If you are a real estate investor, making residual or passive income is one of your top priorities. No one really gets into real estate that isn’t looking to make a good return on their investment. But perhaps you’re not sure if you’d like to become a real estate investor or not. Or maybe you’re a newbie who’s afraid to dip your toes in the water. It is my hope that this article will help you understand a little better how you can get cash out of a real estate investment, so you can feel more at ease and make the leap!
Cashflow means that when all is said and done, after paying the bills on an investment, you’ve got cash left over to put in your pocket. It’s cash in your checking or savings account. Now if you are investing in real estate, it is very important that you calculate the numbers as close as you can before you actually make the investment. You can’t just hear about a deal or see a home that you think will bring you cash flow and think it’ll happen. You can’t just go with your gut instinct. You’ve really got to take the time and make the effort to do your homework and crunch the numbers. Good news is that there’s a lot of information and tools that can assist you with this.
- Tax Benefits
You can get cash out of a real estate investment utilizing the excellent tax benefits. Come tax time, you can enjoy tax breaks from that investment because the IRS isn’t looking at your passive income as wages earned. Because of this, you pay fewer taxes on it. Ever wonder why so many wealthy people tie their income up in real estate? The tax benefits are one reason.
Not sure about handling your own taxes? Hire a CPA to do this for you. You’ll get the biggest bang for your buck when you allow the professionals to handle this for you, as tax laws can vary from year to year.
- Home Appreciation
If and when you sell the home, you can enjoy the benefits of home appreciation. This means that over the years, the home should appreciate over time (if the market stays strong). That appreciation can end up as cash in your pocket when you sell it.
When a home builds equity, this means that the mortgage is being paid down and the house is worth more than what’s owed on it. If you’ve got tenants in a property, they’re paying down the mortgage, and that home is building equity. Later, you could use this equity as leverage for a loan to purchase another property if you want. Of course, I teach my students to not use their money at all to purchase rental homes, but if you’re going the more traditional way, equity is one way to get cash out of the deal.
In our live events and online training, I teach my students how to maximize cash out of deals with creative techniques.
Real estate investing is a means to afford the kind of lifestyle you desire. Whether you’re holding onto it for the long haul, flipping, or using our Niche2Wealth strategy to purchase and sell via lease option, there’s plenty of ways to get cash in your pocket. The more you learn and act, the more you’ll experience the kind of success you’re seeking.