The most common misconceptions about real estate.
You'll finally learn How to Buy Your First Investment Property.
With a quick scan of the Internet and you might think that everyone is a real estate investing expert.
But most of those so-called experts are giving out bad advice. I want to take this time to debunk the myths about investing in real estate:
There’s only one way to invest in real estate: capital gains: FALSE
Nearly everyone out there touts investing for capital gains (typical for flippers) and not cash flow. I’ve been investing in real estate for decades and though it’s tempting to chase the quick buck, I will never invest in a property for the purpose of flipping.
Nearly everyone out there touts investing for capital gains (typical for flippers) and not cash flow. I’ve been investing in real estate for decades and though it’s tempting to chase the quick buck, I will never invest in a property for the purpose of flipping.
You have to come up with the down payment yourself: FALSE
The power of OPM, or using other people's money to invest, allows you to come up with the typical investment of 20% which limits your cash outlay. You can do it with real estate, but you can't do it with most other investment classes.
The power of OPM, or using other people's money to invest, allows you to come up with the typical investment of 20% which limits your cash outlay. You can do it with real estate, but you can't do it with most other investment classes.
Investing in real estate is too risky: FALSE
Some experts will say that investing is too risky and there are too many negatives about it to make it a worthy investment. This may be true if you’re only in it for capital gains. Investing for cash flow allows you to make money in both an up or down marketing. Furthermore, you don't need to worry about the liquidity of the asset either.
Some experts will say that investing is too risky and there are too many negatives about it to make it a worthy investment. This may be true if you’re only in it for capital gains. Investing for cash flow allows you to make money in both an up or down marketing. Furthermore, you don't need to worry about the liquidity of the asset either.
There’s only one way to make money in real estate: FALSE
If you hold onto your investment and collect monthly rent then when it comes to taxes, you can depreciate a portion of your property each year as a loss. This, in reality, is phantom income because it goes directly contra to your stated earned income for a tax year, lowering your taxable income. Additionally, any costs associated with the investment are also contra to your income. So you essentially are able to maintain your asset tax-free. Finally, if you do sell the property, you can roll your profits into another real estate investment through a 1031 exchange, tax-free.
If you hold onto your investment and collect monthly rent then when it comes to taxes, you can depreciate a portion of your property each year as a loss. This, in reality, is phantom income because it goes directly contra to your stated earned income for a tax year, lowering your taxable income. Additionally, any costs associated with the investment are also contra to your income. So you essentially are able to maintain your asset tax-free. Finally, if you do sell the property, you can roll your profits into another real estate investment through a 1031 exchange, tax-free.
If any of the benefits have changed your mind about investing in real estate, then you should download my free gift to you...
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To making life better,
- Robert Kiyosaki
- Robert Kiyosaki
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