Decade after decade, real estate has proven to be a solid investment. A rental property can generate cash flow in addition to building equity. Owning investment properties also may offer certain tax advantages.
Here are some issues to consider when you’re thinking about investing in real estate:
- Type: Do you want a duplex, triplex or quad that you can live in yourself while renting other units? Or do you want to buy a condo, townhouse or single-family home? Do you plan to rent the property out year-round, or use it as a vacation rental? If the latter, will you also use the property yourself?
- Location: You’ll pay a premium for a property in a more desirable neighborhood or a vacation hot spot, but you may command a higher rental price.
- Repairs: If the house needs work, consider whether you’ll earn your investment back. Updates to kitchens, bathrooms, HVAC systems and roofs can all be costly.
- Maintenance: Maintaining the property helps protect your investment. If you don’t live nearby, you’ll need to contract with someone to keep the house in good shape.
- Local landlord/tenant laws: You’ll need to do some research on local regulations, particularly on rent control or other laws that could affect your ability to cover your mortgage payment, property taxes and expenses.
- Tax implications*: You can deduct operating expenses that exceed the amount of rent you collect on an investment property, and you can depreciate an investment property. You can deduct losses on the sale of an investment property, but you must pay capital gains tax on profits. The implications may change if you live in the home.
* Consult your tax advisor
We can help you determine how much equity you have available and how much you can afford to invest in a property.
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~ J. Z.
I just wanted to share my amazing experience with buying a condominium with some incredible people at Prudential Fox & Roach/Trident Mortgage. During a life transition, I found the perfect place for me to live with Johanna Erwin and Kathryn Behm's help. From the beginning, they were so kind and accommodating and catered to my life circumstance to help me achieve my goal of buying a new home. Johanna moved with such speed and persistence in helping me get everything ready, that it was easy. After I placed a bid on the condominium, they gave me a calendar of all the upcoming events with a day-by-day activity list of things that needed to be achieved for the transaction to be completed in a timely manner.
It was about one month from the time that Dennis Kinslow helped accurately analyze my financial situation and Linda Brautigam started my credit check until the time that settlement occurred. How fast was that? Never heard of such speed in the mortgage industry before. Then the settlement finished in about an hour, since I had already completed a walk through.
I can't say enough praises about Johanna, Kathryn, Dennis and Linda. They have been so fabulous!!! They are a dream team that moves like a well-oiled machine.
I especially thank Linda in her diligence in following up with all the many, many last minute details in the final preparations moving towards settlement.
It's amazing seeing perfection in action when all the steps to conclusions are not fixed, but moving.
Well, thank you again for having a superb team of highly talented people who work with tireless effort and precision in your company.
Their hard work changed my life for the better.