Between artificially low interest rates and rising inflation, things are certainly interesting in the housing market (and overall economy). Once interest rates start to creep back up in 2022, what does the market look like for investors?
On this episode of Investing in Real Estate, I’m answering three of your questions on the future of the housing market, avoiding capital gains taxes, and the best ways to put an old 401k to work. Please join me for this Q&A episode!
On this episode you’ll learn:
- How rising interest rates will impact the housing market.
- Ways to avoid paying capital gains taxes.
- What to do with an old 401k.
How Rising Interest Rates Will Impact the Housing Market
The Federal Reserve is saying that we can expect to see a rise in interest rates in March 2022. I actually think this is a good thing for the economy. The low rates we’re currently seeing are artificially low, and have been for a long time. This has made the retail market crazy for homebuyers. But as an investor, I buy during all cycles of the housing market. As long as you’re making a strong purchase with high IRR, you’re going to be just fine.
Ways to Reduce Capital Gains Taxes
There are a few ways to reduce or completely avoid capital gains taxes. The first thing you should do is talk with your CPA to hash out the pros and cons of a 1031 exchange. Other ideas include cost segregation, real estate professional deductions, and keeping track of your improvements. Again, the best strategy for you is going to be personalized, so speak with your CPA.
What to Do with an Old 401k
The best thing to do in this situation is to sit down and see what makes sense, financially. You could pull the funds out, but expect to pay a hefty fee. This may be worth it if you make the right investment. Alternatively, consider moving the funds into a self-directed account.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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