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How to Invest in Property the Safe Way

Learning how to invest in property is a great way to also learn about safe investments. Investment groups and individuals can learn from each other. Any new business investment venture, whether silent or active, should start with a goal plan. Always consider the source of the information that you operate from for the best overall property investment advice.

Sell a Home

One of the safest ways to invest in property is to purchase a single family home and plan to sell it after living in it for two years. Under the Taxpayer Relief Act, purchasers could exclude a percentage of the capital gain earned so that it could be reinvested into another home. This can be an investment boon because the sale of the house could be virtually tax free. See a tax adviser who is familiar with real estate taxes to plan out the structure of this type of venture.

Home Sale Qualifications

To qualify, the home you are selling must have been your primary residence as a couple for at least two of the prior five years. While those years need not be consecutive, if the home is rented out for over three years, it would be necessary to occupy it once again after that (for at least two years).

Residence Rentals

Another way to safely invest in property is to purchase a home and rent it out rather than sell it. This can be particularly fruitful in a soft market. You can find investment money to fix houses by refinancing one that you already own. You could also decide not to sell your principal home and make it a rental property instead. When this happens, the new home you purchase can become your residence so that you could once again qualify for a lower interest rate on an owner-occupied dwelling. Renting a residence is one of the safe property investments that many average people can afford to do easily and profitably, regardless of the sales market.

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