Phoenix Real Estate Investment Strategy to Build Wealth


Sam Elam, Associate Broker

Gilbert, Chandler and Mesa homes and condos for sale are the ideal real estate investment to build your financial future. The highly skilled workforce attracted to the Metro Phoenix AZ Southeast Valley by our medical, tech and aerospace jobs have the income to pay higher rents for quality properties.

Why purchasing Arizona real estate is so appealing:

  • HIGH DEMAND - You don’t need to create a demand for your rental homes - everybody needs shelter to live in – it is a must have - not discretionary. As new jobs are created, we will have job seekers moving here.
  • LEVERAGE - You can purchase Arizona real estate for far less than 100% of its cost, which you are unable to do with any other investment type including – stock, bonds, diamonds, boats, etc. etc.
  • NO COST NET WORTH - Your tenant will help you pay off your investment loan. If you never made a dime owning the property, having someone else paying off the loan is a great deal!
  • QUICK PAYOFF OPTION - If you make one additional payment (all principal) every year, your 30-year loan is shortened to a 25.6-year loan. That's only $811 paid annually on an original $160,000, 30-year loan at 4.5% interest rate. That additional principal payment also SAVES you from paying an additional $22,968.65 in interest over the life of the loan. How’s that for a wise place to put a little extra cash! 
  • TAX BREAKS - While your home appreciates, the IRS lets you depreciate the structure over 27.5 years and accelerate the depreciation of components in the home with a shorter economic life. So you get a tax break while the value goes up!
  • PORTABILITY - Need to move to another area away from the current location of the investment property you own and manage? No problem – you can take it with you… sort of. The IRS is very understanding about this. You can sell your investment property in one area and replace it with a new investment property in another area you acquire for the same or higher value and with the same amount or more debt, within the timelines allowed under 1031 Tax Deferred Exchange, and the IRS will defer taxes on the gain until you no longer replace the investment property you sell. At that point, you must realize gains and recapture depreciation. How’s that for a sweet deal?
  • CAPITAL GAINS - And here’s the kicker… If you do a little planning, you can sell all of your prior investments within a limited period of time, roll the money into your dream home, rent it out for a couple of years, move in and live there for several years and then get the $250,000/$500,000 principal residence capital gains exemption when you sell… or just live in your big, dream home debt free and enjoy the good life you worked and planned for!

Most investors put down 20 – 25% of the sales price and finance the balance. The minimum goal is to at least breakeven after carrying costs that include PITI + HOA + Property Management + Repairs + Reserves. It takes market knowledge, thorough financial analysis and negotiating skill to acquire a property in the right area that attracts tenants and commands the rent to cover all costs. For more information go to Phoenix real estate investments

And you always want to have an exit strategy – when you eventually sell to acquire a better performing investment or liquidate your holding(s). It takes skill to identify properties that will appreciate at or above the norm.

Let’s talk about homes for sale that would make excellent real estate investments in Chandler, Mesa and Gilbert AZ. Call or text Sam Elam at 480-213-1799.

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