The Recapture Tax You May Owe When You Sell Rental Property
Friday, November 30
A few years ago when I was still actively selling investment real estate, one of my customers recounted a story about the first time he learned about the depreciation recapture tax, and it wasn't a pleasant experience. He had just sold an income property he had owned fo...
Why a Mortgage Payment Calculates Higher in the USA than in Canada
Saturday, October 27
The USA and Canada each use a compound interest equation to amortize bank loans. That means that each country charges interest on the principal amount of the loan as well as on any accrued interest. So lenders in both countries are the same in that they equally compound interest on the l...
Why Real Estate Investors Use a Replacement Reserve
Monday, October 15
A Replacement Reserve is a method of setting aside funds (usually in a bank account) to cover a rental property's anticipated (though inevitable) future capital improvement expenses such as the replacement of a roof, carpets, air conditioning and heating equipment, appliances and other ...
Payback Ratio: Know When You Will Recapture Your Initial Investment
Thursday, September 20
The Payback Ratio is just one of a variety of calculations investors might use when evaluating a real estate investment opportunity. And though it's not as popular as perhaps capitalization rate or internal rate of return for making investment decisions, that's not to say the payback ratio can't ...
How to Figure a Real Estate Investor's Annual Depreciation Allowance
Wednesday, September 19
One of the biggest tax deduction benefits associated with real estate investing is the allowance for depreciation real estate investors are given by the IRS. Primarily because depreciation (known as cost recovery) is a "paper loss" the real estate investor can write off during each year of ...
Cash-on-Cash Return: How to Make the Calculation
Tuesday, September 18
The Cash-on-Cash return (or CoC) is a popular rate of return anyone engaged in real estate investing should understand because they undoubtedly will see it posted in some real estate analysis report at one time or another.Its popularity is mostly attributed to the fact that the cash-on-cash retur...