Hey, it's Steven. Today, I'm going to answer the question: How can we profit using real estate in a recovering market? Typically, during the recovery stage of the real estate cycle, there is some housing inventory, newly built housing inventory, that needs to be taken out by the market - needs to be bought by the market. So, during that recovery period, that inventory starts to be bought by the consumers. In addition, the vacancy rate decreases throughout the recovery period. Prices are typically flat or increasing during this time period. The recovery period usually lasts as long as the inventory or the excess inventory lasts. So, as people start to buy homes, there becomes create space in the market, and then builders start to become interested in building again. That's really when the recovery period starts. Now, how do we succeed in this real estate recovery period? Well, my investor partners and I like to focus on marketing. So, what does that mean? It means really nice pictures. Sometimes, it even means staging the properties. We're really trying to make it look very, very attractive - our suites very attractive for our tenants to live in. And that helps attract great tenants. What we also like to do during this time is start to increase the strictness or the depth of our screening, and that ensures that we only get the best tenants and that they're going to last a long time. Sometimes during the recession, it's a little bit harder to be really strict with the screening because there just aren't as many good qualified tenants available. But we definitely start to increase screening during the recovery period. Also, the recovery period is a good time still to look at property because prices could be flat or still recovering,...
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Recovery period real estate Form: What You Should Know
D). The 20-year recovery period of the GDS, defined as any taxpayer's capital cost over the period after June 13, 1996, when the property was in service. It is applicable to residential or nonresidential real property, including manufacturing properties, buildings and structures used primarily as a residence; any building for a business purpose; and any building for public accommodations or for purposes of leasing such property. For property of a type not defined herein, each year of such property may be treated as a separate GDS. In the case of property subject to an option under IRC Section 613 or 1431, the 20-year recovery period will also apply to such property. The 20-year period also applies to leased property subject to an option and to property used by the taxpayer, or by an affiliated person, as a business asset under Sec. 179, if the property is not used in its intended business. It applies also when the property is used in a trade or business other than its intended business. This section applies to any taxpayer whose basis in the subject property exceeds its fair market value when the property was placed in service by the taxpayer. This section does not apply to property described in section 1040G(a)(3)-(4) or IRC Section 164(c)(2), where (1) the basis of the property is zero or (2) the taxpayer has a constructive trust interest that vests under a valid election of the taxpayer made before December 1, 1999, and that has not vested under this paragraph because of the revocation of the election by the beneficiary. In all other cases, the period for recovering the full cost of the property applies. See also section 6621(f)(4), which defines the accelerated 30-year recovery period for qualified real state-owned property placed in service before August 4, 2004. See the discussion of section 469(e) in Publication 1046 or Publication 526, General Revenue Procedure, for rules on how the 30-year period will generally apply to property that requires the adoption of alternative depreciation systems. Rev. Pro. 2017-17, 2017-56 I.R.B.
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