No question today, but here’s some info you may find interesting:
What are the 5 returns of real estate?
1. Positive cashflow
2. Appreciation
3. Sweat equity
4. Principal paydown
5. Depreciation deduction
Many people only think of #1 and #2.
#3 never comes up. But a benefit of rental real estate is you can increase the value by:
– raising the rents
– running it more efficiently
– improving or expanding the property
Likewise, most people overlook #4. It’s a slow process, but if you own a San Diego property for an extended period, you’ll pay the loan down quite a bit. Eventually to zero.
And #5 is again overlooked. Depending on income and involvement in managing the property, most people would be eligible for a nice deduction on their taxes.
