Is This a Good Time to Buy Investment Properties and Invest in Real Estate?

As a Realtor / Mortgage Broker… I’m asked this question quite frequently. Is this a good time to buy Real Estate for investment purposes – Referring to income producing Real Estate.

The answer is YES!

The reason is – the Real Estate market has soften up and there are many more properties to choose from. It much easier to negotiate the price and terms in your favor. The interest rates are at all time low. Home owners are becoming tenants and the rents go up, not down.

Does that mean go crazy and buy the first property you come across. Of course not! As in all markets you must be selective and set goals / plans as to what it is you want to achieve. You can make a lot of money in Real Estate and you could lose money if you are not careful. Common sense right…? You would be surprised what I have seen in my career!

What are the advantages to buying Investment Real Estate: (A-C-E-S)

A is for Appreciating – People usually think of one form of appreciation and that is in a upward market the prices go up with time. There are actually two more less apparent forms of appreciation. Forced Appreciation and Purchase appreciation. Forced appreciation is when you could do some renovation and redecorating to make the property immediately increase in value and Purchase appreciation is buying a a bargain price / below market value with a built in appreciation..

C is for Cash Flow – Buying investment properties with a negative cash-flow is not for the unseasoned novice. The only time this would make sense is if you feel the appreciating is so strong that it’s worth the risk. On the other hand, positive cash-flow properties are the ideal. I have sold many properties where a novice investor is generating $500 to $1500 positive cash-flow net. The timing is perfect for finding positive cash-flow properties. The prices are lower, the interest rates are lower and the rents are still high and going up because there are more renters than buyers right now. Just think of all the people that have lost their homes due to the economy… they are now renters.

E – is for Equity Build. In other word, a portion of your monthly mortgage payments are paying off the balance of the mortgage loan on your property and building equity. And guess what- your tenant are helping you pay off the loan while you provide them with a nice place to live. It’s win-win.

S – is for Shelter, tax shelter that is. Real Estate offer a fantastic tax sheltering opportunity. I’ll leave that for you to discuss with your tax expert. Every situation is different.

Here are the 3 most common ways to make money using Real Estate as a vehicle

1) Buy and Hold… usually that mean to buy a property and rent it out for the long term

2) Rehab – Buy and fix up for a quick flip. Sometime a little paint, some creative decorations and sprucing up the curb appeal can make a huge difference.

3) Lease Options – Great way to control Real Estate with no money down and no need for good credit. You’ll need a motivated Seller and a Good Tenant Buyer.

Hope this brief article is helpful. I will go into more detail in my future articles.

Traditional IRA – Safe Savings and Investment For Your Retirement

In general, IRA contributions have a positive impact on your current tax standing. You will also benefit from extra money in your pocket, mainly because you will be saving more money for your retirement by avoiding those taxes. In addition, these IRA accounts are tax-free until you decide to take out the money that you invested. Therefore, you will not pay any taxes on the income that you actually placed into the account, so long as you don’t take it out. So, when you retire you will have lots of money even though you are not earning any income.

Traditional IRAs – There are different types of structures of IRA; there is the Roth IRA and the traditional IRA. The traditional structure of the IRA will be discussed in detail in this article. The truth is when most people think about IRAs, they think savings, retirement, contributions and great tax benefits. If you were thinking all of these, then you are on the right track, mainly because individual retirement accounts or arrangements (IRAs) is a traditional way to save money for your retirement, as the money you save is on a tax-deferred basis. Although traditional IRAs have a few restrictions on them, you will be surprised to note that you don’t have to pay those high taxes until you are ready to withdraw your money for retirement.

Fantastic Long-Term Investments for Retirement – Traditional IRAs are one of the greatest ways of putting your money aside for that particular time when you can’t earn money like when you were younger. You have retired and your earning ability is neutralized, but with a traditional IRA investment, you don’t have to worry about your retirement and where you’ll be getting money from. This is because the contributions that you make towards your IRA will be generally lower your tax bill as it reflects an adjusted gross income.

Benefits of a Traditional IRA – You will definitely stand to benefit form non-tax deductible opportunities. In addition to this, you will be able to avoid income tax on any given amounts that you have contributed in any specific year; therefore you can leave your IRA and let it grow all by itself. Furthermore, the tax on the interest that is accumulated will be deferred until you withdraw from the account. With specific reference to traditional IRAs, you can begin withdrawing the disbursements when you reach that golden age of 59 1/2 or above and it’s commonly mandatory for you to take disbursements when you reach 70 1/2 years and above.

Limitations of a Traditional IRA – There are some limitations as to how much and what you can contribute to traditional IRAs in any given year. If you do exceed these contribution limits, you may be liable to face some serious penalties from the IRS. So, you will need to exercise extreme caution, so as not to exceed the limits. If you are participating in another form or type of retirement plan from an employer, have a tuition, student loan deductions, domestic production activities deductions, or you receive Social Security benefits, you will face restrictions and limitations.

Use EFRBS As A Pension And Investment Scheme

EFRBS investment options for pension are a great choice for all and sundry. Those who take the decision of choosing this particular scheme for their pension plans can be well assured that they would be going in for one of the best policies that are available in the market today and are offered by the companies offering such policies in the United Kingdom.

EFRBS is an acronym for a scheme known as ‘Employer Financed Retirement Benefits Scheme’ which really is quite self explanatory. This particular scheme is unregistered and is a replacement scheme to the erstwhile FURBS policy that was available to the citizens residing in the United Kingdom.

The main purpose behind the introduction of the EFRBS scheme by the government of the United Kingdom is to help the employees by allowing the employers a chance for recompense their staff through a method of pension after their retirement.

Employees with a pension scheme that has been approved by both their employer and the government while being accountable to what they earn can also make avail this scheme. The EFRBS policy and scheme is also applicable to the citizens in the United Kingdom who do not pay any kind of tax as well. What is a great flexible option that is available in this scheme is that it is applicable to both residents in the United Kingdom and those who do not reside there. Citizens of the United Kingdom who might even want to leave for another destination for personal reasons are also welcome to apply for the EFRBS scheme.

The EFRBS scheme is most suitable as an investment as it allows for the contribution of the employer in the fund while ensuring that there are no deductions as regards tax from the monthly salary of the employees as far as the latter’s scheme for pension is concerned. Further, annuity is not required to be purchased when the plan for pension comes to an end. With this scheme it is also possible to invest into properties and also issue loans out of the pension itself.