Reason Why You Need to Invest in Rental Properties

This is the advantages of rental investment:

  • cash flow- is money you get after all expense, mortgage etc are deducted
  • passive income-
  • has good tax perks
  • help people have a home
  • retirement
  • appreciation of property
  • get tax free income*

Reasons for buying rental business(single family or multifamily homes)

  • real estate is cheap
  • renter pays for you investment
  • another source of income
  • tax breaks
  • use banks to fund your investments
  • grow more properties from your rental properties

According to investopedia these are the features of a profitable rental investment.

  • good cashflow
  • good condition of the physical property
  • location
  • school
  • natural disaster- so need to have good insurance
  • rent- is able to pay for the mortgage, tax, insurance, repairs and give passive income
  • vacancy rate is low
  • building permits and future developments- because development will drive the value of your property higher.
  • amenities-
  • job market- if there is growth vacancy rate is lower and drives rents higher
  • crime- drives rent lower\
  • neighborhood
  • location

Problems you will encounter when buying rental properties

  • tenant issues- non paying tenant
  • TTT toilet tenant trash
  • making the repairs
  • collecting rent
  • calls at middle of night
  • evictions
  • tenant screening
  • keeping your property safe
  • maintenance
  • property management
  • keeping with the finances
  • financing the investment

Deal is:

  • Equity participation (cash flow and appreciation) 10%
  • preferred rate of return 10%
  • Asset management fees (property management)
  • Acquisition fee: finders fee and syndication 10k
  • cash flow split equally
  • tax free refinance within 5 years to return investors money.

Steps in syndication https://www.reiclub.com/articles/20-step-real-estate-investing-syndication-process

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