Friday, May 16, 2014

Why buy Income Property?

Income property is still the safest and best way to build wealth over time.  Real Estate occasionally does have bubbles but they are rare.  Now is the time to be getting into real estate while the prices are still reasonable.  The economy has picked up some but it is still not growing at the pace that is to be expected for healthy job growth.  We have been in the non-recovery recovery period but real estate was beaten down so far that there have been major price increases in certain places, especially Las Vegas. 

Income property is to generate income.  It is not to buy for a tax deduction or to just hold it at a loss and then sell at a later date.  No one needs to invest to lose money.  You can still operate a cash flowing investment property while using the depreciation and interest payments to lower you taxable income.  The key to owning investment property is the cash flow.  If you can get enough rent to cover the expenses you have a winner.  It doesn't matter what your actual cash on cash return is if you are cash flowing.  Eventually the returns on a good investment property will become infinite because you will get all your money back in a few years.  Once you get your original investment back you will then have a lifetime of profit that is really that can not be measured.

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