Nathan Colmer | The Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
When it comes to investments, everybody seems to have their own opinion of what to do with your money. Stocks, savings accounts, bonds-even gold- are all touted as good investments however one of the most time tested investments is real estate. The LBI real estate market offers some exciting and potentially lucrative investment opportunities and Long Beach Island real estate investment should be considered when planning for the future.
Please keep in mind that I am a real estate agent and any investment should be considered only after speaking with a financial planner, accountant and other advisors. There are tax implications that should be taken factored into any Long Beach Island real estate investment and of course, any investment carries some risk with it. That said, the real estate market on Long Beach Island has proven to be relatively stable and the potential for returns is very high. Below I have outlined some of the ways one can invest in the LBI real estate market, all of which I have personally undertaken with great results.
There are three main areas of investment in the LBI real estate market. They are:
The LBI real estate market has always been a comparably stable market which helps to make Long Beach Island real estate investment a safer prospect. Much of this stability has to do with the lack of short sales, foreclosures and other distressed sales. There is perhaps no greater drain on a market than distressed sales and the LBI summer rental market helps to ensure that homeowners can retain their properties even in the worst of times. With very few distressed sales on the market, home prices are generally not subject to the massive swings we see in other real estate markets around the nation. This helps to make Long Beach Island real estate investment not only practical but also safer.
Learn about investing in LBI duplexes and single family homes to be used as a rental property. You can read about the different property locations, home styles and costs of ownership associated with renting a house in the Long Beach Island real estate market.
Flipping homes has become big business across America thanks to the popularity of TV shows like "Flip or Flop" on HGTV. While house flipping as depicted on these television shows is not really practical on Long Beach Island, there is tremendous potential in building a new home on spec and selling it in the LBI real estate market. You can read more about the potential for this kind of project and see if it is the right investment for you.
The commercial real estate market on Long Beach Island is unique and investment should be taken with careful consideration Generally speaking, the commercial market is the slowest of any property type on Long Beach Island so the potential for land appreciation will be slower than that of a single family home or duplex. That said, the potential to build and sell a business can have great returns.
Real estate can be an excellent investment and act as a great balance to one's investment portfolio. Of course, it is best to consult your accountant and/or financial advisor to determine the best options available to you, but there are some creative ways to invest in the LBI real estate market by using an IRA. The IRS allows an IRA, Individual 401(k), or HSA to acquire real estate as an asset without penalty and while keeping the tax benefits associated with that account type.
An IRA can purchase any type of real estate, including residential, commercial, raw land, agricultural, and more. The IRA can buy the property outright, meaning the IRA is the title holder. If the IRA does not have the full purchase price, the IRA can partner with a person, company/entity, or another IRA. It can also secure a non-recourse loan (see below) to buy real estate. This can be an attractive option when buying an investment property in the LBI real estate market.
A 1031 tax exchange on Long Beach Island offers the ability to defer the tax paid on capital gains for an investment property when that money is rolled over to a new, and more expensive, investment property. The process involves first listing your house on Long Beach Island for sale and contracting a buyer as you would in any LBI real estate transaction. After an agreement is signed, an Exchange Agreement is signed where the property transfers to an intermediary, usually an attorney, an exchange company of other trusted 3rd party. The sale transaction proceeds as any transaction would and settlement occurs. After settlement, you have 45 days to enter into a contract of sale for a qualifying replacement property.