With inflation exceeding 1%, standard investments which return about 2% may not even keep pace. Interested in 9% or more? While no one can guarantee any specific return, some of my clients are getting returns exceeding 9%. If this sounds interesting to you, then check out the spreadsheet at right. The numbers are typical for my clients.
What would happen if you bought the property, held it for 5 or 10 years and sold it with full tax consequences? I created a spreadsheet that answers this question. I would have included it here but it is a large page and would not fit. You can access it by clicking on the image below. Before you click the image I have a few comments. In creating this spreadsheet I made a number of assumptions including factors such as purchase price, tax rate, etc. The assumptions are listed on the left hand side of the sheet. These may not match your specific situation. If you would like to modify the sheet so it matches your situation, contact me and I will send you the actual spreadsheet.
Click to display the spreadsheet.
How would you compare this to a CD? A Google search turned up CDs with return ranging between 1.5% and 2%. As a comparison, I put together the following table based on a Google search for the highest paying 5 year CD. The result was a CD from USAA which pays 2.72% compounded monthly. If you would like a copy of this spreadsheet, send me an email. According to an online CD calculator the interest earned at the end of the 5 year period on a $39,500 deposit would be $5,747 BEFORE taxes. At the end of the same 5 year period with the above property, your gain AFTER taxes would be $28,889; over 5 x the return from the CD.
One other advantage of real estate is inflation. In inflation kills CDs because you are locked in at a fixed rate and you can only get interest rates as high as 2.7% if you are willing to lock your money up for 5 years. How does inflation benefit real estate? I see three ways:
Contact me if you are considering buying or selling Las Vegas real estate. You will be glad you did.
...Eric
Eric Fernwood
RE/MAX CENTRAL
8400 W. Sahara Ave
Las Vegas NV 89117
Email: EricFernwood@gmail.com
Website: www.EricFernwood.com
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Cell: 702-358-8884
Fax: 702-202-2020
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