Real estate is still the best retirement investment option despite the common fears of fluctuations, housing ‘deflation’ and natural catastrophes.
While you are preparing for retirement using the traditional tax preferred vehicles like 401 and IRAs you have to consider the long-term benefits of investing in real estate.
Why some people don’t like to invest in real estate:
1) Catastrophe: Many people shift from the traditional brick and mortar businesses to online stores and investment vehicles because of monetary, economic and natural disasters. They believe that investing on a commercial or residential building is very risky because it depends on the economic performance for rent flow or returns.
2) Stiff competition: Although residential and commercial real estate looks interesting for some, they are discouraged by the glut of available rental spaces on the market. Some believe that during an economic crisis, it is very difficult to find buyers who will pay the appraised value of the building.
3) Fear of deflation for commercial/residential structures: Some individuals believe that now is the worst cycle of real estate because they think that business formation is low and there are many commercial spaces available for rent.
Correcting the misconceptions
Owning a commercial or residential building is different than being your own manager or tenant. To maximize your profits, it is important to find a well built and energy efficient structure in a desirable location. You can also rely on topnotch retirement advisor who will assist you in real estate investment planning to ensure high returns and stable cash flow in no time.
Why real estate is still the best retirement vehicle?
1) It is a good investment option for terrible savers. The moment you buy the property, you have no choice but to maintain it. In doing so, you are saving money for the future. It can immediately be a stable source of monthly cash flow and wealth and even greater in the future.
Statistics show that many Americans are bad savers. The 2014 survey conducted by the US Bureau of Statistics reveals that 80% of Americans ages 30-54 believe that they will not have enough savings for retirement. The other 35% of the American population ages 65 and above currently rely on Social Security. With these figures, you can conclude that many people lack the self-discipline to put a monthly deposit to their traditional retirement vehicles like 401k, IRA, SEP and the like. The reality is even if they did consistently contribute it still would not be enough to maintain their current lifestyle.
2) It has many tax benefits like-
1. Tax credits-
a. First-Time Homebuyer Credit: You will receive this tax credit if you purchase a new home (qualified home) from April 9, 2008 to April 30, 2010. The credit is equivalent to 10 percent of the purchase price of your qualified home. The maximum credit is $7,500.
b. Mortgage interest credit: You can deduct home mortgage interest if your mortgage is a secured debt on a qualified home.
c. Points- It refers to certain charges you paid to obtain a home mortgage. If you paid on a loan to improve your main home IRS you will receive points. These points are deductible as home mortgage interest.
2. Tax write-offs: (My favorite:-)Your rental property can give you any of the following benefits depending on your job classification and income-
a. tax-free cash flow
b. tax deductions against your other income
3. Tax deduction strategies: You can take advantage of valid business deductions from your rental properties which include-
a. Personal expenses
b. Travel expenses- You have to prove that this is related to your rental business operation
c. Wages- Payment to individuals who watched over your property(including family members who worked for you)
It is true that the real estate business has its own risks especially if you depend on yourself to make all the edges meet. But investing for retirement has its own rewards. Now is the very best time to invest in real estate. Take it from our good friend Mr. Warren Buffett who when asked what the best investment for this current market climate on an CNBC interview on 2/27/2012 indicated that “…Actually Single Family houses bought on a distressed basis now and financed over a longterm at these interest rates may be the best investment of all.”
So if you would like to receive a free Game Plan on how you can take advantage of this investment strategy and retire in 5-10 years Click Here for a free no obligation game plan consultation. My team have been helping ordinary people all across the country do just that for the past 7 years successfully. As a bonus I’ll send you a free copy of the Strait Path To Real Estate Wealth book by Kris Krohn Click here.
Talk to me for more information on retirement options.
P.S – If Your in the DMV area, Register for my upcoming event “Create Wealth with Real estate Investing” on April 12, 2014 230-530pm. See my events page or Click Here to register!
With Your Success In Mind,