Reaping the Full Tax Benefits of Detroit Investment Properties

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Investing in real estate provides ample benefits, ranging from passive income from rental properties to long-term value appreciation. However, another significant benefit of investing in Detroit real estate is the tax benefits, especially for those earners who fall into the high-income tax bracket.

Investing in Detroit Michigan real estate saves you extensively on your taxes – giving you the opportunity to use the saved taxes on more fruitful investments, or simply as an addition to your savings account.

The value of depreciation

For many investors in Detroit real estate, the most powerful tax incentive stems from depreciation. In fact, the IRS requires that all investors depreciate the value their investment properties, thus giving you a strong tax benefit.

Depreciation is a capital loss that you take on paper, which accounts for the wear and tear of the home, as well as any built-in obsolesce. However, keep in mind that the value of the land itself cannot be depreciated. Only the building structure on the property itself can be depreciable. Subsequently, as condominiums and town homes do not have any land value, the entire value of the Detroit investment property can be depreciated.

For a residential Detroit real estate investment, you can depreciate the value of the property over 27.5 years. For commercial Detroit real estate, the depreciation is calculated over 39 years.

Categorization as a “real estate professional”

If the IRS categorizes you as a “real estate professional,” which means that you invest 750 hours annually towards your Detroit investment properties, you have even greater tax benefits. In fact, if you invest this type of time, along with full participation in the management of your Detroit investment properties, then you have almost limitless tax deductions from your income taxes.

However, if you are not a “real estate professional” for your Detroit real estate, then the maximum you can deduct is $25,000 from your ordinary taxable income. However, keep in mind that this includes the depreciation value as well. In addition, should your annual income surpass $100,000, and you are not a “real estate professional,” then the $25,000 deduction begins to phase out, and after $150,000 in income, you are not subject to any deduction.

Nonetheless, you can still qualify as a “real estate professional” simply by hiring a property manager. You just need to make the major decisions, such as setting rents, interviewing tenants, and managing major expenses. However, you do not need to manage the day-to-day operating details. For the nearly unlimited tax expense deduction, this small effort may prove to be significantly worthwhile.

Value of a 1031 Exchange

Detroit real estate investments provide interesting tax benefits that are not matched by any other type of investment instrument. The 1031 Exchange allows any investor to sell a property, and then invest those proceeds into another similar asset. When this occurs, you can defer your capital gains tax.

As long as you invest your sales funds into another similar asset, you do not incur any capital gains or losses – and no other type of investment instrument can provide you with that type of tax benefit.

Deductions in Interest Expense

Another tax benefit to Detroit investment properties stems from your deduction of tax expenses. If you take on a mortgage for your Detroit real estate, then you can deduct the taxes you paid for this investment – saving you potentially tens of thousands a year in tax deductions.

Purchasing Detroit MI real estate provides ample opportunities, not only in passive rental income, “free equity” from renters, and long-term appreciation, but also significant tax benefits that can save you tens of thousands annually. No other type of investment can live up to those benefits.

Article Source: http://www.articlesbase.com/real-estate-articles/reaping-the-full-tax-benefits-of-detroit-investment-properties-423894.html

Purchasing Your Commercial Investment Property

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Once you’ve found a commercial investment property you think you may want to invest in, you’ll need to negotiate with the seller and do some thorough investigation to verify information you’ve been given, and to pick up anything that may not have been revealed or been obvious on the surface. This process can be considerably more involved with commercial property investment than residential property investment.

 

There are 5 basic steps you need to take when negotiating and purchasing a commercial property.

 

  1. Negotiate with the seller
  2. Exchange conditional contracts, including being subject to finance
  3. Do your due diligence on every aspect that may impact the value of the property (you can get help with this step from professionals with experience in this area)
  4. Fine-tune the contract if necessary
  5. Settle the purchase of the property.

 

 

As with any investment the single, most important factor in protecting the long term value of your commercial property investment is to buy well in the first place. It’s much easier to do your research and make an educated selection of property to purchase than it is to improve an under-performing commercial property investment after it’s been purchased. If you’ve paid absolute top dollar, it may be difficult to see value for money in efforts to add value.

 

Negotiating With The Seller

 

You want to develop a ‘street-smart’ position that will enable you to hold your own in negotiations to purchase a commercial investment property. If you can’t get what you want through the front door, turn around and see what you can get through the back or side doors! In other words, there is more to negotiation than the purchase price of the property and other ways you can secure your profit before you buy. If you are unable to gain the advantage you want in the price or in other ways (the length of the settlement period, vendor financing, income guarantees from the vendor, etc), you may need to re-think whether the property is the right one for you. You need a ‘take it or leave it’ mentality when negotiating the purchase of an investment property and prior to making a binding commitment with your signature on a contract.

 

Doing Your Due Diligence

Step 3 of the negotiating and purchasing process requires that you do your due diligence. What exactly does that mean? If the property you are looking to purchase currently has tenants, go and speak with them! How happy are they, what kind of problems do they have with the property, are they willing to extend their lease or are they unhappy and planning to move? These are answers that will help you as the future owner; but they’re also important when deciding on whether or not to purchase the property to begin with.

 

During this investigation stage, be sure to also check out:

 

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  • condition of the building
  • running costs of the building (actual, documented costs, not just ‘industry averages’)
  • building efficiency (remember, even though the tenant may be paying the outgoings, if yours is an efficient building the tenant will be more inclined to pay you a top rent)
  • leases and how well or how poorly they’ve been constructed, options, when the rent reviews are due and on what terms, etc. – and match these up with the criteria you would expect to find in a well-drafted lease document, keeping in mind there will be an opportunity in the future for you to restructure the leases to your benefit. If there’s a long term lease in place that’s not beneficial to you, then ask the question: ‘Do I really want this property and, if so, why should I pay top price?’

Article Source: http://www.articlesbase.com/sales-articles/purchasing-your-commercial-investment-property-458132.html

Off – Season Investment Properties in UK Yields High Returns

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With the UK in the grip of falling investment properties rates, increasing ambiguity and a lack of available credit, many property investors may be starting to think that the good times really are over for making serious money from investment properties in the UK. Few years back, UK has seen an tremendous investment properties boom which has formed many property millionaires off the back of rapidly increasing property rates. It appeared that anyone could purchase property in the UK and quickly make a fortune. At present, things could not be looking gloomy with repossessions soaring and property prices plunging.

Common fallout of investment property purchasers, market is the propensity for drawing the lowballers out of the woodwork. More and more investors who may never have referred this type of negotiation, now feel they have the upper hand and are more likely to submit a lower than normal offer.

What is a lowball offer?
Although not written in stone, usually an offer lower than 90% of the requesting cost is considered a lowball offer. The biggest risk of such type of suggestion is that the seller will be completely insulted and may reject any further chances at negotiation. If it’s done perfectly, however, the seller will make a counter offer and the games are afoot, often leading to a sale where both parties are happy with the results.

Here are some tips to help you find some middle ground between seller and buyer when submitting a lowball offer:

Invest when the market is down:
The best time to invest in properties is between Christmas and New Year’s Day. You’re less likely to run up in opposition to other competitive bids and the seller will be happy to get some action during this slow time. Keeping this train of thought in mind, one of the worst times to make a low offer is during the spring when purchasers is out for a investment properties.

Don’t be insulting:
There are shameless purchasers out there who will submit a incredibly low offer just to test the waters. This usually upsets the seller and sets the stage for some tense and hostile investment properties deals.

Justify your offer:
Support your low bid with details. If the investment properties is costs higher than market value, explain why and provide comparable sales in the area that support your argument. If there are deficiencies in the property, explain them along with the guesstimated cost of fixtures.

Article Source: http://www.articlesbase.com/real-estate-articles/off-season-investment-properties-in-uk-yields-high-returns-572355.html

The 3 Incredible Benefits of Investment Property Finance

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The incredible benefits of investment property finance have been around for decades. Anyone who is in the know about making money knows that investing in property in any form is one of the most stable and sure fire money making investment opportunities in the world. Property values will double every few years and in developing countries, that rate of return could be twice or even three times of normal markets. China, the Middle East and the developing coastlines of European countries are just some of the examples of property lines that have been making people all over the world tremendous amounts of money.

Now it is a buyer’s market – especially in the U.S market where the subprime crash has tunnelled prices to unbelievable depths. Now this is another incredible benefit of investment property finance. Because of the low low prices, aspiring investors have more and more opportunities to make money on property that is below the market value. Because of the elastic nature of the properties economics, the value will eventually in the next few years, progressively increase. Securing a piece of property is easier now than ever more, you just need to be educated on the different methods to do it and cash in on the falling market.

The other benefit is a low risk on any loans you secure to start your headway into investment property finance. The proper use of leverage, especially of your available funds will ensure that your profit margins increase. This is of course only a good opportunity if you have a good knowledge of contract law, finance, some basic accounting and of course the insurance market. The investment strategy should be sound – and you should never borrow too much money than you can handle. Be modest in the beginnings of your investments in property and have a look at several portfolios before you do anything.

Another incredible benefit is the varying ways money can be made on property. Be it through the rental market, mortgage, or any other permutation of investment property finance is king in wealth building. With a sharp eye on liquidity, safety of investments, rate of return and tax benefits, you will live the incredible benefits of investment property finance. Imagine knowing how to dip your hands in several long term and short term portfolios that give you an excellent income. This can be done, and you don’t have to be a property expert to do it.

You just need someone to show you the way. Reap the incredible benefits by learning from the experiences and the teachings of some of the best property moguls on the internet. Through wealth building programmes you can learn at home (and finding them is as easy as doing a search on Google), investing a modest sum, you can be well on your way to building an impressive portfolio. I won’t waste your time as I expect you are itching to investigate the opportunities in property finance. My only advice to you – learn all you can, learn from the best and you can be the best. Anyone can make money from property – it’s just a matter of knowing how.

Article Source: http://www.articlesbase.com/finance-articles/the-3-incredible-benefits-of-investment-property-finance-584281.html

How to Find Cheap Investment Property

Author: admin / Category: buy property, conveyancer, estate agency, estate agent, Estate Agents for properties, for sale, for sale, free information, home buyers, house, house sales, how to sell your home, land, listing, mls, mortgage bond, properties for sale, property for sale, property sales, property wanted, Real estate, realtor, rentals, rentalsEstate Agents for properties, renting property, sell property, selling property

Property prices in the UK have evened out in the past few months. Contrary to what others say, the decline is not necessarily an unfortunate event since prices have risen gradually for a number of years now and a correction was foreseeable at some point. For some in the industry, a slowdown in the property market may not seem like a good time to buy your next investment property. However it presents opportunities for you as a property investor to find cheap investment property.

If you’re investing with a long-term approach, which you should be if you’re earnest about making money from property, then the current environment is a good time for you to snap up bargains especially if you have ready cash to invest. The best thing about a slowdown is that the market is favouring buyers. This means that you can get even better deals for your next property purchase. With the current climate bringing about numerous below market value properties, finding cheap investment property has become less challenging.

Property investors know that buying BMV properties is what successful property investing is all about. Making profits from the day of purchase itself is a task that many have found achievable and will continue to do so. For those on the lookout, there are some simple ways you can acquire cheap investment properties.

Repossessions

Purchasing repossessed homes is an excellent way of obtaining bargain prices because these properties are often bought for a fraction of their actual market prices. Repossessed properties may not always be advertised voluntarily but lenders are often willing to answer questions because of their need to sell the property and regain their capital investment – your best bet is to speak to local agents and check out all the local and major property auction houses that cover your area. But before making the decision, make sure to check the property first to avoid problems.

Property auctions

You can also find cheap investment property at auctions where 90% of cheap properties, according to Sunday Times, go under the hammer. Buying properties at auctions can save you up to 40% as long as you know what to do. Prior to attending an auction, your finances must be in place so you can go ahead with the completion of the purchase in the timescale required.

Typically when the hammer goes down on your bid, you’ll need to put down 10% of the purchase price and pay the balance within 28 days. Before making a bid, be sure to conduct relevant research, make sure that the property is in a good location, have a survey done on the property, and view it prior to auction day. To know about upcoming auctions, contact local auctioneers or sign up for their catalogues.

Just because prices are going downhill doesn’t mean all doom and gloom. Overall the decline presents a good opportunity for you to negotiate good prices at below true market value, bag a bargain and increase your chances of earning profits once the market improves.

Article Source: http://www.articlesbase.com/finance-articles/how-to-find-cheap-investment-property-638723.html

Taking Advantage of the Profitability of Your London Investment Property

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London is one of the most popular markets for property investors. With its great employment opportunities and high salaries, many people find the city an appealing place. Additionally the UK capital is seen as a good choice for investors with a long-term approach. If you have a London investment property and you intend to hold on to it for a considerable period of time, then you’re in a good position.

Even though London has experienced a short downturn in recent times, it’s still regarded as a strong option for several investment opportunities because of its status as one of a very few number of genuinely international capitals. Some of the assets that make the city appealing for many property investors are its financial services infrastructure, airports, schools and universities.

High demand for rental properties

If you have a London investment property and you’re renting it out, then you’re on the right track. According to research from the Centre for Cities, the UK is expecting more than 3 million people renting privately by year 2021. This means that – based on the current trends – a fifth of new homes have to be rented to fill the demand at that particular time. It cannot be denied that the demand for rental properties is rising steadily. The reason for this is simple: There isn’t enough supply. Add to that the current state of many would be homebuyers who would rather opt to rent than make the decision to buy due to declining prices or the difficulties involved in obtaining the best mortgage product.

Where you should invest in London

When investing in London, the one major thing to consider is if you’re more interested in rental income as a source of overall return or in capital appreciation. If you’re a landlord, you need to have a particular level of rental income to provide funds for your investment. If your goal in property investing is achieving capital growth, then you have made a good choice of location. In Central London, house prices have experienced capital appreciation of 217% over a decade, according to Landlord Mortgages. Meanwhile, buy to let investments in Central London have seen average annual rental yields of 4.7% and 5.9% in Manchester and the North West.

Buy below market value

The best strategy for a property investor to take is to buy properties below their market value. One way of doing this is to find desperate sellers of cheap properties before they are turned over to auction houses and estate agents. When you deal with desperate sellers, you can be ensured of acquiring properties for 80% or less of its real market value. That means substantial savings on your part.

There are many people who think that it’s impossible to locate vendors who are willing to sell their properties for significantly lower prices. However, there are compelling reasons why several sellers choose to accept heavily discounted property prices. There are those who need to emigrate abroad and need to divest themselves of their property immediately. Some have been unable to keep up with their mortgage obligations and have opted to put up their properties for a quick sale. Others have inherited out-of-town properties and don’t want the bother involved in tending the property. Others still have lost their jobs or are undergoing divorce or are facing repossession.

People will always see property as a way to earn profits and guarantee income. And if the property is located in such a highly profitable area such as London, the chances of becoming more successful as a property investor increases. Thus, if you have a London investment property, it makes sense to take advantage of the profitability it offers.

Article Source: http://www.articlesbase.com/finance-articles/taking-advantage-of-the-profitability-of-your-london-investment-property-670966.html

Prideoftexas: Whether you are looking for an Austin home for sale or Austin investment property

Author: admin / Category: buy property, conveyancer, estate agency, estate agent, Estate Agents for properties, for sale, for sale, free information, home buyers, house, house sales, how to sell your home, land, listing, mls, mortgage bond, properties for sale, property for sale, property sales, property wanted, Real estate, realtor, rentals, rentalsEstate Agents for properties, renting property, sell property, selling property

If you are seeking an Austin home for sale to use as a residence or investment property, you need to be able to work with Austin real estate agents who are familiar with the area and Austin based.  They can help guide you towards the best Austin investment property that will retain the best value.  Location means everything when it comes to real estate purchasing.  This goes for both Austin investment property as well as homes for sale. 

 

When you are looking for an Austin home for sale, you should look at it as an investment, even if you plan to reside in the home.  Real estate can be a long term investment or a short term investment.  If you are planning on holding onto the Austin investment property until housing prices go up, which they eventually will, then you are looking for a short term investment. 

 

If you are looking for an Austin home for sale that you and your family will live in for years to come, then you are looking at a long term investment.  You can also rent property out as part of a long term investment strategy. 

 

A good Austin real estate agent will be able to help you find the best Austin investment property.   You can even locate agents online who will help you find the right properties for you.  Whether you are looking for an Austin home for sale in which to live, or as strictly an investment, you can find plenty form which to choose when you take a look in Austin. 

 

The internet makes it easier for those who are looking for property to find what they are looking for right away.  When you are looking for an Austin home for sale, choose a real estate agent who understands the value of modern technology and has homes and Austin investment property listed on their website.  This way, you can get an idea of the properties that are on the market as well as the price range for such properties.  This can help you narrow down your search efforts considerably, especially if you do not live in the area and have a limited time in which to buy a home.  If you are planning on relocating to Austin, you can use an Austin real estate agent who will help you find the Austin home for sale that is right for you. 

 

Now is the perfect time to buy property in the area of Austin.  The prices are lower than ever, making it possible to find many bargains in the area.  Whether you are looking for property that you can live in, or if you just want to have Austin investment property that you can use for a long term or short term investment, you can find the best deals when you look for an experienced real estate agent in Austin, Texas who knows the area and can work with you both online as well as off line. 

Article Source: http://www.articlesbase.com/business-articles/prideoftexas-whether-you-are-looking-for-an-austin-home-for-sale-or-austin-investment-property-911734.html

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