A lot of people think buying an investment property means they will have extra monthly income. Well that’s sort of correct; however, not the objective. A rental investment is a property for retirement or an equity generator towards more rentals. The purpose of a rental investment is to make enough money on the rent to pay the property's mortgage, taxes, insurance and to have some money left for maintenance and unexpected expenses.
People think making high profit on your rental is the prime objective of owning a rental property. However, the more money you make, the more money added to your income which takes you into a different tax bracket and now you are paying taxes on your future retirement fund. The extra money being made should be used for maintenance. If you are making a few extra bucks, then increase your mortgage payment to pay down the mortgage faster or here is another thought: place the money into a money market fund that pays you a high dividend.
Have your money making money for you, not the government.
The faster you pay down the mortgage means you will have more money to access to buy another rental property. With the value of your property going up yearly and the mortgage going down fast means that you can re-mortgage, take your money and buy another rental and the beautiful part is the rental is still paying the mortgage. Now you have 2 properties.
And the process begins again.
By re-mortgaging your rental to buy a second one, you are using the banks money to make money. When you go to retire then you will have one, two or maybe three properties worth $300,000 each. That’s $900,000 to put towards your retirement, Yippee!!!!!!!!
If you want to know more then call or email me. I have several clients that I have been working with over the years building rental portfolios. I can have you on your way to being a millionaire and the odds are better then a lotto ticket.