For those who are new in the game, cashflow is basically the income you get from your investment property (usually rental properties). This is a major factor in generating a high return for your investments and savings. Once you increase cashflow by accumulating properties, you can plan your income and determine the course of future investments. HOUSEKEEPING Also, you’ll see a lot of tax benefits when it comes to real estate investments. Consult your CPA to see how you can depreciate properties that you are holding onto for rental income and also discuss with them acceleration methods used to front load depreciation to give you more capital to buy more and keep building your portfolio. The answer to how long it’s going to take, as you might’ve guessed already, is up to you. Your real estate skillset, determination, experience, and risk management are major players in this ballgame. It’s all about how smart you invest in the industry. If you do your due diligence and play your cards right, you’ll one day realize that you’ve gained a considerable amount of wealth already. •
• Understand how far to go with finishes and layout changes to keep within the budget and comps in the area. • Stay away from potential losers such as foundation issues and bad floor plans. • Have a sales strategy in place prior to the purchase that accounts for commissions, closing costs, holding costs, etc. Contrary to “reality” real estate shows, getting rich doesn’t happen overnight. The longer it takes to flip the property, the more expenses you incur for maintaining it while waiting for a buyer. Working with getting coached by or partnering with a seasoned investor is a huge advantage, as you learn best practices and pitfalls to avoid, which only years of experience can provide. #3 RENTALS In a normal rental property scenario, you have a tenant who is essentially paying the rent in exchange for living privileges. If you bought the rental property with a mortgage, your loan will eventually cancel itself out over time. Why? The rent you receive from your tenant is basically used to pay the loan, which is increasing your equity in the property. The money left over is your cashflow divided by the amount you put down to come up with your CAP rate. This is a GREAT way to build long-term wealth.
Michael Jordan is founder of Strategy Investment Group, a full-service turnkey property developer based in Metro Detroit, servicing clients from across the world. What started off as a single home build has evolved to the collection and refinement of almost every type of investment property available on the market. Our website is strategyproperties.com.
Contact us at (734) 224-5454 or email us at info@getuwe.com to learnmore.
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