It goes without saying that the stock market beat everyone up in 2018.. However it looks like 2019 is starting out better! Whew! Investing in real estate also has its ups and downs, some years are better than others. But if you buy right plus understand that it is a long game. You will be OK. Have you heard, you make your money when you buy not when you sell! Huh?
One of my mentor’s always said that people buy rental property for three reasons;
Cash Flow! Appreciation! Depreciation!
1. Cash Flow; An ideal Cash flow purchase is buying a property at a reduced price and renting it out for a high double digit cash on cash return or 12-18% return before expenses. This property is usually in a declining neighborhood and has a limited investment lifespan but the payoff is quick!
2. Appreciation; This is buying a property that is an appreciating neighborhood and location. It will cost you more going in but you know why your paying more. Your “profit” is evident in the form of your tenant paying for the property while it appreciates. (no instant gratification here)
3. Depreciation; When either of the residential properties above are rented they can be depreciated on a 27.5 year schedule. This gives you a nice break on your taxes. And it needs to be calculated into your overall strategy. (We suggest that you consult with your professional tax person on this one.)
Do you know why your buying investment property? Talk with us about your real estate investments when renting, buying, or selling we would like to help!
To your success!
Do you have questions about
maximizing your return on your
real estate investments? I invite
you to call me and discuss your needs.
With many years in the business, I’m
confident our team can guide you in the
right direction. We help our clients
rent, buy and sell real estate in the
upstate of South Carolina.
Call 864-395-6538 for more info on
how to make money in real estate!
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We appreciate your referrals!