The profit potential of home ownership has cooled as the real estate market has declined. Even in a declining market, real estate can be profitable and following the builder is one of the several strategies you can use.
Making a profit is relatively easy when the real estate market is rising but when it slows down, getting a good price for their homes and selling is a challenge for home owners. In all but the most negative conditions, following the builder affords homeowners the opportunity to make a profit on real estate. This maneuver is used by many people and they move even there's no need just so they can make a profit.
Following the Builder
In many areas of the country, hundreds of houses within a 50 mile radius of each other are built each year by builders. Entire communities or groups of 3-5 builders would build entire communities around huge employment centers. An important opportunity would be presented to you because of this.
Facts about a New Community
For less than later phases, builders would sell the first phases of communities. But they would have to get the cash flow moving. However, selling at higher prices is difficult because dirt lots and construction equipment is what the community consists of. Prospective buyers are then presented with a great profit opportunity.
Getting in on the first phase of the build out is the idea. You will purchase the home at a discount, which gives you built-in equity. Selling the home for a profit at a higher price is what you'll do as the community is built up. What you can do while you're doing this is keep an eye out on the builder's projects and finding another location where you can do the same thing again.
When you live in each house for a year or more, along the way you can pick up nice profits. There's a downside though, and that would be repeatedly moving.
Facts about Tax Consequences
This has worked well for a number of people who have done it more than once. But tax consequences is the result if you generate profit this way. To be prepared in dealing with tax consequences, you need to discuss your plans with your tax professional and this includes projected timing and profit potential.
You can build up a nice nest egg with this type of real estate investment if you're willing to move yearly and carefully invest so your profits are clear.
Making a profit is relatively easy when the real estate market is rising but when it slows down, getting a good price for their homes and selling is a challenge for home owners. In all but the most negative conditions, following the builder affords homeowners the opportunity to make a profit on real estate. This maneuver is used by many people and they move even there's no need just so they can make a profit.
Following the Builder
In many areas of the country, hundreds of houses within a 50 mile radius of each other are built each year by builders. Entire communities or groups of 3-5 builders would build entire communities around huge employment centers. An important opportunity would be presented to you because of this.
Facts about a New Community
For less than later phases, builders would sell the first phases of communities. But they would have to get the cash flow moving. However, selling at higher prices is difficult because dirt lots and construction equipment is what the community consists of. Prospective buyers are then presented with a great profit opportunity.
Getting in on the first phase of the build out is the idea. You will purchase the home at a discount, which gives you built-in equity. Selling the home for a profit at a higher price is what you'll do as the community is built up. What you can do while you're doing this is keep an eye out on the builder's projects and finding another location where you can do the same thing again.
When you live in each house for a year or more, along the way you can pick up nice profits. There's a downside though, and that would be repeatedly moving.
Facts about Tax Consequences
This has worked well for a number of people who have done it more than once. But tax consequences is the result if you generate profit this way. To be prepared in dealing with tax consequences, you need to discuss your plans with your tax professional and this includes projected timing and profit potential.
You can build up a nice nest egg with this type of real estate investment if you're willing to move yearly and carefully invest so your profits are clear.
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