Just a recent post going to go out on my newsletters
Yes reads very well as my wife cleaned up my spelling and grammar . Now this was for the american buyer but some of this can be used by the international buyer as well
The key to real estate investment is to invest in one, and not diversify the
focus. It is often about following one path till you find success in it. You
need to find a way through which you can reap maximum benefits. Some of the
reasons for investing in real estate might help you in making this decision.
The first reason is income that is received from the property that you invest
in. You can make good use of this cash flow by investing in other real estates.
You can also keep this money safe for any emergency situations. You need to
learn to make money from money.
The value of every single property keeps on increasing over a period of time but
the investor is not taxed on the increase unless and until he decides to sell
it. You might consider this just like the tax treatment of mutual funds and
bonds. If the prices of properties around yours start increasing then there
will be an obvious increase in the value of your property.( we are hoping for this )
You can also increase the value yourself by upgrading and renovating you
property. You can add rooms or enhance the landscape. Refinancing your property
might be done by cashing out at a higher rate as you are not supposed to pay any
tax on this earning.
Another reason for investing in real estate is that you are able to borrow cash
against the equity held by you in other leases and makes use of that money as
the deposit for another investment. By doing so you are rendering the costs of
your interest liable for taxes.( international investors will take some time to set up in the USA but it is possible )
This strategy is known as leverage and is used as one of the techniques to build
up on your income. Through efficient use of leverage, an investor is able to
uphold his capital and achieve profits as well.
It is also possible for an investor to exchange the property he has invested in
for another similar property and postpone the tax payment on it. Considering the
complications involved in tax laws after some consultation with an expert
adviser you can figure out a way.( 1031 exchange here )
If you move back into your rental house and occupy it as your home for at least
two out of five years before you decide to sell it, then there would be no need
for you to pay the taxes on its sale. The only tax that you are supposed to pay
will be on your previous wear and tear entailment claims. The rest of the money
goes back into your hands.( again only if you plan on staying here but again just another what if scenario )
As an investor you are entitled to demand further reduction in the gross amount
on which a tax is calculated depending on the value of your property minus the
cost of the land on which it stands over a certain time period. The current
duration is set at 27 years. Depreciation is possible in case of furniture,
carpet and the appliances in your house over a time period of 5 years.
The depreciation period for driveways, exterior fences and planters as well as
trees is 15 years. When you choose to sell a property, taxes need to be paid for
all previous depreciation.
Ps my wife sure can clean up my work LOL
Thanks for the great advice. Really helpful for investing in the US property.
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