Arizona investment property has been the source of much news in recent years. First because of its rapid rate of appreciation until the credit crunch, and then because of its equally dramatic depreciation from the 2006 highs. The most amazing thing about the boom and bust is how many people never saw it coming. And even more amazing is the amount of “wealth” that was destroyed in such a short period of time, ultimately resulting in many people having more loans than houses.

However, for those who have positioned themselves properly, the next decade will provide an unprecedented opportunity to build wealth using real estate! This is not an exageration. Never before in our nation’s history has there been a more perfect time to take a hard look at investment property, especially Arizona investment property. I know it’s a bold statement, but I’m completely confident in doing it. That confidence comes from knowing that governments around the world are behaving irresponsibly and printing money like never before in history. Furthermore, the government has taken on debt loads never before seen in history! These two factors are nothing more than a financial house of cards that is unsustainable.

Do the factors mentioned above affect you? Yes… Maybe even more than you think.

Let me explain… You’ve worked hard or smart and set aside money for retirement in some kind of account. I bet your retirement account is denominated in US dollars. Let’s say you’ve been able to set aside $100,000 in cash. How would the government’s ability to print money impact the purchasing power of your cash? Printing money decreases the purchasing power of your cash.

For example, what type of new car can you buy today for less than $3,000? Can you buy a new car for less than $3,000? Did you know that in 1970 $2800.00 would buy a new Camaro with a V8? Whereas today, a new Camaro with a V8 starts at $31,000! How is that possible? Today’s assembly lines are much more efficient and automated with less metal in today’s vehicles. The answer is simple: inflation.

The creation of paper dollars causes inflation that devalues ​​existing cash. Your cash! How much will you be able to buy in the future with that 100k you saved? It will depend a lot on what you do with it today.

The second route that governments take from you is that of taxes. How high will tax rates go in the future with our country’s growing debts? Bigger debt requires bigger payments. Since the government doesn’t produce or sell anything, its cash comes from you in the form of taxes. In the last 4 decades, the US has gone from being the largest creditor nation in the world to the largest debtor nation in history! Now is the time to protect yourself from future taxes.

Investment properties can protect you from both inflation and taxes. Plus, there’s the added benefit of cash flow. Places like Arizona, which have been so affected by the change in market direction, have investors and property hunters taking investments at incredibly low prices.

Let’s examine the effect Arizona Investment Property cash flow can have on inflation, taxes, and cash flow:

Inflation: The price of “real things” rises in an inflationary environment. Look at the price of gold, silver, copper, sugar, and cocoa, to name a few. Real estate is a real thing. It is tangible and will always have intrinsic value because people have to live somewhere. Crops have to be grown somewhere. In general, real estate will keep pace with inflation.

As the credit crunch resolves, you will see (and we are now seeing) prices stabilize and then resume a gradual or perhaps sharp increase, depending on how much inflation the Federal Reserve and Treasury put into the system. That doesn’t mean property prices won’t fall further; however, the property should not be purchased with the sole intention of speculating on the price. Investment properties will produce cash flow when properly purchased. Those with the foresight to understand that investment properties in Arizona, for example, have received tremendous success by offering an opportunity to purchase at incredibly low prices… These price levels provide more opportunity for appreciation for those who choose to purchase. now and keep the property. property as rental. With many properties selling for less than $100,000, the opportunity for the average person to purchase their first investment property in Arizona, or for foreigners, like our Canadian neighbors to the north, to purchase their own Arizona vacation property is ripe. higher.

Taxes: Buying and owning an investment property can provide great tax advantages. Depending on how you own or own your property, you may be able to write off expenses and depreciation against other income earned from your job! Seriously, ask your accountant.

Cashflow – This really is the hidden gem of perks. Let’s say you have your $100,000 invested in a property in Arizona. And that property pays you or generates cash flows of $1000 a month in rental income. You have now created a 12% annual return on your invested cash! You also have the potential for appreciation! And you get this income tax-advantaged, which means you keep more of what you earn! You also own the property, which gives you control to sell or keep the property, depending on market conditions.

When was the last time you earned 12% of your cash in a mutual fund or bond?

So why Arizona investment properties specifically? It sounds like these arguments would apply to most investment properties, right? Perhaps, however, when investing one should look for the highest degree of possibility of a winning investment. And, of the states that have been hardest hit by market troubles, Arizona offers statistical factors not found in places like Florida or Nevada that also suffered from the recession.

Other than that point, Arizona has not had a negative year of population growth in the last 40 years! Even during the recession, Arizona’s population has grown, which of course will require or demand housing.

Arizona also offers new business growth:

“Good universities in the area have provided a skilled and educated workforce, which has positioned Phoenix as a competitive force in business,” says Bill Humphrey, senior vice president and general manager of XONEX Relocation, which provides global relocation services for the transfer of employees.

“Phoenix is ​​projected to experience further growth, especially as the technology, green energy and health/life sciences industries have begun to take root in the area.” Humphrey says that homes that sold for $500,000 before the recession are now in the $300,000 range.

This equates to more jobs, which will bring even more attention to Arizona in this economy as more and more people struggle to find employment. These people will require housing.

Also, as the saying goes, “retail follows rooftops,” meaning that businesses will prosper where there are populations that support them. This influx of people will provide Arizona with a faster recovery and a strong economy.

When you take the above facts along with the fact that Arizona investment property prices are at their lowest levels in over a decade, it’s easy to see that those who invest in Arizona property will now benefit from inflows of higher cash and more stable rents, higher property appreciation due to both demand and inflation, and a more robust local economy in which to operate.

All of this gives the investor an advantage over other areas when considering investment properties.