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Paying taxes is always a tedious thing to do; that is why some Americans specifically look for tax-free states to call home, so they can avoid one of the biggest contributors to their annual tax bill, especially if they want to improve their finances. Although they can save money in one way by living in income-tax-free states, people are risking to pay more in other ways because losing revenue is usually compensated with other taxes. Keep reading to understand what it means to live in a tax-free state and if it can be financially beneficial to you:

Which Are the ‘Income Tax-Free’ States?

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It’s not a secret that numbers drive real estate investment decisions. But the real question is, which metrics are valid? Which metrics matter? Depending on your investment goals and property type, some metrics are more important than others. The following metrics/terms real estate investors commonly use when making portfolio decisions:

1. Capitalization Rate (Cap Rate)

Cap rate is mostly used for apartment complexes and commercial buildings. Capitalization rate can also be used for houses and small multifamily properties, but the flip side is that operating expenses are unpredictable with houses since you can’t know how often or how bad your turnovers may be. Cap rate allows you to compare properties in the same asset class with different characteristics that make direct comparison impossible. The disadvantage of the Cap rate is that it’s only a snapshot. …

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If you have an investment property and are thinking about selling it and purchasing another property, you need to know about the 1031 tax-deferred exchange. This procedure allows the investment property owner to sell it and buy like-kind property while also deferring capital gains tax. In this article, you’ll find a summary of the main points of a reverse 1031 exchange — an often overlooked sub-section of a 1031 tax-deferred exchange.

What Is a Reverse Exchange?

A reverse exchange is a property exchange when the replacement property is bought first, and then the current property is sold or traded away. It was created to help buyers buy a new property before being selling or trade-in an existing property. This may allow the seller to keep the current property until the market value increases, thereby choosing the right time to sell for maximum profit. …

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Theatres are closing all around the world. No one knows when projectors will be turned on again. Cinema is not the only industry under threat in the time of the pandemic. However, there is some irony in the fact that many people have turned to streaming platforms to get entertainment to fill the long hours of social isolation, often watching content that was made initially for theatres. Audiences have been consuming more and more films at home anyway. …

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Since online retail is growing, and there are not enough industrial buildings, people are forced to find new ways of storing items. Although the demand for big-box industrial space still exists in the urban fringe, the last mile warehouse is about getting all you need close to the customers. After all, you can refill it with trucks from your regional distribution center whenever you need it. Look for spaces in the thousands of feet in buildings that have similarly sized floor plates.

Your last mile warehouse does not need to be an industrial space. With a limited amount of available warehouse buildings, last mile users are now switching to whatever they can find. This means vacant big box retail space could be the best option for the last mile industrial needs. …

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Naturally, there’s no such thing as a “No Risk” investment property, but STNLs are no exception, but can mitigate much of the inherent risks. Here are a couple of risks you should consider before investing.

Single-Tenant Property

Although you’ll probably have 100% occupancy with a one-tenant property, also keep in mind that your rental income is completely dependent on only one business. If your tenant decides to vacate the property because of a bankruptcy or to end a lease, your income instantly drops to zero.

This is why, with an SNTL property, it’s very important to find a high-quality tenant whose business plan and business model is proven, and will continue to do well at the location (think legacy brands in QSR and Drugstores, such as McDonalds, Wendy’s, Starbucks, and Walgreens) and therefore unlikely to leave. …

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If you are considering leasing or buying a property, you need to know the difference between Rentable and Useable Square footage.

Usable Square Footage

The usable square footage of an office space represents how much space your firm will occupy. It includes the whole floor area within the walls of the space that you are leasing. This is the number that you’ll have to consider when deciding whether or not an office is adequately sized for your needs.

Rentable Square Footage

The rentable square footage includes the usable square footage and a percentage of the floor space with all shared areas in the building. Communal restrooms, stairwells, hallways, cafeterias, gyms, lobbies, and on-site property management offices can all be included in this number. Since lease agreements require tenants to help with the cost of maintaining shared areas, it’s actually the rentable square footage and not the usable square footage that is used to determine your rent. …

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Walk Score measures the walkability of a property’s address using a patented system. For each property, Walk Score finds hundreds of walking routes to the nearest amenities. Points are assigned based on the distance to amenities in every category. Amenities that are within a 5-minute walk get maximum points. A decay function is applied to give points to more distant amenities, and no points are given after a 30-minute walk.

Walkability is the degree to which a walking distance encourages walking for functional or recreational purposes. …

The main aim of Opportunity Zones is to encourage long-term investments, especially in low-income rural and urban areas throughout the country, and to boost the economy. An Opportunity Zone is an economically distressed rural or urban community that has been identified by state, local, and federal qualifications.

Opportunity Zones offer a great investment opportunity for smart real estate investors. However, investors should bear in mind the risk profile of Opportunity Zone deals, which can be much higher in some targeted census tracts than the exchange. The key is to stay diversified while taking advantage of the capital gains tax relief that is available through the program. …

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In these ever changing times, a retail landlord may find that they are stuck with an empty retail space. Recent retail trends, and the impact of closures due to Covid-19 have made it difficult for brick and mortar businesses to stay profitable.

However, there are many retailers who have found ways to adapt to this new environment. Although long-term creditworthy tenants are necessary– short-term tenants are also a good option, particularly in well-located areas.

Pop-Up Retailers

Stores that sell seasonal products, like Christmas decorations or Halloween costumes are a common sight in many cities. In fact, some business models make a good profit just by opening up a chain of pop-up stores in several states. …

About

Joe Killinger

Entrepreneur-Investor-Founder. Posting tips and insights from my experiences in real estate, investing & entrepreneurship- https://www.joekillinger.co/

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