Investing in Real Estate

Why Invest in Real Estate? An Informational Guide By Maria Luccesse, HoulihanLawrence.

Diversify Your Financial Portfolio. Build Your Wealth.

As a means for generating assets, financial experts agree it is hard to beat real estate. Investors seek four major benefits from investing in real estate: income, tax advantage, leverage and appreciation.


Why invest in real estate?

  • Rent produces positive cash flow

  • Lower Tax Rates are the result of a new law which allows investors in commercial properties, i.e., buildings, shopping centers, office buildings, and motels to pay a a lower tax on the capital gains from any sale. The new rates are effective on transactions: May 6 2003 - December 31, 2008

  • Depreciation is the best real estate tax deduction. The IRS requires property investors to depreciate their investment properties, i.e., rental houses, apartments, warehouses, office buildings, and shopping centers.

    Residential Property is depreciated over 27.5 years on a straight line basis
    Commercial Property is depreciated over 39 years.
    Depreciation helps reduce the tax burden from your investment property.


    Real Estate Financing:
    General Information
  • Cash

  • Conventional Financing

  • Real Estate Syndicates, Limited Partnerships, Limited Liability Companies, or Corporations

  • Retirements Accounts: through a self-directed IRA, you can buy and sell investment real estate while deferring the tax consequences. This includes undeveloped land, commercial buildings, condos, residential properties and vacant lots (Sec. 408, IRS Code). The property cannot be for personal use while held by an IRA. However, you can invest your self-directed IRA for the purchase of a future retirement home by using the property as a rental until you retire, then take a distribution of the property from the IRA.

  • 1031 Exchange (Sales of Existing Property) Sec. 1031 IRS investors can defer capital gains taxes on the exchange of like-kind properties. 1031, or tax-deferred exchanges are a huge advantage for investors.



    ALL Investment Real Estate offer Tax Incentives.

    We strongly advise that you research any investment thoroughly with the help of Financial, Tax, and/or Legal Advisors. Securities offered through SEC partners contact us for more details.


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