Real Estate Investing
TYPES OF INVESTMENTS
Buy and Hold
Long Term Rentals
Buy and hold real estate is a long term investment strategy where an investor buys a property with the intent of renting it out for positive cashflow for a number of years while the value of the property appreciates. The rental income pays for the landlords expenses allowing the investor to make a return on investment from the property in multiple ways.
Short & Medium
More commonly known as “vacation rentals,” investing in these types of properties allows owners to own a property in a vacation destination that they can also use themselves. These properties typically have a higher cashflow than long term rentals, but also require more hands on management for the higher returns.
House Flipping &
Buy LOW and sell HIGH is the name of the game when flipping homes. I will help you identify properties that could benefit from renovations allowing you to resell for a profit once the renovations are complete. You can even take it one step further and cash out refinance the property to pull out your initial investment while also transforming the property into a buy and hold.
House Hacking is a strategy that involves renting out portions of your primary residence to generate income that is used to offset the cost of your mortgage and other expenses when owning a home. When done correctly, it allows people to live in a home completely for free, or even generate positive cashflow through home ownership.
The FIVE Components of Real Estate
Rent Income minus all of your monthly expenses leaves you with residual income. This profit is called Cashflow. When your tenant pays you $2000 in rent, and your monthly bills are $1700, this means your cashflow is $3600 a year!
Instead of paying down the mortgage like you do on your primary residence, your tenant pays the monthly principle portion of your loan on the property!
Historically, Real Estate appreciates (gains value) at a rate of 4-6% a year. This return is not felt in your bank account until you sell the property, but it happens completely passively with no extra work for you!
Real Estate Investors pay some of the lowest taxes of any businesses in the United States. The IRS allows you to reduce your earned income by taking a depreciation deduction against your property, you can also avoid capital gains tax by using a 1031 exchange.
Hedge on Inflation
Just like inflation erodes the value of your savings accounts, it also erodes the value of your mortgage debt balance just the same! The $200,000 you take out today will be diluted over time and will become easier to pay back.
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Interested in real estate investing? As a real estate investor myself, I have experience in multiple forms of investing that allows me to advise my clients with my own success on their side.
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