This is the last installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Over the last two centuries, about  90 percent of the world’s millionaires  have been created by investing in real estate. This has created incredible 'political cover' to be a part of that 'millionaire's club'. What I mean is that, so many people have come to rely on real estate for their past and present fortunes, that it is unlikely major legislation would change its tax-advantaged, and political-advantaged position. Today will be a much more abstract topic, it relates to legacies, dynasties and how your blogger sees the world. What defined the  Middle Ages was land . What defined a noble was being a land-lord (as they still are). It is my, possibly unpopular, belief that our country may be on the tail end, or just past the  Pax Americana , a...

This is the next installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.  Today we will cover some of the most common tax reasons to have real estate. This article is not intended as tax advice, please do not make tax decisions based solely on the content here. The biggest tax reason to hold real estate is because it shelters income. The asset produces expenses, most of which are tax deductible, while the gains can be deferred or offset, a common way is by a  1031 exchange , but even if one did not pay it, their long-term 'capital gains' rate is either 15% or 20%, versus up to 37% for federal. When deferring with a 1031 exchange, the goal is to 'defer until death', at which point the real estate will 'step up' by about either $11.4M (single) or $22.8M (married). This means that only equity above this amount is subject...