Are you a Real Estate Investor or a Speculator?
If you follow these items you too can make moves with the best of them! (to view a Real Estate Investment analysis click copy-of-fmrrworksheet)
- Determine Level of Liquidity - liquidity is the ability to quickly convert an investment into cash, without losing any of the principal that you’ve invested.
- Determine Level of Marketability - marketability is the ability to convert an investment into cash quickly, at any price.
- Determine the Impact of Leverage - leverage is the use of borrowed funds to finance a portion of the purchase price of an investment. The ratio of borrowed funds to the total purchase price is known as the loan-to-value (or LTV) ratio. A high LTV would result in high leverage, while a low LTV would result in low leverage.
- Evaluate the Investment Management Issues:
1. Asset Management - this is where you monitor the financial performance of the investment and make changes as needed.
2. Property Management - involves the overall day-to-day operation of the property and the physical maintenance of the building or buildings.
- Consider the Tax Impact of Your Investment Decisions: This includes such issues as:
1. Classifications of passive
2. Active and portfolio income and losses Capital gains taxes Income taxes
3. Tax Credits, Tax deductions, Tax Deferments
- Evaluate and Reduce Investment Risk - risk is the possibility of losing either the principal invested and/or the potential income from the investment. We help you reduce investment risk in several ways
- Risk Analysis - This is the process of evaluating alternative investments based on their level of risk
- Shifting risk - structure your leases and rent agreements to shift the exposure of increasing costs to the tenants. This can include shifting the risk of rising interest rates, operating expenses or tax increases.
- (The Biggie) Due diligence prior to purchasing an investment property - Due diligence is the process of examining a property and related documents such as appraisals, inspections, environ mental surveys and title work in order to reduce risk.
Make sure to Review the (copy-of-fmrrworksheet) Investment analysis. If you would like to receive a analysis specifci to your property, feel free to contact me.. Your Mortgage Planner, William Doom, CMPS. 1.888.271.3437 x7
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2 comments:
Thank you for sharing a nice post. I am also interested in knowing about tax deductions, etc. IRS Deductions can greatly reduce your tax liabilities.
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