Real Estate Investing and the Capital Gains Tax

In any investment, there are always taxes involved. In real estate investing, one of the most important and unavoidable taxes is the Capital Gains Tax (CGT). Capital gains are a profit that a seller will earn on the sale of a non-inventory asset like that of a real estate which was bought at a much lower priced. The government will tax the investor on their profit so it is best to think of ways to lower the CGT legally.

If this is the first attempt in real estate investing, stop for a bit and remembers that anything done, when it involves money, the IRS is always lurking in the shadows. Evaluate very carefully the choices out there before settling to buy.

First step is to assess the ownership condition of the property. Tax laws will allow that if the property were going to be a primary residence then there is a chance of a tax free capital gain. Another is if there is a child in college who could become a co-owner and who can actually live in the house while going to school for a minimum of two years, then the taxes can also be lowered considerably.

Whenever there is a need for repairs, do not think DIY. Always hire a contractor and make sure that all expenses are carefully recorded. DIY is not tax deductable, however, the materials can be if insistent on this course.

Plan the sale of the property very carefully. It is important to remember and take note that the price of the sale should correspond with the ITR. Often, the capital gains tax will affect the status of the ITR based on a current income. It would be a good move to break down the income in multiple years.

Adjust the sale through cash credit. Often, there are repairs needed before the sale could be made, so if redoing the kitchen is needed to be done to sell, it has to be done. Talk to the buyer if they are willing to take cash credit instead. This will always simplify the tax liability.

There is no way to escape taxes. As the saying goes, “two things are unavoidable: death and taxes.” Thinking of trying to escape will be illegal and when caught, the money cost to clear your name and to pay for the lawyer will be considerable. Analyze the goals and make a decision intelligently.

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Homes for sale in Rogers AR

Real Estate Investing: Things to Consider When Buying on a Short Sell

Pune Properties - Real Estate India - SucasaAs a reaction to the economic and real estate crisis, more and more people consider short selling their properties to protect their credit ratings. The humiliating choice between short selling and being foreclosed will drive the home owner to an emergency sale. These are the unfortunate time when real estate investing can come into play as there are now opportunities to buy prime properties for a fraction of their actual price.

There is a drawback to this type of investing however. To protect the investment, get some legal advice from a knowledgeable and experienced real estate lawyer and call a competent accountant to discuss what ramifications can be faced on short sale taxes.

It is important to note that not all lenders would readily agree to a short sale and they would prefer foreclosures. However, there are too many properties now foreclosed and there are not a lot of buyers so there might be a chance that they would agree.

There is the existence of the Mortgage Forgiveness Debt Relief Act of 2007 wherein the IRS can judge that the forgiveness is actually an income on the part of the property owner and they are within their rights to tax that. There is also the fact that lenders may just run after the property owner of the balance of the money owed and paid. There are some states which can label this as a deficiency. The best thing to do would be to hire a lawyer and talk about this thoroughly.

Briefly, short selling a property does not necessarily mean that the remaining balance of the loan will not be paid. As an investor, it is best to investigate these special considerations before jumping the gun and paying for an unstable property. With potential problems the property may end up being more trouble rather than an investment.

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Why Real Estate Investments?

Panama Property = Money
Many individual may ask why real estate investments, but if you see past history many investors have earned a lot of wealth in this investment. Recent press release has shown that lot of people are investing in it. If the investment is done carefully and intelligently you can earn huge wealth.

When you invest in real estate you can borrow money. You must have some amount of your own money and balance can be borrowed as loans and mortgages. In this kind of investment, you have no fear of losing your money as you have in stock market. Real estate market is slow to react, it has its own ups and downs but not drastic.

In real estate investment the properties can be bought at much lesser price than the actual market value. Sometimes you can purchase at 60%-70% of the market value.

A huge amount of tax advantage is there in real estate, government allows huge depreciation of the property.  Real estate has two values one for land and another for the building on that land. The depreciation value is divided in equal parts over its “useful life” which 27.5 years.  It is quite confusing a professional person can help you in this. You must have properties in different cities in order to save your investment. If market has gone down in one city it does not affect another city.

In real estate investment you can increase the value of your property, by adding extra feature. You as an investor have full control over the value. In real estate the correct price is left to the buyer or seller. There is no fixed price; this is the reason why people can make money in these investments. You have to be efficient to know when to close the deal. Real estate offers great investment opportunities.

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Real Estate Investment: One of the Best Investments

Photo: people do investing so as to secure their future. Real estate investing is one of the investments which can be done in many ways. When anyone decides to do investment in real estate there are variety of option available for investing.

Before investing n any particular field it is very necessary to have complete knowledge about it such as its background details, its profile etc so that we are not duped in future and our investment remains safe. Real estate investing not only means we have to only give away something. In real estate investment we can also purchase, give away something on rent or can have ownership or share in profit.

Real estate investment can be started from anywhere or any place .For safer side many of them starts Real estate investment from their hometown .In olden days, to secure their treasure many people used to bury their wealth in their backyard; this can also be termed as real estate investment.

Our home place, neighborhood seems to be more secure so many people go for it. Once it is decided their where we have to invest remaining work can be carried out by real estate agents .they look after all our paper work such as keeping records about our investments statistics. They also have knowledge about various company profile and suggest people accordingly.

Real estate investment can also be done at tourist places. With having complete knowledge, it can help us to earn large profit. With the help of trustworthy property managers, we can do investments at tourist places across the nation.

For handling different assets across the nation, it is not necessary for us to visit the places and handle our investments personally. We can appoint property agents who are masters in this field. They can carefully handle our investments.

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Free Foreclosed Homes

ForeclosedForeclosed homes that are sold at 30%-40% less than the market price are called free foreclosed homes. Real estate investing on such properties will give a neat profit as the prices that they are quoted to be are not the actual selling prices. So if it is sold at the same price as that was quoted on the price tag, there is still a profit to be made.

These real estate properties are sold at a low price because the financial institutions that own them just want to get the money invested back. The reason why financial institutions such as banks and lending companies exist is to make a profit. Any bank is always hesitant to ‘play heavy’ on their borrowers because they always want to make sure that the monthly payments and interests are made regularly. This is the only way they can make a profit on their money they loaned borrowers, on that interest rate. Foreclosed properties means that the bank lost money on this investment and they are always making moves to get their money back as soon as they can.

Before buying a free foreclosed home, however, investigate the property first. Look at the location if it is saleable and viable. See if the value of that property is competitive with the other properties around it. If it is too high, then the property would be difficult to sell. If it is low again, then the potential buyers will think that there is something wrong with it.

If the price is right and the area is viable, the next thing to investigate would be how much repairs are needed to be done. Do not buy a property where the cost to repair it would be higher than actually building a new house. Be wary of ‘good deals’ because there is always a chance that it may be a loss instead of a profit.

Once the decision is made to buy it, prepare the money needed to cover for the bidding. It would be very embarrassing to win the bid and tell the bank that the money you have is still unavailable.

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Real Estate Investing Woes: Short Sales Profits

Better: two-flatsFor people who have homes, it took a lot of time and hard work to finally be able to afford to buy a house on their own. The careful building of credit took years to do before the banks would even consider them as having to potential to borrow money for a real estate property. There was also a lot of effort made to pay the monthly amortizations and interests on top of paying for the utilities that come with homes. Love and care is always poured into home to make sure that there is a roof over the heads of the families who own them.

Millions were caught in surprise when the financial crisis first hit two years ago. The economic slump caused a lot of payments to be missed and at that time, there were no active involvement of the government to prevent foreclosures. The humiliation of losing a home greatly affected the American psyche and there were not a lot that could be done but to short sell the home that took blood, sweat and tears to acquire.

Short selling is when a property owner decides to sell their asset at a lower cost than what was actually paid for. For real estate agents, the number of property sold short as a result of the economic crash was way more than what they could actually sell.

Lenders may or may not agree for a short sale on a real estate because this means that they too will not be seeing the profit that they had expected to see when they first loaned the money. Most lenders would rather foreclose a property as this means more profits. However, because of the sheer number of foreclosures that had occurred in the last couple of years, short selling seems more attractive.

Real estate agents and real estate investors will still get a commission and profit despite the low price. However, the sheer volume of properties being sold short has affected a lot of investors and there is a hesitance to the market.

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Making Money With Real Estate Affiliate Programs


In the real estate business, there are many things to earn money easily and fast. Plus, it can benefit everyone in the business. Gaining lots of money can be done with commissions. Typically, a website who is owned by a stable real estate owner gives credits to those who help them sell their business. There are many means for these sites to give away money. How to make money with real estate affiliate programs can be done in the list below.

Here are the following means to gain money through affiliate programs:

  1. Affiliate through different sites.

After owning a website, you have to affiliate in bigger companies that cater real estate services. There are websites that can give you large commissions on sales, referrals and many more.

  1. Assist those who want to move.

There is an affiliate program that will make you really profitable just by assisting clients that will move to a real estate property.

  1. Make use of text messaging.

A property code number must be texted by a prospective buyer who is interested in a real estate. Each sale can cause you a percentage of the sold property.

  1. There are programs that make profits by lease and rent of real estate properties.

Leasing and rental can gain you loads of money as well. For each time a real estate is rented or leased, you can gain much profit.

  1. Getting a client to sign up for the affiliate program.

When you get a prospective customer to be a member of an affiliate program, it can get you a percentage share. Each time this member sells, the one who referred can also gain from it.

There are more means to gain money with real estate online business. They can gain even more with different affiliate programs. However, there are more affiliate programs available online.

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Being Successful

Photo: Estate Affiliate Programs is a tough but very profitable world. Even when the internet was not that popular yet, many people pursued this real estate business. Why is that so? It is because individuals get huge amount of money with commissions, referrals, and many other means. And as the internet is continually evolving, there are different ways evolving as well to make money, and that includes being a real estate affiliate.

To be able to have a successful real estate business, you must be able to sign up in different affiliate programs. Joining affiliate programs will gain you more money than you expect of.

Making money is so easy with being a real estate affiliate. Just imagine reading, clicking, copying and pasting on your Facebook account and other’s websites. It is as convenient and fast as that. Then, you gain percentage as commission for each individual who want to be a member too. Or the commission may be higher each time you or a co-affiliate sells. You can simply earn money through referrals. The best thing is that you are given extra cash when you affiliate for a year.

Being triumphant in the work you have is simple. Dedication and determination to work must be done. With a real estate business, it is really hard to sell. Yet, when you have affiliates, you will surely earn more money. Earning as much as US $10,000 or more per month does not need to be such a struggle. The money can be yours with merely just commissions.

On the other side, when you already opened a real estate website, it is best to employ different affiliate programs. This is because websites can really earn on different affiliate programs that offers real estate assistance. When you want your business to progress, there are different tools that can be useful to utilize.

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