In a recent blog we looked at some great reasons to buy and/or sell a home in the Albuquerque area this Spring.
If you're already living in the house of your dreams, however, it's also a great time to buy real estate for investment purposes.
Real estate is a tried and tested passive investment and wealth creator. Indeed, John Jacob Astor, America's first multimillionaire, made most of his money from real estate investment. Back in the early 1800's, Astor took his profits from trading in silks and furs and bought land in an area called Manhattan...
Today, Astor's net worth would have been around $450 billion and the principles in terms of how real estate investment can shape your legacy really haven't changed an awful lot.
Here are some of the key current drivers: -
- The rental market is continuing to expand and rental rates are rising. There are many reasons for this, but they include tougher lending standards since the beginning of 2014, increased workforce mobility and low wage inflation, making it difficult for certain would be home buyers to save enough for a down payment.
- With more properties coming onto the market, there is a great deal more choice within the local inventory, enabling you to more easily find the options that best suit your investment direction, whether you are looking to renovate and flip for a fast profit or create a long term passive investment stream.
- If you are looking to obtain finance for your investment, mortgage rates remain at incredibly low levels. How long they will remain so low is something that is very difficult to predict, so those who delay decision making in the next few months may regret it, in terms of reduced rental income profits etc.
- With the end of the year now entering our thoughts, it's worth remembering that rental properties offer many potential tax deductions, including legal and professional fees, property taxes and necessary, ordinary and reasonably priced repairs (not improvements).
- The 1031 Exchange process enables an investor to sell a rental property and put the proceeds of the sale into another more expensive investment property purchase without paying any taxes on the proceeds (time limits apply). If you already own a portfolio, consider the potential to upgrade your rental income by upgrading to higher value homes in a very tax efficient way.
At Everest Peak Realty, we know all the ins and outs of property investment and can provide you with free and valuable advice tailored to your needs and aims.