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Five ways rental properties are the ideal investment.
Today we are going to be discussing the ideal acronyms with you, these five key benefits to rental properties.
So the first one is income with cash flow. You have a tenant in place that’s paying rent and where your expenses are less than your rent, you have income. You have cash flow that’s coming in. That will be today money, tomorrow money, it will continue through as long as you have this property.
Second one is depreciation. This asset, the structure of the asset will depreciate on paper and on taxes. Talk to your accountant about how that can impact your specific situation.
The third one is equity, E for equity. We’ve got growth of the difference between what you owe on the property and what the market value is. That will continue over the course of time as the tenant pays down your principle balance on the mortgage.
And we have appreciation of the asset. So, as that property appreciates which history has shown us that they do over time even though there are periods of time where we’ve got some dips, we hang onto that thing. We’ve consistently seen appreciation.
Leverage. I talked about having a mortgage. We can easily leverage rental properties to further dramatically increase our return that we have on that investment. Rather than putting $200,000 into a $200,000 property, we can put $40,000 or $50,000 down and increase our return through the appreciation and the cash flow that we have from that rental.
So I hope this is helpful for you. If you have any questions or you’re interested in learning more, feel free to reach out to our team. We’re more than happy to help you out.