A quick guide to investing in real estate?
Is it a good time to invest in real estate?
Yes, it is still a good time to look at investment real estate as a wealth building strategy.
Given the recent volatility of the stock market, residential investment real estate is more stable, tangible and its ability to use leverage using a 30-year fixed rate mortgage, can give you significantly more return on your money.
Researching the type of real estate you want to invest in and having a strategy on acquiring, holding and selling the property are the first steps.
Typically, you need 25% down payment and pay a higher interest rate if you do not live in the property. However, if you occupy the property you often can qualify for lower down payment and interest rate. Residential real estate includes a single-family home up to a fourplex (4 units).
As an example, you purchase a duplex (2 units) and live in one unit and rent out the other. The rental income can often pay most or all of your mortgage payment. You have the ability to deduct expenses and depreciate the rental portion of the property to potentially lower your taxes.
Live in the property for 2 of the next 5 years and you may qualify for a capital gains exemption when you sell. Then move out and purchase another investment property to live in. Consult with a tax professional on the specifics of your situation.
Employing this strategy can provide a low-cost way to build your wealth.
By Dave Hiller, Broker: For more info, contact me at 503-729-8797 or visit homepdxrealestate.com.