Hard Money Loans: How to Strategically Finance Your Rental Properties
Understanding hard money loans doesn’t have to be hard! The expert team from Kiavi and TurboTenant will discuss the basics of hard money loans and the benefits of using them before diving into the ins and outs of financing your rental property to maximize your monthly cash flow.
How to Get Started in Rental Property Investments
While there are many ways to invest in real estate, investment approaches can be broken down into two primary categories – fixing and flipping a property to resell it quickly for a profit and buying and holding a property long-term to rent. Let’s take a look at the latter. With a buy-and-hold strategy, real estate investors reap the benefits of rental income, appreciation, and profits generated by the property. Investing in rental properties also provides passive income, stable cash flow, tax advantages, diversification, and leverage.For those who aren’t sure how to get started, we’re digging into the information you need to keep in mind.
Why invest in rental properties?
Investing in rental has long been considered a sound investment–that sentiment continues to grow as tenant demand, occupancy levels, rental income growth, and property values soar. The white-hot rental market across the nation is spurring both seasoned real estate investors and beginners to dive in headfirst. Rising home prices paired with increasing rents put real estate investors in a promising position, encouraging many investors to add new properties to their portfolios, even as mortgage rates have risen in 2022.
What are the benefits of rental properties?
Investing in rental properties benefits the real estate investor in different ways, like positive cash flow, potential tax benefits, and property appreciation, to name a few. Let’s further examine what these benefits can mean to you.
Positive cash flow
In rental investing, positive cash flow is the goal, which is when money is added to your bank account monthly from your occupied rental properties. Once you begin to add more properties to your portfolio, many investors earn positive cash flow without having to go to a 9 –5 job or punch a time clock daily. Determining the amount of positive cash flow you will receive on a rental property is basic math. You simply calculate the property’s net operating income (NOI)by adding up the total rent minus all expenses. The resulting number is your positive cash flow.