Owning some smart rental property is a great way to achieve a passive income. Unfortunately, some people run into trouble with renting because they don’t know all the tricks of the trade. If you want to increase your margins and save yourself some money, try these three tips.
Smart Rental Property Moves: House Hacking
House hacking is a great way to get into real estate if you have no experience. House hacking refers to the practice of renting out a portion of your primary residence. This can help you pay for some or all of your mortgage payments. Essentially, your tenant is going to buy the home for you. This can partially or fully eliminate the single biggest expense that you are facing. That leaves you free to take the money you would be using for a mortgage and invest it in other places.
House hacking works best if you have a mother-in-law apartment. This will allow you to live separate from your tenant. If you have a small family, you can increase your margins by living in the mother-in-law apartment and renting the larger portion of the home.
Transfer to an LLC
Many people make the mistake of owning their own rental properties. This unfortunately leaves you open to a whole host of liability concerns. It is far better to own nothing, but control everything. You can do this by setting up a business entity like an LLC. Transferring your property to an LLC can help you avoid personal liability.
The only asset that your LLC should hold is the rental property. When rent is paid to the LLC account, you should immediately transfer it to your personal account. This way, if someone files a lawsuit against your LLC, the only thing that they can take is your rental property. Your personal funds and personal property are all protected.
Smart Rental Property Moves: Preventative Maintenance
Maintaining your home can be costly. It may seem odd, but the secret to saving money with maintenance is to spend more money. By spending more money now, you spend less in the future. It is much cheaper to clean and fix small problems, than it is to repair large problems. For example, refilling the grout in a tiled bathroom isn’t nearly as expensive as fixing the water damage that will occur if water soaks through the cracks.
As always, you should be keeping very precise records on all your financial transactions. Doing so will help you to save money and take advantage of tax deductions. Know the rules and regulations that surround your rental ventures. The more you educate yourself, the more you will be able to do.
Want to get started in Smart Rental Property real estate investing? Learn more about it at one of our monthly meetings!
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The Southwest Florida Real Estate Investment Association is the leading source of SWFL real estate investing events that provide investment education and networking in southwest Florida. We analyze the housing market and foreclosures and provide information, education, and networking events in order to build a network and knowledge base for investors and potential investors. Our members include real estate agents, brokers, investors, hedge fund managers, rehabbers, wholesalers, and more.
Our SWFL REIA General Meeting is held in Fort Myers where we provide education on hot topics in investing and an opportunity to enjoy the camaraderie of your fellow investors. You’ll get a chance to ask for advice from successful real estate professionals and even make a few deals on your latest projects.
To become a member, anyone can register as an individual, a couple, or a corporation. Being a member opens the doors for endless networking opportunities, advice from members with decades of experience, new ideas from entrepreneurs, camaraderie with those just beginning, and deals and contracts done in the meeting room. For those interested in Cape Coral rental property investment and/or Fort Myers rental property investment, SWFL REIA will be able to provide a network to help launch a successful investment career.
The SWFL REIA is known and respected as a source of current, actionable and useful information about the housing market in the area that we meet.
We meet twice a month.
One of the premier sources for real estate investing networking and education is the SWFL REIA. In the real estate world, the SWFL REIA is different in that it does not do information product sales. Their meetings are focusing on the best ways of investing in real estate by collaborating with other property investors who are sharing their experiences.
We look forward to meeting you at a meeting soon!
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