Newport Beach Homes – Harbor Realty

Investing in the Orange County real estate market has historically been one of the most secure and profitable forms of investment.  In theory it all sounds very simple; buy an Orange County property at a low price, enhance it, and then sell it.  In reality things are slightly more complicated.

Capital Gains Tax & 1031 Exchanges

The first major pitfall for Orange County property investors is something known as capital gains tax.  Put simply, if you make a profit from the sale of a property, the government wants their share.  The impact of this tax can be somewhat reduced through tax deferral, known as a 1031 exchange, which sees you disposing of one property and acquiring another.  The entire deal is then seen as an exchange and not a sale, thus deferring the capital gains tax debt.

Quality Home Investments

Many types of residential property in Orange County can make excellent investments.  The more desirable property types such as single family homes and apartments are particularly safe investments.  Commercial property, if approached correctly, can also make for a good investment.  Let’s not forget that even if it takes some time to resell a property you have acquired for investment purposes, you can still generate revenue through short term rental.  The rental laws in California are flexible enough to ensure that your property does not need to be tied into long tenancy rental agreements.

Finding good investment homes in Orange County is not as difficult as many people would have you believe.  Any area, such as the Orange County real estate market, that witnesses a good growth rate in its local economy, invariably presents many great investment opportunities.