The major drawback of real estate as an investment in years past has been its liquidity. For the most part, and particularly with technology and the Internet, that is no longer much of an issue. Properly priced property sells and real estate can be turned into cash should the need arise. The secret of course (not much of a secret), is not to be forced to sell but to sell when the market will yield the greatest return to you, the investor. “Buy low, sell high” is sage advice, but when it comes to real estate. “Buy, hold for a long time, sell” will almost always yield fantastic overall investment results.

Real Estate Investment Objectives:

Income – Real estate investments structured with enough down payment, will generate a positive cash flow. As time passes, in most markets, even a highly leveraged, negative cash flow property can turn into a positive cash flow investment.

Depreciation – Theoretical Depreciation is the tax deduction one can use against the income real estate produces. Depreciation is” on cash expenditure.” Residential income property is usually depreciated over 27.5 years. Only the improvements are depreciable, not the land.

Equity Build-up – This results from the periodic pay down of the principal amount of the loan, usually through monthly payments on an amortized loan. Even if there is no appreciation over the life of the loan, the property owner would end up with a free and clear property at the end of the loan payment period on a fully amortized loan. This is usually a 30 year period on residential property.

Appreciation – While the amount of appreciation varies from market to market, real estate is a growth asset and often the largest part of the return on an investment in real estate is the equity gained through appreciation. Even small amounts of appreciation year after year can be considerable. Usually, the longer you hold on to a property, the better. The effect of appreciation is greatly magnified by the use of leverage.

Leverage – Through the use of borrowed money (OPM – Other People’s Money), combined with a small amount of money of your own, you can control real property. The best leverage most of us can obtain in the stock market is 50%. In real estate, it is not unusual to obtain 80%, 90%, and even 100% leverage. With leverage usually comes risk, and with risk comes potential for investment reward.

In addition to the IDEAL as stated above, real estate investments have potential additional tax benefits – Investors are allowed to write-off (within income limitations) all operating expenses, interest on loans secured by the property, and property taxes. Also, Gain from the sale of real estate is treated as capital gain and investors also have the option of exchanging which, if done in accordance with the tax laws (IRC 1031), can result in partial to no recognized gain, which affects the immediate cash tax consequence.

Retirement years increase with life expectancy and you may be retired for thirty years or more. Will your retirement assets support you for thirty years or more?

90% of current retirees rely on charity and family support – or – they seek employment after retirement. Do you want to find yourself in this position?

The average social security monthly benefit is $800; future social security benefits are in jeopardy. Are you relying on social security benefits to assist you?

Financial models demonstrate that baby boomers will require $2,000,000 in retirement assets in order to guarantee a net monthly income of $5,000.

Will your retirement investments reach $ 2,000,000 by the time you are ready to retire?

Direct Your Retirement Account Into A Safer, More Profitable Investment In Real Estate

You may be able to direct your retirement account away from risky stocks, bonds, and mutual funds and into a safer, more profitable investment in real estate.

Section 408 of the Internal Revenue Service (IRS) tax code permits individual investments in real estate within an Individual Retirement Account (IRA).

This means that you can have a tangible investment in real property – with a grant deed and title insurance – through your IRA. A self-directed IRA lets you – the “I” in IRA – decide how your money is invested.

The Employee Retirement Income Security Act (ERISA) of 1974 defines permissible retirement investments. Although not a new option, surprisingly few people are aware of this exciting retirement investment opportunity.

The IRA Invest Team can help you roll over your existing stock-driven IRA – or other investment fund – into an IRA real estate investment for higher return with no tax penalty.

Contact us to receive a free consultation, and let us show you the way to a secure retirement.