Category : Tax Credit

Real Estate Investment: Top 3 Perks

Imagine this scenario: the bills are paid, the groceries are safely tucked away in the fridge, the car is in good order, and you find yourself with a tidy sum that you’d like to save for a rainy day. But rather than place that money in a typical 401k contribution or deposit in a savings account, why not put your money into something real? Enter real estate investment, a surprisingly-profitable method of securing your funds for the future that’s both efficient and fun! Whether you’re a long-time investor or just getting started, let the experts at RE/MAX Plus use our decades of experience to show you why real estate investment is right for you!

  • Cash flow

 Perhaps THE biggest perk to real estate investment is the steady stream of income that comes from renting out your property. Savvy real estate owners reap a monthly profit even after any maintenance and mortgage fees are paid. The income itself is often much more stable and predictable than playing with personal portfolios and the constant rise-and-fall of the stock market. With the profit received from real estate, many property owners reinvest into making improvements and repairs to their own home or use that income to further their private investments elsewhere. Bottom line: it’s your money, you decide!

  • Tangible Assets

Whether short or long-term investment is your goal, owning real estate gets its best value from being a tangible asset. This means that unlike stocks, CD’s, and other investment opportunities, your actions as the owner can have a direct influence on just how much your property is worth. Putting a new roof on a home or upgrading a kitchen/bathroom can add thousands of dollars to the property value. Re-tenanting a building or adding a secondary service such as in-house laundry hookups can justify an increase in rental charges and improve income performance. Compared to other investments, you have a greater degree of control over performance and value than any other type of investment.

 

  • Taxes, Inflation Hedges, and Equity

Besides the income and control gained as a real estate investor, the perks of tax breaks, inflation hedging, and general equity are extremely valuable. The cash flow you receive from rental charges is not subject to a self-employment tax, mortgage interest, or property taxes; investment properties are all considered write-offs. Plus, with a fixed-rate mortgage, monthly payments remain the same even as inflation increases, protecting your investment’s value. Finally, as the mortgage is paid off, equity is created, which can be used as collateral to fund your retirement, buy another property or even pay for college tuition! The benefits are endless!

By Melissa Dittmann Tracey, REALTOR® Magazine

Spread the word this holiday season to your clients: They only have a few more days left in the month to take advantage of tax credits for energy efficiency home improvements–so ’tis the season to upgrade!

Tax credits up to $500 are available for home owner’s to claim until the end of the year, but they better hurry. Congress has yet to renew the tax credits for 2012.

“Making efficiency improvements this year will lower home energy bills and improve home comfort for years to come, while also reducing 2011 federal income tax bills,” Kateri Callahan, president of the Alliance to Save Energy, said in a statement.

The allowance for the tax credits that home owners may be eligible for include:

  • $300 for electric heat pump water heaters, electric heat pumps, central air conditioners, biomass stoves, and natural gas, propane, or oil water heaters.
  • $150 for natural gas, propane, oil furnace, or hot water boilers.
  • $50 for advanced main air circulating fans.
  • 10% of the cost of insulation and sealing materials, exterior doors and certain types of energy efficient roofs.
  • 10% of the cost, up to $200, of exterior windows or skylights.

For more information about applying for these tax credits and what projects are eligible, visit the Alliance to Save Energy web site.

Repaying the First-Time Homebuyer Tax Credit

As a reminder, if you qualified for and received the 2008 First-Time Homebuyer Tax Credit of $7,500, you will need to begin repaying the “zero-interest loan” this year on your 2010 tax returns. 

For those who qualified, you should have receive the IRS Notice CPO3a informing you of your  responsibilities.  You will need to complete IRS Form 5405 and attach it to your yearly tax return until the credit is paid in full.  You have 15 years to repay the credit.  You have the option to either adjust your withholdings or make quarterly estimated tax payments to cover the additional credit repayment amount that will be added to your taxes.

If you have any questions or concerns, you should refer to a tax professional.

Veterans-Qualify for Tax Credit

If you are a veteran and served outside of the U.S. you may still qualify for the 2010 Tax Credit. You have until April 2011 to qualify. For more information regarding the criteria to meet go to:

http://www.irs.gove.newsroom/article/0,,id=21594,000.html