How can owning rental property HELP you retire a lot faster and with a lot MORE money?

How do you eat an elephant? One bite at a time! Same can be said with rentals one at a time. I’ve seen many local investors here in Syracuse and who invest local that live out of state grow over the years and grow their rental business larger then their 401k. How is this possible?? Putting 10 percent or more away each month… PAY yourself first is the name of the game. This article below is a MUST read. Good Luck and as always feel free to reach out to me if you are thinking about getting into Real Estate OR want to add investments to your portfolio…. John

First let me say that I prefer the second title to the first because saving your way to retirement is really the concept that I want to attack and hopefully destroy in your mind by the time you finish this article.

Second, let me make a few concessions. Does building cash flow require education? Yes. Does this require courage? Yes. Does this require commitment? Yes. Does this require hard work? Yes.

But let me ask you this. Are you really thinking there is something for nothing out there? Do you think that you are going to get ahead without courage, commitment and hard work? I don’t think so. I think you know this is true. However, because of lack of self-education, you just don’t know what to do so you keep doing what you are doing year after year, decade after decade.

“Formal education (high school and college) gets you a job.
Self-education gets you rich.” -Jim Rohn

According to Social Security, 90% of Americans are retiring at or below poverty income levels. The main reason for this is that they are saving for retirement instead of building passive streams of income. They retire with only social security income and their meager savings.

We will call this Business Model No. 1. It’s scrimping and saving your way to retirement.

Special Note: Remember that a family is a business. It is a business that is supposed to run at a profit. Most people never learn this simple point.

Let’s look at the results of Business Model No. 1 over a nine-year period compared with Business Model No. 2.

Business Model No. 2 is building wealth and passive income streams with real estate. We will keep it simple and only look at single-family property for this example.

Beginner facts

Let’s look at the median income in the US. As of 2011, the median income in America for a family is $50,502 according to the Census Bureau.

If we take a conservative approach and decide to save 10% of our income for investments that is about $420 a month.

I understand that the vast majority of people can’t and don’t do this. They live paycheck to paycheck with no savings at all. That is why the average 65 year old only has $35,000 to show for 40+ years of working 40, 50 even 60 hours a week.

But for this example, let’s say they do it.

What Results will you get in 9 years (and 32 years) with Business Model No. 1?

According to BankRate.com, the average stock market return since the turn of the last century is 9.4% — 4.8% in price appreciation, plus approx 4.6% in dividends. The average inflation for the same period has been about 3%.

At the end of 7 years, you will have saved up about $45,000.

At the end of 9 years, you will have saved up about $70,000.

It will take you 32 Years to save up $1,000,000

Because of inflation, your $1,000,000 is now only worth $388,337.03.

Now you have to start taking out money from the principle effectively forcing yourself to “pray you die before you run out of money.”

Where are the golden years? Travel, grand kids, cars, houses, charity and legacy. Just pulling out the equivalent of $40,000 a year in today’s money means you have less than 10 years worth of savings. What if you live longer?

Now let’s look at Business Model No. 2: Building Passive Income

Take the average of my last 7 deals.
$20,000 Equity Capture
$400 a month cash flow after principle, interest, taxes, insurance (PITI) and $100 a month maintenance and vacancy reserve.
$12,000 down. This is the total down payment including everything out of pocket.

Start saving the same $420 a month but this time, educate yourself in real estate investing and start buying income-producing assets instead of speculating in the stock market.

29 Months to save up $12,000
Now Saving $820 a month ($420 from earned income, $400 from cash flow)
15 Months to save $12,000
Now saving $1,220 a month
10 Months to save $12,000
Now saving $1,620 a month
7 Months to save $12,000
Now saving $2,020 a month
6 Months to save $12,000 and buy another house
Now saving $2,420 a month
5 Months to save $12,000 and buy another house
Now saving $2,820 a month
4 Months to save $12,000 and buy another house
Now saving $3,220 a month
4 Months to save $12,000 and buy another house
Now saving $3,620 a month
3 Months to save $12,000 and buy another house
Now saving $4,020 a month
3 Months to save $12,000 and buy another house
Now saving $4,420 a month

We are now at the end of year 7. Let’s see where we really are.
10 Houses
Picked up $200,000 in equity
$4,000 a month in passive income

Where are you at with Business Model No. 1 in the stock market? You’d have $45,000 and no monthly income.

Let’s go just two more years: You will average about one house every two months over this period.
Two more years and that is 12 more houses.

We are now at the end of Year 9. Let’s see where you are.
22 Houses
$440,000 Equity Capture
$8,800 a month in positive cash flow

Where are you with your savings program in the stock market? You’re at $70,000 and no monthly income.

Obviously there is no comparison financially. Building wealth with real estate is much more effective.

But now let’s see how your life will be different at the end of those nine years.

It’s not the money, it’s the Lifestyle.™

How do your bills come in? Monthly, right? How does $70,000 in the stock market help you pay your bills? It doesn’t. How about that $8,800 a month passive income? All your bills are paid aren’t they? Yes. The average family in the US spends $4,009 a month.

Could you quit your job if you had $8,800 a month in passive income? For most people the answer is yes.

Remember:
As soon as your passive income meets and exceeds your bills,
you are retired. It has nothing to do with age.
We have students in their 20s that have done this.

How long will you live in retirement?
How well do you want to live in retirement?
Can you enjoy your golden years? Travel, grand kids, cars, houses, charity and legacy.

In conclusion, building wealth with real estate is so much more effective than speculating in the stock market it is not even comparable.

So get out there, get educated and start building passive streams of income for you and your family.

Posted by Stephen Davis

http://www.UpstateLeasing.com

315-345-6633

Home NOT selling? Don’t have time to sell it? Consider Renting it!

I’ve been in Real Estate 11+ years and sometimes owners just don’t have time to sell for one reason or another. Maybe, they had a job transfer and need to move now, listing got stale and didn’t sell maybe it was over priced, not the right time of the year to sell, condition or ETC. Whatever the reason renting OR renting to own has become an option more and more home owners I see and talk to are deciding to do. I’m sure most ask themselves do I want to be a landlord? Well, that’s where I come into play especially if that home owner is moving out of state. I can help market, screen potential tenants, show, sign the lease and addendums, collect rents, deposit, accounting, and manage their home,  There are many advantages to renting including building equity while renting, making over what your mortgage payment is for passive cash flow and etc. Here are some advantages of renting out your home.

Advantages

• Rental income can cover some or all of the mortgage payments, freeing you from having to dole out the entire amount each month. You might even make a profit if your monthly expense is low enough.
• You may be able to continue to build equity at the expense of the renter — especially if your particular market is not affected or minimally affected by the slowdown. If your mortgage has been in existence for a number of years, more of the payment may be being applied to principal, so every payment is eating into the amount owed at a faster clip.
• Landlords gain tax advantages in addition to the regular deductions of mortgage interest and taxes.

If you or somebody you know is considering to rent for whatever reason, please give me a call I’d like to help you. John

3 Reasons to Start a Passive Residual Income

Having a passive residual income flow can bring a lot of freedom and opportunities into your life. Following are 3 of the many reasons you should start building a passive residual income now.

1. Once you have built a residual cash flow, the money continues to come in after the initial work is done. You are making money even when you are not working. It comes in whether you are eating, sleeping, or taking a vacation. This really comes in handy if you become sick. Imagine you are stuck in the hospital for a few days or longer and your medical bills are piling up. At least you would still have cash coming in to help cover the expenses.

2. Passive income brings about personal freedom. If you build a large enough stream of residual income, you will not have to work for another employer or company. You can work when you want, take a day off when you want, spend time with your spouse and kids when you want, and take a cruise or trip when you want.

3. Residual income opens up a lot more opportunities. If you have a flow of money coming in that pays all your monthly bills you can take more chances. You might want to start your dream business. Having that passive cash flow can allow you to plunge into starting a new business without having to worry so much about failing. Many people fail in new business startups because they do not make enough early on to keep the business afloat. They cannot last long enough for the business to become established and feel pressure to make it an overnight success. Think about the times you had a great chance to buy something of value at a bargain price but didn’t have the extra money for it. Someone else bought it and turned a nice profit. Or the times you could have invested in a stock before it fully took off (like Google). Having a passive income allows you to take full advantage of these opportunities.

Hopefully, this article has opened your eyes to the benefits that a passive residual income stream can bring to your life. If I can be of help feel free to give me a call…. Article courtesy of Lee Moss

315 345 6633

Investing in rentals for newbies

I’ve sold, owned and managed single family homes, 2-4 families and apartment complexes over the years and one thing I always keep in mind and tell newbies is buying RE is NOT a sprint it’s a marathon. Start small, save, read, and join a investment club if you have one in your area. Over the years I’ve seen many properties that look great on paper but not so much when purchased. Do your homework and get a team in place such as a lawyer, a Realtor “that deals with investment properties” and a lender before you do any buying. Below are some good tips when investing:

http://www.dummies.com/how-to/content/real-estate-investing-for-dummies-cheat-sheet.html

Tenant Retention

Excellent article below and I believe this is why I have amazing tenants that stay long term. Communication, be responsive when an issue arises & make timely repairs as needed is important to retaining tenants. This can either make or break tenant/landlord/prop manager relationships.

Vacancy is one of the largest challenges faced in the rental market by property managers and landlords.  Factors such as the economy can lead to difficulties filling vacant rentals and lessen the success of the rental community.

10 reasons why

If you’ve owned income property for any length of time, you know that managing a rental can be financially rewarding. At the same time, you’ve also likely discovered that property management requires a large commitment of time and effort.

While it may make sense to take the do-it-yourself approach if you’re a handy person, live close to your property, and don’t mind devoting several hours per month to the task, in many cases this just isn’t practical—especially if you hope to expand your business. With this in mind, here are some critical tasks a property manager can help you with:

1. Setting the right rental rates: While looking through the classifieds to see what other landlords are charging for similar properties is a fine way to ballpark your rent price, a good property management company will conduct a thorough market study in order to set a rental price for your property, ensuring that you achieve the perfect balance between maximizing monthly income and maintaining a low vacancy rate.

2. Collecting and depositing monthly rent payments on time: If you’ve ever worked in a billing department, you know that securing payment from clients can be difficult, not to mention awkward. Property management companies have efficient, tried-and-true systems in place to effectively collect rent and maintain on-time payments. You’ll find this particularly important if you have a limited number of properties, and collecting payments on time is crucial to maintaining your cash flow.

3. Marketing and advertising your property: Through long experience, a property manager will know exactly where to market your property and how to craft compelling advertising materials—a significant advantage when it comes to filling your properties quickly and avoiding long vacancies.

4. Finding the right tenants: Experienced property managers are experts at finding good tenants, and will take care of all the details, including the securing all criminal background and security checks, running credit reports, verifying employment, and collecting previous landlord references.

5. Managing tenants: In addition to finding good tenants, a property management company will manage all aspects of the tenant-landlord relationship. The property manager will handle both routine and emergency maintenance, take care of routine inspections, and manage any situations where conflict resolution is required.

6. Managing vendor relationships: Property management companies have relationships with maintenance workers, tradesmen, contractors, suppliers, and vendors that it’s almost impossible for an independent landlord to duplicate. Not only will your property manager get you the best work for the best price, they’ll oversee any necessary maintenance projects.

7. Ensuring that you’re in compliance with housing regulations and property laws: There is a multitude of applicable laws and regulations to abide by when renting and maintaining your rental property. These include local, state and federal regulations, as well as fair housing regulations (such as the ADA). A property manager can help you avoid lawsuits by keeping your property up-to-date and in compliance with these regulations.

8. Enabling you to invest in geographically distant properties: If you manage your own properties, you’re pretty much limited to investment opportunities within a tight radius of your own home. By hiring a property manager, you can take advantage of investment deals in any location you wish.

9. Maximizing the profitability of your time: By having a property manager take care of the day-to-day aspects of running your income property, your free to spend your time identifying further investment opportunities or otherwise furthering your career.

10. Maximizing the profitability of your money: Most property managers charge a percentage of your property’s monthly rental rate in exchange for their services. The rate typically runs around 10%, which is generally less than the money you save by hiring a professional to take care of your property and is tax deductible.

If you have any additional questions please give me a call, text or email. Thank You!

315-345-6633/John@UpstateLeasing.com

Please be aware: Don’t take a chance dealing with an inexperienced/unlicensed property manager or handyman to protect your most expensive investment. You wouldn’t trust an unlicensed Doctor to perform surgery on you so don’t take a chance with an unlicensed leasing agent/property manager to protect your most expensive investment. NYS requires property managers placing tenants, receiving deposits/money to be licensed as a broker with a number of years experience to hold them to certain standards, ethics, and continued education on laws and fair housing every 2 years.

 

 

Article compliments from http://www.allpropertymanagement.com/resources/hiring-a-property-manager/10-reasons-to-hire-a-property-manager-a6.html