John R. is a experienced investor who found himself unable to ignore the real estate investing opportunity because of the cash flow that it would generate.
The more he explored real estate investing, the more he came to appreciate the many unique benefits of real estate as an investment vehicle. ”The incredible thing about real estate is being able to write off all of the expenses, such as interest, property taxes or management fees. Depreciation is a big write-off as well,” he said.
John was able to use these benefits even when the market wasn’t great. “When I bought our first home in Hawaii, the prices dropped the next year. Despite the drop, we were still able to sell the house in four years. We sold it for twice the amount we’d bought it for.”
As opposed to some investors who might be more comfortable trying to rehab & resell the properties, John believes that there is more to be gained from investing in properties and letting them pay for themselves over the long run. “Some may disagree with me, but I think you make more money in the long run that way. My wife and I own over 50 properties now. We have a LLC that holds our properties to protect ourselves.”
John doesn’t limit himself to one type of investment, but is willing to look at any type of real estate investment as long as the math makes sense. This includes mobile homes.
“I call them metal boxes that spit out money. The overhead is low and the rents are reasonable. The thing is to keep renters in them. Vacancy can be a challenge—in fact it’s probably the biggest challenge for investors—but if you plan ahead you’ll be fine.”
The key to success, John says, is to make informed and rational decisions with your investments. “Don’t get emotional about the property. It’s hard, but you’ve got to keep emotion out of it.”