opportunity-zone
Jan 08 2019

Opportunity Zones

Since I am in in the property management software business, most all my blogs are related to property managers or landlords. However, this blog will cover a new federal program for real estate investors call Opportunity Zones. While it may benefit property managers or property management companies, it’s definitely geared towards real estate investors. With that in mind, read on!

The Genesis

Sean Parker, the co-founder of Napster (not part of the gold heist with Mark Wahlberg) worked with law makers on a new program call Opportunity Zones. The states governors are responsible for identifying low income census zones in their respective states.

Today, there are approx. 8700 defined Opportunity Zones nationwide. The zones are geographical areas that have been designated as investment opportunities that will benefit the community as well as those investors who participate in the program.

The program was created by the federal government in an effort to drive private investments into the low income areas across the country.

Timing

Time is of the essence for this program. It is a 10 year program that has the highest rate of benefits packed into the beginning years.

Investors should consider moving quickly if they want to maximize their returns.

Benefits of Opportunity Zones

Tax breaks are one of the biggest benefits to real estate investors. The effect of these tax breaks will grow over time. There are 3 primary tax benefits.

  • Temporary Deferral of Taxes until 2026
  • Up to 15% reduction of those gains for the 2016 tax year
  • 100% of the funds appreciation is tax free if the investor holds them for 10 years or more

Communities

This new Opportunity Zone program has given local communities instant assets that they did not have before. The program now turns abandoned, rundown, vacant properties into investment ready assets for high net worth individuals as well as hedge fund managers and the  larger banks.

Planning

If you plan to take advantage of this opportunity, you will need to carefully plan your strategy. Get your team of experts together and devise a plan that is right for you and your situation.

You may also discover that you have investments already in these designated Opportunity Zones. After my own investigation, I’ve found that I have an investment that appears to be right on the edge of a designated opportunity zone in Cleveland, (Bradley County) TN.

A well executed investment plan will be a win for all involved. Communities will see an increase in affordable housing, economic growth and job creation.

About PropertyZar

PropertyZar is a real estate technology company specifically in the web-based property management software for owners and professional property managers. Read more Top Property Management Blogs. Learn more www.PropertyZar.com

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