The price of real estate has come down dramatically in the last few years. While this can be bad if you are trying to sell a home, it can be an excellent opportunity if you would like to invest in real estate property. In fact, there are also more ways to finance your real estate investment than ever before, too.
Long Term Real Estate Investment vs. Short Term Real Estate Investment
A long term real estate investment can be a great choice if you wish to purchase a property and use it to continue to earn money such as a home or office building you charge rent to a tenant. Long term investments in property also allow you to make tremendous upgrades and dramatically increase the value of the property.
Short term real estate investing was very popular a few years ago. Once common way this was done was for a buyer to purchase a property, such as a foreclosed house, for a greatly reduced price and then do several types of quick fix up projects to the house and turn around and put it back on the market with a drastically increased price. This method made many people very wealthy when the real estate market was booming in the last decade. It may be making a return in popularity as the economy improves.
Either a long term or short term real estate investment can be a good way to start investing in real estate. Each method depends on your ultimate goals with the investment.
Tax Benefits of Real Estate Investing
Protection from income taxation is a great way to build a tax shelter. While tax evasion is a crime, tax avoidance is perfectly legal and makes great financial sense when it comes to real estate. The reason is simple: real estate purchases benefit the owner greatly. Purchasing real estate to avoid taxation can take an average real estate investment and turn it into a great one.
The goal of real estate investing, at least for tax benefits, is to protect large amounts of income that accrues with the property from being taxed. In addition, there are also a number of tax deductions on real estate investments. Most real estate investments allow deductions for the following items:
• Mortgage loan interest
• Property taxes
• Insurance premiums
• Maintenance expenses
• Depreciation
• Some forms of travel
• Casualty and theft losses
Real estate investing makes great tax sense. Since our country was founded, real estate has helped many families build small fortunes. Anyone who is willing to take a little risk with real estate investments can reap great financial rewards for years to come.
Considering investing in real estate in the near future? This is a great time to do it! Call our office for a list of my “Top 10 Investment Properties in Flagstaff” for some suggestions if you are interested in this lucrative investment opportunity.
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