Simple Tools for Creating Value (Part 2 of 5)

Creating value in real estate is not a mystery. In part 2 of this series we will look at several additional ways in which we at Rho Orion Investments Inc.recognize and create value in real estate.

  1. Tax Benefits–There are many tax advantages unique to Real Estate. While individual purchases may vary, almost all purchases offer capital depreciation, deductibility of expenses and deductible mortgage interest.

 

  1. Tangible, Concrete Asset– Investors are purchasing a real interest in a real asset with underlying value (land, improvements and chattels) independently verified by a state agency through property tax assessment, market comparables and simple business evaluation tools. Unlike a stock or mutual fund whose value lies in its perceived trading value, Real Estate has real value. Unlike other investments, a Real Estate investor is buying an operating business with a historical operations record. The business and the underlying asset (the buildings, rental contracts, incomes and expenses) can all be evaluated, measured and compared to arrive at a reasonable purchase price. Who among us can predict a stock or mutual fund with the same certainty? Recent records show that not even professional brokers and agents can.

 

  1. Property Management–Due to the number of units in an apartment building we can afford to have professional property management that handles the on-site and tenant matters. Good management reduces risk, increases value, foresees and mitigates problems and ensures that tenants and investors sleep well every night.

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