Tuesday, May 22, 2012

Real Estate Wealth - Control the Key

Have you ever wondered what would happen to your home if you just stopped paying your property taxes ?

How about if you never again paid a mortgage payment ?

I think you know the answers !

Ownership of Real Estate


People often say "if only I owned my home" or "if only I owned several rental properties" , then I would be rich.

Well, let me tell you one thing straight up. No individual can ever truly own real estate. Well, at least not in my previous experiences. Let me explain this before you go clicking somewhere else.

When you purchase real estate, you purchase the obligations that go with it as well. Every piece of property that I know of has a realty tax obligation attached. If you don't meet this obligation, the government could sell your property to someone else to reclaim this unpaid tax.  Therefore, you don't truly own the real estate.

Control the Key


A better way to look at purchasing real estate is that you are actually purchasing control of how the property is used. You can choose to use it as your Principle Residence. You can choose to use it as a Vacation Property. Or you can choose to use it as an Income Producing Property. The choice is yours.

However you choose to use the property, you will be in control of how it is managed. As long as you meet all of your obligations, you are free to use it as you have decided.

You can receive many benefits from controlling real estate. It can provide you with a comfortable lifestyle. It can provide you with a sense of pride. It can reduce your living expenses by not having to pay rent. It can even provide you with a positive cash flow of income if managed properly.

To Trap a Gain


Another way to benefit from controlling real estate is to coin the term trap a gain. This means simply to sell it to someone at a higher price than what you paid someone else for it originally. This gain could be totally tax free or partially tax free, depending on your local government rules.

Many investors solely invest to trap a gain, while others buy strictly for the positive cash flow it creates. The choice of how they purchase the real estate is totally theirs. In other words, they control how they would like to manage the property to make their desired profit.

                                                          ____________________


For whatever reason or purpose you have for purchasing real estate, please remember, no one truly owns real estate. We merely buy it to control what we want to gain from the property. When it is no longer useful for us, we sell it to someone else along with it's obligations.And so on, and so on, and so on. The only thing constant are the realty taxes.

As always, I welcome your comments and suggestions for future topics.

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