Currently, real estate investment is a hot topic. Almost everyone wonder if they are going to sell, buy, trade or avoid investing entirely. Over the past few weeks, the theme of trade in real estate has made headlines. With the lack of qualified buyers and housing market decline, many investors find that it is sometimes smarter to trade in equally good qualities.
When a real estate investment is traded for similar property, it is referred to as a 1031 exchange. To participate in 1031 exchanges, real estate investors must maintain services of a Qualified Intermediary QI. Investors participating in 1031 exchanges must comply with Internal Revenue Service guidelines set out in Section 1031 of the IRS Code.
1031 exchanges allow investors to change real estate while deferred capital gains and depreciation are recovered taxes. Real estate is not the only property that can be replaced by 1031. All types of investment properties including equipment, boats and aircraft can be traded.
1031 exchanges prohibit the exchange of houses used as personal homes or vacation homes. If the property is rented on a regular basis, however, housing can be traded for other rental housing.
Another popular investment strategy for real estate is to purchase unpleasant properties like foreclosure or bank owned houses. Concerned properties usually require significant repairs or renovations, but this is not always the case. Foreclosure homes are sold at market value through public auctions. If no one offers the property, it will be returned to the bank.
Currently, bank owned housing is sold for about 80 cents on the dollar. Also known as real estate or REO real estate, investors must negotiate with the banks depreciation department. Buying REO home usually requires more time and effort than investing in foreclosure homes. Investors should be prepared to participate in multiple counter discounts with lenders offering REO houses for sale.
Many real estate investors buy bank owned and foreclosure schemes for the purpose of the house to browse. Flipping houses for profit is not as easy as the popular TV shows show that it is. Simple repairs often cost huge costs. Major repairs require licensed contractors, permits and inspections. Before investing in distressed properties, be sure to estimate the actual cost of repairs. Otherwise, you can end an investment nightmare.
A lesser known property investment is probate properties. When a person dies, all that they own must pass through the probation process. The probation can be between six months and three years. During this time the property is responsible for taking care of the property. This may include mortgage payments, property taxes, insurance and maintenance. If the accommodation is insufficient, a probate judge may order the probate examiner to sell the property.
Probate traits are often profitable jewels, but finding them requires some detective work. Real estate investors will have to visit the court where problems with the circumstances are handled. Probate information is a matter of public information and contains valuable information about the estate and the home administrators contact details.
Many real estate agents are not aware that they can sell real estate under probate. Offer to buy their property can eliminate financial burden and help the executor to speed up the probation process. If several heirs are entitled to property, they must all agree to sell the property unless a judge has ordered the administrator to sell the property.
These are just some real estate investment opportunities. While the media project is constantly bleak and convicted, it is important to remember that real estate has always been one of the most valuable investment opportunities. Those who invest now can potentially reap big profits later. Just remember, invest no more than you can afford to lose.