![]() | |
![]() | |
![]() |
Real Estate Information |
|
![]() |
Investment Property - Leveraging Rental Property Equity
Owning investment property is a tremendous wealth building strategy. Thousands upon thousands of individuals have amassed great wealth by investing in rental properties. Unfortunately, few investment property owners learn how to leverage equity in a way that maximizes tax deductions while creating and locking in equity gains. Instead, they leave themselves open to price fluctuations in the residential property market. These fluctuations can wipe out or severely reduce equity positions in property. Housing Boom To End? There is little doubt we are coming to the end of a huge boom market in residential properties. For the last four years, properties have appreciated at unheard of rates. The question, of course, is what happens when the market cools off? Will we simply see a price plateau or an actual drop in prices? While nobody is sure, the clear consensus is property owners should move to preserve equity while they can. Protecting Equity Gains Protecting equity gains in your investment property requires careful planning. This leveraging strategy is fairly simple, but can sound complex. Please keep in mind this is just an introduction to the investment property tax strategy. You will need to contact us to learn more. The investment property tax strategy protects your equity gains by separating and leveraging them. The leveraging process is best explained with an example. Scenario 1 - Without Tax Strategy Assume you purchased a rental property in 1999 for $250,000 with nothing down. As of July 2005, the combination of loan payments and appreciation has resulted in a gain of $250,000. You have amassed wealth, but all of it is at risk. If prices drop twenty percent over the next year, you will lose $100,000 of your equity in the rental property. Scenario 2 - With Tax Strategy We are going to use the same exact scenario. It is July 2005, you have $250,000 in rental property equity, but all of it is risk. You decide to implement the investment property tax strategy and the following occurs. Our goal is to protect the $250,000 in gain on the rental property while also maximizing tax reductions. The first step is to refinance the property with, typically, an interest only loan. A percentage of the equity gain is taken out of the property and placed into an equity index insurance product. The equity percentage is arrived at by determining the payment amount you can afford on the loan. Typically, it is tailored to match your current loan payment amount. Going back to our scenario, what happens if property prices pull back 20% over the next year? You do not suffer the loss of $100,000 because the gain is sitting in your equity index insurance product. Essentially, it is a wash and you have protected the capital gains while capturing a stock market-based rate of return. Ah, but it gets better. Equity Index Insurance The investment grade insurance product isn't just any policy. Instead, the policy we use is tied to a stock market index. What if the stock market suffers a loss? Not to worry, this policy carries a guarantee that you will never lose a dollar, even if the market crashes. If the stock market did crash, the policy would simply credit you with nominal growth for the year in question. In all other years, the policy would grow with the stock market. On top of all of this, the money in the insurance product grows tax-free. So, what has been accomplished? First, you have protected your rental property equity gains from home price fluctuations. Second, you have leveraged your equity into two growth channels, the stock market and appreciating house prices. Third, you have converted taxable growth [property appreciation] into tax-free growth [insurance]. With housing markets ready to cool down, this strategy effectively locks in your profits. Preserving equity gains should be a primary goal of any investment property owner. Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for overpaid business taxes. Visit http://www.businesstaxrecovery.com/articles for more tax strategies and articles.
MORE RESOURCES: Real estate investors are purchasing more U.S. homes as high prices lock out would-be buyers CBS News Delistings Surge Nearly 50% as Sellers Who Can't Get Their Price Quit the Market in Frustration Realtor.com $900,000 Homes in New York, Illinois and Oregon The New York Times BlackRock to buy real estate firm with $7.3 billion in assets Crain's Cleveland Business Real Estate Transactions, July 7 edition Hopkinton Independent Milestones: Massive data share to benefit 300k MLS members Real Estate News by RealEstateNews.com Aspen Real Estate Snapshot, Aspen Daily News Real estate investment firm acquires local single-family rental community Baton Rouge Business Report OBBBA Is Now Law — What the Real Estate Industry Needs to Know CLA (CliftonLarsonAllen) Paul Huntsman Launches a Real Estate Site Aimed at Competing With Zillow Building Salt Lake Questex expands coverage of operational real estate sector with acquisition Hospitality Investor Russian Demand for U.S. Real Estate Surges 78.5% The Moscow Times Northwest Healthcare Properties Real Estate Investment Trust Announces Timing for Second Quarter 2025 Results Yahoo Finance 🤔 A real estate Ponzi scheme? Outlier Media Brockton home sells for $610K; Bridgewater home that sold for $533K has outdoor shower Enterprise News Real estate transfers: 7/9 Toledo Blade Paul Simon's Daughter Blasts Richard Gere for Selling Her Childhood Home to Real Estate Developer Rolling Stone Real estate transfers in Pike County from June 16-30, 2025 Muddy River News AirGarage Raises $23m to Modernize Parking Real Estate Parking Network Top transfers: Delaware County commercial property hits over $5 million The Columbus Dispatch Midwest market leader elevates brokerage head as CEO steps down Real Estate News by RealEstateNews.com Real Estate Transactions | June 23-27, 2025 Republic-Times Ultra-rich Americans now pouring cash into luxury real estate for ‘safer, less volatile’ investment than stock Yahoo Finance Check out this $10M Gulf Breeze estate dubbed the ‘The crown jewel of the Emerald Coast’ Pensacola News Journal Top residential real estate sales for June 23-27 in Longboat, Lido, St. Armands, Bird Key Your Observer Rising Temperatures, Rising Risks: How Climate Change is Redefining Insurance and Real Estate AInvest JM Electrical Promotes Craig Chisholm to Chief Financial Officer Boston Real Estate Times Monaco F1 Grand Prix Sparks Local Property Frenzy The World Property Journal RealT sold shares of Detroit homes it has never owned Outlier Media Is the surge in delistings good news for buyers? Real Estate News by RealEstateNews.com The scenario that could reignite Israel’s real estate market The Jerusalem Post Hunneman Secures Financing for Historic Multifamily Redevelopment in Downtown Lowell Boston Real Estate Times Boston Office Market Sees Momentum with Leasing Gains and Pre-Leasing Surge, JLL Report Shows Boston Real Estate Times Former KVH Middletown HQ sold for $5.25 million to become housing, to top latest sales Newport Daily News Tampa real estate investment firm under investigation for potential deceptive practices Florida Politics Residential Real Estate Markets Show Resilience in 2025 The Ritz Herald 'Married To Real Estate' Canceled After Four Seasons On HGTV, Say Hosts Egypt Sherrod & Mike Jackson Deadline Healthcare real estate adviser hires managing director from AIF Capital Green Street News BlackRock goes deeper into private market investing, acquiring real estate firm ElmTree Funds BenefitsPRO Middle East Real Estate Market Size, Share, and Trends, 2033 Market Data Forecast Blackbook Properties: Reimagining Luxury as a Leading Boutique Real Estate Brokerage in the USA Totalprestige Magazine R-LABS Announces $3.5M Investment to Expand its Solutions to Address Canada’s Real Estate and Housing Challenges Business Wire From Column to Community: Why I’m Taking The Mic (and What to Expect) Community Advocate "Atland will be a key player in the consolidation of the real estate asset management sector". CoStar Occupational hazard: Mistaken for a Mamdani fan The Real Deal Can a Spate of New Builds Finally Revitalize Gowanus? The New York Times Receiver sells another Martin Selig parking property The Business Journals Where are home prices falling most in America? This SWFL community made top of the list Naples Daily News Triten Real Estate Partners, Angelo Gordon Seal $150M Refi for IOS Portfolio Commercial Observer From Humble Beginnings to a Real Estate Empire: The Inspiring Journey of Sanjay and Usha Kakade Times of India Trump on past presidents: Ike was 'underrated,' FDR 'amazing,' Polk 'sort of a real-estate guy' Yahoo Historic Villa Calafia Estate Lists for $18.5 Million Galerie Magazine 10 Steps for Picking a Hot Real Estate Market for Investment in 2025 Norada Real Estate Investments Detroit sues blockchain real estate firm that owns rentals with hundreds of violations Detroit Free Press |
![]() |
![]() |
![]() |
RELATED ARTICLES
Purchase Your First Home with Confidence If you are making the transition from renter to homeowner, you're not alone. In 2004, 40 percent of homebuyers were purchasing for the first time, according to "The 2004 National Association of REALTORS® Profile of Home Buyers and Sellers. Selling Houses: Cutting Edge Design Tips for Selling In this article, you're going to discover new techniques for marketing houses, and you'll find that these fresh, new interior design ideas will help sell your home faster, and for a higher price than the competition!Buyers' physical senses respond to a home's design, and what a buyer feels is based upon their psychological reactions to sight, hearing, smell, touch, and even taste. Design Psychology employs new strategies in interior design to entice buyers. Be A Realtor With Curb Appeal Are you a realtor with curb appeal or are you more of a fixer-upper needful of updating?How you present yourself to colleagues, buyers and sellers, from the very first moment, will influence your sales records as well as the confidence and satisfaction your new clients feel. Even if you're a Realtor in demand, with more listings than hours in a week, you may well find areas that you can polish. Why Mobile Homes? There are mobile homes for sale, for much less than stick-built houses, in most areas of the country. Despite persistent predjudice against them, and sometimes the people living in them, mobile homes are the cheap housing choice of millions. Business Credit Card Dirty Tricks My system teaches people that the proper useof credit is the fastest way to speed up your profits in real estate investing.And you can use this system no matter what your own credit score is. Branded Email in the Real Estate Industry Branded Email in the Real Estate IndustryYou're in the real estate industry, and that means you've got a brand. Chances are, you've spent quite a bit of money to build that brand, whether it's through franchising fees, marketing, websites, business cards, other print materials, advertising, yard signs, and/or through other means. Popping The Real Estate Bubble Myth! If you turn on the TV, listen to the radio, or even surf the internet, you'll notice that there is a lot of people talking about the "Real Estate Bubble", and asking the question, "when is it going to burst?" They (these so-called experts) have been saying for years that the real estatemarket can't continue this type of growth. These "experts" remind me of chicken little, with all of their prosphesy of doom and gloom, and the "sky is falling" syndrome. How to Afford Your Dream Home Is it your dream to one day own a holiday home in the sun; a beautiful house where you can escape, relax and be free of the worries that seem to go hand in hand with every day life?Well, you're not alone!A recent survey by a well known mortgage lender in the UK revealed that up to one in three Britons not only dream about owning a home in the sun but fully intend to make that dream a reality some day. And in the US the number of Americans planning to one day buy that ideal second home haven is now up to three in ten people. Real Estate Negotiation Secrets When you bought your home, you offered less than you were willing to pay, right? That's the most common negotiation technique. For experienced investors, however, that's just one little secret among the many more powerful ones. Young Couple Buys Ranch with Government Money Kirk and Tina Sczepanik had a dream. They wanted a ranch of their own. First Impressions Will Sell Property Fast! First impressions count, buyers will have already formed an impression before they step into your property. A well-kept garden, pathway and fence, plus a freshly painted front door are immediately appealing, whereas a scruffy outdoor space with a litter bin outside the front door may turn many prospective buyers away. Tenants in Common (TIC) Tenants in Common is a way of sharing ownership of property among two or more people. Each tenant holds an undivided interest in the property, and each tenant may own a different size portion of the property. Notify Them When Youre Moving One of your first steps, when you're getting ready to move, is to pick up a stack of change-of-address cards from the post office. Yes, old-fashioned go-by-snail post cards! You'll want to notify everyone in your address book and also. Selling Your Home: 5 Deal Killers That Are Lurking In Older Homes You've listed your home for sale, you have a Buyer and now their Inspector is performing an inspection. You think you have a pretty good home, but do you really know for sure? What is he finding? Why is it taking so long? Here are 5 deal killers to watch out for when selling your home. Real Estate Web Design - 3 Items You Must Include on Your Site Real estate web design requires you to do things a little bit differently because you are selling either your services or actual homes, so there must be several things present on the web page to make it user friendly. Unfortunately, many real estate web sites are poorly designed, ask visitors to supply tons of personal information before being able to view any information, don't provide enough information not to mention photos, and are all around a pain for many visitors. Staging® Your Home for Sale: a Superior Real Estate Home Marketing Technique: Part 1 Every Realtor KNOWS that a home should be shown in its best light to help sell it faster and for more money! We also know that, properly done, it Is a lot more than putting fragrant pies, breads or cookies in the oven, opening the drapes and turning on all the lights; although even that helps greatly.Setting the stage to obtain the highest value, fastest, for a home has recently evolved into a real estate specialty that can pay of grandly for the seller and help the buyer overcome the immense emotional strain of making a decision on which, of many similar properties, to purchase. Golf and Waterfront Living: Live, Play, Relax With today's planned lifestyle communities, golf and boating enthusiasts have an opportunity to purchase the home of their dreams just a chip shot away from the green or stone's throw from the marina. In addition to an ideal home setting, golf and waterfront community residents enjoy an active and diversified lifestyle experience complete with first-class golf courses, marinas, beaches, spas, clubhouses, recreation areas, fine dining and countless other amenities. How to Make Money in Real Estate Without Doing the Scrunch Work If you don't have the time to invest working on fixers or if your tired of working on fixers to make money investing in real estate, try this method.Many real estate investors make thousands of dollars on brand new homes with little work. Selling Your Home? A Warning About Attachments Before you list you home for sale, determine what you don't want to leave behind.Our friends sold their home for full price and moved out a few days before closing. Investment Real Estate Made Easy - Make the Most from Each Investment Dollar When it comes to buying investment real estate, there are many schools of thought on how to get the most out of your money. Some say lease optioning your houses is the best and safest way to go. ![]() |
home | site map |
© 2006 TIGER MEDIA |