Hi, Mark, Kohler here with another tax and legal tip, now I want to give you five reasons
Why you should be buying rental real estate, and I'm not a real estate broker or agent
I'm your tax advisor wanting to help you build wealth and save taxes and before I list these five
I want to give a disclaimer here. [I'm] not saying you're going to put all your wealth in real estate
You're going to be diversified
You're going to have an emergency fund you're going to be building a retirement account
[there's] going to be a variety of strategies [you] might use to also get real estate
There's some risk involved
But you may not even be buying real estate in [your] own backyard [remember] the United States is our backyard now
You're one southwest flight and the Hampton away from checking on your real estate. So have an open mind and be
considering strategies to acquire real estate and
Diversify your wealth so number one why is rental real estate so cool because you can use
Leverage meaning instead of investing a hundred thousand in the stock market you can invest ten thousand in a rental property and borrow
Ninety thousand from the bank now when you do your Roi or return on investment. That's against your
[$10,000] and as long as you can cover the cost of borrowing
Your return [on] [investment] is against your ten grand not the hundred Grand
Because you're using the bank's money to get you to the purchase via retic [LI] you can buy 10 properties with that hundred Grand
Leverage your [money] and get a much bigger return on investment number two that rental real estate is going to grow tax-deferred
or tax free even now tax deferred because you don't pay taxes tell you sell the property so it's going to grow and
Appreciate and appreciate the mortgage is going to go down and down and you're going to build equity and equity and then someday
You may sell it and have capital gain a lower tax rate to boot
Now if you want tax-free results, you might use a 1031 exchange to defer it even further pass it on an inheritance
You could use a Charitable remainder trust?
And you can even use installment sales to spread out the gain over time
So lots of ways to exit that real estate and a preferred tax method
Number three can I say tax free cash flow because what's cool about rental real estate is it's your rent
minus Depreciation
mortgage interest property taxes
maintenance and all those extra expenses like travel dining entertainment home office pdas laptops internet cell phone and
therefore on paper you're losing money
Even though you have cash flow and thus you have tax-free. Cash flow going into your pocket with a leveraged investment
Number four remember rental real estate is a small business, and I want you to treat it like that
it's going to be reported on your personal tax return or on an entity and flow into your personal tax return and
Even though you may have cash flow you can have tax losses on paper that [could] be deductible against your other income
Thereby it's a tax benefit strategy
And I want you to track all [your] expenses related to the rental property
Remember again travel dining entertainment home office pdas laptops all that good stuff [our] deductible against your rental property business
in number five
Rental property is really like a forced retirement plan because once you buy that rental a lot of us feel
Emotionally stuck and you've signed on a mortgage possibly so you're going to be committed to keeping that rental alive
And there's going to be months where you're going to be like oh this rental property is killing me
But there's a lot more months where you're like. Oh my gosh. That's the best thing
I ever did and folks if you could be buying one rental property [in] year it just make that simple goal
Where would you be [five] [ten] or [fifteen] years from now in conjunction with the other retirement planning guys the rental property?
Forces you to save me as Americans are terrible at saving you money of us try to compare like
$50 [or] $100 into a bank account every month if you've got a rental property [you're]
Committed to it and take care of it
And it's going to grow and build your return in summary you've got to consider rental real estate
And I know it's not for everybody
[but] [it's] for a lot more people out there than you realize and it could be the perfect fit [for] you in your retirement plan
Thanks for watching it if you love that video
I've got a lot more please subscribe to my channel
And I shoot weekly videos that can help you in your business personal life and better live your American dream
Also check out my newsletter free newsletter every week with blog articles tips strategies tax deadlines
You'd love it also if you like social Media
Please follow me on social Media with some daily tips and if you like to connect that way it can be a lot of fun
but finally please check out my tax and legal library I have
50 plus videos on these topics and more where I pull out a whiteboard and breaking down hours and hours of helpful information
That can better help you live American dream
you