Strong rental markets in the Katrina and Rita disaster zone means real estate investment opportunities for boomers, says Jerry Cohen, founder of Florida-based EquityBuild. What's the appeal? Tax incentives under the Gulf Opportunity Zone Act of 2005 (GO Zone), lower cost of housing and favorable rental ratios make these areas a great place to buy, according to Cohen.
Under the GO Zone Act, which has been extended to the end of 2009, the IRS allows investors to shelter up to $25,000 of taxable income through a 50-percent first-year depreciation deduction for residential rental property located in the impacted areas. This is in addition to the normal straight-line depreciation deduction. That means immediate tax benefits and positive ownership cash flow, Cohen says. Under the circumstances, any positive investment is a welcome one.
