Ricky Novak is the President of Strategic 1031 Exchange Advisors, a consulting firm in Atlanta that specializes in 1031 exchange structuring for real estate investors and developers. Ricky also currently serves as Chair of the Board of Directors for the Atlanta Bar Association Real Estate Section for 2009 to 2010, as well as on the Board of Advisors for several Atlanta-based real estate developers or businesses. We’re happy to have Ricky as a speaker for March 27 event, and recently talked with him about real estate tax tips and investing advice for 2010.
Many speculate that the Fed will have to raise interest rates by late this summer or early next fall. Most of Ricky’s clients are real estate investors, so he advises them to be cautious about how rising interest rates could affect the cost of their investment properties.
The current economy altered the kinds of things Ricky emphasizes to his clients. The firm has been talking to their clients about re-evaluating their portfolios to really understand why they’re investing in real estate and adjust their investments accordingly. Whether real estate is a short-term or long-term investment for a client should also be considered.
“For the first time in a long time people are now looking at real estate as a long-term investment strategy. People before looked at it in the short term as a liquid asset, but people are now going back to the fundamentals of real estate,” Ricky said. “No matter how sophisticated or simple the investment is, whether it’s a single family rental home or a 1000-square-foot office space, make sure you can properly underwrite the property and make sure it’s a sound investment from the start.”
Ricky also talked about the tendency for real estate investors to overlook the benefits of a 1031 exchange. Understanding how the exchange allows investors to defer the potential taxation on the gain from a sale is something investors should look into. Above all, Ricky notes that 2010 is a transition year that will surely include lots of ups and downs. It’s a great time to reflect on where you are in your real estate portfolio, Ricky said, and have a strong long-term strategy with short-term goals within the plan.