This might not seem like the ideal time to talk about investing in Myrtle Beach real estate, but property prices have gone down and it’s actually a very good time. Just think—you could be planning and sowing your seeds for future profit for the time things do return to normal with supply and demand—and they will. Most people have frozen now and are not seizing the moment. Here are four great ways to make that profit happen!
Four Ways To Plan For Myrtle Beach Real Estate Profit
Profit from real estate cash flow.
Seems pretty easy—collect rent on a property you buy, right? But more is involved here. You should be familiar with the area you want to invest in or be working with a person who does. You need to be aware of factors like growth in the area, the rate of vacancies, and the trend in Myrtle Beach real estate taxes. Don’t forget to consider things that could affect your profits, such as nearby construction, employment rates in the area, and growth of population. You also should factor in expenses such as repairs, even big ones, insurance, maintenance costs, and taxes. These are especially important if you are using financing rather than strictly cash. Of course, the main thing to look at here is actual price of purchase. As with anything you invest in, you want to get the lowest price possible so you can sell at the highest price possible. It’s not only about appreciation, as so many people have found out the hard way during the Myrtle Beach real estate bubble!
Real Estate Appreciation Profit.
Think about two kinds of profit here—The first kind would be based off economic circumstances in the area, such as large population growth or being an area where many people are moving to. In this case, demand is bigger than supply, opening the door for great profit. Systematic inflation profit, however, is not really anything you can do to affect one way or the other; it’s just things like cheaper financing and it’s passive. There is also forced appreciation, which is when value is added to your property from something you have done to improve it. Buying a run-down fixer upper, doing the renovations to flip it for a profit is forced appreciation.
Real Estate Profit From Depreciation.
It’s actually the tax code that causes this kind of profit. When the value of an asset is reduced from wear and tear, it is considered a non-cash expense type of depreciation. It’s assumed that you are saving money toward replacing that particular asset (real estate). After dividing up a building’s value, part of the earnings you receive will have a portion of that value subtracted. The tax deferral that results can then be useful in the generating of earnings, which are tax-free. You should speak with your tax attorney about the ways you could maximize this area of the tax code.
If financing is what allowed you to purchase a property, then each of your payments help bring down the outstanding balance of the loan. Hopefully, you planned carefully for the potential revenues, expenses and the purchase price and you’ll slowly be gathering equity and ultimately making your net worth increase. The best outcome would be to own the property as an asset that you can later sell for a nice profit. Your tenants will hopefully be giving you good profit as well.
Myrtle Beach real estate has always been a very profitable business and will always be. But it does require some homework and effort in understanding the market you are getting into. It can be a risky venture, but with informed decisions, can also really pay a great profit!
If you’re interested in learning more about how you can profit from Myrtle Beach real estate investments, call Jerry Pinkas today! We would love to answer your questions.
Visit our investment site – MBCondoExpert.com – for great real estate investment tips.
Jerry Pinkas Real Estate Experts
604 N. 27th Ave Myrtle Beach, SC 29577
Your Myrtle Beach Real Estate Specialists!