Opportunity zones are low-income areas that the government allows investors to invest in for tax breaks. Opportunity zones provide great opportunities for investors because the areas allow investors to save money on their tax bills. Similarly, opportunity zones are great for low-income areas because investors drive growth into the areas and revitalize distressed properties. There are several ways that investors can capitalize on the benefits that are provided by opportunity zone investing.

Opportunity Zone Funds

Opportunity zone funds allow groups of investors to pool their money together to benefit from the advantages of investing in opportunity zones. Both corporations and individuals can invest in opportunity zone funds. There are several regulations that opportunity zone funds need to follow to retain eligibility from the IRS. For example, the properties that opportunity zone funds invest in need to be significantly renovated within 30 days of the initial investment.

Tax Incentives

Three primary tax benefits are provided to investors who invest in opportunity zones. The benefits can be claimed by investors when they are filing their taxes. Investors can choose to claim one of the benefits of all of them if they are eligible.

Opportunity Zone Risks

Investing in opportunity zones comes with its own set of unique risks. Investors who need their money to remain liquid should not invest all of their funds in opportunity zones since funds need to remain in opportunity zones for a minimum of five years to be eligible for the tax incentives. Additionally, with most other investments, investors should invest in areas that they expect to grow steadily.

Opportunity Zone Rewards

Aside from the tax incentives, there are many great rewards to investing in opportunity zones. Investors can develop distressed areas and need assistance, providing help to many people during the process. Additionally, investors can own long-term assets that will continue to grow through opportunity zone investing.

Opportunity zone investing provides ways for investors to invest their money while developing properties wisely. There are nearly 9,000 opportunity zones available in the United States, providing a multitude of investment opportunities for investors.