In reality, interest rate investment and property investment field are almost completely opposite investment strategies. But there is still a lot of mistaking that interest rate and property investment is almost the same. The interest rate investment strategy is more to short-term profit making. This is because the cash-flow strategy are little and slow in return and in term of amount it show that impossible for long term growth. This interest rate may be a good place for investing some cash with high interest rates while you waiting for another investment to generate money. Furthermore, you if have gaining a lot of assets and you just want the pure cash flow as “mailbox money”, so this interest investment can be consider as investment strategy.
The money you earned from interest rate actually more suitable for your retirement plan instead of using to generate profit. In additional, the interest will be tax deferred due to there won’t be any real tax benefits for a interest rate tax lien that outside of a retirement plan.
Property Acquisition Investment Strategy
In terms of property acquisition investment strategy, it is completely different direction from the interest rate investment strategy. This kind of investment is not looking for quick cash flow instead it more looking forward to the great opportunity to foreclose and obtain a property for a long-term investment and generate a large amount of wealth. Normally people take this as part of a long-term land acquisition strategy or development strategy for estate that you believe can be redevelopment against.
There is one similar common between interest rate investment and property acquisition investing whereby both of these can be use as retirement plan. However in most countries and states there are tax benefits charge the property property holder outside of a retirement plan. In the United States, there will have this sale of the property to the investor for the property owner who don’t pay tax. All the property would be taxed as preferential capital to gains interest rates for government and you may be able facing kind exchange if you not pay taxes at all.
Generally, if you gain more property, you able to receive more depreciation benefits from holding property. Otherwise, you may find yourself with significant equity whereby you want to do a little bit strategy changes to take more advantage in terms of opportunities of real estate.
These kind opportunities mainly are substantially restricted only for retirement plan and other reasons point to holding this investment outside of your retirement plan in the eventuality that you end up owning the property.