I choose to invest in long-term rental properties because of the fantastic returns rentals can provide. I am seeing over 24% cash on cash returns on all of my rental properties. I show exactly what kind of income long-term rentals can provide over ten years in this article.
Invest Four More has a lot of information on many different aspects of rental properties and Real Estate. Hopefully this guide can provide an overview of my entire strategy regarding long-term rentals and link you to more detailed articles on each subject. I also give you details on the rental properties I own including videos, figures on cash flow, purchase prices, financing terms and how I bought my properties. I have details on all of my properties here. Here is a link to my article on my goal to purchase 100 rentals by January 2023.
Why invest in long-term rental properties?
A few years ago I started looking into the best way to invest my money for retirement. Most money magazines and books told me to invest money in the stock market, mutual funds and bonds and over 30 years I would build up enough money to retire. I was surprised at how much I had to invest to have enough money for retirement and I also had to guess how long I was going to live so I didn’t run out of money! I knew there had to be a better way, trying to guess how long I was going to live to determine how much money to save for retirement just seemed wrong. It was depressing looking at how much I had to save and depressing trying to figure out how long I would live. After doing more and more research, I discovered passive income. Passive income is money you have coming in every month without doing any work. The best way to obtain passive income is to start a business that runs by itself. Long-term rental properties may be the easiest way to build a business that provides passive income and allows you to retire early.
When I talk about retiring early, I don’t mean 60 or 55, I want to be able to retire when I am 40 (I am 34 now). I know it all depends on how old you are now, but don’t give up hope if you are already approaching retirement age or are even there. I have been able to create a passive income of over $2500 a month in the first two years of investing. That does not include tax advantages, equity pay down or appreciation. I will have my first rental property paid off about 3 years after I purchased it just by re-investing my cash flow. At the end of this year I will have over $4,000 in cash flow coming in!
Right now is also one of the best times to purchase a rental property. Rents are up, property prices are down, but still appreciating and there are still great deals out there.
How to get started
There are many different ways to get started in your investing career. The first step to take is to research different rental strategies, potential returns, and decide if investing in rental properties is right for you. Not every market is the same and not every market provides a great rental return versus purchase price. However, my market is not an anomaly with it’s fantastic cash on cash returns from rental properties. Here is a great article on the top 20 markets in the US for single family rental properties. Many of these markets have much better potential than my market and I am making over 24% cash on cash return on all of my rental properties.
Books are a great way to learn about Real Estate and rental properties. There are a ton of books out there, but I think The Millionaire Real Estate Investor is a great all encompassing book with case studies and detailed strategies. This book does not mention my snowball strategy for paying off mortgages, but I have yet to find a book that does. Here is another blog with a great article on the best Real Estate investing books ever written.
There are a ton of websites out there with a lot of information on rental properties and Real Estate investment. It can get overwhelming trying to figure out who is legit and who is not. My favorite is Biggerpockets.com. They offer a fantastic forum with topics in rental properties, landlords, lease options, flipping and many other topics I don’t cover. They also offer a great blog with many guest bloggers who are all active investors sharing their stories and knowledge. I have learned a ton from this website and read every blog they publish.
Local Real Estate clubs are another great resource for beginning investors. The clubs are full of seasoned and rookie investors who are willing to help and share information. You may even find deals at the clubs that are not advertised anywhere else. Search Google for REIA in your area to find local Real Estate investing clubs. I discuss my first REIA meeting I went to here.
Of course I try to offer information on long-term rental properties throughout my blog and detail my success and experiences. I detail exactly what properties I purchase, when, how much I paid, how much it cost to repair them, and what I rented them for. I detail exactly how I found my properties, how I financed them, and how I am paying off the mortgages and why. I also explain how to begin buying rental properties with little money down! Here is an article I wrote on resources for investors including hard-money lenders, news sources and other great information.
A second step to consider
I got into Real Estate because my father has been a Real Estate agent since 1978 and I needed a job after college. I didn’t plan on being an agent for very long, but 10 years later I am still a Realtor and love it! I make my own schedule, make a lot of money, and I don’t have I boss! There are many different ways to make money in Real Estate and you don’t have to be a sales person to succeed. I am not a sales person, in fact I don’t even work with traditional buyers or sellers. Not only can you make a lot of money by becoming an agent, you can also save a ton of money on your own rental properties and find more rental properties by being an agent. I detail the advantage and different ways agents can make a living in this article.
If you don’t want to become a Realtor, one of your first steps should be to find a great Realtor who can help you find houses. Ask your friends,
Where to find potential rental properties
Finding properties to purchase is one of the most important keys to a great investment strategy. I provide many ways to find properties. Not only do these resources help you find great deals on homes, but they help you determine values and potential profits in your market.
How to finance and build your strategy
There are many different ways to build your rental property empire and start building wealth and passive income. One of the more important aspects of building a rental property strategy is how you finance your properties.
- I discuss what type of property works best for my model here.
- I discuss what type of loan works best for my strategy here.
- Here is an article on how much money you will need to purchase a rental property here.
- I discuss how to get into your first rental property for less here.
- I discuss how to get loans easily on more than four properties in this post, this has become a tough find for many investors.
- How re-financing can bring you even greater returns on your rental properties.
- Why I use the snowball strategy to pay off one property at a time
- A few things to watch out for when investing in rental properties here.
- How to make big profits on Real Estate without paying taxes
- How to invest in non performing loans
- Can you really afford your primary residence?
- How to find a great property manager
I have had many people inquire about guest blogging on my site or having me post a guest blog on their site. If you are interested in guest blogging, please send me an email(firstname.lastname@example.org) with what your article would be about, sample work and a link to any site that you would link to in your article. If you would like me to guest blog, please send me information on your site and topics you think would be beneficial to your readers.
I will slowly be introducing products that I believe will help investors with their business. The only product I have so far is Cash Flow University from Ben Leboyovich. Ben, is an investor in multi-family properties and specializes in creative financing. Basically he tries to buy properties with as little of his own money as he can. You can check out his system here and an interview I did with him here.
This blog contains a lot of information and it can take some time to read through everything. Remember, the best things in life don’t come easily and quickly. Investing in Real Estate takes time, money and knowledge. However, it takes a lot less time than a 9-5 job, may make you a lot more money, and probably takes less knowledge and stress. Don’t be intimidated if you don’t understand everything or end up with a lot of questions. Please feel free to comment or email me and I will do my best to answer your questions. Info@investfourmore.com is the best way to email me personally if you don’t want to comment.
Also, if you haven’t already, by signing up to follow Invest Four More by email, I will send you a special white paper for free, covering the 7 Principles of the Invest Four More Strategy, investment comparison models, and more.