I was talking today with someone who had found me on “the web.” As I spoke to him about the four benefits of real estate investing I realized that it had been a while since I had done a post about them.
Now, if you already know them, feel free to skip this post. Or take a refresher. Since about 60% of my visitors each day are first time visitors I’m going to assume many of you have not stopped by before.
Here are the 4 Benefits of Real Estate Investing…as I see them. (Quick, if you’ve been here before see if you can name them before moving on!)
- Cash Flow Before Taxes
- Principal Reduction
(How many did you get? If you got all four, congratulations! I’ll give you a gold star if you’ll send me a self addressed stamped envelop.)
Yes, there are other peripheral benefits. Leverage. Everyone knows about housing. Easy loan qualification. But the financial benefits can be boiled down to these four.
Do you know how to calculate them? Better learn. What is appreciation in your area? Historically? How will you be utilizing depreciation?
All those are good questions to help you successfully calculate the returns each and every rental property is bringing home for you.
Here’s a tip for you seasoned investors. If the last time you calculated the four benefits was when you were considering purchase, perhaps you need to do it on a yearly basis. Remember, as time goes by depreciation schedules begin to take a dive. Could that equity in the one property be better served in two? Just a question. The numbers will probably give you the answer.