A lot of people compare real estate returns to stocks, saying “hey this deal is only making 5% return – I can beat that with the stock market!”
But the beauty of real estate is that it makes you money in so many different ways, and you have way more control over how the asset performs versus just trusting someone like Elon Musk or Jeff Bezos with your money.
The first way is Cash Flow, also known as cash on cash return. Ask yourself – for the amount I have invested, how much am I seeing back in cash flow? This is what people mostly look at as the way they make money, but it doesn’t tell the whole picture.
The second is Tax Savings. You can deduct your many expenses and mortgage interest on your tax returns. The best part is depreciation which really reduces your taxes on cash flow. *Talk to your accountant to learn how this works! I am not a CPA or tax advisor.
The third is Mortgage Paydown. No matter what, you are paying down your mortgage each month. So even if you do nothing and there is NO appreciation at all, after 30 years you are at $0 debt!
And the fourth is Appreciation. Making renovations that make your property worth more is the safest way to benefit – this is called “forced appreciation.” Don’t bank only on appreciation, but in strong markets like LA values do tend to go up more consistently over time.
To learn more about real estate investing, set up a call with me!
www.lyonideas.com/call
Sammy Lyon
REALTOR®️
DRE #02113227
www.buyahouseinLA.com
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