Real Estate Analysis and Commentary

September 11th, 2024 12:32 PM

Appreciation is a Secret Weapon


It’s easy to focus primarily on the monthly cash flow properties generated. Indeed, this is a tangible and immediate benefit. However, appreciation, or the increase in your property's value over time, can often be where the most significant financial gains are made. Unlike cash flow, which can fluctuate with market rental rates and operational costs, appreciation tends to trend upwards over the long haul.

Slow and steady isn’t always sexy, but it does usually win the race.
 

How to Harness the Power of Appreciation


To truly capitalize on appreciation, here are some of the tips we’re always sharing with our investors:
  • Adopt a Long-Term Perspective. Real estate is typically not a get-rich-quick scheme. A long-term viewpoint allows you to weather market fluctuations and realize significant gains.
  • Pay Down that Debt. For leveraged properties, appreciation increases your equity, even as you pay down debt. This leverage can amplify your return on investment.
  • Take those Tax Bennies. Remember to consult with a tax advisor on how property appreciation affects your tax situation, especially regarding deductions and capital gains.
There are a few more months left to this year. Let’s appreciate our appreciation and put some practices into place that will grow the long-term value of your investments, whether it’s improvements, upgrades, or a strategy towards tenant retention.
Posted in:Appreciation
Posted by Bob Peterson on September 11th, 2024 12:32 PMLeave a Comment

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