The Importance of Buying & Holding Rental Property

Buying and holding rental properties can be one of the best investments you can make for building long term wealth, creating passive income and taking advantage of tax write offs, benefits and loopholes. Rental properties if managed properly are assets that can and will pay for your liabilities. Just imagine your life being financially free never having to worry about when the next paycheck is coming in or how you are going to pay the bills at the end of each month. Many of my student partners were able to leave both the 9 to 5 rat race and the financial rat race behind because they made a sound decision to educate and invest in themselves. Now you can too!

What’s Behind the Gold Rush to Invest in Rental Properties?

American and international investors have woken up to the fact that purchasing real estate investment property is a smart investment for the future. Despite fluctuations in the markets statistically property values continue to rise over the long run. Manhattan real estate, Silicon Valley real estate, Washington, DC, Baltimore, MD, Houston, TX, Philadelphia, PA, Boston, MA, Miami, FL markets to name a few have continued to be on the upswing. And until time machines are invented those that hold onto properties will keep winning. In fact, America’s first multimillionaire said one of his only regrets was not buying all of Manhattan.

We’re also entering a time when financial analysts expect stocks and technology companies to collapse again. When that happens those that are invested in them can quickly lose everything. Real Estate and home values may certainly fluctuate, but with very few exceptions – the land and need for housing isn’t going anywhere.

Then there is the income derived from rental properties. One of the biggest challenges facing virtually every individual today is having enough income coming in for retirement. Some would like more income now, but everyone needs income during retirement. So far the statistics show that the overwhelming majority are set to outlive their savings and ability to work. Do you have a plan that is going to generate income for you during retirement?

These awakenings are all happening at a time when United States real estate market is still relatively cheap in most areas, lots of properties are available, demand for housing is high, and while interest rates are at incredible lows. It’s the perfect combination of factors for more individuals like you to dive in.

Now let’s dig into some of the reasons buying & holding rental properties are so advantageous, and really can’t be overlooked by anyone…

Inflation Protection

Unless you invest in something that protects you from inflation the riskier the investment. It can be a silent killer to your financial future. For those new to this concept; money devalues over time. $100 used to be decent amount of money, as did earning $100,000 dollars a year. Many would be hard pressed to live a mediocre lifestyle in many US cities unless they make at least $100,000 per year. So even if you managed to stash away $1 million under your mattress for the next twenty or thirty years (and it doesn’t get burned up, blown away, or stolen), it will be worth just a fraction of what it is now, by then. Real estate protects you from inflation as it also goes up as the cost of living goes up.

Taxes

Rental properties offer access to lots of different tax breaks. Without protection from the tax man, you’ll be giving up more and more of what you earn and make each year.

Passive Income

Buying & holding rental properties doesn’t just give you income. Done right it can provide passive income. That means if you get a property manager you’ll keep on getting rental income without really having to do anything. Then you can head off on retirement or exploring the globe while getting paid every month not to mention that income and equity can be passed down from generation to generation.

Leverage

Leverage is one of the most underestimated tools for generating better returns and building wealth. Used wisely leveraging with financing allows investors to make money by using other people’s money to invest with. Maybe you only have $100,000 to start with. But if you use that as a down payment and borrow $300,000; you can actually position yourself to making profits using a loan depending on your equity position and monthly rents.

Accumulating Wealth

Income properties are ideal for accumulating wealth. They may offer appreciation. But even without appreciation as real estate investors paying down loans with rental income, or making improvements; you are building up wealth for the long haul.

When any of my student partners have a goal of becoming a successful real estate investor I let them know on day one your end goal should be owning a portfolio of properties that are cash flowing every month.

I”ll See you at the closing table,

Marcel Umphery the “R.E.I. Successmaker”