Real Estate (Keys to Wealth Through Real Estate)
1. Timing real estate markets is a key skill. The popular bromide is that the key to success in real estate is: location, location, location. Buying real estate when a market is still soft is difficult. Selling real estate when a market appears great, is also difficult. However, correctly timing the purchase and sale of real estate is more important than location in most cases.
2. Due diligence is crucial when purchasing investment real estate or even when purchasing a home Becoming emotionally attached to a parcel of real state is understandable. However, thorough due diligence regarding the physical property, rent roll, income and expense reports and the real estate market are critical.
3. Wealthy real estate investors minimize federal income taxes using a specialized technique called cost segregation. Cost segregation increases depreciation from real estate by correctly allocating components a shorter economic life. This specialized service is often performed by appraisers. In many cases, real estate investors can increase depreciation by 50 to 100% using cost segregation. It is also possible to "catch up" real estate depreciation that was underreported in previous years.
4. Property taxes are a substantial expense for real estate investors in many locations. In Texas, property taxes are often about 3% of the market value of the property. Other parts of the country have tax rates as low as ½ to 1%. Real estate tax valuations are revised periodically depending on the law and local practice. Successful real estate investors either appeal the property taxes themselves or hire an expert with skills and knowledge to effectively reduce their property tax assessment.
5. Most wealthy real estate investors specialize in one type of property. They don't buy an apartment complex one year, a retail center the next year, and an office building the following year and an office warehouse property the subsequent year. It may appear that all types of real estate investment are similar. However, each is actually a separate type of business requiring specialized knowledge, experience and contacts.
6. Real estate management is both the bane and the core skill of successful real estate investment. There's nothing sexy about real estate management. It involves a myriad of details regarding leases, tenants, repairs, and budgets. It is the operational element of real estate. However, success in this area is critical for success in real estate.
7. Visiting your real estate is basic, but often overlooked. Many real estate investors love the pursuit of new acquisitions but don't care for the tedium of overseeing past conquests. Your property managers can report how the property is doing and the market by phone. However, their perception is often colored by the relative level of their success. A personal, on-site visit adds context and granular detail which cannot be obtained through reports or phone visits.
It is possible to accumulate wealth through real estate investment. Keys to success include timing real estate markets, due diligence, minimizing taxes, specialized knowledge, property management and on-site property visits.
Click here for a FREE preliminary analysis of tax savings resulting from your property.
Cost segregation produces tax deductions and reduces federal income taxes across the country and in every size market. Below are just a few examples of where cost segregation generates meaningful tax deductions.
City:
- Memphis, TN
- Dallas/Ft. Worth, TX
- Phoenix, AZ
- Miami, FL
- San Francisco, CA
- Houston, TX
- Washington, DC
- Denver, CO
- Las Vegas, NV
- Boston, MA
- McAllen, TX
- Knoxville, TN
- Stockton, CA
- Charlotte, NC
- Jackson, MS
- Poughkeepsie, NY
- Columbus, OH
- Manchester, NH
- Syracuse, NY
- Indianapolis, IN
- Cincinnati, OH
- Riverside, CA
- Sarasota, FL
- Lancaster, PA
- Youngstown, OH
- Austin, TX
- Little Rock, AR
- Fresno, CA
- Raleigh, NC
- Richmond, VA
Cost segregation produces tax deductions for virtually all property types.
Property Type:
- Retirement home
- Drugstore
- Mini-warehouse
- Greenhouse
- Research and development
- Bank
- Regional mall
- Lodging
- Strip shopping center
- Racket club
Almost every industry, including the following, can generate cost-efficient tax deductions by using cost segregation.
Industry:
- Automotive parts distributors
- Electrical component manufacturing
- Textile mills
- Laundry facilities
- Real estate lesser
- Durable good wholesalers
- Printing activities
- Beverage and tobacco product manufacturing
- Mineral product manufacturing
- Food manufacturing
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