When you’re looking into buying VA real estate, there are going to be some obvious steps that you will need to take. It’s important for you to be able to look at whether you’re interested in living somewhere close to Washington, DC – say Alexandria or Arlington where you can pick up a bus near home and have easy access to the Metro – or whether you would rather live a bit further out.One way to look at it may seem a bit silly: if you were to choose to live near an airport, would you prefer to be minutes away from Reagan National or is Dulles more your speed? Still, when you’re going to be buying VA real estate, answering this question can give you a sense as to whether or not you’d be content to live in Vienna or Chantilly.Of course, even after you’ve settled the debate of where to buy VA real estate, you’ll need to look at what your interests are and what you want and need to have in the property that you choose. Knowing each of those things will help you prepare for the next step in buying VA real estate: choosing a Realtor.When you choose a real estate agent to help you find and buy VA real estate, you’ll want to be sure of the following:o You should be sure that the agent you work with when you buy real estate in VA is someone who will be working with you and focusing on your interests. In part, this means that you should know whether or not when your agent suggests a mortgage broker he or she will get a kickback for the referral.o You should be sure that the agent you work with when you buy VA real estate is not going to charge you administrative fees; the commission that he or she makes on the sale should cover the costs of picking up the phone when you call.o You should be sure that the agent who you choose to work with when you buy VA real estate is representing your interests and not those of the person selling the property.o You should be sure that when you choose an agent to help you to purchase VA real estate you are working with someone who will advise you but who will not tell you what choices you should make. Buying VA real estate, after all, is something that you are doing and not something that the agent is doing.When you are buying VA real estate, it’s important that you are able to work with a real estate agent who will be there for you and who can answer your questions when you have them. The real estate agent that you choose to work with when you buy VA real estate is there to support you through the process of purchasing real estate; shouldn’t you be able to feel confident that you are working with someone who is focused on your interests and needs?
When it comes to saving for retirement, investment advisors generally recommend that one contribute regularly to an Individual Retirement Account (IRA) or a company 401(k) plan. Steady growth can be achieved, they suggest, by diversifying one’s portfolio with a mix of stocks and bonds. Rarely, however, do they recommend adding real estate to the investment portfolio. By neglecting to invest in real estate, one could be missing out on the many benefits afforded by this asset class.Advisors and investors may shy away from this investment for many reasons. Advisors might avoid it possibility because they are not licensed to sell it. Thus, they have no incentive to decrease the amount of money that they have under management. Also, investors often avoid real property because often they don’t understand it. Even if they do, they don’t feel that they have enough capital to make an initial investment. But if they became better educated in the benefits of real estate, they would find that it offers some advantages not seen in other investments.Often, advisors recommend utilizing investments such as mutual funds to achieve risk-adjusted, long-term appreciation when saving for retirement. By utilizing qualified retirement vehicles such as an IRA or 401(k) accounts, investors can often receive a tax deduction to offset income, reducing their current tax bill. They may also use Roth accounts to forego the upfront tax deduction enabling them to receive retirement account distributions tax free. Real estate may also provide long-term appreciation, as seen in stock and bond mutual funds. In addition to receiving up-front tax advantages just as qualified plans do, real estate investments may add other tax advantages when the property is liquidated.Many might be surprised to learn that over the past ten years, despite the “real estate meltdown,” real estate prices have outperformed the Standard and Poor’s 500 stock market index by a wide margin. As of May 2011, data provided in the Standard and Poor’s Case Shiller index (CS) showed that real estate prices, based on a 10-region composite, advanced 30.1% over the latest ten year period. During that same time the Standard and Poor’s 500 (S&P500) stock market index advanced just 7.1%. This is despite the fact that over the past two years, stock prices nearly doubled off of their March 2009 lows. During this same period, bond and commodity prices have also moved dramatically higher, causing many to worry about future market corrections. Only real estate prices have not performed and remain 32% below than their peak. The S&P 500 was just 13% from its all-time high based on May data. This is a value that an investor might look upon as a good opportunity based on current prices.Both qualified retirement plan contributions and real estate investments offer tax incentives. When one contributes to a qualified retirement plan, the investor can usually deduct the contribution from gross income, reducing the income tax liability. Real estate, even when purchased outside of a qualified plan, offers tax deductions, sometimes as great as a qualified plan contribution. Individuals who own their own home can deduct mortgage interest and property taxes paid if they itemize their tax deductions. If they don’t itemize, they can still deduct their property taxes to receive some tax relief. Investors who purchase real estate investment property do even better. In addition to the mortgage and property tax deduction that home owners receive, real estate investors also receive deductions for property maintenance and depreciation. If this investor is not generating positive cash flow on the property and the investor has an income of less than $100,000, he or she can write off up to $25,000 for losses against their gross income.A residential real estate also receives a special capital gains tax exemption not offered to other investments. If one had lived in the home as a primary residence for two of the previous five years, the individual is allowed a capital gains exemption of $250,000. This amounts to a $37,500 tax savings based on the current 15% Long Term Capital Gain tax rate. Not so with distributions taken from a qualified plan. These are taxed as ordinary income, at your highest tax rate. If the investor owned a primary residence along with a rental property, the investor could sell the primary residence at retirement, take the capital gain, and move into the rental. The tax-free distributions from the liquidation of the primary residence could be used to pay off any remaining mortgage on the rental property and provide extra funds for retirement expenses.Real estate offers many positive benefits that may be important to a person planning for retirement. Like stocks and mutual funds, real estate has the potential to appreciate, preserving purchasing power. Adding real estate to one’s holdings increases diversification and reduces overall portfolio risk helping to ensure a financially successful retirement. Residential and investment real estate often provide tax benefits not found in other retirement investments.