - Emerging Property Markets 1
The latest investment property headline is this: Popular and well trodden markets such as France and Spain are out, Bansko is in.Where?Bansko, Bulgaria.
Regarding Real Estate On Leased Land
1.Why are there so many properties on leased land?There are several situations here.
Real Estate Investing with No Cash and No Credit
Lots of folks think it can't be done.How in the world can you buy a piece of real estate property without cash or credit? How is it possible to buy a $50,000 house or a $1 million dollar house if I don't have an abundance of cash or an excellent credit rating?Nothing stops a would-be investor cold in his tracks like "no cash or credit.
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