When many first think about owning property for investment, they get nervous as to the liability that may occur with owning property. Though that is something an investor should be weary of, if you speak with the correct advisors and get the proper education, you have created a much more controlled atmosphere. Advisors are a great place to start and can include, but are not limited to, attorneys , CPAs, Realtors/real estate agents/brokers, insurance agents/brokers, current and former real estate investors, and lenders/mortgage brokers. With reaching out and getting advice from the proper advisors, you are mitigating risk. When you mitigate risk and understand what kind of business you are getting into, you are now taking risk, but now in a much more controlled fashion.
Now that you have an understanding of the business aspect and how to mitigate risk, WHERE IS THE MONEY? There are three main areas wealth is created through rental properties: 1) Cash Flow – money brought in minus money used to operate the property; 2) Principal Pay Down – the tenant’s monthly rent is contributing towards the mortgage that may be on the property; and 3) Capital Appreciation – the increase in value of the property over time. There are also numerous advantages to owning rental property which not only includes the preceding topics, but also the tax advantages and write-offs. Tax advantages such as capturing deprecation against your investment property over a period of time determined by the IRS and “Cost of Doing Business” expenses that can go against any earned income the property(ies) may bring in.
The question no longer becomes “Where can I lose in real estate?” but rather “Which property will be the first I get started with?”
Don’t hesitate to give me a call to get started with your real estate investment venture! I am always happy to assist my clients to the best of my ability and share my network of connections to help them grow and succeed.
Jacob C. Ashley
Ready Real Estate
Cell: (978) 265-8238
Email: [email protected]