Many people believe that speculation in real estate (in other words, buy at a lower price and sell at a premium) is a good way to achieve financial freedom. It happens that people who persistently come to this way, earn good money. But, in my opinion, it is too difficult and risky. We will understand why this is happening? In the case of acquisition of real estate we call the bank to get cash. The interest rate on credit will increase with decreasing initial payment, because it is the bank takes over most of the risk of the loan. own/’>Harold Ford Jr. Subject to the passing of property to rent, most (maybe all) of the profits will go to debt repayment.
As a result, we have not left any funds to carry out works on modernization of real estate or even to repair if something suddenly breaks down. Under this option, the steps, you to make money, bet on Change the value of your property, not on any action aimed at the modernization of real estate in order to increase your cash flow. Can only wait and hope that the market will grow and your property increase in price. But, as we said in "The Myth of Property 2", the value of the value of your property will be controlled only if you can work on the dimensions coming from its cash flow. In this case, such an effect is excluded. Even if you guessed right, and the real estate market went up, the sale of the property will have to pay a considerable tax rate of 20%. And as you may have already mentally count, this is a large amount of which not everyone is ready to leave.
After all, according to the law no tax is charged only if the immovable property was in your possession for over 3 years. In our country the practice option when property is sold very modest amount, the remaining money goes to bypass the basic contract for the sale of real estate. This is done to reduce tax payments. Ensure that you get the entire amount is also disappearing due to the lack of it the main contract.