Sure, lots of agents may say they can help you buy a rental property, but at Brass Key we actually own and manage rentals. Company founder, Andrew Batson, owns over twenty rental properties and our team has helped buy dozens of properties at foreclosure auctions. We know where to buy, and more importantly what and where not to buy. A rental property can be a fantastic investment or a huge headache so it pays to listen to a true expert.
We can help you buy the right property at the right price…including short sales and foreclosures. And we can teach you the ins and outs to manage it yourself or our property management group will handle everything from leasing the property, collecting rent and taking care of all maintenance.
Long Term Strategy
Investing in real estate shouldn’t be a get rich quick scheme. Instead, focus on retirement. Imagine having a dozen properties all mortgage free. You can typically buy a rental property with a 20-30% down payment. If you take out a 15 or 30 year fixed rate loan and then apply the monthly rent to covert the management, taxes, maintenance and pay the mortgage you’ll slowly be paying off the mortgage balance. Your mortgage payment is fixed, but your rent and the property’s value should increase slowly over time with inflation. It’s a great retirement vehicle because you don’t have to worry about the effects of government policy on the value of stocks or bonds. And, you’ll generate a steady monthly income from rent.
A great strategy for young investors is to buy an inexpensive starter home, live in it a year or two, then purchase another home and repeat. When you buy a home as an owner occupant you can put down as little as 5% and the interest rates are more favorable than the rates offered to investors.
Always budget for repairs and maintenance. If you don’t have any cushion available to cover the mortgage while the home is vacant or pay for repairs then now isn’t the time for you to be purchasing a rental.
Real estate offers a number of tax advantages. The IRS allows you to depreciate the property, so each year you write off a 1/27.5 of the value (That’s $2750 on a $100,000 home). Although you didn’t really spend that money, you get to write it off as an expense. That reduces your taxable income. And, when you sell a property after two years you pay the reduced long-term capital gains rate. Even better, you can sell one investment property and buy one or more properties and not pay any tax if you properly take advantage of the 1031 tax deferred exchange rules! Real estate can also be a useful tool in estate planning.
Most people don’t realize they can buy rental properties with their IRA or even 401(k) money. We work with the largest provider of self-directed IRAs, along with a local lender that will lend money to your IRA secured by real estate (which is unusual). Rather than being stuck in the stock market, talk to us about how you can move your retirement funds to a self-directed IRA and purchase rental real estate.
Worried about tenants not paying their rent or calls for clogged toilets? Brass Key has a full service property management group that can truly make owning a rental property hassle free. We’ll advertise the property, show it, complete background checks on tenants, handle all the paperwork, collect the rent and handle all maintenance calls. You’ll get a statement and a check each month. Property management costs typically run about 10% of the monthly rent and 75% of the first month’s rent for leasing.
The best way to get started is talk to an experienced investor. Give Andrew Batson a call at 303-466-7633 or email email@example.com to setup a time to talk about your investment objectives.