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Putting your money in an index fund will probably make more money than the average real estate investment.
by throwaway201103 6y ago
Putting your money in an index fund will probably make more money than the average real estate investment.
- raverbashing 6y agoMy point exactly
- fizwhiz 6y agoLooking at the returns alone is an incomplete picture; a huge part of being a real estate investor is having clever tricks at your disposal to reduce your taxes.
- SpaceRaccoon 6y agoCould you please share some examples?
- compsciphd 6y agoinvest 1 million in a building, raise its value to 2 million. sell building for 2 million. buy another building for 2 million. 0 taxes paid on growth. and new basis is 2 million.
- jere 6y agoDon't you pay capital gains on real estate sales? It's something they remind you of everytime you sell a house.
- CydeWeys 6y agoYou do. The real tricks around real estate involve depreciation, not selling. You don't sell, you just keep adding properties to your portfolio with your profits to increase your total deduction from depreciation and loan interest, and that way you never end up showing a paper profit even though the total value of your holdings is going up radically over time.
- compsciphd 6y agonot if you buy a replacement. (which goes together with the depreication comment). https://www.investopedia.com/articles/06/section1031exchange.asp https://www.investopedia.com/articles/06/section1031exchange... though I was wrong about the stepped up cost basis. was confusing that with inheritance.
- verulito 6y agoThat'd be true if it weren't for cheap leverage that you get with real estate. 3%/yr with 5x leverage is 15%/yr