15 Years Are Plenty
Three Ways With a House
Rent, fix and flip or make it your retirement but you need to make up your mind. Each of the above is a strategy that can work for you if you plan your work and then work your plan. Let’s take a quick look at each while I demonstrate why, how and when. After digesting the
ideas it is your turn to make it happen.
Renting is as much a plan as fix and flip or the retirement plan but
you must have a idea of why you are renting, how long you will rent
and what you will be doing throughout the rental period. Renting is generally the least expensive way to have housing for you alone or for you and your family. The lower expense can help you accumulate a down payment or building fund when you purchase
a home. Renting also can give you an idea of what type of house,
how many rooms and an idea of what type of floor plan works best.
Set a time limit and get to saving or investing the money!
Fix and flip is for those who want to find something in a good growing neighborhood that is under valued and buy something that you can fix up and sell hopefully for a profit. You must be careful
of the neighborhood and be quite sure it is getting better, not worse
with both the houses and the people. You should take an ARM, at
the lowest interest rate you can get because you will need your money for the remodel. Today you can get a 5/1 arm in the high
2% range to the low 3% range. To save on the income tax on your profit you need to be there 2 years and make it your owner occupied
The last plan is the retirement one even if you are in your 20’s or 30’s. You want to do that because paying a home mortgage has limited advantages, deducting the interest on your mortgage and
deducting your property tax bill. The big advantages comes when
you use this house as an owner occupied for a minimum of two years and are married. The 1st $500,000 in profit is tax free for married; $250,000 if single. With a 15 year mortgage you will have
paid the house off in 15 years; half in a little over 8 years. During that time your house can easily increase by some significant number, which when sold, would give you a nice tax free amount of cash. Do it several times and you may just have a $1,000,000 in your bank account.
Any plan can work for you if you understand it and are willing to work
it. I know that to be true, because it has worked for me!
Not Everyone Wants to Build Equity in Their House
Moving Up Can Be Easier Than You Thought!
I have sent a number of ideas out to all showing various mortgages that will put you in the best financial place you can be in at this time. Today I can help you become independently wealthy with just a few moves, at most.
The U.S. Government will allow you to take $250,000 in profit from your owner occupied if you are single when you sell it without ever paying tax on it. If you are married you can take $500,000 in profits when you sell the house as well tax free. Qualifications are simple: you must be an owner occupied and you must have been in the property for two years at least or two years out of 5 years, and not just the last two years of the 5 year stay. Any two years counts and it can be or have been a rental during the 3 years you weren’t in it. If you are able to do this you will have a stipend that would be very hard to get in other ways.
We currently have a 7/1 arm; 30 year loan that is fixed for 7 years and then becomes a variable for the remaining 23 years. The interest rate is in the high 2% range for the first 7 years with the principal and interest payment on a $100,000 loan in the low $400 a month range. A million dollar loan would have a monthly payment in the low $4000 a month if you qualify. The amortization, pay down of the mortgage, is very quick.
Real Estate prices are starting to rise again and with very low interest, you can realized the price you need to make the maximum profit you want up to the tax free limits above with less trouble than you would have had in the past decade. So why not try to structure something that can help you become wealthy. We are here to help.
Remember there are various ways to structure a plan. Get on it, start working it and smile perhaps for the rest of your life.
Retirement Starts At 25
If you haven’t been paying attention let me bring you up to date. The Social Security Fund
is in a bad way at this time as the Baby Boomers who are now retiring are taking more from the
Fund that is coming in. If you are over 55 you may be okay when it is your turn to retire and start drawing your Social Security check. If you are younger than 55 years of age I would start working
on another way to get cash once you have reached 65 years of age. Those 40 and under should realize that your retirement is on you, and if you ever get anything from Social Security I would consider it a bonus.
That is why I am writing this column to explain how you can live your life to its fullest and still
build yourself a retirement package that ignores any income from the Social Security Fund. it can
all be done with real estate. First you must realize your residence is more than a home for the family it is an investment that can pay huge dividends in the future. This requires planning and the use of the right financing to make it all work.
Next comes the simple investments in real estate that have medium and long term consequences. Included in this are two types of investment: a primary residence and a pure investment. The primary residence aspect is simply realizing your house or condominium is more than just a place to live. It is an investment as well and can be short term or long term and with the right financing it should be profitable. The right financing is the shortest amortization you can afford, as it will yield the most profit.
A real estate investment can also be making the real estate part home and part investment. This comes about by buying a duplex, triplex or fourplex. You would live in one unit and the other unit(s) would be an investment. The right financing vehicle has extra importance on this type of situation. You should be able to take a much shorter amortization because you have the extra help in paying the mortgage with the rental income you collect.
The simple investment is purchasing a house, units or a condominium for rental purposes.. The property does not have to be expensive; it should be, however, as much an investment you can buy with a loan that is amortized over 15 years. Once the 15 years passes you will enjoy a major increase in your investment income which you can keep, or sell the property and receive capital gain tax advantages. If you keep the project you should begin again buying another property, as soon as your are ready financially. If you decide to sell you should seek a more expensive project as long as you use a 15 year loan. The idea behind this is to increase your assets and your income at the same time with an eye toward retirement on your terms.
There are other ways to use real estate to help your retirement in the distant future. You can
buy a second home, which should be in a nice recreational area, as a beach, lake, ski lodge, golf course, horse riding facilities or the mountains. The reason behind the various recreational facilities
is to have the opportunity to get vacation rentals for your unit. You can make a lot of money on vacation rentals which helps you pay down a shorter amortizing mortgage, which in the long run will get you a very nice capital gain on the sale of the property. Regardless of the vacation rental second homes also go up in value which fits nicely into our plan.
I am ending this report at this time because there are sophisticated maneuvers that can
come into play with options, buying and flipping and trading. I will write a column on the more
unusual ways to make money in real estate in the near future. For now concentrate on what I have outlined today.
WHERE DO WE GO FROM HERE?
As the year 2015 slowly picks up steam to make it out of here before being replaced by 2016, it is time to take a quick look back and a long look forward to