Post Tagged with: "real estate"

Remember 2 Critical Factors When Pursuing a 1031 Exchange

Property For SaleCarrying out a 1031 exchange here in Utah is increasingly gaining traction as an incredible way to build a real estate portfolio. Insufficient capital often gets in the way of buying properties a provision in the tax code offers you a relief.

Under the Section 1031, you have the chance to use all your capital gains from one property in buying another property. The provision defers the capital gain tax, which can be as high as 30 percent indefinitely. That way, you have more capital towards your next purchase.

However, for the best results, you need to bear a few factors in mind.

Time is of the essence when finding a replacement property

As much as the IRS wishes to let you build your real estate empire, they can’t let you have all the fun. In fact, they put you on a short leash when carrying out an exchange. Naturally, you need to notify them of your intention so they can give you a go-ahead.

Once you have it, you have exactly 45 days to come up with a replacement property. See, under the section 1031, you need to exchange one property for the other of equal or greater value. If you miss this deadline, the exchange will fall apart, and you will lose your tax advantages.

Sealing the deal is also time sensitive

If you make it through the first hurdle, it is time to seal the deal. You have 135 days, or risk losing the tax deferment advantage. During this period, you must sell your current property, find a qualified intermediary to handle the sale process and close the deal on the replacement property.

For the best results, you need to have a buyer with ready financing lined up. The intermediary handles all the monetary transactions. Hence, you need to ensure that all the paperwork is in great order to before committing to deal to increase the chances of success.

With a little effort and commitment, you can grow your real estate holding with the help of section1031 of the tax code. You only need to adhere to the stipulated deadlines and rules to enjoy the tax deferment advantages.

July 20, 2018 at 1:59 amStudy Section

3 Reasons to Get a Mortgage While You’re Young

House model and keys on top of documentsThey say most young people don’t buy homes because they’re too busy chasing careers in several cities. That’s not always the case. There are many young people who see the value in investing in real estate early.

City Creek Mortgage cites some of the reasons to get a mortgage and buy a house while you’re young.

You have more than one source of income

This is a case-to-case basis, but chances are if you’re young, you may have a lot of things going on and you most probably have more than one source of income. That’s one of the advantages many millennials today enjoy. They always look for more than one way to make a living. It could be a contractual project, a side hustle, an online job.

If you have many sources of income, then you can save up for the down payment on a home faster than others can.

You’re not settling down for now

Many young people choose to rent because they don’t know when they’ll settle down. They are too focused on chasing their dreams, career, or people that buying a home in one city doesn’t really appeal to them until they’re old. If you have the capacity to buy, invest in the property through financing and enjoy it later.

You’re thinking of investments

Real estate is one of the best investments you can make because it’s something that increases in value as the years go by. If you want to see a forecast on the home’s value after 20 years or so, ask a mortgage company for a quick computation and run the numbers in your head.

You can really have it all, as long as you know what, when, and where to invest your money in. So, go through the list and see if you can start early with your plan to own a house. You’re never too young nor too old to get a mortgage.

April 27, 2018 at 7:10 amMind of Money