Why Do Most People Invest in Rental Real Estate?
With Spring comes an uptick in serious buyers looking to invest in property, each with their own agenda. Among the most common reasons buyers will tell you that they have chosen this type of investment, five stand out as most common:
- Cash Flow: Buyers are looking for a monthly cash flow.
- Equity: Buyers are counting on selling the property for more than they paid for it.
- Debt Paydown: The tenant who will be living in the property will be the ones that are paying down the mortgage for you. In ten, twenty, thirty years from now, you have a property that has been paid off by a tenant. You then own an asset that will still be producing income.
- Depreciation: Buyers are able to depreciate the property for tax purposes (after consulting a tax accountant). Being able to depreciate your asset over time is a big advantage in offsetting income.
- Appreciation: This is the Big One! When all is said and done, the result homeowners are counting on above all else is Appreciation. In the West we have seen an impressive appreciation over the past several years. Property ownership remains a major contributor to individual wealth.
When we think about the home where we grew up, and consider what it was worth thirty years ago, if we had kept it all these years, we would probably be very wealthy!
If you find yourself in a position that does not allow you to qualify for a traditional loan currently, consider alternative financing. Sun Pacific Mortgage offers many programs that can make real estate investing possible when it looks hopeless. Our hard money loans are often used to purchase rental properties until a conventional loan becomes possible. We await your call at 707-523-2099, we are here to help.