|
|
Are Fractional Shares For You?
Fractional shares (“fractionals”) are sometimes confused with other vacation property options, such as time shares and condo hotels. While there are similarities, there are a number of things that make fractional shares unique, and thus suited for...
Costa Rica Real Estate & Living - 124 Tips & Traps
New York City is not for everyone and neither is Costa Rica.
Over the last 46 years, I have lived in ten different countries, visited thirteen others and now consider Costa Rica as home. However after visiting you may feel different…
Some...
How To Analyze Any Property In Less Than One Minute Flat!
How many times have you seen a run down vacant property and thought to yourself...that would be a good investment? You see it for several weeks or months and do nothing about it and all of the sudden you see someone is now rehabbing it and you see a...
How To Avoid Pitfalls In The Sale Of Your Home
Appraisal vs. Market Value
When you sell your home, appraisers use comps (comparable market sales) of local properties sold within the last six months to value your home. With today’s rapidly rising seller’s market, six-month-old information...
My Story on starting out in buying properties for growing plants
Bill's Life and his Lessons Learned and Opinions, Part III
When I was twelve years old, I had bought and sold many shares
of stock on the NYSE. I was a motor mouth even then. I always
was eager to talk to anyone who liked to invest and...
|
|
|
|
|
|
|
|
More Return On Equity For Your Investment Property Dollar
Few would deny that real estate is a solid investment. It provides an attractive combination of stability, reliable cash flow, preservation of principal and capital appreciation. However, many investment property owners nearing retirement find themselves in a quandary. They are equity rich, but cash poor, with increases in the value of their property far outpacing income growth. They also are often tied down by the day-to-day issues of property management and, particularly in cities like San Francisco, California, shackled to the constraints of rent (and eviction) control. In fact, San Francisco is home to some of the lowest cash return on equity in the state's real estate marketplace, which is somewhat counter-intuitive given California's ever-booming property market.
The obvious answer is to sell the property and unleash the dormant equity, but that can be problematic. These investors face the reality of prohibitive capital gains taxes and recaptured depreciation, as well as the task of identifying an alternate investment venue; or locating, acquiring and financing suitable replacement property in the time period allowed, taking advantage of tax deferral under IRS code section 1031.
An ideal solution for many investment property owners may be to reinvest the proceeds from the sale of their property and utilize a subsequent 1031 exchange into a tenancy-in-common (TIC) ownership type, also known as co-ownership of real estate (CORE) interest in a suitable replacement property.
1031 exchanges, also known as Starker exchanges or tax-deferred exchanges, permit owners to sell investment property and defer tax payments by reinvesting the proceeds into another investment property (or investment properties). In order to completely defer the payment of tax, among other things, the replacement property must be of equal or greater value and all the equity from the sold property must be reinvested in the new property. The marriage of 1031 exchange and TIC/CORE allows investors not only to defer their capital gains taxes but also to upgrade their investment real estate.
TIC/CORE is a way of sharing ownership of property among two or more persons whereby each tenant holds an undivided interest in the property. Tenants-in-common may own interests of differing sizes. TIC/CORE investors are on the title and considered separate owners of the real estate. They share pro rata in the income, tax benefits and appreciation of the property. Their TIC/CORE interest can be purchased, sold, gifted, bequeathed by will or inherited; and it is subject to property taxes, gift tax, and estate and inheritance taxes in the same manner as any property held in sole ownership. With a TIC/CORE property, each of up to thirty-five investors have the opportunity to own an undivided fractional ownership interest in an investment-grade property, such as an office building, shopping mall, apartment
complex or industrial property, costing anywhere from $10 million to $150-plus million.
The benefits of investing in TIC/CORE properties are substantial. Such properties employ professional asset and property management, relieving the investor of day-to-day tenant headaches. More important, investors often receive greater cash flow and overall returns than they had in their previous sole ownership property. Typically, many people receive between 2-3 percent of their equity in their property in rental income. By selling this property and placing the equity into a larger investment-grade property, they can potentially experience annualized cash flow from 6-8 percent, paid monthly, and 12-16 percent overall return on their investment. Also compelling is that TIC/CORE exchange investors can diversify among several property types, and geographic locations through fractionalized ownership, while still enjoying 1031 exchange benefits on each amount. Thus, investors can potentially reduce risk in their overall real estate portfolio.
Investors seeking to exchange for a TIC/CORE property are best advised to work with a financial advisor experienced in 1031 exchanges. Such advisors work closely with top real estate providers, who give the investor access to the best properties available. In addition, many TIC/CORE opportunities have pre-arranged, non-recourse financing in place, which is perfect for investors working within the 1031 exchange time frame. Numerous hours of upfront investigation, evaluation, due diligence and life cycle planning transpires before a property is offered to an investor group. Investors faced with only a 45-day window to identify a suitable replacement property to complete a 1031 exchange can select a suitable project with confidence.
Given the tax deferral, institutional-grade quality of the property, professional property management and pre-arranged, non-recourse financing aspects, a 1031 exchange replacement property structured as tenancy-in-common ownership can be a very wise and profitable solution. It allows the investor to maintain everything they like about real estate (monthly income, preservation of principal, capital appreciation, etc.), while eliminating most of the hassles of property ownership.
(c) 2005, 1031 Exchange Options.
About the Author: Cary Losson is the Founder and President of 1031 Exchange Options. A luminary in the TIC/CORE 1031 exchange marketplace, Mr. Losson is frequently quoted in journals and periodicals concerned with investment property issues and advice. For more resources to assist in your learning: http://www.1031exchangeoptions.com/resources.html
Source: www.isnare.com
|
|
|
|
|
Real Estate, Property, Land and Homes for Sale, lease and rent ... |
Comprehensive real estate and property listings. Includes information on buying and selling, tips on building, an auction timetable and other helpful ... |
www.realestate.com.au |
  |
Real Estate | Homes for Sale | Houses for Sale | MLS Listings ... |
RealEstate.com provides home listings , homes for sale , REALTORS , house listings , apartment locating services. We have Florida real estate , Texas ... |
www.realestate.com |
  |
REALTOR.com: Real estate listings & homes for sale |
Search for a new home or find mortgage rates, real estate agents, and relocation services throughout the US, Canada, and Puerto Rico. |
www.realtor.com |
  |
Real Estate on Yahoo! Real Estate - Homes, Mortgage Rates, School ... |
Yahoo! Real Estate is the most comprehensive place for real estate, housing market information, school reports, local mortgage rates and more! |
realestate.yahoo.com |
  |
Find Your Home Value, House Values and Prices on Yahoo! Real Estate |
Yahoo! Real Estate - Free instant home values and comparable home valuations for millions of houses. Check your home's price or any house value. |
realestate.yahoo.com |
  |
Real Estate, Houses for Sale, Rentals, Commercial and Businesses ... |
Real Estate, Houses for Sale, Rentals, Commercial and Businesses for sale at Realestate.co.nz. |
www.realestate.co.nz |
  |
Real Estate - Buy, Sell or Rent a Home - New York Times |
Online real estate listings for properties in New York and nationwide. |
www.nytimes.com |
  |
Century 21 Real Estate Agents and Brokers |
Agency with franchised offices throughout the United States, Canada, Europe, Latin America, the Middle East and Asia. Find local offices and agents, ... |
century21.com |
  |
Zillow - Your Edge in Real Estate |
Zillow provides a free Home Valuation Tool for Real Estate enthusiasts. Whether you're an agent, broker, buyer of investment property or first time ... |
www.zillow.com |
  |
STLtoday - Homes |
Real estate agent revels in the boom in downtown St. Louis living ... [more real estate news as seen in the St. Louis Post-Dispatch] ... |
www.stltoday.com |
  |
Real estate - Boston.com |
Boston Real Estate - Search the Boston Globe and Boston.com for Massachusetts Real Estate, Boston Condos, Land for sale, Vacation Rentals and more. |
www.boston.com |
  |
ABCs of Real Estate |
Real Estate ABCs consumer tips, hints, and resources for home buyers, sellers, and mortgage borrowers. |
www.realestateabc.com |
  |
washingtonpost.com - Washington DC real estate, Maryland real ... |
Washington, DC, Virginia and Maryland homes, real estate news and headlines. [Registration required] |
www.washingtonpost.com |
  |
Coldwell Banker Real Estate Corporation |
Real Estate from Coldwell Banker ®. Buying a home, selling a home, or finding a real estate agent is easy with Coldwell Banker. Find a home, sales associate ... |
www.coldwellbanker.com |
  |
Detroit News Online | Real-Estate |
Sellers around the state have been frustrated with the slow sales patterns of Michigan real estate over the past year or two. But buyers have been enjoying ... |
www.detnews.com |
  |
Newsday.com - Long Island Real Estate for Nassau County and ... |
In a real estate market increasingly defined by niches, ... Real Estate Resources. Search by school district for recent home sales in Nassau and Suffolk ... |
www.newsday.com |
  |
Real Estate for Sale, Rent and Share @ Domain.com.au |
Real Estate for Sale, Rent and Share @ Domain.com.au. Houses and apartments for sale or rent all over Australia. Thousands of properties in Sydney, ... |
www.domain.com.au |
  |
Luxury real estate news and features - Forbes.com |
Luxury real estate news and features at Forbes.com. Core topics include real estate, mansions, condos, co ops, oceanfront realty, second homes, ... |
www.forbes.com |
  |
Real Estate News - Prices, Mortgages, and Calculators from CNNMoney |
Latest on mortgages, refinancing, & home tips from CNNMoney.com. Calculators for refinancing, mortgage payments and more. |
money.cnn.com |
  |
Los Angeles, California, national and world news, jobs, real ... |
Los Angeles' leading online source for local, state, national, world, entertainment, and sports news. Plus jobs, real estate, cars and shopping information ... |
www.latimes.com |
  |
|