Here is our September 14th, 2020 Email Update about Real Estate in Northwest Atlanta (primarily Woodstock, Canton, Roswell, Acworth, Alpharetta and parts of Marietta.) We hope you and your families are healthy and well in these unusual times.
Covid 19 and Politics Still Dominate the News. Schools and Covid remain daily news items. Cobb County announced Schools reopening for in person learning October Fifth one day and cancels football games the next. Cherokee County which allowed in person learning in August was subject of nationwide news with the need to quarantine over 1100 students, mask less students, and two high schools shut down completely. It’s a hot mess with no easy answers.
Politics rears its head over money. Fulton County has the mayors of its cities threatening to sue over federal COVID relief money. Mayors want to help businesses. The County wants to stockpile Personal Protection Equipment.
If you have a tenant having trouble making the rent there may be help on the way. This is critical in that it is impossible to practically evict a tenant current for non-payment of rent. Cobb County is about to pass a bill that will offer rental payment assistance.
Overall in the housing market we are seeing better activity than expected with all that has gone on. Sales prices year-to-date in 2020 compared to the first eight months of 2019 are up in every area and the numbers of sales has declined. Of note is that the numbers of sales differential has declined in all or our markets – what I’m making that mean is that people are seeing the value in Northwest Atlanta (particularly Canton were homes had a Median Days on Market of 21 days.) For our region sales prices rose an average of 6.55% while the number of sales dropped 4.85%. All real estate is hyper-local and if you’d like a professional analysis of value or your property at no charge let us know (contact info below)
.png)
Top 7 Reasons to 1031 Exchange
#7 To pull equity out tax-free by refinancing. One of the primary advantages of a 1031 exchange is to defer having to pay tax that otherwise might be due. One disadvantage is that all of the proceeds must be reinvested in the new property to defer all taxes. Investors can convert their equity into cash by completing the exchange using little or no leverage on the replacement acquisition. Then subsequently pulling cash out by refinancing the property. The refinancing proceeds are not taxable.
#6 To transfer a greater amount of wealth to your children through a step up in basis. When you sell highly appreciated property later in life, it lessens the value of your estate because of the tax that was paid. It also fails to capitalize on the principle of compounding. A 1031 exchange is the perfect tool to maximize the value of your estate and build greater wealth for your heirs. Additionally, upon your death, your heirs receive a step up in basis, so tax is never paid.
#5 To upgrade the quality or return on your current investment. Sometimes a property doesn’t perform as expected or the return starts to decline. Sell the underperforming asset and replacement it with a property that has a better anticipated yield.
#4 To move your property from one geographic location to another. For investors who are moving to a different state and want to take their investment property along, a 1031 can help accomplish that goal. Other investors may be tired of the long miles between three different rental houses they personally manage and want an easier trek. Through a 1031, they can sell the properties they own and buy property in a location that better suits their current lifestyle.
#3 To sell management intensive property and buy more of a passive investment type property. For the investor who personally manages rental homes, or other multi-tenant property, the thought of owning a larger, professionally managed investment can be very attractive. Using a 1031, they can eliminate management headaches by exchanging into a triple-net leased property where the tenant takes care of everything or into a fractional interest in a larger commercial property that is being professionally managed.
#2 To convert an older investment with maintenance concerns into a brand new built home. Right now there are areas in Northwest Atlanta that have new homes for around $250,000 that rent for around $1700 a month providing a safer place to own and better returns to than a 40 to 50 year old home. We’re seeing 6% cash on cash returns.
#1 To build much greater wealth through compounding, time and leverage. Exchanging allows you to keep all of your money working for you— not only now— but most importantly, into the future. There is a reason that Einstein said that compounding is the most powerful force in the universe. It has made many a millionaire. Exchanging allows you to keep your equity working for you into the future.
I’d like to invite you to a private meeting with me to discuss any real estate related questions you may have regarding rent rates, handling problem tenants, exploring whether you should refinance, or sell. We can also show you some properties we think will prove to be good investments. Simply give me a call at my office 770-726-1454 or email me at mike.stott@mac.com I promise to give you honest information, un-thought of options, and proven solutions; with no heavy handed sales pitch.
For those looking for something to do in the midst of all this – here’s 8 waterfalls to visit in North Georgia – call before you go.
