What You Get From Just One Rental Property.

Posted By Ryan Young

Just one rental property can have a massive impact on your income and your tax return. In this article we dive into some of the most important benefits you receive from just one rental property.

Adding just one rental property to your investment strategy can have a major impact on your life. From an increase in income to great tax benefits, investing in rental properties is something that every investor should take the time to understand and compare against other investment opportunities.

Monthly Cash Flow

With just one rental property, you receive predictable cash flow each month, and, that income can even be guaranteed, depending on the tenants you accept. This steady cash flow can be used to fund the acquisition of more properties, pay down debt used purchase the property, pay for your lifestyle expenses, & more. Most other (if not all) investment options do not produce a reliable stream of monthly cash flow.

Leverage

Real estate is the easiest asset to leverage, then, use the proceeds of the loan to acquire more properties while tenants pay the debt for you. This means you can borrow against the property at any point and apply the amount you receive from the loan to buy more properties. This money is now going to be paid back by your tenants, while you have the tax free lump sum to use to create more wealth and cash flow.

Appreciation

Real estate prices will always go up over time because of demand, rental increases, inflation, & other factors. You can even force appreciation to increase the value with minimal cash output. Unlike stocks, you are in full control of the asset and can truly control its future value.

Depreciation

Tax code forces you to depreciate investment properties over time even though the property is increasing in value. This allows you to receive some of the best tax incentives that exist. Taking proper depreciation on your tax filings can render you zero liability in some cases even though you received positive cash flow over the course of the year. Consult your tax professionals and see how this will effect your own tax situation, I think you will be surprised by what they tell you.

Practicality

Real estate will always be needed. In good times and bad, people will always need a place to live and it is the last thing that a person can go without having. With interest rate high and the prices of purchasing a home out of reach for many, this will only further increase the demand for rental housing of all types. Study the market you are interested in investing in and understand the demand for rental in that area, it is likely higher than you think.

Tax Benefits

Real estate investments are typically taxed at the lowest rate possible and often won't have to pay taxes on the income from the property because of required depreciation, interest payments, maintenance deductions, etc.

Passive Income For Life

Just one rental property will provide a steady flow of cash for the rest of your life with doing little to no work if you have proper management in place. This can also be transferable to your heirs with the proper structuring.

Generational Wealth Creation

As mentioned above, you can create generational wealth that can continue to provide for your family long after you are gone. This can provide them with a reliable nest egg, cash flow, and tax benefits when established correctly.

These are the key benefits of simply owning one rental property, but there are many more. Now, you can imagine the benefits you can receive if you scaled up from one to many. This can truly be life changing if done properly. You can spend time with your family, fiends, and causes dear to you because of the reliable and tax efficient income cash flowing investment properties can provide you and your family for generations.

When considering your investment property purchase, it is important to remember that having the right capital provider can make all of the difference. Real Estate Capital Group was created by investors for investors with the sole purpose of simplifying the lending process so investors can scale the portfolios faster and reliably. With over 50 years of real estate investing and financing experience, you can be assured that RECG has the ability to get your deal closed fast while providing valuable insight only an investor can provide.

Please reach out and run your next deal back us, we are here to help and answer any questions you have. Click here to submit an inquiry and we will get right back to you.

Ready to apply for a no doc, asset based loan for your investment property, use this link and see how simple we have made the process.