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Maximizing Your Real Estate Investment: An Introduction to Opportunity Zones in the U.S.

by Tonya Callison Author

Opportunity zones were introduced in the United States as an economic development tool to offer a chance to invest in distressed areas. The opportunity zones' major aim is to help spur economic growth. It also helps create jobs in communities considered to be of low income and provides tax benefits to the investors. As an expert in real estate investment, the article provides insight into opportunity zones and their benefits to investors. At the same time, here’s some advice on what to do when it comes to opportunity zones real estate investment

An Overview of Opportunity Zones

The opportunity zones investment program was part of the December 2017 tax cuts and Jobs Act. The program provides three main levels of tax benefits to the investors and developers willing to take part in the program. Before investing in the program, it is important that you, as an investor, understand the steps involved in the program that works across the nation.

Understand How the Opportunity Zones Work and Their Benefits

Even though the step might be obvious since it is a long-term commitment, you must do proper due diligence. This will help you learn about the program, how it operates, and the possible benefits you might enjoy in the future as an investor.

Finding Opportunity Zone Properties for Sale

After the due diligence about the opportunity zone program, you should focus on finding the actual opportunity zone properties for sale. In the United States, there are various opportunity zones mapping tools showing the exact locations of the qualified zones. In addition, there are tools like Novogradac and EIG that provides a snapshot of every zone, for instance, the population and poverty rates, among other information. Finally, after the research and knowledge, you should start finding individual markets that will help you find off-market investment properties.

Self-Certify the Opportunity Zone Fund.

After setting a target property, ensure you gain access to the Qualified Opportunity Zone Fund within the market. At the same time, you should ensure that you have the owner’s details and contact information about the property you identified. The best way to self-certify is by filing the IRS 8996 form and submitting it with your taxes.

The form is significant since it measures the existing qualified opportunity funds, ensuring they meet the required standard in the previous tax year. After that process, you can reach out to the decision makers behind a given opportunity zone property through the contact information obtained. It would be best if you avoided interacting with many people as this will help you save a lot of money on unnecessary expenses.

After following all the steps mentioned above, you can wait five to ten years to reap the tax benefits. Upon finishing the procedure recommended, you can wait and see the rapid growth of the opportunity zone you chose to invest your money in. After that, there will be a high chance that you will reap the tax benefits of your investment. Because the time for maximum benefit runs out, you should consider making your moves sooner as an investor. Lastly, stay current in case of any updates concerning the Opportunity Zone program. 

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About Tonya Callison Advanced   Author

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Joined APSense since, June 6th, 2018, From New Delhi, India.

Created on Mar 4th 2023 05:08. Viewed 132 times.

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