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Real Estate Tax Incentives
Lower Your Taxes
Tax incentives for real estate investors can often make the difference in your tax rates. Deductions for rental property can often be used to offset wage income. Tax breaks can often enable investors to turn a loss into a profit.
For which items can investors get tax breaks? You could claim deductions for actual costs you incur for financing, managing and operating the rental property. This includes mortgage interest payments, real estate taxes, insurance, maintenance, repairs, property management fees, travel, advertising, and utilities (assuming the tenant doesn't pay them). These expenses can be subtracted from your adjusted gross income when determining your personal income taxes. Of course, these deductions cannot exceed the amount of real estate income you receive. In addition to deductions for operating costs, you can also receive breaks for depreciation. Buildings naturally deteriorate over time, and these "losses" can be deducted regardless of the actual market value of the property. Because depreciation is a non-cash expense -- you are not actually spending any money -- the tax code can get a bit tricky. For more information about depreciation and various tax alternatives, ask your tax advisor about Section 1031 of the U.S. Tax Code.
Have a Positive Cash Flow
There are two kinds of positive cash flows: pre-tax and after-tax. A pre-tax positive cash flow occurs when income received is greater than expenses incurred. This sort of situation is difficult to find, but they are usually a strong and safe investment. An after-tax positive cash flow may have expenses that outweigh collected income, but various tax breaks allow for a positive cash flow. This is more common, but it is generally not as strong or safe as a pre-tax positive cash flow. Regardless of what kind of real estate you choose to invest in, timely collections from your tenants is absolutely necessary. A positive cash flow -- whether it be pre-tax or after-tax -- requires rental income. Be sure to find quality tenants; a thorough credit and employment check is probably a good idea.
One of the most important factors in determining a solid investment is the amount of equity you are purchasing. Equity is the difference between the actual worth of the property and the balanced owed on the mortgage.
Benefit from Growing Equity
While investing in real estate is relatively complex, it is often worth the extra work. When compared to other financial investments, like bonds or CD's, the return on investment for real estate purchases can often be greater.
The key to real estate investing is equity. Determine an amount of equity that you want to achieve. When you reach your goal, it's time to sell or refinance. Determining the proper amount of equity may require the assistance of a real estate professional.
Neda Dabestani-Ryba is a licensed Realtor in Maryland. She is a member of the President's Circle of Top Real Estate Professionals. She can be reached at (800) 536-3806 or visit her website for more information: http://neda.dabestani.pcragent.com/ Prudential Carruthers REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity
Law & Logic of Homeowner Association Capital Reserves
In October 1999, Oregon was one of the first states that enacted a significant improvement to its Condominium and Planned Community regarding capital reserve planning, a process by which homeowner associations plan and fund future repairs and replacements. For many associations, the process became mandatory although there was an "escape clause" for pre-October 99 Oregon communities.
How Much Should I Pay For This House?
We probably answer this question for someone a couple times every week. The problem is that they don't have a good formula for determining the most they can pay and still make a profit - so they're scared to make any offer.
Hurricane Katrina And The Impact On Real Estate Prices
In the wake of Hurricane Katrina's wide path of destruction, the real estate market will be affected perhaps in ways not fully understood or expected. If recent hurricane recovery history holds true there will be several good things to come out of all destruction.
Do I Need A Real Estate Survey?
Getting a survey before you close on any real estate is very important.Some people actually buy real estate without having a survey done.
A Log Home Story
Solving problems while maximizing valuesThis story has a few good lessons and observations that no doubt can be used by you to take advantage of hidden opportunities that often lie in plain view for all to see, however, most people have not been trained or instructed on how to recognize or find them.The following true story begins with a classic log home package, engineered, manufactured, approved and delivered for use in Alaska.
Protective Covenants - Buying A Home
In addition to zoning, some properties have covenants recorded at the courthouse that "run with the land." These "protective covenants" can put a serious pinch in your plans for a piece of property.
Buying Real Estate Thats Not For Sale
Buying real estate can start with a look in the newspaper, a visit to a broker, or a search online. These are all good ways to find your next investment property.
Where To Start In Looking For A Central Illinois Realtor
Central Illinois is an excellent location for families and businesses. Property values and local economies are growing constantly and the wide range of available properties is impressive.
Do Open Houses Work?
What are the odds that you'll find your dream at a Sunday open house? What is the likelihood that your home will sell at an open house? Open houses are an integral part of the home sale business. But, do they work?There are two types of open houses.
European tax haven Andorra enjoys the same fiscal benefits as better known Monaco, adding to property demand from those looking for residency in a tax shelter as well as traditional ski chalet buyers who flock to the country between December and April each year.With the end of the ski season last month many ski resorts in Europe have closed up shop until early December with overseas property owners having little prospect of rental income in the summer months.
Selling Houses: Design Psychology Works!
I've taught the concepts of Design Psychology for many years, and I know how much it can empower a person, and allow them to create a fabulous home that sustains their emotions. Since it's based on science, I know that Design Psychology is effective at turning plain spaces into happy places.
Checklist for Buying a Home
I had a client who called saying that his bath tub just fallen through the floor in his new home (new to him). Mold had eaten away the floor from the crawlspace up.
Advantages and Disadvantages to Selling a House on Your Own
As with any business transaction, there are pros and cons to selling your own home. Many people are intimidated by the whole process, but if you know what you are up against, and if you are aware of what needs to be done, you will be more effective at selling on your own, or you will be better at making sure your agent does what you prefer.
Landscaping Adds Great Value to Real Estate And Helps You Sell
Over the years several of our clients have had professional landscaping done and it's amazing to me how little landscaping, can be done for $5-10,000, by a professional Landscaper, and how little value it can add to your home.Small shrubs, trees, and plantings add almost nothing, or actually nothing at all, to your home value on the open market -- until they are several years older! There is another way!Some savvy investors look for good homes that are poorly landscaped and after spending a couple of thousand dollars or less put the property right back on the market for much more money and sell it.
Commercial Real Estate: Assessing The Unique Features Of Commercial Real Estate Parcels
As commercial real estate development progresses into the 21st century, many of the principles upon which the market was founded remain the same. Whether you are a property owner, developer, or commercial real estate agent, identifying and marketing the unique features of your commercial property will maximize the attractiveness of the site to prospective buyers or tenants.
Join the Bulgarian Property Boom With Confidence
An Irish property investor in Sydney, Australia has created an investment kit that provides potential buyers with all of the relevant facts, figures and information to confidently buy Bulgarian property, which grew an average of 30% in 2004. "Bulgarian Property - The Overseas Buyers' Kit" contains a complete guide to the tax and ownership laws, calculators and various information-gathering templates.
10 Frequently Asked Short Sale Questions
1. What happens to the seller's credit rating when they allow an investor to short sell their property?What typically happens is the loan will show up as "paid" on their credit report; however there will be a notation that says "settled for less than originally owed" or something along these lines.
Sell your Property Faster
Learn how to sell your property faster and at the best possible price. Selling your property quickly and at the highest price is the target for everyone looking to move.
Property in Northern Spain
If you're looking for the 'real' Spain where the culture, customs and the traditional Spanish lifestyle have been preserved - a Spain long ago lost and forgotten along the Costa del Sol - consider Northern Spain.Northern Spain has always been a popular holiday destination for southern Spanish tourists, but until relatively recently it was largely unexplored and undiscovered by foreign tourists and those expatriates seeking a new home overseas.
Selling by Owner Tips
Do strangers scare or intimidate you? If you're planning to try to sell your home yourself, you'll have to get used to it. You'll also be opening yourself up to potentially dangerous situations and legal liabilities.
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