Time to sell my rental property?

The big question.

A current investor asked me, "when should I sell one of my homes and cash out?"
It all depends. In theory, never. When you sell your investment property, all of your investment profit, or gain, is taxable. Not that paying tax is a bad thing, because you will only pay tax on profit, therefore you are ahead of the game. However, if you have a gain of $100,000, why do you want to lose $15,000 or more to taxes, not to mention the monthly income that a property can provide. Rather, consider a tax deferred exchange if you want to liquidate the property. This kind of treatment allows you to trade one property for another, and defer the tax that would be due to a later date.

Ok, so you need cash now and you don't want to pay the tax, so what options do you have?
First, one of the easiest ways is to finance or re-finance the property and pull cash out. For example, if your property is worth $200,000 and you currently owe $100,000, one can get a loan for up to 80% of the value or $160,000 putting $60,000 in your pocket. With this option one gets the cash needed, equity is still in the property, and the income stream should easily take care of the mortgage. This money that is taken out of the loan is not taxed.

As always, consult your tax advisor for specifics on your situation since all situations are different. This is just a guide to let you know there are options avaiable for ceritan situations.

I will talk more about tax deferred exchanges next time. Stay tuned!

Invest away!

Paul

With such a stable economy in Springfield Missouri, rental property could be an excellent opportunity to build wealth. Just this morning, I was speaking to an investor who has a home in California that is being used as a rental. Although the home has appreciated in value over the last several years, the income that it is producing versus the amount of money he has invested does not make sense. Thus, he is considering selling the home, re-investing his equity in the Springfield market, and his cash flow will go up by over 4 times compared to his current income.

For an investor like this, it takes a negative rate of return into the black allowing for strong stable growth, instead of depending just on appreciation of value. When you depend on appreciation, this is really more of a speculation type of growth, rather than an investment. Although it can pay off and pay off big, the risk is far greater which means you could lose big also. When bubble markets begin to decline, people start to bail out of the market casuing prices to tumble out of control. With a more stable enviroment, one can have steady income appreciation, cash on cash return, and have an excellent investment for the future.

Rental real estate in Springfield is not a get rich quick plan, rather a good stable investment for the future. Of course, with any investment, there is always a risk factor in which one could lose value, properties could decline, and propeties may not rent for the value one hopes to obtain.
To obtain specfic information on retal investing, take a look at our web site at www.getpaul.com or call me at 800--584-1297.

It's Cruise'n time!

Stress got hold of you? There is never a bad time for a cruise. Taking a cruise to get away from it all is one of the best things you could do for yourself. It forces you to relax, unwind, and get away from the daily grind that we all go through. If forces you to turn your cell phone off and leave the worries behind; something in this day and age we tend not to do when taking a "normal" vacation with the family.

I try to take one at least once a year, if not more, and by the second day I feel a huge relief come over me that I find only a ship. Oddly enough, I am so sensitive to motion sickness that I even suffer from it sitting in my wheeled desk chair. However, most ships are so large you hardly know they are moving, and I always take one of those little white pills which always does the trick. (I had to say it that way since I don't know how to spell Dramirene? I can't say it right either) Trust me, I have had and ulcer in the past from stress, working too much, not enough exercise, blah, blah, blah. I have learned it is way cheaper and much more fun to cruise than to lay in the hospital being treated for an ulcer. And as you and I both know, it is always someone else, not me.

I can't afford it! Oh shut up. You can afford what you choose to afford. Quit eating out, quit smoking, quit buying stupid impulse purchases and give your body a break. And no, $200 purses and $2000 spinner wheels are not a need. Cruises during the right time of year can be as cheap as $300 for an inside cabin, which is all you need. If money is tight, go be stupid and spend a lot on a cabin that you really don't need. They are all the same for the most part, you are just paying for the location of the cabin.

So plan it now, go get a break and enjoy life! Your heart, stomach, and spouse will thank you for it.

Paul
18 cruises and counting

Video Podcasting??? Does it really work??

Video Podcasting??? Does it really work??
Here goes a try...a try to get our first video podcast up and running. This is Paul Dizmang talking about dwellings in the Springfield, Missouri area. Let me know what you think, or if you have any suggestions to getting this video podcasting up and off the ground and getting it done easier. Visit me at my web site http://www.getpaul.com/.

The Dizmang Team Picture

This is a picture of my team of professionals that assist me in all of my real estate activities. That me, Paul Dizmang, in the middle and Jay & Jessica. Jay Reasor works as my Buyer's Agent and Jessica Hickok works as my Office Manager who keeps us all together. Not pictured is Tess (our office receptionist) and Nathan (our rental property maintenance guru). Together we work really well together. Check us out on my web site at www.getpaul.com to see us in action!