Rental Property Investing, Is it for You? By:Tom Lundstedt,CCIM
Introduction to "How to Invest in Real Estate"
Real estate investing has made a lot of money for a lot of people. But, real estate has also lost a lot of money for a lot of people. If you want your real estate investment to make money, you need to know what you’re doing. Beware of "flipping," "get rich quick," "no money down" or "foreclosure" schemes — in fact, avoid them like the plague, unless you really know what you’re doing!
Real estate investing should not be emotional. It involves working with numbers and using formulas to analyze those numbers before you buy. This investment property analysis will help you determine whether a property is a good deal. Or, equally important, whether it’s a bad deal that should be avoided.
Good news: I’ve developed a one-page "INVESTMENT PROPERTY WORKSHEET®" that makes crunching the numbers easy and fun. The worksheet has been used by thousands of investors over the years and now it can help you learn how to invest in real estate.
My name is Tom Lundstedt and I’m a former Major League Baseball catcher who couldn’t hit a Major League curve ball. Fortunately, I found the "curve balls" associated with real estate investing could be turned into financial home runs.
Now I’m the speaker/author of a series of Audio Seminars (CDs with Workbooks) about real estate investing. Whether you’re a rookie investor or a seasoned pro, I promise these user-friendly products will help turn you into an all-star real estate investor!
There are tons of real estate products and advice available — some good; some bad. How do you tell the difference? Well, what I’m gong to do here is give you a free introduction to some key topics covered in my Audio Seminars so you can be the judge. I hope you like what you see and hear and, if so, will buy my Audio Seminars to get even more in-depth information, case studies, formulas, worksheets and investment property analysis. These CDs and Workbooks will make learning how to invest in real estate fun and easy!
Let’s get started:
The first key items for you to focus on are the four financial benefits of investment real estate: cash flow, principal reduction, income tax savings, and appreciation. These four benefits apply whether you’re looking at a residential investment property (such as a rental house, duplex, apartment building) or a commercial property investment (such as an office building, shopping center, etc.). The benefits are summarized below, and then explained in greater detail later when I show you the "INVESTMENT PROPERTY WORKSHEET"®.
Here’s a quick summary of the four financial benefits:
1. CASH FLOW: After you pay all expenses and loan payments, cash flow is the money left over.
2. PRINCIPAL REDUCTION: The loan is paid down with money collected from tenants.
3. INCOME TAX SAVINGS: IRS rules allow rental property owners to take depreciation deductions, which shelter the cash flow and principal reduction. Any leftover depreciation creates a paper loss, which, in many cases, can be used to shelter other income, such as salary from your job.
4. APPRECIATION: Over the long term, many rental properties can be expected to increase in value.
These four benefits are powerful! You earn tax-sheltered cash flow, your tenants buy the building for you, you get to tell the IRS you’re losing money, and over the long term, the property goes up in value. What a country!
This material is designed to provide information about the subject matter covered. The accuracy of the information is not guaranteed. This material is sold or offered with the understanding that neither the author nor the publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.