Podcast Summary
REITs vs Residential Properties: Different Growth Patterns During Property Booms: REITs and residential properties can grow during property booms, but REIT growth depends on the specific properties in its portfolio, while residential property growth is tied to the overall housing market.
Real Estate Investment Trusts (REITs) and residential properties experience growth differently during the boom period of the property cycle. REITs are a collective way of owning property through a company that buys, rents, and manages properties. Shareholders of REITs receive rental income and potential share value growth without dealing with the messy aspects of property ownership. REITs don't pay corporation tax, allowing rental profits to be passed on to shareholders. However, the growth of a REIT during a boom period depends on the specific property assets it owns. The REIT itself is just a structure, and its performance is tied to the performance of the underlying properties in its portfolio. So, while both residential properties and REITs can experience growth during a boom period, the degree and timing of that growth may differ significantly.
REIT performance depends on asset type and use of leverage: REITs investing in commercial property, particularly retail, may struggle during a downturn, while those investing in residential property with leverage can see gains. Consult a tax professional for capital gains tax deferral rules.
The performance of Real Estate Investment Trusts (REITs) depends on the specific assets they hold and their use of leverage. REITs that invest in commercial property, especially sectors like retail that have had a rough year, may not perform well during a downturn. However, those that use leverage and invest in assets that experience growth during a boom, such as residential property, can see significant gains. It's essential to research the REIT's investment strategy and approach it as you would any other investment. Regarding capital gains tax, if you have a small portfolio and plan to move back into the property for a minimum of 6 months to a year, you may be able to defer paying capital gains tax, according to Antonio's accountant. However, it's always best to consult with a tax professional for accurate information.
Misconceptions about avoiding capital gains tax when moving back into a property: Despite common misconceptions, moving back into a previously owned property for a short period does not automatically exempt individuals from capital gains tax. Seek expert advice to fully understand potential tax implications.
The individual in question may not be exempt from paying capital gains tax if they move back into a property they previously lived in for a short period, despite what their accountant may have told them. While they may be eligible for some relief due to previous residence, it's important to seek expert advice to fully understand the potential tax implications. Moving back in for six months to a year does not automatically mean avoiding a capital gains tax bill. Instead, the individual should consult with a tax expert to ensure they have accurate and comprehensive information to make informed decisions. The potential for unexpected tax bills underscores the importance of seeking professional advice in tax matters.
Empower Yourself with Knowledge to Make Informed Real Estate Decisions: Always question real estate advice, understand your financial situation, and consult experts to make informed decisions. Remember, there's no one-size-fits-all answer in real estate.
It's important to question real estate advice and seek multiple opinions before making decisions. In the discussion, Robin Rob emphasized the importance of understanding the market, your financial situation, and the potential risks and rewards of real estate investments. However, she also acknowledged that everyone's situation is unique, and what works for one person might not work for another. Therefore, it's crucial to do your research and consult with experts to make informed decisions. By listening to this podcast and gaining knowledge, you're empowering yourself to ask the right questions and make wise choices. Remember, there's no one-size-fits-all answer when it comes to real estate, so always be open to learning and exploring different options. Stay tuned for the next episode of Ask Robin Rob, where we'll delve deeper into real estate investing and answer more of your burning questions. Until then, have a great week!
