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Expert Answers to Biz Questions

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

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Profiting from Property

 

If you own a piece of real estate--that you don’t actually live in yourself--then you might be exploring what to do with it! Should you sell it off and keep the cash? Should you rent it? Or should you do something else entirely?

Real estate can be very profitable--and very complex. There are a lot of moving parts in this situation, including tax implications related to the estate, the location of the property, how the area is zoned, and what kind of property taxes apply to it. And that’s to say nothing of mortgages and other financial complications!

Consult with experts

Your best bet, therefore, is to consult with attorneys. For instance, if you’ve just inherited property from a deceased relative, work with his or her attorney first. They should be able to lay out how taxes will work and how selling the property could affect that. If you’re considering keeping the property, it may be a good idea to speak to an attorney who specializes in real estate.

Real estate is worth a lot of money

For starters, real estate is an asset. Property has value, and that is value that you can draw on. You can sell the property now and reap the cash, or you can hold onto it and sell it at another time. It may make sense to sell it at a different time depending on your tax situation--a tax attorney can tell you more.

Another reason that it might make sense to sell later rather than sooner: real estate is an investment, not just an asset. It can actually increase in value, helping your wealth to grow. It can decrease, too, of course, so you don’t want too much of your net worth locked up in one property that you’re not living in. But owning property can be a part of a balanced strategy to save money and grow wealth.

Use it to earn money

In the meantime, your property can also earn you an income. Assuming you can do so given local regulations, you may want to consider renting your property to tenants. Renting can be a big money-maker--so much so that it sometimes makes sense for homeowners to rent their old house instead of selling it when they move. Being a landlord isn’t an easy job, but by using services like online rental application software, you may be able to streamline the process a bit. You could also outsource key tasks by, among other things, relying on real estate agents to show and rent the property and by hiring a property management company to deal with maintenance. Of course, you’ll still have demands on your time if you do all of this, so only you can decide if you want to juggle landlord duties with your school schedule.

We’ve given you the basic information, but you still need tailored advice from experts who know the details of your particular situation. We strongly recommend that you speed to real estate experts and any legal aid. Good luck!

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