GETTING STARTED IN RENTAL INCOME
Just as location is a critical component to the value of real estate, knowledge is a critical component to investing success. As with any type of new endeavor, gaining knowledge and experience is essential as you move forward toward success.
If you′re interested in generating rental income through an investment in real estate, but unsure of how to go about doing this, Getting Started in Rental Income will show you the way. Written in a straightforward and accessible manner, this book discusses the two major ways of entering the rental income market the traditional purchase of rental properties or buying and selling fixer–upper properties and reveals what you need to do once you′re in. This easy–to–read guide clearly explains how to:
- Invest in the right properties
- Generate cash flow adequate to make insurance, tax, utility, and monthly mortgage payments as well as to allow for periodic vacancies
- Make a profit from flipping properties
- Take advantage of the tax benefits of real estate
- Implement specific strategies beyond diversification to mitigate real estate risk
- And much more
Furthermore, Getting Started in Rental Income also identifies the pitfalls and market risks of this field, as well as the personal aspects of becoming involved in rental income. If you′re interested in generating income through real estate and want to learn how, this book has all the answers.
PART 1: Approaching the Market.
Chapter 1: The Traditional Approach: Buy, Hold, Hold a While Longer, Sell.
Studying the Rental Income Market.
Advantages to Long–Term Investing.
Disadvantages to Long–Term Investing.
Deciding When to Sell.
The Positive Long–Term Experience: A Matter of Management.
Chapter 2: Financial Aspects: Keeping the Cash Flowing.
Leverage and Real Estate.
Mortgage Payments and Rental Income.
Rental Expense and Tax Calculations.
Tax Planning for Rental Income Property.
Chapter 3: Fixer–Upper Alternatives: The Flipping Market.
The Flipping Concept.
Attributes of High–Potential Properties.
Quick Fix versus Expensive Problems.
Importance of Home Inspections.
Estimating Time and Cost Features.
Rental Income during Your Hold Period.
Chapter 4: The Fixer–Upper Property: Abused Homes with Potential.
Attributes of Fixer–Uppers.
The Importance of Appearance.
Recognizing Market Potential: Valuation Theories.
The Unattractive Property: A Quick Fix.
Creating a Budget.
Checklists of Neighborhood and Property.
Classifying Expenses: Cosmetic or Expensive.
The Buyer Psychology.
Chapter 5: The Combo: Long–Term and Fixer–Upper Portfolios.
Investment Portfolio Planning for Real Estate.
Conversion: Fixer–Upper to Long–Term Hold.
Fixing–Up Expenses in Conversions.
Combining Both Types in Your Portfolio: Limitations and Guidelines.
Living in Your Fixer–Upper.
PART 2: Rental Income Investment Planning Strategies.
Chapter 6: Cash Flow First Aid: Stop the Bleeding, Do CPR (Cash–Positive Reasoning).
How CPR Works.
Studying the Essential Cash Flow Problem.
Guidelines and Suggestions: Managing the Profitable Situation.
Cash Flow and Fixer–Upper Time Restrictions.
Calculating Rental Property After–Tax Cash Flow.
Chapter 7: Taxing Matters: Inevitable but Advantageous.
Real Estate Tax Rules.
Depreciation: The Basic Rules.
Figuring the Base for Depreciation.
Chapter 8: Risky Business and Rewarding Business: Comparisons.
The Nature of Risk.
Comparative Risk Analysis.
Features Defining Risk.
Tax and Inflation Risks.
Mortgage Cost Risk.
Chapter 9: Diversification and Allocation: Many Baskets and Many Eggs.
The Purpose for Diversification.
Forms of Diversification.
Why Some Portfolios Are Not Really Diversified.
Review and Change.
Chapter 10: A Long–Term Investment View.
Cash Flow versus Profits.
Identifying the Profit Margin.
The Importance of Turnover.
Fixer–Uppers and Your Financial Plan.
Long–Term Rentals and Your Financial Plan.
Checklist: The Key Ingredients.