Jeannie Niles Real Estate Investment
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Profiting From Real Estate
Appreciation: Real estate tends to increase in value …. year after year. It doesn’t necessarily go up the same amount every single year, but based on past history, real property usually doubles about every ten years. When you factor in the benefit of leverage, you quickly realize the impact on your net worth of even a 10 or 20 percent down payment.
Leverage: Real estate allows you to use someone else’s money (usually a bank) to make a greater return for yourself. Say you put $20,000 as down payment on a $100,000 property and the bank lends you the other $80,000. If the property value doubles in ten years, your $20,000 down payment has grown to $120,000. And that doesn’t even take into account how much that $80,000 you borrowed has been paid down, or the monthly cash you might have received.
Depreciation: The tax law allows you to deduct “depreciation” of your property against your regular income. This is referred to as a “non-cash item” which means that you get the deduction without putting out any actual cash as, for example, would be the case if you paid for some plumbing repairs. There are, of course, limitations and formulas that apply, but many investors realize significant tax savings this way. Naturally this is an area in which you would want to seek the advice of your tax professional.
Income: Real estate can provide direct income. The spendable you receive each month is directly related to the size of your original down payment. Obviously, the less you owe the bank, the smaller your loan payment and the more cash you have for yourself. Income also tends to increase as rents go up the longer you own the property, And, of course, the money you don’t have to pay in taxes is also that much more in your own pocket.
Basic Investment Info
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While your strategy will change depending on the market, there are 4 primary ways to make money in real estate.
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When crunching the numbers on a property, you'll often encounter some real estate lingo. Here's what things like 'cap rate' mean, and how to use them.
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There are some basic strategies that apply across the board no matter where you are investing or what the current economic conditions are.
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Good brokers don't simply sell you property, they help you define your investment strategy.
Investment Strategy
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Now is the time to be buying! Aggressively priced properties are selling over listing price with multiple offers.
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While almost everyone says they invest for “MONEY,” in reality, we all invest for what we expect the “MONEY” to provide us. Read on for info on defining realistic goals and developing a strategy to achieve them.
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Compared to other types of investments, real estate provides you an incredible amount of control over your property.
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When I work with a client, I try to match the type of property to the investor's personality and portfolio.
Optimize Your Portfolio
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I always encourage my clients to “never be sellers” but there are times when a property needs to be eliminated from a portfolio.
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If you currently have an option loan, also known as an exotic loan and want to get out of it, there are some serious issues to address.
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Good property management is the number one factor in the success of your real estate portfolio.
Every investor's situation is unique, and I have over 25 years experience solving problems. Use the form below to ask me about your unique needs.
Jeannie Niles Real Estate Investment
P.O. Box 317
Palm Desert, CA 92261
P: (760) 360-4020
F: (760) 340-9069
E: jniles@realestate-investment.com
