America’s Favorite Places to Move in 2012

It’s official. We know what we’re talking about – at least when it comes to helping property investors decide where they should be looking to acquire new properties for their portfolios. And if you’re coming late to the income property party, you’re in luck. It’s not too late to potentially crank your profitability much higher than what Wall Street can dream of offering.

It seems that America is beginning to figure out that the markets we’ve been recommending to income property investors for years are being discovered by the public at large as pretty nice places to live also. Call it confirmation that we’re doing something right with our Platinum Properties Investor Network (PPIN) recommendations.

According to U.S. Census data, more than 36 million Americans pulled up roots and moved somewhere else during 2012. Not surprisingly, warmer climates continue to be a major draw. Penske Truck Rental, a global transportation provider listed the top ten destinations for the year, and they include Sarasota and Orlando (FL), Charlotte, Seattle, Denver, Houston, Chicago, Phoenix, Dallas-Fort Worth, and Atlanta.

Obviously, a few of the cities – Denver and Chicago – fall outside anyone but an Eskimo’s definition of “warm,” but the rest we can work with. In fact, if you visit Jason Hartman’s website at JasonHartman.com and scroll down through the markets we currently recommend, you’ll see Houston, Charlotte, Denver, Atlanta, Dallas, and Phoenix. That’s six out of the ten destinations that are listed as a current “buy” for income property investors.

The fact that millions of people saw fit to relocate to these various areas during the past year can only bode well for the continued return on investment for those who choose to buy properties there. The math is not complicated. Besides a pleasant climate, people move where there are jobs, good schools, and a better quality of life.

One of our favorite areas to buy right now is Texas, especially the Dallas-Fort Worth metropolis, where the median home price is a paltry $61,000. That’s just a little over $12,000 down payment to get in on the action. As you or may not realize, Texas is also a landlord friendly state. It only takes about a month to evict a tenant, which is not bad when compared to places like the Socialist Republic of California, where you can expect a good six month fight to get a non-payer out of one of your units.

While there are few guarantees in life or investing, targeting one of these ten areas for the next addition to your real estate portfolio would not be a bad idea. In fact, it just might turn out to be the best move you ever made. (Top image: Flickr | roger 4336)

The Commercial Investing Center Team


Obama Wins: Bad for America, Good for Property Investors

We won’t spend too much time wailing and gnashing our teeth in the aftermath of an election day hangover. Obama won. We may not like it but the will of the majority has prevailed. As Bill O’Reilly said last night, we’ve become a nation of people who want the government to give them stuff and last night’s results prove it. Put another way, we’ve become a nation of people who want the government to take stuff from people who have earned it and give it to people who haven’t. This is called redistribution. Our Founding Fathers weren’t big fans of the idea.

While the stark prospect of a second Obama term gives us the heebie jeebies for what it means to America (a virtual leap towards Euro-style socialism), there are two points we’d like to make. (Top image: Flickr | Neon Tommy)

More Inflation is Good for Income Property Investors

Another four years with Federal Reserve chairman, Ben Bernanke, and Complainer-in-Chief Obama at the wheel is almost certain to stir up a healthy dose of inflation. Like we said in the headline, that’s bad for America but turns out to be the perfect recipe for creating wealth if you happen to own a portfolio of income producing properties tied to long-term, fixed-rate mortgages. As Jason Hartman scholars are well aware, the presence of inflation drives down the real value of a mortgage, which is why we say you should NEVER pay off that loan. Keep refinancing and cashing those tenant checks.

The President Only Matters if You Let Him

The second point is a bit more philosophical. We and many of our readers were kind of jazzed at the idea we might get a businessman running the country for a change. That dream has fallen by the wayside, but the reality remains that the President of the United States (POTUS) of America can only derail your dreams of financial independence if you let him. For those devoted capitalists out there, shrug off the election results. The success or failure of your life depends on YOU, not a teleprompter-abusing empty suit from Chicago.

Whatever grand plans you had for entrepreneurialism in the face of a government that believed in letting Adam Smith’s invisible hand work in the market – hang onto them. The face on the television might not be the one you voted for, but who cares? The government doesn’t create wealth and it sure as heck can’t stop a dedicated capitalist from doing so if he or she really wants to.

So, whatever you do, don’t change your plans. Invest in rental properties and get wealthy anyway. (Top image: Flickr | Neon Tommy)

The Commercial Investing Center Team


Election 2012: Pay Attention to the Capital Gains Tax

Anyone who already invests in commercial property or with plans to do so in the next few years should have more than a passing interest in the presidential candidates’ positions on tax issues, especially when it comes to the capital gains tax. As a refresher, capital gains are taxes paid on the profit from the sale of a property or other type of investment. It applies just as equally to stocks, bonds, rare stamps, or anything else purchased for the purpose of investment. Most types of commercial real estate fall into this category.

Up until 1921, capital gains weren’t such a big deal because they were taxed at the ordinary income tax rate, up to a maximum of 7 percent. Since then, various administrations have tinkered with the rate, sometimes raising it and sometimes lowering it. One thing is for certain. With a presidential election only three weeks away, property owners should be aware of the respective positions Barack Obama and Mitt Romney take on the issue. Trust us, it could make a large financial difference to anyone planning on selling a house in the near future.

Those adhering to Jason Hartman’s gospel of “refi ‘til you die” might not think the issue is such a big deal right now, but sooner or later, most of us will sell a property and we’d like to be able to keep as much of the profit as possible. Current capital gains, signed into law by former President George W. Bush, cap the rate at 15 percent. Here’s where the candidates stand on the issue.

What Obama Wants to Do

President Obama proposes an increase in the capital gains rate to 20 percent on high-earners. His definition of a high-earner is $200,000 for individuals and $250,000 for families. He also wants to impose a minimum 30 percent income tax rate on the so-called high-earners.

What Romney Wants to Do

Former Massachusetts governor Romney intends to take a different approach to the capital gains issue, completely eliminating investment income tax for anyone with an adjusted gross income of less than $200,000 per year, and maintaining the Bush capital gains rate of 15 percent for everyone else

The bottom line is that the issue of how much (if any) to charge for capital gains breaks across traditional party lines. Democrats want to see that the “wealthy” pay their “fair share,” while Republicans are convinced that taxing investment income puts a damper on the economy.

At CommercialInvestingCenter.com, we always suggest that you create a life of wealth and abundance irrespective of which party sits in the White House. Still, it doesn’t hurt to know what the future might hold in regard to your investment income. (Top image: Flickr | DonkeyHotey)

The Commercial Investing Center Team


As Home Ownership Dips, Rentals Rise

The U.S. Census Bureau has recently published reports of the steepest decline in home ownership in the last five decades. It furnishes data that there are only 65% of Americans who own homes.

According to a recent Market Intelligence report by John Burn Real Estate Consulting, this percentage does not paint an accurate picture. This is because homeowners who are late on payments by more than three months are not included in the final figure. As a result, John Burn suggests that home ownership has dipped to at least 62% in the real world.

What do these figures signify for property investors?

As home ownership is in decline, this marks good news for income property investors who rely on revenue from rent.

In previous years, home ownership for the average person was one way of building wealth. Now, a large percentage of Americans are not able to afford the associated costs of this investment, and many would fare much better with rent – at least for the short-term.

The report also speculated that most individuals are temporarily renting in order to clear up debts and save for down payments, all for an average of three years. Other market reports estimate that home ownership will begin to rise by 2013-2014.

This then begs the question: What happens when the market shifts; when individuals start buying more and renting less? What will current investors do?

Jason Hartman, having spent years through market booms and downturns, advises that you do two things now:

  1. Plan For The Future: As a property investor, it’s imperative to foresee obstacles in the future.
  2. Conduct Market Research: It’s also important to conduct in-depth market analysis.

Based on objective assumptions in the real estate marketplace, property investors have a two-three year leeway before the market turns, and citizens begin buying again.

This time frame can reel in a tidy sum of profits to invest in other types of properties besides residential homes. In addition, there will always be a market for renters, as history proves. As groups of renters move on to ownership, another cycle of renters will begin short term rentals, before jumping on to the American Dream.

In summation, there will always be a market for property investors to fill vacant properties for rent, if:

  • The investment property is in a stable location. Always choose properties in a central vicinity.
  • The property is well-maintained, and therefore provides an incentive for people to want to make a temporary home there.

These figures should motivate investors to hold onto current opportunities. With low home price and low interest rates on the rise, it’s a buyer’s market – for property investors who hold current capital. (Top image: Flickr | Sasha Y. Kimel)

The Commercial Investing Center Team