There are many great ways you can reinvest the proceeds from the sale of your Oklahoma City house. In our latest post, we explore some options to make your new found cash work for you!
People sell their home for all sorts of reasons. Sometimes the cash is needed right away to pay a debt, and sometimes they find themselves with an unexpected surplus available to use elsewhere. Instead of spending this money on material objects and things that come and go, why not reinvest your earnings into something that will benefit you down the road? Below we will discuss some of our favorite ways to reinvest the proceeds from the sale of a Oklahoma City house!
Real Estate Crowd Funding
A great way to reinvest the profits made from your Oklahoma City area house, is to put the money into a real estate crowdfunding opportunity. You’ll want to research any investment before sinking your money into it, but investing in a real estate crowdfunding opportunity can be a passive and hands-off investment that can really pay off.
Crowdfunding is a way for business owners to raise funds, not by asking one investor for a big investment, but by reaching out to a wide pool of investors who each contribute a small amount of money. The main difference between crowdfunding and more conventional methods of raising money is the medium used, as crowdfunding is typically performed online.
Real estate developers have embraced crowdfunding as an alternative to more conventional ways of financing property. For example, large developers use crowdfunding sites to attract investment from groups of approved investors, whereas small business owners have launched campaigns to raise funds for smaller investment deals.
There are simplistic examples of this. Yet these are the types of deals you can invest in by crowdfunding in real estate. Mid-market commercial properties have yielded high returns. But, like any project, putting the money into crowdfunded real estate deals has their pros and cons.
There is no greater investment than that in the future of your children. By contributing to a 529 plan or a designated college fund, you’re not only contributing to your child’s future, but you are also teaching them a financial lesson. The money placed in a 529 plan will grow tax-free, and will not be taxed when the money is withdrawn. Many families utilize these savings plans for their children ahead of time, so they are not blindsided by huge bills when their children begin college careers.
529 investment plans expand on a tax-deferred basis and contributions are tax-free when used to pay for eligible education expenditures, including college tuition fees, books and supplies, certain room and board costs, up to $10,000 in K-12 school fees each year and up to $10,000 in student loan payments each beneficiary and per child.
Eligible 529 plan distributions are also exempt from state taxable income, and several countries provide a State income tax deduction or a Federal income tax credit for 529 plan contributions.
A 529 plan account may be opened online or through a licensed financial advisor. 529 plans offer the same benefits to all families, regardless of their household income or the amount they contribute. You can participate in almost every 529 plan, no matter where you live or where your child goes to college.
A Rental Property
When selling one home, it can be a great idea to reinvest in another. Not only will you avoid capital gains taxes this way, but you will also be able to find a rental property that really performs and generates a substantial profit for you. If one home or investment property isn’t working, maybe it’s time to try something different! When you find the right rental property in Oklahoma City, you’ll be able to generate an almost passive income, building on the proceeds you have received.
Residential rental properties are also more available to newcomers because they are less costly. Less capital is required in the first place, so this also means it’s easier to get financing. Although there are variations, residential rental properties are also usually easier to handle. In most cases, handling one tenant is simpler than handling 20.
The biggest benefit of owning a rental property is that the tenants can provide you with a direct income stream. Those monthly rent checks should go directly to your business account, hopefully, more than offsetting any monthly expenses.
Buying rental property is a big investment and can be a profitable investment.
The real estate market seems to be full of milk and honey — especially for those who know how to evaluate real estate deals. When you have an eagle eye, you ‘re going to cash out high, and buying a rental property is just one of many ways to do that. Although this might not be a walk in the woods, the average owner of the rental property knows that it yields the best results.
Becoming a landlord in this day and age will happen with a finger-snap on the rise of the Internet, because there is always valuable knowledge to help you. From finding the right property and analyzing its current value, to screening tenants-everything can be done in a simple and efficient manner.
Rental income is also a good source of passive income. You may buy a rental property company for years, produce a large net worth, and use cash profits to help a savings fund — or even pay off your rental income mortgage.
If you sell an underperforming rental, you can use the funds to improve your primary residence. Building equity in your home as well as adding a feature you will personally enjoy is never a bad thing. Whether you want to improve a dated kitchen or repair an old roof, now is the time to get those things done. While you might be faced with capital gains taxes when you choose to spend the money on improvements, you will be able to take a deduction for your home improvement costs. Plus, in order to face capital gains taxes, you would need to generate hundreds of thousands of dollars in profits.
Landscaping outside your home is the first thing people think about your house. By refreshing the exterior of your house, you can easily give it a whole new look without investing a significant amount of money.
One of the best ways to improve the beauty of your yard is to add some flower beds. Such basic gardens can include easy-to-grow perennials. Try to paint your front door in a vivid contrasting color to give your home front a confident feel. Only make sure the paint you use is made for exterior surfaces. For a more welcoming feel, you can also add some comfortable patio furniture and string lights to give your guests a different place to relax and enjoy the weather.
New flooring will also add value to your house. If you can afford to invest more, it’s better to upgrade to hardwood floors or refinish those in your house. Real estate brokers agree that hardwood flooring homes sell more money than homes without it. It is therefore wise to invest your tax return in new hardwood flooring.
Even if you don’t have any plans to sell, the improvements will make your house more liveable.
Add years to your property: a well-maintained house can last about 80 years, but some housing companies built 40-50 years ago are no longer viable. Although the quality of construction is the primary determinant of how long your house will last, proper maintenance and home renovation are no less important.
Pay Off Other Debts
Do you have high-interest debts weighing you down? Now is the time to clear them up once and for all. Paying money to borrow money doesn’t usually make sense. While carrying a mortgage can actually help in some financial situation, but having a high-interest loan or credit card doesn’t.
Paying off the debt means reducing uncertainty, reduced risk, and better capacity to deal with personal crises, recessions, and depressions.
Behavioral economics has to be taken into consideration with your decision — you and the financial condition are the factors that matter most. If your debt is stressing you or you have a substantial unpaid balance, put all your energy into reducing it. In the other hand, if you just have a tiny amount of debt due to low interest rates, it could make more sense for you to let the debt live for a while and build up your savings.
Before you go and spend all of your proceeds, don’t forget about the looming tax man. When you reinvest your proceeds into a “like-kind” investment, you will be able to avoid capital gains taxes. Always be aware of your tax consequences when you reinvest the proceeds from the sale of your home. You should always consult with your financial planner or CPA before making any financial moves.
Learn about some great ways to reinvest the proceeds from the sale of your Oklahoma City house! Get in touch with us today to learn more! 405-395-2085
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