How Your Rental Property Tax Write-Offs Help You Save On Taxes
Should You Buy? Should You Sell?
Now the booming markets or bust markets are something that our talking heads on TV have a lot to say about. To be sure, it is also something that concerns a lot of investors. How do we know if the real estate sector is booming, and where? Obviously, these are concerns that investors have because they want to act in ways that offer the best return on their investments. I would, however, want people to ask different questions. For instance, what should investors do in booming markets – buy or sell?
It could well be that during boom times, there is a lot of buying sentiment floating around. High demand can sweep us up and make us feel as though it is the right time to invest. However, I actually do not like to buy in areas where the markets are booming. I like to do the opposite. I would prefer to sell in boom markets. These are the times when you are likely to get the best return on your investment.
And believe me, you, as a property owner, will know when the market is booming. You will not have to wonder about it. This is the time when you're going to receive offers for your property. There will be people texting you, calling you, and messaging you with offers to buy. This is because when markets are booming, demand is high. And you are in possession of something precious – supply!
So when you put your house on the market for sale, you are likely to receive 15 offers in the first week. Some of those offers may be higher than your asking price. Hence, in my experience, we sell in booming markets, and we hold when the markets are quiet. The market is always cyclical, and a boom will follow the bust. We sit tight, and we do nothing.
Now, presuming that you bought your investment home at the right time and you wisely waited until the boom time to sell – what now? There is a significant tax liability that arises when you sell an asset like a home. How do you avoid this, is the next question? It is always my advice to sell in booming markets and then do a tax-deferred 1031 exchange into some other market. Here again, you choose a market that makes sense. Not a booming market, but one that is likely to see a boom sometime in the future.
Some of these choices can sound difficult to make, but help is at hand. At ICG Real Estate, we have been helping people invest in residential properties in ways that help to transform their financial future. You, too, can transform your future with the help of our Remote Control Retirement Riches formula. To know more, sign up for our free quarterly property expo today!