Okay. Let's play show and tell. Have a look at this graph.

 image003_479 

What are we seeing? Proof that housing, as an investment, is less volatile than the stock market and highly competitive in terms of performance. Yeah. It jumped out at me, too when I received it this week in an email newsletter.

Here's the scenario. You buy into the SP500 or the Dow Jones Industrial Average OR you pick up a median-priced piece of residential real estate in January 2002.

The SP500 index is 106.4 while housing is 110 and the DIJA is 115.4. Even though housing is currently down 25 percent, it hasn't taken as rough a ride in terms of peaks and valleys as either of the other indices.

And in comparison to the current 25.3 percent drop in housing? From January to…

1637 Views, 3 Comments

Read Full Post

Although the Austin economy has proven itself to be almost recession proof, there are still investors who face problems going to the bank and getting approved for a loan. There can be a lot of reasons for that:

- You're coming out of a bankruptcy.

- You have cash and good income, but bad credit scores.

- Your portfolio of investment properties is too full.

In any of these situations, when you find a prime property and a willing seller and there's just not going to be a loan on the table, does that mean you're dead in the water? Not necessarily.

In the 1980s investors could avail themselves of assumable loans until the banks figured out they were losing money because they weren't reaping all the fees associated with new loans. When that source…

7285 Views, 1 Comments

Read Full Post

Homework time, friends. On January 1, 2013 a new 3.8 percent tax will take effect on some investment income including real estate transactions. It's going to be important for you to clearly understand this tax, which is -- shock of shocks - complicated, which is why advise you to have a pow-wow with you own tax advisor.

I don't know about you, but I'm the kind of person who does better with real life examples. The National Association of REALTORS has put together a terrific brochure that outlines some scenarios in which the new tax will come into play. The link to the material is at the bottom of this post, but there are a few general things you'll want to keep in mind as you read.

First, where did this thing come from? It was passed by Congress in…

2828 Views, 0 Comments

Read Full Post

One of the bits of lingo you'll see tossed around in real estate investing is "1031 exchange." This is one of those topics that is as complicated as you let it be. Smart investors -- which is what we all try to be -- have smart accountants. If you don't have one of those guys? Go find one. That said. Here are the basics.

A "1031 exchange" is a federal tax designation. (Yeah, I know makes my eyes roll back in my head, too.) Essentially it allows you, the investor, to sell Property A and buy Property B without losing money to a capital gains tax. Normally, you'd be looking at 15%   loss on capital gains, so the exchange lets you hold on to more money to keep your investment (aka property) portfolio afloat.

The requirements to qualify for a 1031…

29413 Views, 0 Comments

Read Full Post