Tuesday, November 13, 2007

'Mailbox Money' Approach Opens An Investors' Mind To Possibilities

Recently, our office represented out-of-state buyers who purchased a four-story office building in downtown Columbus. Downtown revitalization here is such that strong potential exists to take the 1st and 2nd floors to office space, and the top two floors to residential. Downtown living is hot in many cities. While the high-rise/loft residential market has softened here somewhat, the city still is providing 10-year property tax breaks if you buy a downtown condo or loft.

Would that be enough to get you to invest? Who knows? My point is that there are many different types of investments. Office, retail, industrial, multifamily, and combinations of all. There are office condos, multifamily over retail and/or office. The buyers of the building here, at the corner of Gay and High Streets, saw that the property was being offered for auction. They took a look in advance and bought it at the sale.

It's all about your comfort level. In the case of this building, being out of state, the new owners will hire a management company, and our group will be presenting a management proposal for them to consider. A lot of potential investors don't initially consider real estate a viable possibility at first, because they don't know about "Mailbox Money." Their concern is "how will I take care of the real estate?" Mailbox Money is the concept where an investor does not have to worry about the property -- a management company takes care of all leasing, management, maintenance, etc. An investor merely receives an income check each quarter and a status report.

The bottom line? Find an agent you trust, find an agent with the heart of a teacher -- not a salesperson -- and give them the opportunity to help you understand the many income and exponential tax advantages of different types of real estate. Then, exploit that agent's understanding of the marketplace to help you find a property that meets your budget, and helps meet your financial goals. And don't be stuck solely on income generation. Income is highly important, but the tax advantages on the back end of the transaction are enormous.

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