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Articles and Homebuyer Tips To Save Time & Money
Real Estate University I Search For Homes I Contact Us I Print This Article
Tax Free Income - The Ideal Wealth Builder
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This ideal wealth builder concept is very simple, and can be summed up in one sentence! Buy one investment property per year for the next 10 years. Or be even more agressive and buy two properties a year and double your tax-free income. However, for this overview, we will use one property. Here's how it works:
Find yourself an Exclusive Buyer's Agent who knows what you're trying to accomplish. This person will be invaluable to you in locating the right properties. This person will not have any conflict of interest and will be there....just for you!Then, get to work! Locate and purchase one great investment property. Try to stay in a $125,000-$150,000 price range, because you want this property to appeal to the widest segment of renters without being on the low end. Look for a home in an up-and-coming area. One that is well constructed. If it's priced under market, that's great! But keep in mind that the most important consideration is the location and the property itself. You're going to be in this for the long term!Year #2 - Repeat the same procedure. Then keep repeating the procedure for the next ten years...always being careful to find just the right property.The example I'm presenting will be based on the assumption that the home has been maintained in ideal condition....both the home and the area have appreciated in value and the rental market for the area has also increased.This is the ideal wealth builder scenario:Starting in year #11 - Refinance the property you purchased in year #1. This $150,000 home (at least in the Middle Tennessee market) should now (10 years later) be worth $225,000-$250,000...if you have bought it following the above guidelines. You will have also kept the property rented, which has made all your payments...and you've taken advantage of all the tax breaks associated with the rental property. And you will have paid the mortgage down considerably. The increase in the rental market should easily pay your new mortgage payment, but be careful to keep the payment in line with the rent.Proceeds from a re-finance are not taxable income, so you are looking at approximately $100,000 of tax-free income. You've not sold the home (which would be taxable)...you've only refinanced it. Could most people live on this amount of money for a year? You bet they could!
OK - So now we start repeating the process all over again. In year #11, you will refinance the property you bought in year #2...and so on! This system will provide income for many years. You will only have to work if you choose to do so! Isn't that a great feeling?
These properties will serve you well - so take care of them and they will take care of you! This investment plan works....so plan carefully! Contact us for more information about starting your tax-free income plan.
Remember, you have a friend in Nashville Real Estate! We are Exclusive Buyer's Agents - always working exclusively for you - 100%. Hope to hear from you very soon!
 Accent Realty Group Pam Rumley
Exclusive Buyers Agent
Broker, CRS, ABR, SRES, e-PRO
409 Shute Lane Hendersonville, TN
Office 615-826-0305
Direct 615-428-8500
Fax 615-826-0389
Toll Free 1-866-359-2800
pam@pamrumley.com
The agent to call when you need someone to go that extra mile!
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