We as Blue Coral team think real estate is one of the best ways to make money and build wealth. Although we are not investment advisors we sell investment properties and we would like to show our customers how these properties create the returns, Here is why:
There are many ways to turn a profit with real estate, The Blue Coral way is the most profitable one.
When you buy a stock, the only way you can make money is if you can be a wall street wizard and pck the right stock, if the stock appreciates in value, and if you sell it at the good time. (lots of “if”’s there…)With real estate you can make money in many ways, here are the most obvious reasons:
* Rental income. That one is the main source of profit investors are going for when buying a rental, and doesn’t need an explanation. “Rental” goes two ways, long term and short term. Long term rental properties are not really our business, we specialize on “short term” (Vacation Rental) properties where the rent income is highest.
* Buying great value. You turn an instant profit if you manage to buy a property for under market value. Blue Coral creates an incredible value with all the upgrades and already in-place management agreements.
* Selling high. You can make extra money if you stage the property to attract buyers over market value. With all the extras and upgrades when time comes to sell your property no doubt will be the most advantageous property to any buyer. With stocks, you always buy and sell at market value. With real estate, you could in-fact beat the market.
* Increasing equity. If you take a mortgage to finance a rental, you are increasing your equity with every mortgage payment. Consider putting down 25% on rental and with mortgage repayments you’d be around 33% equity at the time, those 8% of the property value were paid by rents and are increasing your net worth every month.
* Leverage increases returns. If you put 20% down on a property, you will still receive rental income based on 100% of the property value, making it a great return for your 20%. Imagine your property is worth $400,000 and you average rental income is $ 160,000 (this calculation is based on 8 bedroom unit, daily average rent based on $ 800 and annual average based on estimated 55% occupancy – HOA / Property Taxes / COR will cost around $ 90,000 so you will clear $ 70,000) Your annual mortgage payments will be around $ 36,000 so now have a $34,000 profit on $80,000 down. That is a very cool 43% return on your deposit. Good luck trying to get an almost guaranteed 43% on stocks.
* Leverage makes you profit on the full selling price. If that same $400,000 property you bought with $80,000 down sells for $420,000 a few years later, you get your $20,000 plus principal payments back, and a $20,000 profit. Not to mention you are making about $ 34,000 profit a year after year until you sell it. * Tax benefits on interest. Depending on your country of residence, you can often deduce the mortgage interest from the rental income, and create a tax free profit.
* Tax benefits on improvements. You can also deduce the cost of the improvements from the rental income, while the added value to the property is yours to keep.
* Profit from a lump sum on a refinance. So you bought your $400,000 place, and put $60,000 worth of improvements, that the tenants paid back with rents. The property is now worth $460,000 because Blue Coral delivered an exceptional property, you can refinance to get the $160,000 cash and put 35% down on your next $400,000 rental!
* Profit from extra cash flow on a refinance. If you are able to refinance the property to lower your mortgage bill payments while the rent stays the same, you are generating more cash flow every month. You can build a cushion for maintenance, save up for a deposit on a new rental, or have more great rent income to live off.