subject: Because The Real Estate Market Place Cools, The Profit Possible Of Home Ownership Has Cooled Also. [print this page] As the actual estate current market cools, the profit possible of house ownership has cooled as well. Here's a technique known as "follow the builder."
It is fairly simple to make a profit whenever you sell your house if the marketplace is rising sharply like it has been in most of the country for the last 3 years. It becomes much more difficult when a hot marketplace slows down. It's very tough to make a profit on the sale of your home when prices are falling.
Is there a method to be relatively sure you will make a profit whenever you sell your home? There's below all but the most negative market conditions. In fact, I've seen young, energetic couples use this maneuver multiple occasions once they don't even have to move.
Follow That Builder
In many areas of the nation, there are builders who develop hundreds of homes every year inside a fifty mile radius of each other. They develop entire communities or are one of 3 to 5 builders who build whole communities around large employment centers. This present you with an important opportunity.
New Community
Builders will usually sell first phases of communities for significantly less than later phases. On 1 hand, they have to get the cash flow moving. On the other, it's tougher to sell at high costs since the community typically consists of dirt lots and construction equipment. Put the hands together and you have an excellent profit opportunity.
The concept would be to get in on the very first phase from the build out. You'll purchase the home at a discount, which provides you built in equity. Because the community is built up, you sell the house for a profit at a greater cost. While you're performing this, you maintain tabs on the builders projects and find an additional location where you are able to do exactly the same factor.
You'll end up living in every house for a year or much more and picking up good profits along the way. The only real downside is you need to move repeatedly.
Tax Consequences
I've noticed this function nicely for a quantity of people who have carried out it more than as soon as. Nevertheless, you need to be aware that generating profit this way can have tax consequences. You need to discuss your plans (including projected timing and profit possible) together with your tax professional so that you're ready to deal with any tax consequence.
