9 things you should know about Investing in an Opportunity Zone
What is trending in real estate and investing? In the wake of the United States’ fading flip-a-palooza trend (thanks HGTV) we wonder what will be the next big trend in real estate investing.
Please meet: The Opportunity Zone.
I recently attended a Real Estate Investor’s Club meet-up and the Opportunity Zones were of course a common discussion unfolding at many of the little huddles that make up these get-togethers.
In today’s global market and with information being so readily available, people indeed look to invest in the next real estate trends. Going into 2019 the Opportunity Zones are a hot topic and for good reason. The full scope of the opportunity is not yet fully understood by most, as it is a new federal program and details are still unfolding. As this is a 6 trillion dollar market, investors want to be in the know. So let’s take a peek at what we do know.
Benefits of investing in Opportunity Zones
· Value plays: growth potential in Opportunity Zones may be stronger than average and often have enormous potential just from a value growth position.
· Revitalizes neighborhoods: There is nothing more rewarding than doing your part to bring back opportunities to people and areas that have been less fortunate. Doing this with the great ROI potential on an investment can be a great win-win.
· Tax benefits to you. ROI on an investment grows exponentially when you can capitalize even stronger on the third wealth building principle (Tax deductions)
· Tap into a $6 Trillion dollar market: the largest federal community initiative ever created.
What exactly is an Opportunity Zone?
Opportunity Zones is a term derived from a new federal program, which is designed to revitalize economically distressed communities. These communities exist throughout the country, and in all 50 states. The government can only do so much to build up or re-build these communities, and dependent on local governments and investors to do their part of infusing the economy in their own communities.
It is my belief Congress is recognizing that local governments and the private sector are more effective and more resourceful at building local communities than the federal government programs are, hence the reason for this tax incentive to cajole the private sector to do what they do best.
Why Opportunity Zones can be a win-win for everyone
Investors enjoy win-win opportunities as a vehicle to grow their investment portfolios and that’s of course the key to the success of the program.
Keeping it simple, the goal is to give tax incentives to smart investors who want to revitalize distressed neighborhoods while communities receive these benefits:
· New Jobs are created
· Higher paying jobs are generated
· Property values climb
· Government receives larger tax revenue
· Investors receive tax incentives for doing so
So much to know! Since we here at HTBUSA are not tax professionals or politiwonks, this is a great time to defer to the IRS for more information. Check out these Opportunity Zones frequently asked questions put out from the U.S. Government newsroom website. You can also chat with your tax professional whether or not this is a good program for your portfolio.
How can you be involved in Opportunity Zone investing?
At “How to Buy USA Real Estate” we are always in search for the latest trends in Real Estate. We network and study these opportunities every day. Just like with ANY INVESTMENTS, while they can be lucrative investments, there are NO GUARANTEES, and may not be for everyone. If you wish to stay in the know, we will have regular updates for those who have interest in investing in these Opportunity Zones. If you would like to be in these regular updates subscribe here to receive the latest insights.