Section 1031 of the Internal Revenue Code has been called the single greatest wealth building tool available to real estate investors. If you are unaware how Section 1031 of the IRC can magnify your returns and help you create wealth, review this:
An investor who purchases $100K worth of Google stock in 2000 sells the stock today for $200K. The investor yields a whopping 100% return, correct? Well yes, but don’t forget that when tax time comes around, our Google investor will owe the IRS and State Taxing Authority about $30K. After taxes, the profits from the Google investment plummets from $100K to $70K. Still not a bad return, but after taxes our Google investor now has only a total of $170,000 to reinvest.
Now let’s contrast this with an investor who makes the same returns in the real estate market. A property purchased for $100K, appreciates to $200K. The investor earns the same $100% return. The major difference however, is the investor can elect a 1031 Exchange and defer the capital gains taxes. Doing so leaves the investor with a total of $200K to reinvest.
Rice Real Estate & Las Vegas Property Management
Rice Real Estate is a full service residential real estate brokerage offering worry-free rental property management in Las Vegas, Green Valley Ranch, Seven Hills, Silverado Ranch, Southern Highlands, Mountains Edge, Summerlin and Henderson. Through our extensive network of renters and state of the art marketing techniques we strive to exceed your expectations. We are committed to upholding professional ethics and standards.
Our team provides not only professional management, but also common sense and personalized service at competitive rates – the cornerstone of our long success in the business. Broker & lead Property Manager Heidi Rice has been managing rental properties since 2001 and manages all properties as if they were her own. Rice Real Estate is known as one of the best Las Vegas Property Management companies….just read our reviews here!