When you invest in real estate, you have to have a long term vision and patience. Unlike buying stock which can be readily purchased and sold, investing in real estate does not afford a quick sale. While it is true that in years past, people were able to flip properties and make fast money in real estate, for most real estate investors the idea is to buy and hold real estate. Some investors in real estate will benefit from federal income tax breaks and other investors in real estate can hold a piece of property and later sell it and buy other property while deferring the payment of any federal income taxes until the real estate is cashed out. Real estate is not a liquid investment and you may need to consider a long term strategy or option even if you are considering a shorter term investment in real estate. Read our articles on investing in real estate and learn about problem tenants and how to handle them. Learn about finding the right team to help you navigate the world of real estate investing. And, finally, learn about how to structure your investments, insure your real estate investments and minimize your federal income taxes.
Getting Rid Of PMI On Real Estate Investment
Getting rid of PMI on investment real estate property can be nearly impossible with declining real estate values. Q: We bought an investment property for $76,000 about 7 years ago with no money down. Our interest rate is at 7.5 percent. We would love to get rid of the private mortgage insurance (PMI) on the [...]
Investing In Real Estate With Friend Leads To Problems
If you invest in real estate with friends or relatives, plan ahead. Otherwise, you may find yourself deep with problems when money is short or disagreements arise. Q: My friend and I bought a single family house to make some fast money. We wanted to flip the property, but, could not, and we’re on the [...]
Investment Income Tax Won’t Hit Most Homeowners
New investment income tax won't hit most homeowners. The Obama health care bill contains a new investment income tax but it won't hit most homeowners. Homeowner's with investment income over $250,000 will be hit with a new investment income tax. Investment income includes investment profit from a home sale, but the investment income tax won't hit most homeowners. Homeowners hit by the new investment income tax must have investment income over $250,000, so the investment income tax won't hit most homeowners.
LLC vs Corporation: Is An LLC Better For Real Estate Investing?
Most people prefer an LLC for real estate investing. But some accountants still recommend that their clients use an S Corporation to invest in real estate. LLC, or limited liability companies, have become the method of choice for real estate investors. Most states have laws that permit the use of limited liability companies or some other company structure that is similar to an LLC.
1031 Exchange: Rolling Real Estate Profits Into Another Real Estate Purchase
Investing the profits from one real estate property into another purchase requires the use of a 1031 exchange. A 1031 exchange allows you to defer any capital gains tax owed on profits you earned from selling the first real estate property when you invest the profits into another real estate purchase. There are very specific rules, but if you follow them correctly, the 1031 exchange allows you to defer taxes from the profits from the first piece of real estate as long you own your new real estate.
LLC Limits Type of Mortgage Lenders You Can Use
When you're a real estate investor you may decide you want to create a limited liability company to hold your real estate assets and to protect you. When you use an LLC to hold your properties, you're limited in what kind of mortgage lender you can work with to get a mortgage. Mortgage lenders have to specialize in either residential or commercial real estate loans.
Automatic Extension for 2003 Tax Return
If you still haven't filed your 2003 tax return, you're running out of time. Your automatic tax extension is almost up.
Avoid Capital Gains Or Gift Tax On Real Estate Investment
What's the best way to pass a second home on to heirs? If you don't want to pay capital gains tax on a sale or a gift tax you should give your heirs an ownership share of the home gradually. If you give an amount of the real estate investment equal to the amount that's not subject to gift tax you can avoid gift tax. Right now you can give people up to $13,000 a year tax-free. That protects everyone from paying capital gains tax or gift tax on this real estate investment.
Real Estate Investment: Waiting For The Best Deal
Homeowners in some parts of the country such as Arizona, Nevada and Florida, are learning the hard way that their real estate investments may lose value. The growing number of foreclosures and short sales makes some wonder when the real estate market will hit bottom. If you're looking to purchase real estate, how do you know when will be the right time to buy? While you can't time the real estate market, remember that you don't always have to buy real estate at the very lowest price to make money.
1031 Exchange: Deadlines, Type Of Property Impact Eligibility
A 1031 exchange allows you to buy and sell investment property within a specified time period and defer paying taxes to the IRS. Primary residences, second homes and vacation homes are generally not eligible for 1031 exchanges. Real estate market conditions may make it harder to sell a property and potentially prevent a successful 1031 exchange. Talk to a 1031 exchange company about doing a reverse exchange instead.