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Enhanced Buying Power in Today's Real Estate Economy
By Dion Smith
Are you looking for a good investment property? This could be a piece of land to build on, an existing structure for rental purposes, or a home or condo that you will occupy. Yet, any of these purposes may lend themselves to investment advantages if you plan to build up some equity over the next few years before selling the property for a profit.
If you do plan to resell the property within a relatively short amount of time, you will want to keep a few guidelines in mind when you go shopping for your property purchase.
1. Location, location, location. Yes, as most realtors will agree, location is everything. Of course, that is not to say that some people have not turned around a house in a low-income neighborhood and made a nice profit on it, but for the most part, you want to buy something in a desirable neighborhood that will attract a good selection of buyers. Check neighboring properties that have recently sold to determine a reasonable selling price for the property you are interested in. If property values have been declining, chances are you could have problems selling your house for a nice profit in the next few years.
2. Consider rental property. If you have the means to supervise and maintain a rental unit, this can be a great way to build equity for the future. The renter(s) can pay the mortgage payment, and after selling the property, you will reap all the profit. But if you are unable to spare the time to supervise and care for a property that you don't occupy, this may not be a good option for you.
3. Get a fixer-upper. Again, this is only for those who know how to do the construction work that will be required to renovate the property. Or you might have connections in the construction business with those who can provide materials at cost and labor at reduced rates. Even a few cosmetic improvements can sometimes bring in thousands of dollars more when a property sells.
4. Use your property as a tax write-off. Many homeowners use the interest on property payments as a tax deduction. This can save you a substantial amount of money when filing your annual tax return. Property improvements sometimes can be deducted, also.
5. Deduct home office expenses. If you buy a property and use one or more rooms for a home office, you may be able to deduct some of the overhead of maintaining the property as a home business expense. Check with a tax accountant before purchasing a property if this is your aim, however.
Let your property work for you when you purchase with a view to maximizing your financial investment, both now and later.
About the Author
This article was written by Dion Smith of The Westside Group, a top-notch California real estate agent. The Westside Group also provides a wealth of free resources for any home buyer or seller. Contact us today to receive your FREE HomeBuyer or HomeSeller Handbooks. Reproductions of this article are encouraged but must include a link back to http://www.westsidegroup.com
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