There are many real estate opportunity zones that you can explore. However, the obstacle lies in finding out what these opportunities are and acting on them in time. A real estate opportunity zone is an area with certain tax cuts. There are tax cuts because these areas need an incentive for further growth. Due to this, the program affords serious benefits to smart investors who can take action.
What Are They?
It is important to understand what real estate opportunity zones actually are. Some zones did not recover after the 2008 crash. In response to this, the government intervened with tax incentives, and the zone program began. An investor can take advantage of these benefits for up to 10 years after the initial status assignment. Investors are able to defer their capital gains tax for these 10 years, which is a considerable benefit.
Your profits will depend on how long you keep the investment. Due to the tax benefits, there is profit potential. This is because the tax benefits tend to attract investors and projects. With the influx of new investment, the zone can become wealthy in the future. A city can be designated as an opportunity zone, due to economic decline. However, after this happens, the area can experience huge growth due to the program. The area will still keep its tax advantages for the 10-year period, despite no longer being in decline. So, investors can look out for real estate opportunity zones that have seen high growth in the past 5 years.
Key Real Estate Opportunity Zones
There are many real estate opportunity zones to explore. Portland, Phoenix, Nashville, Atlanta, and San Jose are all prime real estate opportunity zones. Additionally, notable counties include Hall County in Texas, Monroe County in Mississippi, and Wilcox County in Alabama. San Jose in California is very lucrative, along with other areas in California, such as Oakland. Over the past 5 years, home values in Oakland have increased by 48%.