Real Estate Assets
Building
Investment Real Estate Wealth
ALL ABOUT REAL ESTATE INVESTMENT STRATEGIES
Wealth Accumulation Wealth accumulation in today's real estate investment portfolio is totally dependant on strategic planning. We can all relate to real estate markets where most investors prospered regardless of how they managed their investments. Markets where the appreciation in value compensated for poor planning. However, those wild appreciation cycles in the real estate market do come to an abrupt end. Hence the importance of considering all the 'what if’s' in the planning stages of an investment property acquisition. Continued below
An example would be the sudden lack of interest in real estate on the part of investors owing to the impact of the Tax Reform Act of 1986. The 1986 Tax Act wiped away many of the tax advantages enjoyed by real estate investors, causing real estate values to plummet owing to a drastic fall off of investor demand for real estate. However, contrary to the opinion of many during that fall off, ‘informed’ real estate investors continued to prosper. Real estate as an investment continues to outperform most other types of investments. The key being, Strategic Planning. . . a 'business plan' for each individual property. Real estate continues to stand alone as an investment vehicle that offers financial structuring and tax planning alternatives in the acquisition, disposition or holding stages of an asset. Frequently, owing to a lack of expertise on the part of the investor, as well as the investment counselor, unsound investment decisions are made. Often, the investment picture becomes somewhat distorted by confusing investment jargon such as; cash on cash return, equity rates of return,, internal rate of return (IRR), cap rates, tax-free or sheltered returns, etc.. In the midst of the hype, the investor would do well to focus on the ultimate goal, ACCUMULATION OF WEALTH...after tax. A primary concern of a prudent investor should be. . .If I invest $$$$$ of my dollars in this investment property today...what will my invested dollars grow to (on an after-tax basis) over an anticipated holding period? Real estate is the lone investment vehicle that provides the investor with the opportunity for financial structuring and tax planning monitoring over the entire life of the investment. Wealth accumulation can be greatly enhanced through prudent tax planning in the acquisition as well as disposition phases of a real estate investment. About the
author: Stewart L. Mac Donald, CCIM, is President of
Real Estate Assets, Inc., a consulting services company
focused on maximizing wealth through Asset Management in
the real estate portfolio. Mr. Mac Donald has counseled on and
has been an active participant in a wide range of investment
real estate projects. He has written and presented seminars on
"Strategic Planning in the Investment Real Estate
Portfolio" before bar associations, financial planning and
investment groups. | |
