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|How to make the most money when investing in housing in the United States?
The least tax paid?
Take investing one million dollars in cash to buy a house in the United States as an example, assuming that the net return on investment of the house is 8% (net income of $80,000 per year):
Rent the apartment If you rent the apartment for 20 years, the rental income will be 1.6 million.
After 20 years, the original price of the real estate will be sold 2 million (it is normal to double the value in 20 years).
Net income in 20 years is 2.6 million.
Mortgage loans If you use the property to mortgage, according to 75% of the proportion, you can loan 750,000.
The interest rate is 5%, and the annual interest rate of 750,000 loans is 385,000.
Firstly, the 38.5 million loans can be tax deductible, while the principal and interest repayments of 750,000 loans are less than 60,000 annually, and 20 years principal and interest repayments are made.
Rents are used to repay bank loans, with an annual surplus of 20,000.
In the future, the annual interest rate will decrease as the principal decreases, so your future net income will be more than 20,000 yuan per year.
In addition, you will be able to borrow 750,000 US dollars from the bank, add 250,000 US dollars to your own account, and buy another 1 million commercial shops.
According to the 8% return, you use the second property to mortgage as the first one, and so on.
The same is 1 million cash, through which you can buy 4 sets of 1 million, a total value of 4 million real estate.
The actual investment cash for every 1 million commercial property is $250,000.
Investment of 250,000*4, Annual rent:
80,000*4 Principal and interest:
60,000*4 Annual net income:
20,000*4 = 80,000 Although the net annual return is also $80,000, the same as the effect of scheme A rental property, but in these four properties, you can legally tax-deductible 38.5 million*4=144,000 per year; and 20 years later, you will sell these four properties, even at the original price, will get a return of 4*2 million,8 million!
The return for 20 years will be 80,000 * 20 years + 8 million - 1 million = 8.6 million US dollars.
The above calculation still neglects the effects of real estate appreciation, rent increase, interest decline and other factors.
Actually, the income gap is bigger!
In addition, there are 1031 trading rules.
The so-called 1031 transaction rule is a tax law that the U.S. government encourages reinvestment.
As long as the investment is equal to or greater than the income of the real estate, you can not pay taxes.
Real estate with 1031 exchange deferred tax can be exchanged for more or more.
When all real estate is finally sold and the same kind of exchange investment is no longer continued, VAT will be paid at the same time.
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