I invite you to take the next few minutes to learn the truth about the real estate market , how it compares with other methods the advantages and why it is such a lucrative form of investment . Many potential investors will say , " I need to get into the property market investment FLORIDA " , especially considering the current stock market fluctuations and the HOT market for investment properties , but simply do not know the facts about Orlando property investing and how to use the method of sale and leaseback property management .
When the last time the financial adviser or your broker tried to convince you that moving a portion of your assets to purchase investment property in Florida is a good idea ? Never right ? " Why " is simple . Not earn commissions when you buy investment property in Florida . It is also likely that you probably have never had a comparison of "apples to apples " stocks against Florida Investment Property quite like the one you see here .
Reason 1 :
Strength: Banks characteristics loan money will not buy stocks . The banks , however , to compete hard in loan money to buy investment property in Florida . The first question should be, " why is this ?" We have to do with risk management , which we will discuss later . The fact that banks want to loan you money to buy Florida Investment Property creates a situation that would call POWER .
Suppose you have $ 10,000 to put in some type of investment. If you choose to buy $ 10,000 worth of stocks, you own just the $ 10,000 of stock . Pretty simple. However , suppose you choose to invest this $ 10000 investment property in Florida using a 90 % mortgage (which in many cases can go up to 95-100 % mortgages in today's market ) , you will own the $ 100,000 investment property in Florida . If both of your investments were to appreciate by 10 % , the actual gain with your stocks would be $ 1000 where your actual gain with Florida Investment Property would be $ 10,000. This equates to a real return on investment of 10% against a 100 % return on investment. That's what we call power.
Strength: Real Estate of Florida vs. stocks
The traditional argument against Florida Investment Property Investing (mainly from stock brokers ) was always " I can take an average of 10 % of stocks with little effort so why would you invest in property investment by Orlando believes that only 6 - 7% ANNUALLY ? " This view does not take into account the strength figuring .
If you take the above statement to be true and to compare ACTUAL numbers, stock investment gained 10% of the initial $ 10,000 value (or $ 1000 ) and Property Investment Investment Orlando won 6% of the original $ 100,000 value ( or $ 6000) . This is still a real return of 10% vs. 60 % . It is difficult to see which investment provides a greater immediate return on investment. Moreover , these numbers do not take into account any income from your property during the year , or essential tax advantages to owning property , which we will discuss later .
Reason 2 :
Value : As mentioned previously , if you invest $ 10,000 in buying stocks , you own $ 10,000 in stocks ( a fairly obvious point ) . If you invest $ 10,000 in the purchase of investment property in Orlando using the power of a 90 % mortgage , you own $ 100,000 investment property right of Orlando ; Well , only if you paid retail for your property . Any savvy investor will tell you that there are excellent deals available in Orlando investment property , you just need to find them .
What if you bought a $ 100000 property happened to be worth $ 110,000 the day you bought ? Happens The answer is yes , all the time . If you keep your eyes open and you're willing to " go through the numbered " to find the good deals are all around you . You may ask yourself , why would anybody sell a $ 110,000 property for $ 100,000 ?
Value : Making money when you buy.
The reasons are endless as to why a quick sale is desired, but just to name a few : job relocation , divorce , an estate established or perhaps a current evaluation of the property simply was not before the sale. By " finding this NEGOTIATION " have completed two things .
You have added $ 10,000 to your asset column in the form of justice .
You create extra strength for you as the value of your property increases ( a gain of 6.10 % to $ 110 thousand is better than a gain of 10.6 % to $ 100 thousand ! ) Remember , you make money in Orlando investment property when you buy , not when you sell .
Reason 3 :
Control: Take our hypothesis one step further . When you buy the $ 10,000 worth of stocks , what can you do to increase its value ? If we follow the previous assumption , you have invested $ 10,000 using a mortgage 90 % to buy a property $ 100 000 that has a real value of $ 110000 because " found too . " So what can you do to further increase the value of new property $ 110,000 you ?
It's amazing what a cleaning , just to adorn and a paint job can do to increase the value of a property . Only a few hundred dollars well spent can lead to huge profits of the investment property of Orlando . The property $ 110 000 with a little effort could easily be worth $ 115 thousand , $ 120 thousand or more practically overnight ! You have to do any of this work yourself ? Absolutely not if you want to do that sort of thing then have at it, but if not, simply hire done and accept the slightly lower net profit.
Reason 4 :
Higher tax situation : Tax code in the United States linked to reward investors who make housing and other property available to the population . When you invest in stocks , tax in some of the highest rates in the tax code . When you invest in property investment by Orlando , undergoing one of the best tax positions in the business world . Remember the wealthy that hold substantial portions of their assets in property investment by Orlando ? Tax advantages are one of the main reasons this is true .
Continuing with the above example , say that you have completed " their trading you" with $ 10,000 invested with a 90 % to mortgage to buy the property $ 100,000 assessed for $ 110000 (because they " found a lot " ) , which have improved to say, $ 115 000 to the cost of other $ 1000 in cleaning etc. assume that one year passes and the property investment market in Orlando rose by 6 % , your property would be worth $ 122 000 now . so far, so good right ? If you're like most people, you may want to spend some of your hard earned money .
Do the numbers. Have a mortgage at current rates that started at $ 90,000 and after a year's worth of payments (the majority of which is tax deductible ) you still owe approximately $ 89,000 . However , your property is now worth about $ 122,000 . If you were to refinance at 90 % once again , would you take out a new mortgage of about $ 110000 . This will leave you with about $ 21,000 in cash in your pocket . Now , the big question you have to pay tax on that money ? Absolutely Not it sell the property or you have made a "master GAIN " . You just borrow money from you . You are able to do what you want with that money , free of any tax. Obviously , a good strategy is to buy two more properties just like the first your deal !
Also , we have not taken into account the fact that all payments of interest in this property are tax deductible . In addition , you are also able to underestimate the same property and all its contents for additional tax advantages if you choose to do so .
Be fair and compare the tax position of the Orlando property investment scenario with stocks. Assume that the initial stock investment $ 10,000 increased by 10 % in the first year , creating a profit of $ 1,000 and wish to have access to it . If you drag it out , you will pay from 20 to 28 % (or higher) in capital gains tax in order to gain access to this money . This reduces your net profit to $ 800 ( actual 8% ) or less, depending on the tax situation. Compare that to Orlando Investment Property and start to get the picture.
Reason 5 :
Limit your exposure to risk
Risk Management : Do you remember when we said at the top that banks would compete hard in loan you money in Orlando Investment Property ? Answering " why" is very simple. Low risk . Banks suffer little if any risk when loaning money on Orlando Investment Property due to stable, solid market growth rate properties , as well as the fact that if you defaulted on your payments will simply sell the property to another . This is in direct contrast to the volatile stock market, which can vary daily with sharp increases and decreases in value . Furthermore , banks realize that a property is not going anywhere , and many investors know all too well about the com and other types of businesses that were there yesterday and today .
This is all not to say that buying investment property in Orlando is not going down periodically , however the dips are much less dramatic than can be held in stock , turns out that the willingness of banks to loan money to property .
Reason 6 :
Protecting peace of mind .
Finally , now that we understand the value of strength and risk management realize that a profit of 6% Investment Property Orlando " beats the pants off " a stock gain 10% real return on investment by a wide margin (about 50 % , not taking into account various factors that can increase this number such as tax advantages , income on property etc. ... ) owning good , solid Orlando investment Property allows you to sleep at night, or going on extended vacation without worrying about column of your assets . This is directly opposed to holding a substantial percentage of your assets in stocks.
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