Santa Cruz California Investment Properties

Looking to purchase an investment property in Santa Cruz County California? A multi-residential property? See below for just some of the reasons it's a good idea to invest in real estate!

If you're considering selling an investment property in Santa Cruz County Click Here

Leverage

Through the use of borrowed money, combined with a small amount of money of your own, you can control real property. The best leverage most of us can obtain in the stock market is 50%. In real estate, it is not unusual to obtain 80%, 90%, and even 100% leverage.

Appreciation

Real estate is a growth asset and often the largest part of the return is the equity gained through appreciation. This is certainly true in the Santa Cruz County area!

Tax Benefits

Investors are allowed to write-off (within income limitations) all operating expenses, interest on loans secured by the property, property taxes, and the non-cash expenditure of depreciation. Gain from the sale is treated as capital gain and investors have the option of exchanging (1031 Exchange) which, if done in accordance with the tax laws, can result in no recognized gain, thus no immediate cash tax consequence.

Cash Flow

Real estate investments structured with enough down payment, will generate a positive cash flow. As time passes, in most markets, even a highly leveraged, negative cash flow property can turn into a positive cash flow investment.

Equity Build-up

This results from the periodic pay down of the principal amount of the loan. Even if there were no appreciation over the life of the loan, the property owner would end up with a free and clear property, which generates rental income.