Nov
08
Investment Real Estate – A Golden Market For Buying Rental Property
By
Michael K. Houston asked:
If I were to ask if you ever thought about investing in real estate, my guess is you would answer “yes.” Many have dreamed of purchasing investment property to supplement their income, build wealth for retirement, or fund their child’s college tuition but have sat on the sidelines watching their dreams turn to mere wishful thinking. Well, now more than ever is the time to get off the bench and onto the real estate investing playing field. We’re experiencing a rare golden market for acquiring cash flow real estate property that we may not see for many years to come (or ever see again)!
How is this so? It is so due to a combination of historically low interest rates, drastically fallen home values and stable rent prices. A few years ago when home prices were skyrocketing by the day it was nearly impossible to buy a home, rent it out and receive a positive cash flow. Yet the tide had turned, and now it’s very possible to do just that! In the summer of 2008 I helped an investor client of mine find and purchase a deeply discounted renovated bank-owned townhome in Prince William County, VA and a few weeks later secure a tenant for her which provided her a substantial positive rental cash flow. And the beauty of this transaction is that as the real estate market rebounds over the long-term she will enjoy the equity appreciation, tax benefits, and monthly supplemental income while her tenants are paying for her valuable asset.
I truly believe that real estate is the cornerstone for building generational wealth. I have enjoyed the benefits (although not void of challenges) of owning cash flow rental property for 11 years and have made it my professional mission to help renters become homeowners and homeowners become successful real estate investors. The current real estate market provides one of the greatest windows of opportunity to begin that journey towards long-term wealth accumulation. If you are ready to experience it for yourself, I recommend the following steps:
Schedule a consultation with an investor-friendly real estate agent knowledgeable and experienced in finding and structuring profitable cash flow real estate investing transactions. This initial consultation will provide you an opportunity to share your goals and get professional guidance on developing a plan of action to bring your vision to reality. Get pre-approved for investor financing. Your real estate agent should have a team of investor-friendly lenders experienced in financing investment property purchases and consulting buyers on the best loan options, down payment requirements and loan terms to achieve your goals. Lenders now have more stringent credit and down payment requirements, thus making this a critical step before hitting the pavement to see homes. Start looking for your first, or next cash flow property. This is the exciting part! Your real estate agent should be diligent in finding homes that will yield a positive rental cash flow within your loan approval amount. This home search process should include analyzing recent sales comparables to determine the current market value and appropriate offer price, and recent rent comparables to determine how much you can charge for rent. With this data you can perform a quick rental cash flow profit analysis by using this formula: Monthly Rent – Monthly Debt Payment (principle + interest + taxes + insurance + pmi) – HOA/Condo fees – Other Recurring Costs (property management fees, maintenance) = Monthly Rental Cash Flow Secure a tenant. Once you have purchased your investment property your real estate agent should help you secure a tenant, if needed, so you can start receiving your monthly rental cash flow. Plan to hold the property long-term. Wealth accumulation in real estate historically comes from significant equity appreciation that occurs over time.
Note: For tax and legal advice concerning real estate investing matters consult a tax professional and attorney respectively.
Selling A House?
If I were to ask if you ever thought about investing in real estate, my guess is you would answer “yes.” Many have dreamed of purchasing investment property to supplement their income, build wealth for retirement, or fund their child’s college tuition but have sat on the sidelines watching their dreams turn to mere wishful thinking. Well, now more than ever is the time to get off the bench and onto the real estate investing playing field. We’re experiencing a rare golden market for acquiring cash flow real estate property that we may not see for many years to come (or ever see again)!
How is this so? It is so due to a combination of historically low interest rates, drastically fallen home values and stable rent prices. A few years ago when home prices were skyrocketing by the day it was nearly impossible to buy a home, rent it out and receive a positive cash flow. Yet the tide had turned, and now it’s very possible to do just that! In the summer of 2008 I helped an investor client of mine find and purchase a deeply discounted renovated bank-owned townhome in Prince William County, VA and a few weeks later secure a tenant for her which provided her a substantial positive rental cash flow. And the beauty of this transaction is that as the real estate market rebounds over the long-term she will enjoy the equity appreciation, tax benefits, and monthly supplemental income while her tenants are paying for her valuable asset.
I truly believe that real estate is the cornerstone for building generational wealth. I have enjoyed the benefits (although not void of challenges) of owning cash flow rental property for 11 years and have made it my professional mission to help renters become homeowners and homeowners become successful real estate investors. The current real estate market provides one of the greatest windows of opportunity to begin that journey towards long-term wealth accumulation. If you are ready to experience it for yourself, I recommend the following steps:
Schedule a consultation with an investor-friendly real estate agent knowledgeable and experienced in finding and structuring profitable cash flow real estate investing transactions. This initial consultation will provide you an opportunity to share your goals and get professional guidance on developing a plan of action to bring your vision to reality. Get pre-approved for investor financing. Your real estate agent should have a team of investor-friendly lenders experienced in financing investment property purchases and consulting buyers on the best loan options, down payment requirements and loan terms to achieve your goals. Lenders now have more stringent credit and down payment requirements, thus making this a critical step before hitting the pavement to see homes. Start looking for your first, or next cash flow property. This is the exciting part! Your real estate agent should be diligent in finding homes that will yield a positive rental cash flow within your loan approval amount. This home search process should include analyzing recent sales comparables to determine the current market value and appropriate offer price, and recent rent comparables to determine how much you can charge for rent. With this data you can perform a quick rental cash flow profit analysis by using this formula: Monthly Rent – Monthly Debt Payment (principle + interest + taxes + insurance + pmi) – HOA/Condo fees – Other Recurring Costs (property management fees, maintenance) = Monthly Rental Cash Flow Secure a tenant. Once you have purchased your investment property your real estate agent should help you secure a tenant, if needed, so you can start receiving your monthly rental cash flow. Plan to hold the property long-term. Wealth accumulation in real estate historically comes from significant equity appreciation that occurs over time.
Note: For tax and legal advice concerning real estate investing matters consult a tax professional and attorney respectively.
Selling A House?
