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Are you looking for a Team that can help you with either finding an investment, or keeping your investment properties occupied?
At The Tomlin Team we have the experience and know-how to help you find an investment property that provides an excellent ROI. We can also help you keep your properties occupied, maximizing your investment.
Have you ever considered investing in real estate? Since the year 2000, your investments have risen 6.7% in the DOW, declined 12% in the S&P, and declined 30% in the NASDAQ. However, those who have had real estate properties have seen their money grow at a 43% return. What we’re talking about is buying real estate that generates income or is otherwise intended for investment purposes rather than as a primary residence or second home.
Our team is often asked what type of property makes the best investment property. There are lots of options when considering investing in real estate: single-family residences, duplexes, quads, townhomes, condos, apartments… While most investors look to spend as little as possible, some investors buy luxury homes at incredible prices, then either lease them out or remodel & flip them. All that to say, there are many options when it comes to buying investment properties.
Smart investors build up a portfolio of rental properties, aiming to earn a 7-10% return on cost after accounting for operating expenses such as property taxes, insurance, repairs and maintenance. It’s all about diversification. Spreading your assets over a variety of different investments is perhaps the single most important rule you can follow. The reason: If you diversify your portfolio, your investment performance should fluctuate less because losses from some investments are offset by gains in others. Therefore, you should have less risk than if you put all your money in one type of investment, such as stocks and bonds.
A typical investment property generates rates of return to an investor in four general ways:
1. Net Cash Flow, or NCF, is the sum of all positive cash flows from rents and other sources of ordinary income generated by a property, minus the sum of ongoing expenses, such as maintenance, utilities, fees, taxes, and other items of that nature (debt service is not factored into the NCF). The ratio of NCF to the asset purchase price, expressed as a percentage, is called the capitalization rate, or CAP rate, and is a common measure of the performance of an investment property.
2. Tax shelter offsets occur in one of three ways: depreciation (which may sometimes be accelerated), tax credits, and carryover losses which reduce tax liability charged against income from other sources. Some tax shelter benefits can be transferable, depending on the laws governing tax liability in the jurisdiction where the property is located. These can be sold to others for a cash return or other benefit. expected from capital appreciation (prices going up) rather than other sources is considered speculation rather than investment.
3. Equity build-up is the increase in the investor's equity ratio as the portion of debt service payments devoted to principal accrue over time. Equity build-up counts as a positive cash flow from the asset where the debt service payment is made out of income from the property, rather than from independent income sources.
4. Capital appreciation is the increase in market value of the asset over time, realized as a cash flow when the property is sold. Capital appreciation can be very unpredictable unless it is part of a development and improvement strategy. Purchase of a property for which the majority of the projected cash flows are expected from capital appreciation (prices going up) rather than other sources is considered speculation rather than investment. For more information, check out our FAQ page.
You may be saying “I don’t have any extra income to invest in real estate”. Yet, you would be surprised how little you need to get started. With our knowledge of the market, knowledge of location/rent/resale data, knowledge of “hip pocket” listings, and experience, our team can certainly help you make wise decisions. Plus, our services are free to you! We’ll introduce you to our NEW investment calculator that will enable you to discover your ROI with every property you may consider buying, we’ll help you find the best lender, we’ll walk you through the entire process of buying, and we’ll even help you find a great tenant or renter.
Get started investing today!
Send us your information online, or call us at 214-726-2805 to get started immediately!