Let's begin our discussion with a few definitions.
An Asset Vs. Liability
Asset: Puts money into your pocket Liability: Takes money out of your pocket
The home that you live in is a liability because it takes money out of your pocket every month...unless you have a home-based business there. The write-offs alone are worth it!! You also under the current codes, have huge tax benefits for hosting a home-based business.
(Here's a free nugget and idea.) For those of you who are in the handmade beauty product business, add hand sanitizer to your menu and capitalize on demand while meeting the needs of your clientele.... AND KEEP CLEAR RECORDS. Why? For those who will access Small Business Administration (SBA) Loans, these records will be vital in accessing stimulus funds. By doing this, you position yourself to make immediate sales, get tax write-offs and potentially other breaks and incentives for supplying demand during our country's pandemic.
So this potentially changes that liability into an asset!
In thinking about your rental portfolio, a rental property is an asset because it puts money in your pocket every month. This is self-explanatory.
But if you're savvy, you see the coming market demanding creativity and strategic planning to remain profitable! A couple of strategies I can foresee being useful are seller- financing, subject-to agreements and sub-leasing.
My point? The asset is only an asset if it remains profitable.
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