With interest rates set to rise in the near future, property values may be peaking at this very moment, and when the time comes that interest rates do rise, that will more than likely cause property values to go in the other direction. That makes this the best time to make an investment and to choose Sunset Realty to represent you in your investments.
Owning property in the San Diego area is as financially advantageous as it could possibly be, and investing is a good way to get in on that value stream. Other reasons that investors choose our firm to work with is because we are extremely adept at managing 1031 tax-deferred exchanges. These types of transactions allow you to sell your property and enter into a 1031 exchange which is tax-free, and which always involves a building containing more units than your original dwelling.
Obviously, this will be great to your advantage, since raising the rent on 20 units of an apartment complex is much more profitable than raising the rent on 10 units. Our experienced real estate agents can help you find and identify investment properties that have a greater number of units that you can exchange into. It’s also a good idea to get involved with a 1031 tax-deferred exchange if you’re running out of depreciation expense write-offs.
When you 1031 into another kind of property, that restarts the whole depreciation clock and allows you to again make use of write-offs that will reduce your tax burden. This, of course, will protect your cash flow and your incoming revenue stream, so that you can retain more of your profits while giving less away to the government.
Now is also a great time for you to invest because CAP rates are at an all-time low in the San Diego area, and have been averaging between 4.5% and 6%, which is financially advantageous for all investors. There are also cases where investors become aware that their current properties are not yielding the kind of equity they had hoped for. By following the advice of our property investment company San Diego, CA, you can cash in on some of those lost opportunities by finding similar properties which have better returns.