Investing in Palo Alto Area Real Estate
Real estate investing in the Palo Alto Area is an excellent addition to a well balanced portfolio. A real estate investor in the Palo Alto Area can expect an appreciate rate of about 8% per year. Click here to see overall real estate appreciation rates by city. Job creation by high technology companies creates an economy that pulls the real estate prices steadily upwards in the area . The highly educated and highly paid tech workforce also pushes real estate prices upwards, particularly during tech booms, when stock options come into play.
Real Estate in Palo Alto, Menlo Park, Los Altos and Mountain View shows the strongest and most consistent appreciation rates in the area and the nation. Low rental vacancy rates, little land upon which to build new homes, combined with property tax rate increases limited to 1 % a year make investing in Palo Alto Area real estate advantageous. Like New York City, even in recessionary times, there is always strong demand for housing, with the demand exceeding the supply. Generally most real estate investors make their money through price appreciation rather than through income cash flow. Most investment properties in the area show a cash flow within three years. Investment properties in school districts with high API Scores appreciates at the best rates.
Flexibility of Investing in Real Estate: Real Estate vs. Stock
Investing in Palo Alto Area real estate rather than investing in stock allows greater control and flexibility. Palo Alto Area real estate investors can:
More easily interpret trends
Buy or sell at any time
Manage property independently, without brokers or fund managers
Defer Capital Gains Taxes indefinitely
Cash out of real estate investments without penalty, regardless of age
Hedge real estate investments by holding property in several markets
Take advantage of 1031 exchange for wealth building and tax sheltering
Save on taxes—the top tax rate on real estate investment gains is lower than the top income tax rates on money taken out of an IRA or 401k or even regular income
Real Estate Gifting
Passing on wealth to the next generation is much less of a hassle when investing in real estate. 1031 exchange allows real estate investors to withdraw profits without penalty or capital gains tax, making it easy to fund education. Investors can also move real estate equity to children or grandchildren every year without tax liability.
Real estate gifting is also an excellent way to help students and recent graduates establish a tax base and afford housing in the Palo Alto Area. Held investment property ends up being more than just an asset, and can still be used as a home while it appreciates.
Real Estate Investments…. Proven Path to Wealth Creation
Investing in real estate in the Palo Alto Area is a proven path to wealth creation. Real estate investors can build up income generating property that matches nearly half of their annual income – all from non-work activities. Investing in real estate allows you to retire whenever you decide to, with half of your income already in place, as well as a home in the lovely and exciting Palo Alto Area.