Having a house or building or property to call your own is a dream of most of the human population. We want to feel safe and secure, and knowing we own something gives us that security. We want to take care of our family.
The tricky part is getting to the stage where you can afford to get on the asset owning train and then, staying on. Many people get excited, don’t do the research and end up back at square one which is such a shame. Taking that little bit extra time, in the beginning, will save a lot of heartache in the long run.
Are you Ready to Invest?
There are of course indicators that will help us see if we are at the stage to make this big commitment in our lives, to summarize it,
Do you currently have any purchases that have a high-interest payback rate? This might be doable now, but adding mortgage repayments may be the straw that breaks the camel’s back as they say.
Also, having a separate emergency fund is a good idea. If anything, touch wood, were to happen during the investment process, you don’t want to have to dig into your investment funds to cover the expenses.
Even if all your high-interest payments are done or in the final stages, you should essentially have a bit of funding, to begin with. A lump sum doesn’t have to be huge; it will help you get the process off the ground and hold steady till you start seeing returns.
Investing and Taxes
This is the not so fun part of owning property, but it is reality. If you sell a property at a gain, you will get taxed. Depending on how long you have had the property will determine the percentage of tax you have to pay.
Then there are what are called Capital Gains taxes like we need even more dishing out, and dividends. Each sector and development have their own rules and regulations. Read this quick guide and see a more in-depth explanation for percentages and each action.
Some companies can help you with all this legal jargon and paperwork when it comes to understanding and paying-or not-taxes on your assets.
We hire in firms for other areas in our lives, whether it be cleaning services or function catering, so why not in our investment area. They have done the behind-the-scenes work to know how it all runs, so let’s use their knowledge.
Who can help?
It can be daunting knowing where to start and who to start with when it means sorting our finance. Reviews and referrals can be a great beginning point. Companies such as Delaware statutory trust are a reliable and efficient firm with a proven track record, chatting to them might make the big shoulder weight disappear a lot quicker.
They are well versed in what’s called the 1031 Exchange, and this is where you are going to want to pay attention.
A properly structured 1031 can help you know which property to sell, and then use the funds to re-invest in a new asset. This way you will be able to defer paying capital tax gains. There are rules and requirements for this to work, and DST has all the means to help you.
3 Advantages of Using the 1031 section code.
- The main perk, of course, is to sell a property and re-purchase without all the added tax invoices.
- The funds you receive can be used to buy more valuable properties. And continuing this way, build up an exclusive property portfolio.
- You can opt to buy a more manageable building next time around with not so much maintenance or time commitment.
There are tailored options available to all incomes, you don’t need to be rolling in it to start, or even earn triple what you already are right now. You just need to be speaking to the right people, who know the business and have your head on straight.
Being willing and making the initial commitment is the first step to a bright future.