Regardless of what specific real estate investing strategy you employ in your business, real estate represents the single best method of creating long-term, sustainable wealth available today. While the stock market can be extremely explosive and subject to radical day to day shifts in value based upon economic news, oil prices, and political instability around the world, real estate is remarkably stable and has consistently trended upwards in value for the last 100 years. While it is true that real estate values have taken a severe kick in the teeth as of late, investors utilizing a buy and hold strategy are still making money while the rest of the market is struggling.
In order for this strategy to work, it's necessary for you to purchase property as inexpensively as you can and to ensure that the cash flow generated from your property is consistently more than the expenses associated with owning it. In order to guarantee that this happens, you need to perform an accurate cash flow analysis of your property before making the purchase. The following components are critical to your success:
-Income:the single largest income item associated with your property will be rent. It's imperative that you know your local real estate market and how much similar properties are renting for. If you estimate that your property will rent for $1500 per month and market conditions will only support $1200 per month, you can very quickly get yourself into trouble with negative cash flow.
-Expenses:Novice real estate investors often don't have a true grasp of expenses or how to accurately estimate them. Because of this lack of knowledge, many investors have been known to blindly accept expense figures offered by real estate agents or the property seller. This is dangerous because the seller has an incentive to minimize expenses in order to make the investment look as attractive as possible in order to get it sold; the real estate agent stands to earn a fat commission check. When you estimate the expenses for your property, use documented, provable expenses whenever possible, but also use the smell test. Don't forget to factor in an allowance for vacancy because no property can remain rented 100% of the time without fail. You should also be sure to factor in an expense for property management, whether you intend to manage it yourself or hire a professional to do it for you.
-Reserves:Regardless of how new a property is, things are bound to break or need replacing. For instance, water heaters, furnaces, and appliances will invariably break down. When this happens, they need to be replaced. By setting cash aside for these situations, you can be prepared when or if repairs become necessary. If nothing ever breaks, cash will be available for you for any other purpose.
As long as your property will provide you with positive cash flow on a consistent basis, you won't be rocked by market fluctuations, including rapid depreciation of real estate values. You'll still have a positive cash flow to rely upon for consistent monthly earnings. In addition, as the number of properties you own increases; your monthly income will improve. If each property you own has a positive cash flow of between $200 and $500 per month, you can see how lucrative owning 15 or even 20 properties can be.
This monthly income is ongoing and life-changing. You can literally reap the rewards of real estate investing by building a generational cycle of wealth creation that will live on long after you exit stage left.
Holding property as a long term rental also offers tremendous tax benefits to you through depreciation -an ingenious tax code creation of Congress that allows you to take a depreciation tax credit while the actual value goes up-while deferring capital gains taxes until you sell.
Invest early and invest often in property that will provide you with ongoing cash flow. As this cash flows into your real estate business you can use excess funds that you don't need for your day-to-day needs to fund acquisition costs of additional properties that will allow you to better take advantage of other investing strategies that will provide you with potentially huge infusions of cash, further enhancing your bank account and allowing you to live YOUR American Dream.
Long Term Rental Accommodation
Are you in the process of planning a trip to Hawaii, namely Kona? If you are and if your trip is intended to be an extended trip, you may be interested in booking a stay at a Kona long term rental. Before officially making your reservations to do so, there are a number of important points that you will first want to take into consideration. These important points, a few of which are highlighted below, can help you have the Hawaii vacation of your dreams.
One of the many important points to take into consideration, when looking to book a stay at Kona vacation rental, is length of stay. In terms of extended vacations, many individuals have different definitions for the phrase. For example, there are some individuals who consider extend vacations to be those that last two weeks and others only consider vacations extended once they surpass the month long mark. Knowing exactly how long you intend to vacation in Hawaii for, as well as exactly when can better assist you when finding a Kona vacation rental that can accommodate you.
In keeping with length of stay, you will find that most Hawaii vacation rentals advertise the fact that they are long term rentals; however, many accept short term rental reservations as well. Kona vacation rentals, like vacation homes and condos, that accept both long and short term reservations should be closely examined. For instance, a rental may be available for the start of your three week Hawaii vacation, but another vacationer may have made reservations for the second week of your trip. This is why it is important to know your exact intended dates of travel, as it will assist you in finding vacation rentals that are truly available to you.
Once you find a number of Kona long term vacation rentals that peak your interest, you will want to closely examine features available. Although Hawaii vacation rentals do vary, many provide guests with television access, internet access, and parking. As nice as these features are, there is more that you will likely need for an extended trip to Hawaii. For instance, to save you both time and money, Kona long term rentals that come equipped with laundry rooms or at least access to a washing machine are advised.
As with renting any vacation home, condo, villa, cottage, or apartment, cost should also play a significant role in choosing a Kona long term rental. Due to the length of most extend trips, you should be prepared to spend a considerable amount of money on a vacation rental. With that being said, it is also important to take the length of your stay into consideration. Many, especially at first glance, are turned off by the cost of booking a Kona vacation home for a four week period; however, when broken down into components, such as by one week at a time, you may be surprised with just how great of a deal you are actually getting.
The intent of your vacation should also be examined, as it may play an important part in the location of your Kona vacation rental. For example, is your trip to Hawaii for business purposes or would you like to spend time catching up with friends or relatives who may live in the area? If so, you should examine vacation rentals that are conveniently located to where you need to be or at least where you plan to spend the most time. Even if your Kona vacation is for the purpose of fun, you may want to take the time to examine your intended vacation activities, as well as the attractions that you would like to visit. This can also help to ensure that your Kona rental is conveniently located.
The above mentioned points are just a few of the many that you will want to take into consideration when examining Kona long term rentals. As important as finding the ?perfect,? vacation rental is, it is also important to take the other aspects of your trip to Hawaii into consideration. Airline reservations and car rental reservations, if needed, should be made well in advance of your trip.
Both Peter Vekselman & Dominiq Gallagher are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Peter Vekselman has sinced written about articles on various topics from Real Estate, Property Investment and Computers and The Internet. Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1000 real estate deals, owned a construction company, been a private lender, and owned a property management company.To learn more about Peter please visit. Peter Vekselman's top article generates over 27100 views. to your Favourites.
Dominiq Gallagher has sinced written about articles on various topics from Vacation Rentals, Yoga and Jamaica Vacations. Hawaiian Beach Rentals specializes in assisting those looking to plan . Start examining your options, in terms of long term. Dominiq Gallagher's top article generates over 6600 views. to your Favourites.
