018: Why Rental Properties are Such an Awesome Investment

One of the best investments possible is rental properties. Mark Ferguson is going to cover the basics of why rentals are so awesome in this episode of the InvestFourMore Podcast. Cash flow is one of the biggest reasons rentals are such a great investment. Cash coming into your bank account, month after month, enables you to do lots of things: supplement your personal budget, buy additional rental properties, pay off debt, and many other great things. The stock market can’t provide that. Neither can government bonds. And on top of that there are other advantages to rental properties that Mark’s going to cover in this episode.

100 rental properties: Mark Ferguson’s crazy goal.

Why does Mark want to own 100 rental properties? Because he knows the advantages to having rental properties first hand. If he could own that many properties he’d have adequate cash flow to do anything he wants. His life would be entirely his with the cash that supports it coming in independent of his daily work, month after month. Imagine what kind of life you’d live if you had that kind of rental portfolio. It’s possible, through rental properties. In this episode you can hear the details of where Mark is on the way to that goal and how he’s managed to get there.

Growing his rental property business by NOT paying off the property mortgages.

When Mark Ferguson first started purchasing rental properties he focused on using the cash flow they generated to pay off their mortgages quickly. That’s a valid strategy that worked for him for some time. But when he realized that he could have used that same income to put down money on an additional property and increase his overall cash flow, the lights went on and he changed his strategy for his rentals. In this episode Mark is going to tell you how he goes about expanding his rental portfolio by not paying down his mortgages and how he’s reaping the benefits. If you’re interested in buying rental properties, you won’t want to miss this one.

Rental property advantages: much more than stocks or other investments.

Besides the obvious cash flow benefits of purchasing good rental properties there are tons of other benefits that are not commonly spoken of. First off, every property typically appreciates in value over time. That means your property is actually becoming worth more over time, which you can leverage to take out home equity loans to purchase additional properties, or by selling the house to reap a large profit. But rentals also have huge tax advantages. You can write off a certain amount of the actual dwelling’s value every year which can make a significant impact on your tax liability each year, even if your properties themselves don’t show a profit. Those are just a few of the benefits that Mark covers in this episode, so make sure you listen.

[tweetthis]How to buy properties below market value and turn them into rentals, on this episode[/tweetthis]

If you have no money how can you get started purchasing rental properties?

It’s not easy, but it can be done. The main way is to buy the property as an owner-occupant and move into it. The best scenario is to purchase a duplex or triplex and live in one unit while you rent out the other(s). After a few years you can refinance the loan and move out, opening up the unit you’ve been living in to bring in even more cash flow. It requires patience and discipline but is a way that many rental property owners get started with their first rental properties. Does it sound like something that might work for you? Listen to Mark’s explanation of how it works on this episode of InvestFourMore.

OUTLINE OF THIS EPISODE

• [1:01] Outline of what Mark will cover in this episode on rental properties.
• [1:46] Mark’s rental property history and how he began investing in rentals.
• [3:06] The details of Mark’s first deal… the frustrating things he had to document in order to get financing.
• [4:30] A year later Mark purchases his second property and why it took so long.
• [5:52] 16 rental properties – 15 in Colorado and 1 in Ohio.
• [7:01] A new goal: 100 properties
• [10:00] The main benefit of rental properties: cash flow.
• [11:48] Growing the rental business more by NOT paying off mortgages.
• [12:52] Why cash flow from rental properties is superior to investing in the stock market or other investments.
• [16:50] The value and real possibility of buying houses below market value.
• [21:37] The huge tax advantages of rental properties.
• [23:38] The advantages of equity paydowns on rental properties.
• [24:10] The appreciation of properties make rentals an amazing investment as well.
• [26:10] The biggest mistake people make when buying rental properties is that they don’t calculate their cash flow correctly.
• [30:27] Figuring maintenance and capital improvements correctly.
• [35:12] How do you find the great deals on rental properties.
• [39:11] For those who are just starting out and have no money.