Antonio & Alexia's Blog


Discover a Proven Method That Can Save You Money and Almost Guarantees You A Secure Retirement.

What if a good portion of the money you pay in rent, were to be put on a place where you will get some interest and when you decide to leave that residence you get a hefty payoff? As a homeowner, that is exactly what you get. The sooner you start, the earliest you finish.

One of the most basic needs for humans is shelter, having a roof over your head is of primary importance. How do you go about dealing with that issue all your life is very critical to your financial wealth. Renting or owning the place you live in could determine a lot of things when you retire. Owning your house could make this experience one of the most profitable ones of your entire life. After all, when you retire, you might need to have a place of your very own with no mortgage payments and perhaps some income from a few rentals to help you financially. The sooner you start, the better it will be.

Real estate has always been a major part of the portfolio of any millionaire, and a huge part of the assets of a billionaire, you might not get to that level, but that tells you that holding real estate is a good thing. Let's face it, there is less and less land to build. There will always be demand for good housing, selling it or renting it most likely will be profitable.

Our tax system rewards those who take the risk of buying real estate. As a homeowner, the only deductions you get from you income taxes are those associated with mortgage payments. When you become an investor, you actually get something called "depreciation." which means that by simply owning a rental property, you get to deduct the value of the "improvements" in a straight line of 27.5 years. That along with the deductions of all the expenses incurred with running your business of landlord gives you a very big tax break.

Yes, real estate is cyclical, some times it goes up, and sometimes it goes down. But just look at the price your parents pay for their house, it is not even enough to pay the closing costs of a house today. I am sure they had their own declines in prices during their lifetime, but in the long run, they will make hundreds of thousands of dollars in profits. The tax system allows them to keep most of that money tax-free also, specially when it is their principal place of residence.

Here in my own neighborhood called Estudillo Estates in San Leandro, California where I live and work, I know of seniors who bought their places for about $30,000 to $40,000 30-35 years ago, those same properties today can be sold for $600,000 to $800,000 and they are paid for. Their retirement is a bit better simply because they invested in their home.

If you pay rent, you will never get anywhere near that type of financial bounty that homeowners get when they sale their principal residence. Your landlord and his/her heirs will be the ones enjoying the fruits of YOUR rent money.

Making an effort to invest in real estate today is as good as it will ever be. We do not know what prices will be next year, or ten years from now, but if you can pay rent, you could be paying a mortgage, which is building a nest egg for a happy retirement. Talk to a lender, or a Realtor, then get out there and get excited about the opportunities that this cycle or real estate offers you.

The Realtors In Motion       Antonio & Alexia Cardenas   

                  "The Realtors In Motion" 

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Comment balloon 0 commentsAntonio & Alexia Cardenas • September 23 2010 06:59PM