Business and Finance

Section 1031 of the Internal Revenue Code contains arguably one of the most powerful provisions of the tax code for real estate investors the 1031 tax exchange.  Many highly successful real estate investors have used this tax code provision in combination with aggressive pyramiding and upgrading strategies to amass huge investment property portfolios.  Heres how it works:

OVERVIEW
A Section 1031 Exchange allows you to exchange like-kind investment properties without triggering the payment of capital gains tax.  As your property assets appreciate in value you have the ability to upgrade into larger properties with greater cash flow.  Section 1031 also gives you the flexibility to exchange your rental properties that have appreciated in value in hot markets, and re-invest into lesser-known areas that are expected to develop and become the next hot market in years to come.  You can continuously defer these capital gains taxes as you continue to pyramid your property investment portfolio into larger and larger properties.

1031 EXCHANGE BENEFITS
There are a lot of benefits to considering the use of a 1031 exchange:

TAX DEFERRED INVESTING
The ability to re-invest your entire property equity without tax erosion can significantly enhance the amount of capital that stays invested and can make it easier to upgrade into higher value properties with greater cash flow. 

INCREASE CASH FLOW
This decision to upgrade into higher quality properties with greater cash flow can occur faster now that taxes are a lower priority transaction decision.  In some markets the real estate values can get ahead of the available cash flow available from the property.  In these situations it may make sense to lock in your gain and look to re-invest in another property where you can achieve higher cash flow returns.

TIMING THE MARKET
The ability to speculate on the next hot market area or region is a much easier decision under a 1031 exchange.  Why not lock in your profits on property that has already risen dramatically in value and re-invest it in the next hot market?  As long as your capital gains are deferred making these transaction decisions is easier.

COMPOUND RETURNS
If you are stepping up your portfolio through a series of exchanges over time your full capital gain can be re-invested without tax consequence, resulting in accelerated equity accumulation.

FLEXIBILITY
The ability to switch into like-kind properties as defined in the tax code gives you a range of investment options and flexibility.  If you dont want a lot of the headaches associated with managing property you can also consider Tenant in Common exchanges, which do qualify under Section 1031 of the tax code.

CONCLUSION
1031 tax exchanges gives real estate investors a lot more options and flexibility to make better investment decisions on their real estate holdings without the issue of tax over-riding sound judgment.  If you own a rental property or are considering it you owe it to yourself to see if a 1031 exchange is right for your circumstances.

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The American dream is changing, and real estate professionals are doing their best to keep up in order to sell homes. Many buyers still want a big house in an uncrowded neighborhood, especially if they have a family, but there are conditions attached now. Long commutes into the city are more of a deal breaker now than ever before, and areas without a nearby business community, parks infrastructure, or future-proof layout are generating less interest. Realtors working in the suburbs must now learn to identify and market smart growth, and a well-rounded lifestyle, as well as the old ideals of comfort and privacy.

Soaring gas prices have made the suburban commute a tough sell, but rail lines are a cheap solution in many metro areas. Cities with long-established commuter rails have upgraded their routes to accommodate growth, while cities that expanded rapidly during the mid-20th century are building new commuter lines. One example of a large center with a newer commuter line is Vancouver, BC, Canada, where an extensive line called the West Coast Express opened in 1995. An area like suburban New Jersey offers well-established commuter railways, but here too the traditional routes are augmented by new routes, such as the Morristown Line which runs 40 miles between Hoboken and Hackettstown. Real estate agents who know the rail routes in their area, and stay on top of development plans, can help more buyers find a suburban home suited to their needs.

The high-tech bio-tech industries have brought another marketing angle to the suburban home market in recent years. Many companies in these rapidly expanding sectors operate at the outskirts of large metro areas, where they can develop large campuses and research facilities employing thousands. High-tech and bio-tech professionals can live in low-density neighborhoods, and avoid a lengthy commute altogether, if they find a home near their campus. Realtors sensitive to the high-tech market will find these home searches easy to accommodate.

Other new marketing angles for suburban real estate can include high quality school districts, parks systems, improved inter-municipal planning, outdoor shopping plazas, cheaper home prices, and a larger new home inventory. Knowing what makes these areas attractive to buyers will help real estate professionals close more deals, and promote smart growth where they live.

Most real estate agents want to be extremely successful.  Goals are set and then the hard work begins to reach those goals.  So what steps can you take to skyrocket your success as a realtor? Here are 7 powerful steps that will get you on the road to success:

1. Realize your Potential

In order to succeed as a real estate agent, you need to see that you have the potential to reach your goals.

2. Dont Look Back

Everyone has failures or mistakes from the past.  To have success in the real estate industry, you need to learn from those past mistakes and learn valuable lessons from them.  After doing so, simply move forward and make better, more educated decisions from the lessons learned.

3. Dare to Dream Big

To succeed as a realtor, you need to have big dreams and aspirations.  Be honest with yourself as to what you want out of life and what you want to give of your life.  Allow your mind to dream and think big!

4. A Powerful Business Plan

Create a powerful business plan that will organize your strategies.  This plan will be the blueprint to your success.  The business plan should include prospecting, listing strategies, prospect follow up techniques, networking ideas, and ways to boost customer loyalty.

5. Dont Give Up

To reach success as a real estate agent, you must persevere through difficult times.  Even Thomas Edison had to learn this.  When he was inventing the incandescent light bulb, it took him more than 10,000 times to get it right.  Keep striving even when the challenge seems to be overwhelming. 

6. Have an Unstoppable Attitude

You need to have determination in order to succeed as a realtor.  Be wary of close friends or family members that feel it would be better if you focused your attention in another direction or career.  Uphold your unstoppable attitude, determined to succeed.

7. Stop Complaining

You might think there is no correlation between complaining about you difficulties and success, but there is in fact a connection.  When you spend time complaining about the obstacles you are facing in you real estate career, you’re wasting so much time being negative that you are actually missing out on chances to move your career forward.  Don’t think of challenges as problems, think of them as opportunities.