| The strategy of a real estate investor may vary on | | | | some of the pitfalls of being a landlord. |
| the results they want to obtain and their overall | | | | Unless the real estate investor is an expert on short or |
| objective. Some investors want to have real estate as | | | | long term capital gains and other tax implication from |
| a long term investment that will provide growth of both | | | | these types of investments we recommend that you |
| passive residual income and increase value of the | | | | enlist the services of a CPA. A professional tax |
| asset. Other real estate investors are in it to make | | | | preparer understands these regulations and how they |
| larger upfront income that they can realize today and | | | | will effect your situation on real estate investments. |
| not in the future. A third group of real estate investors | | | | Many investors always tell me that they don't want to |
| will utilize both strategies depending on what makes | | | | pay capital gains (no kidding.... show me a person that |
| the most sense for their situation. | | | | loves to pay taxes and I will show you a fibber). My |
| Majority of the investors that we deal with like to | | | | response is typically "...the good news about paying |
| make the upfront money and once a property is sold | | | | capital gains is that means your making money." |
| will take down a new home. My personal belief is that | | | | Nobody likes to pay taxes but if you work with a tax |
| real estate is a great way to make money now but | | | | professional they can help minimize the amount of |
| also to hold a portion for long term investments. Over | | | | taxes by applying the proper deduction, credits, and |
| the years I have held over 20 homes for rent plus had | | | | depreciation concerning your investments. |
| 6 multi unit apartment complexes. During this time I | | | | Investors can also use strategies that will defer taxes |
| have experienced the good, the bad, and the ugly with | | | | such as 1031 exchanges or self directed IRA's. Check |
| long rental properties and have a better understanding | | | | out my upcoming articles in which I will explain these |
| of how to operate them without losing my marbles. In | | | | strategies in greater detail. |
| future articles I will dive in deeper on how to avoid | | | | |