Wealth generation, whether it’s through a career or other means, is often what people will devote a substantial amount of time to. It’s very possible that real estate investing can lead to a majority of a person’s wealth, but it needs to be done right. Real estate is one of the most fluid industries in the world, and it’s not as simple as purchasing property and watching the value increase over time.
A CLOSER LOOK AT REAL ESTATE INVESTING
When you’re ready to expand your financial portfolio and invest in real estate, there are a few things you can do in order to have a more long-term success.
SEEK THE EXPERTISE OF A SEASONED REALTOR
You may already have an idea about where you want to invest for your next property, but if it’s somewhere you’re unfamiliar with, or even vaguely familiar with, you need to find a local and reputable real estate company to work with. You want a team of experts that not only knows the properties, but understands the ebbs and flows of the local real estate market. There is a large amount of data surrounding property growth, but being able to piece it all together in order to accurately assess long term implications is what a great realtor does.
When you are looking for a company to help you, it’s smart to start with word of mouth from family, friends, and co-workers who have lived or invested in that same area. If they had a great experience and have already benefitted, that’s a good sign. However, if they were misled and an investment didn’t work out, you can know more about who (and where) to avoid.
UNDERSTAND SOME DIFFERENT PROPERTY TYPES
When it comes to real estate, just like with stocks, there are different property types. This doesn’t just mean an apartment rather than a house or a construction lot. Good estate planning for long-term success means understanding all the pieces you’re working with.
For any investor, they can only have one principal residence which is utilized by their family. As the name implies, this is the place where you and your family will primarily identify, whether it’s for your career purposes, children’s education, etc.
Anytime that you profit from this property, whether by transfer or sale, the capital is not taxed. This is why partly why any investor is allowed to claim only one principal residence at a time.
It can be known as a ‘vacation home’ a ‘second home’ or the ‘home away from home’, but a recreational property is typically going to be a short term destination for any investor. Multiple recreational properties can be claimed and owned, but unlike the principal residence, all capital derived from recreational properties is taxed (unless it is held in joint tenancy).
YOUR MANHATTAN BEACH REALTOR CAN BE INVALUABLE
Especially when you’re looking at real estate in California’s Greater South Bay Area, one of the most desirable markets in the country, you should absolutely be working with a local expert who knows the market and understands property trends. Estate planning can lead to long-term financial success for you and, if done right, your family, for generations to come.