Recently, I had a conversation with Alex Kuzakovsky at Centre Realty Group who specializes in real estate investments. He has years of experience in this real estate specialty. His repeat customers have profited from his wisdom and guidance in the Boston real estate market. There are some important facts that you should consider when weighing real estate investment options:
During the 1970s, multi-family houses could be purchased in Brighton, Allston and Dorchester for around $30,000. With steady rental income coming in, and the tremendous price appreciation of real estate during the 70s, 80s and 90s, the multi-family houses are now worth millions. Rents have also skyrocketed, as Boston has become the third most expensive housing market in the country.
The building blocks of a good real estate investment opportunity
There are many factors to consider when examining a property for investment potential. How does the neighborhood compare to other areas in the city and region? What is the building material? What is the capitalization or CAP rate? (Price of the property divided by the rental or leasing earnings) How long has the property been on the market?
Off-market buying in the current environment – Is this a good option?
The current trend is for an investment property to be available for sale off market to get a better price or to avoid a bidding war. Off-market sales are considered to be a way to save on the sale of a house or to get a better price. There is the possibility that without an experienced agent, costly mistakes can be made. These errors can be avoided by having an experienced agent conduct a market analysis. “Making off-market real estate investment decisions is not always the right thing for the new investor,” says Mr. Kuzakovsky. “You should work with an experienced real estate agent who knows the area and the investment opportunities in that particular market.” There are also good deals that you can find on the market from MLS or through brokers networking. The key is to be quick and to be committed to finding the right property for your needs. Additionally, it is not a good idea to bypass those who know the market to save a few dollars. Avoid costly errors and potentially losing out on a
With all of the colleges and universities in the Boston area, the rental income continues to come in like the waves of the ocean. With the uncertainty around the stock, bond and money markets, rental income can provide consistent income during your retirement years. Property managers can provide important support if you are traveling or unavailable during your retirement.
What is a 1031 tax-free exchange?
The tax-saving technique also known as “flipping” or a “like-kind” exchange has been gaining in popularity as a way for Americans to save money on taxes from property, by deferring them to another, newly purchased property. 1031 exchanges are a simple concept surrounded by not-so-simple details. If you own a piece of property of equal or greater value, you can defer your capital gains taxes by performing a “like-kind” exchange. Depending on your situation, the complexities may just be worth the tax savings you could receive. Because of the complexity of 1031 exchanges, it is important to have a financial professional familiar with real estate to assist you. A lawyer is generally recommended as well.
Consult a real estate agent that specializes in investing in real estate
According to Alex Kuzakovsky, “investing in real estate can be very complicated for the inexperienced investor. Do yourself a favor and partner with the experts in the field.” For further information, please contact Alex Kuzakovsky, Centre Realty Group, 617-922-3511.
We are committed to making your rental experience the best it can be. If you would like further information, you can contact me at Emily@CentreRealtyGroup.com or 617-233-5043 Are there other Boston area real estate topics you would like me blog about? Please let me know.
Emily K. Beal Director, Business Development and Customer Experience