Song: Thigh Chi
Artists: Paul Horn / Steve Halpern
My mother had recently purchased two brand new homes
as a means of generating income in conjunction with updating her property portfolio...
and doing so without tax on the sale of one of her properties in California
to buy these (my elder sister had arranged a 1031 exchange).
Both of these homes are the same model...
except one is a left hand lay...
and the other...a right hand lay.
Also...
one has all hardwood floors and one has all tile floors....
except the bedrooms and study (carpeted).
Both are two bedrooms and one study (easily made into a third bedroom)...
and two bathrooms.
Both of these properties are in a gated retirement community.
My mother with her realtor.
This picture is from the dinning nook.
On the left is the kitchen...
and to the right is the study.
All Stainless Steel appliances and a granite counter top.
Each house comes with a hearth room with fireplace.
The master bedroom.
The master bathroom.
The master bedroom closet.
The second bathroom.
The second bedroom.
The laundry room and the door leading into the garage.
The study.
I will be talking with the landscaper in a few days.
Half the yard will be pavers...
and the rest will be planted.
The view outside the home.
This is the second home.
It has tiled floors (bedrooms and study are carpeted).
The man on the left is a representative of the builder.
This was the final walk through before she got her keys as owner.
The breakfast nook.
This counter top is Quartz.
The study.
In front of her second house.
As we were leaving for the night...
I thought this was an interesting cloud.
As I had said before...
one of the surest and safest means of retirement is the ownership
of multiple income properties.
My father had started buying properties many decades ago.
He wanted a secure retirement for my mother...
as he was 12 years older than her.
Although I have a comfortable retirement from my previous employment...
comfortable retirements are simply not available to the vast majority
of working people nowadays.
However...
with the steady collection of income properties...
one may provide his family with a very comfortable retirement
(you must start early in life to realize the most gains).
Even should the economy tank...
people will always need a place to live...
and so, you will be ensured a steady income for life.
You may also protect yourself from capital gains taxation
from decades old purchases by updating your properties using a 1031 exchange
(I had learned this from my elder sister).
On my mother's recent purchases...
she had saved herself approximately $300,000.00 on capital gains tax alone...
and while doing so...
she not only had gotten two brand new income properties...
her new capital gains tax base line is reset
to the new purchase price in the event of a future sale...
instead of the decades old property's accumulated equity
(which had gone up in real value over $700,000.00).
A 1031 exchange is a way for the government to stimulate private investment...
and it is through this that income property owners may continually update
their investments without the burdens of taxation on greatly raised value
through accumulated equity.
An easy way for new couples to start out buying properties...
other than finding that rare multi-unit bargain...
is to buy a modest house to start out in...
one which you may payoff with a 10 year mortgage.
When it is paid off...
rent it out, and you will then have more income to buy
a larger home with which to again, pay off in 10 years.
Do it again...and again.
When you are ready to retire...
you will have a continual source of income...
which by then...
will be substantial, secure, and most importantly...
ever fruiting.
A great way to keep your appetite whetted
is to envision your dream retirement property...
the one you would eventually like to live on for the rest of your life.
And...
by enjoying the simple pleasures in life.
This simple path to self retirement...
is of course...
dependent upon two things:
Time
Base income
Time is self evident in the plan.
It simply takes time to put into effect.
Base income is heavily dependent upon a child
envisioning his future career and getting the education
necessary to become a viable candidate for that profession.
However...
even a modest income may be amplified given time.
For most retired people...
it is too late to heavily modify one's income...
but, this is great advice for your grandchildren.
Even so...
for most retired people...
there is time to buy and payoff a primary residence...
and to then sell and transfer that money tax free (same price or higher)...
into your final dream property
(so long as it will be your primary residence).
One of the greatest gifts we can give our children and grandchildren...
is a solid plan to having them achieve their dreams.
With the constant unknowns of the future...
a person who relies upon his own means of a secure future...
will not only never be without...
he will be living a life which becomes ever sweeter with each passing year.
