The answer is BOTH. But given equal market opportunities, what you actually do would depend upon your particular financial and income tax situation. Those with a current income tax bracket above 20% would pay less taxes if they bought properties for appreciation rather than income. Theoretically, those with 15% income tax brackets could structure a fairly decent life-style around the 10% capital gains rate, but practically speaking, they might not have been able to save up enough money to play the 'waiting game' that growth strategies demand. Let's look at each situation separately.

Continue reading “Today, Should You Be Buying for Income or Appreciation”

   Place, form, function, and time utility also apply when buying houses. Place is most important, so we'll deal with that first. The place where a house is located usually has more influence on why people buy than other factors. Families like to buy homes within their budgets near work or good schools. Despite this, developers in search of cheap land have created housing tracts that extend for 20 miles from the city center. Although the initial cost of rural agricultural land when bought by the acre costs less, what about the infrastructure costs of roads, curbs and gutters, sewers, gas lines? What about the time required to obtain necessary zoning changes and permits? Impact fees? Interest? Property taxes? These all add to the costs of converting undeveloped land into housing tracts.

Continue reading “Bargain Houses May Not Be What They Seem”

     If you're just getting started on the ladder to success and need money to expand, or if you're working without a safety net, with no regular pay-check, only by generating quick cash income can you expect to survive as an entrepreneur. Oh, you could get a job, but that's a desperate choice for a true entrepreneur.

Continue reading “When You’re Broke, Income is the Name of the Game”

     As I've grown older, I've come to the conclusion that often the most valuable profit that money can generates is TIME. Being financially able to retire early can give you extra years to pursue your muse. Think of being able to take months off to enjoy leisurely recreation instead of trying to cram everything into a short vacation. Or all the days and hours that can be salvaged by hiring others to do jobs you can't or don't want to do. Financial success is what buys this time.

Continue reading “Time and Tide Wait for No Man”

     An often overlooked but powerful technique for buying and selling property lies in the sale or purchase of Estates for Term and Remainder Estates. This can create real value when sophisticated people sit down to make a deal. The buyer buys a property, paying today, but receiving title only after an agreed upon interval has expired. Or he might buy it for a set number of years, only to have it revert to another party at the expiration of the term of ownership. Both buyer and seller can benefit from this type of transaction, depending upon their particular situation.

Continue reading “Buy Now, Fly Later”

  I've been an investor in one form or another since I built my first house by hand in 1952, and I've been a landlord since 1958. In all that time, overall, single family detached houses have been the best performer for a number of reasons. They're easy to find and to finance. They require far less know-how for the neophyte. They can often be bought with seller-financing. They are easy to manage and if chosen carefully, can be made to produce positive cash flow from the day #1.

Continue reading “Bottom Line, Cashflow is What its All About”

  When a seller calls about a house for sale, make that first call just an information gathering call. Use the time to build rapport and find out all the important information you’ll need to make a decision about the house. The basic information you need to get is the sellers name and phone number, the address of the property they want to sell, number of bedrooms and bathrooms, and what repairs are needed. You should find out the mortgage balance if there is one. Ask if there are any back payments or taxes. One of the most important questions is “why are you selling”. This will give you an idea of their motivation level.

Continue reading “STOP! Don’t Make Offers”

     Usually, in the ideal home, "form follows function". The floorplan is laid out to create the most practical and enjoyable living environment within the limitations of budget and building code requirements. Designs are a compromise between the most desirable plan and living and lot space limitations. But, architects can make mistakes when they design floorplans at random for magazines.

Continue reading “Buy Houses; But Sell Or Rent Homes . . .”

  From any lender’s point of view, being able to have interest earn an after-tax yield that is in excess of the long term inflation rate can create significant compounded profits over time. Sellers often carry back financing in order to be able to sell faster; with greater after-tax profit either from higher rates of interest or from higher than market prices. Conversely, borrowers seek to avoid the ruinous effects of compounding interest and to shelter income – whether in the form of rent or gain – to the maximum extent possible from being taxed.

Continue reading “Buyers and Sellers Are On Opposite Ends of The Seasaw”