Arizona investment property has been the source of much news in recent years. First for its rapid appreciation rate right up to the credit crisis, and then for its equally dramatic depreciation from the highs of 2006. The most amazing thing about the rise and fall is the number of people who never saw it coming. And even more astounding is the amount of "wealth" that was destroyed in such a short time period, ultimately resulting in so many people having more loan than house.
However, for those who have positioned themselves properly, the next decade will hold unprecedented opportunity to create wealth using real estate! This is no exaggeration. Never before in our nation’s history has there been a more perfect to time to take a hard look at investment property, especially Arizona investment property. I know that’s a bold statement, yet I am completely confident making it. That confidence comes from knowing that governments around the world are behaving irresponsibly and are printing money like never before in history. In addition, government has taken on debt loads never before seen in history! These two factors form nothing but a financial house of cards that is unsustainable in the long term.
protect your wealth with arizona investment property
Do the factors mentioned above affect you? Yes… Maybe even more than you know.
Let me explain…You have worked hard or smart and set aside money for retirement in some form of account. I would bet you that your retirement account is denominated in US dollars. Lets say you have been able to set aside $100,000 in cash. How would the government’s ability to print money impact the purchasing power of your cash? The printing of money causes the purchasing power of your cash to diminish.
For example, what kind of new car can you buy today for less than $3,000? Can a new car be bought for less than $3,000? Did you know that in 1970 $2800.00 would buy a brand new Camaro with a V8? Whereas today, a new Camaro with a V8 starts at $31,000! How is that possible? Today’s assembly lines are much more efficient and automated with less metal going into today’s vehicles. The answer is simple: Inflation.
The creation of paper dollars causes inflation which devalues the existing cash. Your cash! How much will that 100k you saved be able to purchase in the future? It will depend greatly on what you do with it today.
The second way governments take from you is taxation. How much will the tax rates be in the future with ever expanding debts owed by our country? Bigger debt requires bigger payments. Since the government does not produce and sell anything, it’s cash comes from you in the form of taxation. In the last 4 decades the US has gone from being the world’s largest creditor nation to the greatest debtor nation in history! Now is the time to protect yourself from future taxation.
Investment property can protect you from both inflation and taxation. In addition, there is the added benefit of cash flow. Places like Arizona which have been hit so hard by the change in market direction have investors and property hunters taking on investments at unbelievably low prices.
Let’s examine the effect cash flow Arizona Investment Property can have on inflation, taxation, and cash flow:
Inflation: The price of "real things" rises in an inflationary environment. Look at the price of gold, silver, copper, sugar, and cocoa to name a few. Real estate is a real thing. It’s tangible and will always have an intrinsic value because people have to live somewhere. Crops have to be grown somewhere. Real property will in general keep pace with inflation.
As the credit crisis is worked out you will see (and we are seeing now) prices stabilize and then resume a gradual or perhaps a drastic rise depending on how much inflation is put into the system by the Fed and Treasury. That doesn’t mean that property prices will not fall further; however, property should not be purchased with the sole intent of speculating on price. Investment property will produce cash flow when purchased properly. Those who have the foresight to understand that investment property in Arizona, for example, has taken a tremendous hit offering a buying opportunity at incredibly low prices… These price levels provide more opportunity for appreciation for those who choose to buy now and hold the property as a rental. With many properties selling for less than $100,000, the opportunity for the average person to purchase their first Arizona investment property, or foreigners such as our Canadian neighbors to the north to purchase their very own Arizona vacation property is at all time highs!
Taxation: Buying and holding an investment property may provide great tax advantages. Depending on how you hold or own the property you may be able to write off expenses and depreciation against other earned income from your job! Seriously, ask your accountant.
Cash flow: This is really the hidden gem of advantages. Say you have your $100,000 invested in a property in Arizona. And, that property pays you or cash flows $1000 per month to you in rental income. You have now created a 12% annual return on your invested cash! You also have the potential for appreciation! And, you earn this income in a tax advantaged way which means you keep more of what you earn! You also own the property which give you control to sell or hold the property depending on market conditions.
When is the last time you earned 12% on your cash in a mutual fund or bond?
The advantages go on and on… I haven’t even scratched the surface of this topic, however, I encourage you to learn more about Arizona investment property today.