A safe bet is real estate investments for the near future.
Real estate investments expect to increase for U.S. investors
Investors in 2017 and beyond are expected to increase their investments in U.S. markets according to KPMG’s 2017 Real Estate Industry Outlook Survey. Real estate fundamentals are regarded as the primary driver of investor interest as well as a growing U.S. economy. Couple this real estate executive optimism with the new U.S. administration’s intention to lower taxes and deregulate businesses, there may be a push for increases in new construction and existing home sales as well as increased demand for office space, retail, manufacturing centers, and other commercial real estate.
Tax benefits for real estate investment owners
Owners have many benefits to owning a second home. These benefits include: mortgage interest, property taxes, and home improvements. For more tax saving tips for your second home, read more here.
As it relates to business owners real estate, the 1031 Tax Deferred exchange has been beneficial for individuals in agriculture and small businesses. This program started in the 1920’s by allowing business owners the ability to defer capital gains taxes. This program is covered here.
How can I invest in real estate properties?
The investors purchase real estate investments in several, very different ways. There are roughly 4 methods to invest in real estate.
- Invest in rental properties. Focus your selection on properties that either have current tenants or are located in desirable areas.
- Flip properties. For most people, this will be the most risky option, especially if you are depending on leverage.
- Real estate investment trusts (REITs). These allow you to invest in real estate without the physical real estate. The REITs own commercial real estate such as office buildings, retail spaces, apartments and hotels. Historically, REITs have paid high dividends making them ideal retirement investments.
- Rent a room. While you have some space of your home that could fit a guest, you can rent part of your home using a service like Airbnb. Yet, remember if you rent for more than 14 days, you will need to report the rental income in your taxes.
In conclusion, you may find comfort in investing using any combination of these methods to gain the right risk and reward configuration. There is no single right answer.