Mohamed Ibrahim’s Blog

The reason to sell or buy real estate should be the need to do so. Either you moved due to work, you have a loan that will reset and you won’t afford it any longer (although you can also try refinancing), or you’ve got a bigger income and can easily upgrade to a larger home.

Don’t sell or buy real estate just because you’re afraid of the market. That’s my opinion for the everyday person - not the investor.

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Too many people mistakenly make themselves liable to pay capital gains taxes when they exchange an investment property with another. They simply haven’t been told about the 1031 tax exchange, the law which enables you to reorganize your investments without actually paying capital gains. Lots of people also mistake the 1031 tax exchange as a way by which they will not pay taxes well they say taxes and death you can’t run away from them. Simply and in summary, the 1031 tax exchange tells the IRS that you really did not stop investing, it is just that you found a better investment and re-organizing your money. That said, it means that you’re not going to take any money out of the property.

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