Return to The Money Mentor Blog

Making a profit with your real estate investment

Couple enjoying their real estate investment
September 15, 2017

By Alliant Credit Union

Investing in real estate can be a great way to accumulate wealth. Whether it’s selling your home after it’s appreciated in value or earning a steady income on rental properties, your real estate investments can be a healthy influx of cash. Consider these tips as you expand your personal real estate portfolio:

  1. Renting? Consider smaller units. Renting out an unused home can be a great source of income. As an added bonus, if you ever have second thoughts, you can always sell (or move in yourself!) when a tenant’s lease terms are up. Consider the benefit of splitting the property into smaller units by partitioning the home into a duplex, if the layout allows or modifications aren’t too expensive. 
  2. Don’t flip; buy turnkey. The mantra of real estate investing is “buy low, sell high.” But your investment may earn you more money, more easily, if you purchase it as a turnkey property vs. a flip. Turnkey properties are ready to rent to tenants with minimal to no renovations needed. The effort on your part is usually minimal because there should be few surprise expenses. Plus, there’s no need to worry about hiring a contractor to make fixes, and you can start making money immediately, without sinking costs into renovations. 
  3. Get the tax benefits. Taxes, while foreseeable to the savvy investor, are often unwelcome. But in some instances, taxes can benefit you. For example, if you decide to flip or to renovate and rent out a property, you may be able to deduct the cost of improvements from the rental income you declare. Talk to your tax advisor to learn more about how this can benefit you. 
  4. Receive extra cash by refinancing. Refinancing your property can be an excellent way to create a steady cash flow. If you’re able to refinance the mortgage on your income property to a lower monthly payment but keep your tenants’ rents the same, you can pad your savings account with the additional monthly income. Or, you can use the extra cash to prepare for any future home renovations or emergency expenses.  

A sound real estate investment strategy can be a great way to diversify your investment portfolio, and as all good investors know, a diverse portfolio can help you weather uncertainty in the market. Speak to an Alliant home loan specialist to learn how Alliant can help you with low rates and flexible terms on both mortgage and home equity loans.


http://www.investopedia.com/terms/t/turnkey-property.asp

http://www.huffingtonpost.com/pauline-paquin/why-real-estate-is-one-of_b_9223400.html