And let Your Tenants Send Your Kids to College
Most people have lots of things to save for but not always enough discretionary income after the family essentials have been met.
A relatively small investment in a rental home can control a good home that will easily rent, generate positive cash flows and pay for itself. The borrowed funds create leverage that earn a return on the total value of the home and not just the amount of cash you have invested.
The strategy is simple. Find a slightly below average priced home that will rent well. It will appeal to a larger group of people while it's rented and when it's ready to be sold.
Rent the home and maintain its condition over the years. As the loan amortizes and the value increases, the equity will grow.
When your student is ready to start college, you'll actually have several options.
- You can sell the property; pay the tax on the gain at the reduced capital gains rate and fund the education.
- Another option would be to refinance and take the proceeds to pay for the tuition. This would allow you to continue to own the asset but would free your equity and under current tax laws is a non-taxable event.
Pam Keen Brantley, Certified Residential Specialist; USN Retired, Broker
Realty Masters of FL ~ #1 in Pensacola Rental homes!
(850) 473-3873 office/ (850) 232-2200 cell
4400 Bayou Blvd. #58B, Pensacola, FL 32503
Over 45 apartments and homes for rent in the Pensacola area. http://www.PensacolaRealtyMasters.com
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