Michelle Millikin

Archive for the ‘Maximizing a property’s potential’ Category

There are some that hold the opinion that the Mortgage Interest Deduction (MID) should be eliminated, or potentially reduced, to increase our tax base to offset our country’s budget deficit. I, personally, am opposed of such a notion because I fear it is clouding the facts to the overall benefits of this deduction to the economic stability of the country.

According to Lawrence Yun, Chief Economist for the National Association of Realtors, home owners pay 80-90 percent of the income tax in our country, and among those who claim the mortgage interest deduction, almost two-thirds are middle-income earners. This means that the people who benefit from this deduction primarily are those same people who are footing the majority of our tax bill in the first place. If we eliminate the deduction we would be essentially making the tax payers pay more in taxes. More importantly, buyers desire home ownership over renting because of the tax deduction incentive. If that incentive is removed, the value of home ownership drops accordingly.

Yun estimates that this elimination of the MID would trigger a 15 percent drop in home values as buyers discount the value of the deduction in their offers. I agree with Yun: whatever deficit reduction through altering or eliminating the MID would “come at an intolerably steep price: trillions of dollars in wealth destruction and a new uncertainty in what has long been recognized as a bedrock of our economy.”

Everyone knows the Wausau Real Estate Market is volatile and on the low-side. I cannot stress the importance of recognizing the opportunity to build wealth that has been laid out before us!

These economic times are the times in which some of the wealthiest people in history have gained their riches – and the few that understand the importance of taking advantage of a “down” real estate market lead the pack.

There are four ways in which to build wealth through income investment property. The first is your basic CASH FLOW.

The second is the PRINCIPLE REDUCTION which capitalizes over time as the mortgage is bought down. You see this return when you sell the property.

The third is TAX SAVINGS. This is the big one because many investors appear cash poor and pay not income taxes, yet are building a huge portfolio behind the scenes, with a tax shelter to help them.

The fourth is APPRECIATION. This is the most speculative reason to invest. No one has a crystal ball and we can only use history to project into the unknown future. Yet, if held and analyzed properly, there is definitely appreciation value to each property, if managed well.

So, New Investors in Wausau, I strongly suggest researching and educating yourself so you don’t miss out on this outstanding wealth-building opportunity, right in your own backyard.

To discuss Wausau Investment Property in closer detail, please give me a call. I, as always, would be happy to help!

Michelle Millikin 715-581-9013