(505) 404-1131 robb@robbkrautbauer.com

Blog #35: Real Estate Market Fundamentals: Interest Rates

So, what happens to real estate investments when interest rates rise? With the global economy in its current state of disarray, inflation is trending upward at an alarming rate. It was only a matter of time before the reserve bank stepped in to flatten the curve with an interest rate hike. Keep reading to find out why interest rates rise and how they influence the real estate market.

Why Do Interest Rates Rise?

As with most other market factors, interest rates are influenced by the supply and demand for credit. When credit demand increases, the interest rates will rise, while a decrease in demand tends to reverse interest rates. 

When more money is available to borrowers, the more money there is in the economy. 

Inflation will also cause higher rates. When the inflation rate increases, the Federal Reserve will raise interest rates. Credit is more expensive, which reduces the amount of money in the economy. 

Of course, the economy is more complex than our straightforward explanation. The Federal Bank needs to maintain a delicate balance to create a stable economy, and interest rates are a significant part of their strategy. 

How Sellers are Affected by Rising Interest Rates

Real estate values are inextricably linked to the Federal Reserve’s interest rate. Higher rates make mortgages more expensive, which reduces the pool of available buyers.

For example, a seller trying to attract buyers to a $400,000 property would suddenly find that their pool of prospects could only afford $355,000 should the interest rates rise by 1%. If interest rates kept rising suddenly, it could still bring prices down even further. There’s nothing quite like uncertain interest rate hikes to spook investors out of the market, which creates more opportunities for savvy property buyers.

Profit could still be made on a property that has been held for a while, but sometimes, the best investment strategy may be to hold for a while longer until the market improves. 

Rising Interest Rates and Property Value

Rising rates will affect cash flow and housing prices. However, a growing economy that keeps pace with mortgage payment increases may not have as much of an impact on real estate values.  For example, if monthly mortgage payments were to increase by $240, but a strong economy enabled employers to deliver a 5% wage increase, the extra wages could offset the increased mortgage costs and keep property values stable. However, the economy would need to keep growing to prevent the market from plateauing. 

Focusing on your financial goals and sticking to your investment strategy is critical to creating a profitable property portfolio. Housing prices invariably trend upwards despite occasional dips in the market like we are currently seeing. For this reason, buying and holding for the long term is almost always the key to successful property investment. 

While property investment is a long-term strategy, buying the right property at the right price will improve your gains, but it’s not easy. Researching the market and analyzing the demographics of an area are time-consuming and challenging tasks. Fortunately, there are experts available who have made all the mistakes and are willing to teach you how to avoid them. Check out the website today to learn how you can improve your future cash flow through real estate investing.

 

 

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #34: Real Estate Market Fundamentals: Demographics

Blog #34: Real Estate Market Fundamentals: Demographics

Many variables will influence your property investment decision when considering your options. Demographics is just one, but it has a critical role in adding value to your property portfolio through making good choices. Learn more about how demographics will influence your investment decision.

Demographic Factors Affecting Real Estate

Real estate demographics data are quantifiable data that analytically describe a community. A study of demographics will include age bracket, income, crime risk, school quality, employment opportunities, and population growth, all of which will impact your investment and the returns you can achieve. 

Research the Real Estate Demographics Before Investing

Demographics are critical to your investment research before buying real estate because they are the next best thing to a crystal ball when predicting the future value of real estate investments in an area. For example, a location with a decreasing or increasing population is a good predictor of the future market. 

Another key demographic is the crime rate. This information will give you essential insights into your prospective rental pool and the possibility of increased rental costs such as maintenance. 

While we would all prefer to live in a low-crime rate area, many new investors make the mistake of overlooking this essential real estate demographic. As such, they increase their risk exposure and their ability to improve their portfolio with capital gains. 

Job Growth and Real Estate Values

Research into the job market of an area is another factor to consider. If there are no employers or none are hiring, then the location is less appealing as a place to live. You may find that you can not charge the rent levels you need to create a positive income stream. 

Carefully examine the employment and income data for an area, and extend your search into the surrounding areas as well. Many people are prepared to sacrifice travel time for slightly cheaper rents if the commute is reasonable. 

How Amenities Can Impact Real Estate Investments

Families will search for affordable places to live by balancing rental values against easy access to good quality schools for their children. An area that is local to good schools will generally improve the value of your investment and provide a greater pool of rental possibilities. 

For example, Worcester, MA, is the second largest city in New England and provides an excellent example of how educational opportunities can be a critical factor influencing the quality of an area. 

Many of the suburbs around Worcester have some of the nation’s worst performing schools, with a correspondingly disappointing result in the real estate values. However, one suburb, Westwood Hills, is an exception, as the schools have a solid rating. The local real estate also achieves higher median values than the surrounding areas.

Your research into real estate demographics should seek out these anomalies as they are often less well known to other investors and, therefore, less competitive to enter. 

Rental Versus Owner-Occupied Demographics

The ratio of owner-occupier versus renters real estate demographic data is another indicator that can help you achieve more value in your real estate investments.

Owner-occupiers tend to take more pride in their property’s appearance, so streets with more owner-occupied homes tend to appear well looked after and more appealing. A house on a good-looking street will generally fetch a higher price than a street full of rental stock whose landlords put little value in the property’s general appearance. 

As you can see, researching a prime real estate investment can be overwhelming to investors entering the market. Fortunately, you can ensure you purchase a well-positioned property by talking to the experts who are already successful real estate investors and can help you do the same. 

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #33: Real Estate Fundamentals: Government Subsidies, Projects, and Infrastructure

Blog #33: Real Estate Fundamentals: Government Subsidies, Projects, and Infrastructure

Governments can have a profound effect on the state of the real estate market. Policies, subsidies, and infrastructure projects will significantly influence the current and future prices of properties in an area. Learn more about why your research should include an in-depth analysis of government influences.

Zoning Regulations and Building Codes

Governments have been regulating land use for centuries, with zoning regulations and building codes undergoing frequent changes. Local governments create their own building codes, with requirements varying substantially between areas.

Consider the surrounding properties and ensure your property is zoned for the area’s intended use. For example, a residential property next to a commercial zone will have less value than a residential property in a residential area.

Regardless, homes that are up to code are generally more expensive than ones that need repairs or remodeling. When considering a property that needs work, understanding the extra costs should factor into your decision.

Local Goods and Services

Government-provided goods and services such as fire protection, law enforcement, water sanitation, schools, public transport, and roads make an area more attractive and drive prices upwards.

Locating an area where the government may be planning significant upgrades could help a savvy investor score a lower-priced property that will be significantly more appealing after the planned upgrades are complete.

Government regulations and services can impact the long-term growth prospects of an area. Zoning regulations and building codes often enforce restrictions that prevent investors from doing what they need with a property, such as developing a high-density living area. Every analysis must include the costs for the investor to comply with the local regulations and building codes. 

Investors must also consider the property taxes and the level of government investment in public goods and services. These government-run projects can significantly influence rental prices and the future growth potential of the property, such as market rents, vacancy rates, population, income growth prospects, and overall property values.

Government Subsidies

Subsidies related to property markets provided by the government are often contentious issues. While the government’s goal is to stimulate the economy and make new houses more affordable to more people, you cannot ignore the influence a sudden influx of new buyers will have on house prices. Significant tax deductions and subsidies put more air into a housing bubble until it has the opposite effect as house prices rise to even harder to reach heights. 

Any property investment requires careful analysis, and it’s often challenging to navigate the government’s intentions or even trust they know what they are doing in the case of subsidies. However, opportunities abound in any market; you just need to know how to find them. If you would like to get into the property market, but would rather avoid costly mistakes, talk to investment professionals immersed in the property market every day. The best advice will help you buy the right property at the right price so that you can invest with confidence.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #32: Real Estate Market Fundamentals: The Local Economy

Blog #32: Real Estate Market Fundamentals: The Local Economy

The housing market often reflects what’s happening in the economy. When times are good, there’s money in the economy to invest in housing. If times get tough, the Federal Reserve may intervene to reduce the pool of spending money. Unfortunately, when the Federal Bank starts looking at the possibility of an interest rate hike, it usually means there are leaner times ahead for homeowners and real estate investors alike. Keep reading to learn more about how the local economy influences the real estate market.

How Does the Federal Reserve Determine Interest Rates?

Many factors will cause the Federal Reserve / Central Bank to fiddle with interest rates. In general, though, it’s the state of the economy that determines the interest rate.

High interest rates make credit and mortgages more expensive, reducing the amount of money circulating in the local economy. Of course, some areas are harder hit than others when interest rates change.

The top end of the market takes a heavier hit due to significant price differences. After all, one percent of one million is a lot of money, but 1% of $400,000 can hurt more for lower to middle-income earners, which is the demographic where mom and dad investors have most of their finances tied up.

Why Are Interest Rates Critical to The Real Estate Market?

Interest rates influence the value of a property. When interest rates go up, credit gets more expensive, and property buyers’ borrowing capacity decreases. Buyers who may have been considering properties close to the city will need to look further out. In these cases, appealing suburbs outside the metro area can suddenly benefit from higher values.

Housing Starts Versus Home Sales

The housing market has two main sectors: home sales and housing starts. Home sales include established homes, while housing starts refer to new homes that have not yet been built.

The volume of housing starts, usually in brand-new suburbs with the latest, most up-to-date infrastructure, increases when the economy is full steam ahead. After all, who doesn’t love a brand new, shiny home that’s never been lived in before?

Housing starts will influence the local economy in many ways, including employment, land sales, raw building materials, and the businesses and support services that grow up around new suburbs. A weaker economy usually creates a corresponding drop in new home sales and a slight uptick in the sale of established homes.

Slow economies can have a dramatic effect on the housing market. Economic slowdowns influence the local economy as finance gets more expensive and the number of buyers in new home builds dries up. The reverse is true in a healthy economy.

Whatever the state of the real estate investment market, you can always find lucrative opportunities when you know where to look. However, it can be challenging to know where to put your investment dollars when you are not immersed in the property industry every day. Invest with confidence by talking with the experts who have successfully navigated the property market and consistently come out on top.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #31: What Happens to Real Estate During Inflation?

Blog #31: What Happens to Real Estate During Inflation?

Many investors regard real estate as one of the best strategies to hedge against inflation because property prices over any given decade tend to trend upward. This article will discuss why inflation occurs and how it can affect your real estate investments.

What is Inflation?

The economy is dynamic, and many variables will impact inflation. However, at its core, inflation is a measurement of the increase in prices of goods and services over a period of time, including real estate costs and rent prices.

Inflation is influenced by the amount of money circulating in the economy. When more money is available, prices tend to rise, but there is also the expectation that prices will always go up eventually. A more straightforward way to think of inflation is that the dollar’s purchasing power degrades over time.

Real estate creates a reliable buffer against inflation because property prices increase over the long term. Investors also gain an advantage through cheaper interest rates and the ability to increase their yields by rising rental prices in line with inflation and supply and demand.

Why is Property a Reliable Asset against Inflation?

Real estate investment is a long-term strategy. Property prices can fluctuate in the short term like any investment vehicle. However, holding an investment property over the long term is when the magic really happens.

As property prices rise, the original mortgage repayments remain reasonably stable. Of course, the Fed can make repayments more or less affordable if it decides to get aggressive with its interest rate adjustments. Even so, your repayment responsibilities will tend to balance out over the long term.

Rising property values are often matched by increases in rent. Should you keep a property for ten or more years, the value of the rent you can charge may have doubled, but your mortgage repayments will be similar to when you first bought the property. You will have effectively increased your rental yield two-fold or more.

Such increases in yields are difficult, if not impossible, to match in other investment vehicles. Plus, you also have the advantage of a significant increase in equity, as property values can often double or more over a decade.

In short, a long-term real estate investment strategy is an excellent hedge against inflation.

Investors can take advantage of lower interest rates to purchase property that will increase in value over time, often at higher rates than inflation. They can also pass on inflationary costs to tenants in the form of higher rents and profit from capital gains in property prices over the long term.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #30: Mutual Funds: Eggs in Too Many Baskets?

Blog #30: Mutual Funds: Eggs in Too Many Baskets?

Investing in a mutual fund might seem logical. It’s an opportunity to let a seasoned investor decide where your money goes, and typically, the investments made by a mutual fund are fairly diverse. That is to say, they fall into a variety of markets, and as such you can feel protected. If one market doesn’t pan out, perhaps one of the other ones will.

A lot of experts say that diversification in your investment portfolio is a good thing, and to a certain extent, they’re right. Investing in, say, only one stock, is a bit of a dangerous move, because what if that stock crashes? But diversification can also be very dangerous.

If you invest in a mutual fund that invests in a hundred different companies, that doesn’t necessarily mean that you’ve reached optimal diversification. A lot of mutual funds invest specifically in a single industry, which means that you still face many of the same problems you would if you only invested in a single company. And what about mutual funds that invest in multiple industries?

At that point, you run into a problem of overdiversification, which is sometimes, adorably, called “diworsification”.

If your money is in a million different companies, keeping track of how all those companies are doing is a nightmare. Another problem is that investing in a lot of companies means having to own a lot of stocks in each of them, meaning that you have to put in quite a bit of cash up front. And perhaps one of the biggest issues with overdiversification is the fact that having your cash scattered in all directions means that even if one stock is performing well, you still might not make money after you account for how another market is doing.

Now let’s think about another investment: real estate. It might seem on the surface that real estate is an investment inherently lacking diversity, but the truth is, there are all kinds of real estate. You can invest in single family homes, multi-family dwellings, or office properties. You can invest in different parts of your city, or even in other cities. There are plenty of ways to have diverse real estate investments, and yet it would be really difficult to run into a problem of overdiversification, because it’s all real estate.

Real estate is a reliable, steady investment. Everyone needs it, and so it’s not going anywhere. This is just one of the many reasons real estate could be the right investment choice for you.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #29: Stocks Are a Gamble

Blog #29: Stocks Are a Gamble

Stocks are probably one of the first things you think of when you think of investing. The stock market is a big, well-known path of investing.

But just because something is popular doesn’t mean that it’s the best thing! Stocks, like any investment, come with a set of downsides that you’d be a fool to ignore. Today we’re going to talk about just how risky the stock market can be.

The stock market is controlled by supply and demand like any other market. That’s just the way it goes in the economy. But the stock market can move fast — too fast to keep up with. A stock can crash in a few months, if not weeks, if things go south for the market. And there are so many ways things can go wrong.

If people stop buying iphones, what do you think your Apple stock is going to be worth? It all comes down to how much the company itself is worth, and that depends on the economy at large. When things start dipping, as they have throughout the year 2020, then the stocks go down with them. You simply can’t rely on most stocks to not flake out on you.

And what about the long term? A company that made, say, the tapes for answering machines might have been doing great in the eighties, but how well do you think they’re doing now? Most companies don’t live to see their hundredth anniversary. The sad truth is that most things eventually become obsolete, and with technology advancing faster and faster by the day, that’s a bigger risk than ever

So, why not invest in something steady? Something people are always going to need? There are a few things that are simply necessary for human life, and one of those is shelter. Real estate is never going to become obsolete. As long as there are people, those people are going to need a place to live, a roof over their heads. Furthermore, real estate is a relatively stable market — even when it goes down, it doesn’t do so as rapidly or dramatically as some other markets do.

If you’re thinking of expanding your portfolio, think about real estate before you start looking at the options in stocks. It’s an essential asset you can count on to provide a prosperous future for you and your family.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #28: Why Tax Benefits Make Investing in Real Estate a Better Move Than Mutual Funds

Blog #28: Why Tax Benefits Make Investing in Real Estate a Better Move Than Mutual Funds

Everyone wants to increase their wealth; however, it can take some time to figure out how to make that happen. Many look to mutual funds and real estate for investment opportunities. Perhaps they know somebody who has seen success from one of these methods.

Still, the question remains: which of these investments is the better option? The first step to answering this question is to understand what each option entails:

Mutual Funds vs Real Estate

To put it simply, a mutual fund is a hodgepodge of investments pooled together by many different people. Mutual funds may include stocks, bonds, and various other types of assets. Professional money managers oversee these funds. As such, they make the calls on what to do with the money to see that multiplies with time. While some investors may prefer this hands-off approach to investing, it has some disadvantages. Perhaps most notably, there are quite a few middlemen in the process.

Real estate investments are a little more straight-forward. Real estate investments involve purchasing property for profit. This often involves renting the property out to tenants, which results in the collection of revenue from rent. The increase of the real estate’s value over time can also provide revenue. Unless an investor chooses to hire a rental property manager, the sole responsibility of the real estate lies upon the investor. This increased responsibility calls for a more hands-on approach, but results in more control over the investment and involves less risk.

JD Esajian, president of CT Homes LLC and national speaker with FortuneBuilders Inc., explains that “real estate continues to be one of the most popular investment strategies for protecting and growing one’s wealth. Combined with the enticement of generating cash flow, investing in real estate also opens a treasure chest of tax advantages.”

Some tax advantages include:

  • Deductions
  • Passive Income & Pass-Through Deductions
  • Capital Gains
    • Capital gains are the profits homeowners make when they sell their real estate property.
      • Holding property for more than one year before selling is the most beneficial option presented to an investor, as it calls for a lower tax rate to be paid by the investor
  • Depreciation
  • 1031 Exchange
  • Tax-Deferred Retirement Accounts
  • Self-Employment/FICA Tax
  • Opportunity Zones

Mutual funds do not offer these same tax benefits. In fact, mutual funds face many challenges that real estate investments do not. Some cons presented by mutual funds are:

  • High fees
  • Tax inefficiency
  • Poor trade execution
  • Potential for management abuses

Why Real Estate Comes Out on Top

Real estate offers more control over the investment, whereas mutual funds rely on complete trust in the money manager. It also has the potential to bring in more revenue than mutual funds thanks to tax benefits that mutual funds do not share. The obvious conclusion is that real estate investments are a much better option than that of mutual funds.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

 

Blog #27: Cryptocurrencies vs. Real Estate: Why Cryptocurrency Comes Up Short

Blog #27: Cryptocurrencies vs. Real Estate: Why Cryptocurrency Comes Up Short

Looking for a way to make extra money over time? If you have the means to do so, investing is always a good idea– as long as you’re making smart investments. Making risky investments in cryptocurrencies like Bitcoin can certainly be thrilling, and it’s definitely become somewhat of a fad in recent years; it seems like everyone and their mother has money in some sort of cryptocurrency at the moment. But you should think twice before putting a significant amount of your savings into cryptos, no matter how good of an idea it seems in the moment. That’s because it doesn’t have any tangible backing, among other reasons.

If you’re looking to make a more promising investment, real estate investments could be one great and much safer, more tangible option. If you’re not quite convinced yet, just put down the DogeCoin for a second and let us explain why cryptocurrency comes up short when compared to real estate. 

Cryptocurrency and its risks

Your first question might actually be what, exactly, cryptocurrency is and how the infamous process of investing in it works. Essentially, a cryptocurrency is an electronic currency that does not physically exist, but still holds worth. The value of cryptocurrency goes up and down based on how many people are purchasing it– it’s all about supply and demand. So, if you buy cryptocurrency at a low price, you may be able to sell it for more money once it becomes more valuable. The key word here is may.

One of the risks of cryptocurrency is that it’s extremely volatile. What seems like a good investment one day could be thousands of dollars wasted the next. And while most investments come with the risk of losing your money, cryptocurrency poses another unique risk due to its intangibility. Cryptocurrency isn’t backed up by any physical assets– it’s all electronic. That means it’s susceptible to glitches, errors, and hacking. 

Real estate investments and its benefits

Meanwhile, real estate is one highly tangible asset that offers a much safer investment– it definitely has a physical form to back it up! It’s a whole house! While the fact that property can’t be hacked like cryptocurrency can is a huge plus, real estate investments also offer tons of other benefits: great, steady cash flow, tax breaks and deductions, and steady appreciation in value. It also comes with competitive risk-adjustment returns: over the past 50 years, the average annual return has been about 11%. 

While real estate is a long-term investment, the overall return will be worth the wait. Overall, it offers long-term financial security and a nearly guaranteed great return. This, along with its tangibility, makes it a more secure option by a landslide when compared to cryptocurrencies.

So before you jump on the next big cryptocurrency bandwagon, really think about the risk you’re taking and ask yourself if that money could be better spent on real estate. Sometimes it’s best to play the long game. Happy investing!

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #26: Keeping Money in the Bank vs. Investing in Real Estate: Why Real Estate Comes Out On Top

Blog #26: Keeping Money in the Bank vs. Investing in Real Estate: Why Real Estate Comes Out On Top

We all want to use our money wisely. For those of us with a little extra to spare, you might consider investing in real estate. If you’re stuck between investing in real estate and saving your money, here’s a quick guide to help you.

Keeping Money in the Bank 

A lot of people choose to take their extra money and put it in their savings account. While they don’t get much back in return, they won’t lose any money. Most people figure that it’s easily accessible if they need it in the future. 

However, you miss out on the chance to make even more money if you keep it stashed away. You might earn a little bit of interest (though it’s usually less than the rate of inflation), but investing in real estate could earn you a lot more. 

Investing in Real Estate

Real estate has always been a favorite investment for people that want little risk and high returns. While it requires more money and time at the start, the passive income stream and possibly considerable appreciation more than makeup for it. 

The biggest reason to invest in real estate is the tax benefits. You can receive lots of deductions, saving you anywhere from hundreds to millions each year, and you’ll still be earning through passive income. Here are some of the ways your real estate investment can get you tax benefits. 

Depreciation

The IRS allows you to list depreciation as a deductible expense on your taxes. Anything that depreciates, including real estate, can be counted for a depreciation deduction.

Pass-Through Deductions

Pass-through deductions are covered under the Tax Cuts and Jobs Act. Some business owners, including those who earn rental income, can deduct up to 20 percent of their net income from their taxes. 

Capital Gains

With a real estate investment, you have the option to pay capital gains tax rather than income tax, which is typically more expensive than capital gains.

Retirement

Some retirement accounts, like an HSA or an IRA, allow you to invest in real estate tax-deferred or tax-free.

Opportunity Zones

Opportunity zones offer reduced or eliminated taxes for real estate investments in the country’s most rural and distressed areas.

Why Real Estate Wins

If you’re trying to figure out what to do with your money in the long-term, invest in real estate. You’ll earn and save a lot more than you would if you keep it in the bank. The tax benefits alone are enough to show that real estate investments are the way to go. 

 

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #25: Gold vs Real Estate: Why Gold’s Depreciation and Poor Sustainability Outlooks Puts It At a Major Disadvantage

Blog #25: Gold vs Real Estate: Why Gold’s Depreciation and Poor Sustainability Outlooks Puts It At a Major Disadvantage

With rising inflation rates and unprecedented costs of living, choosing the right investment strategy is paramount. Thanks to its wide availability and flashy draw, many new investors look to gold as a viable investment option.

Unfortunately, due to its impracticality, poor long-term returns, and declining demand from new generations, most seasoned investors advise to steer clear of gold.

Here is what you need to know:

Gold Depreciation Over Time

Turbulent economic conditions allow investors to reflect on their current investment portfolio. Out with the old, and in with the new! 

Rare earth metals and crop production have shown their hand in the history of investment. While generations ago it was a coveted resource, over time, gold has lost its draw to newer investment options. Emerging generations simply do not value it as readily as do older generations.

In contrast, real estate is a tried and true method with diverse options for property investment. From residential rentals, to industrial real estate, and even vacant land, real estate is a trusted resource for current and emerging market trends. 

Investors also have to consider the instability and decrease in value of other precious metals and goods. A 2019 study of metal sector deals revealed that coal was actually the primary revenue contender of global mining, with gold coming in second to last. 

This decline in demand may partially be attributed to an eco-friendly global mentality. Mining has taken its toll on the environment as a whole, leaving a hole in the pockets of the future stability of an investment in rare earth metals. 

Erosion, deforestation, and excessive water use all make gold an unsustainable investment choice for the environment. This makes sense when you consider that many have rallied for the preservation of earth’s most precious resources: Earth itself. 

Looking to the Future

With the onset of work-from-home measures and rampant pandemic precautions, space is a necessary resource for buyers. Moira Taylor, co-owner and CEO of Taylor Made Realty in Atlanta suggests, “Investors should consider the suburbs of major metropolitan areas, as they’re an ideal investment and have seen an increase in buyer demand in places like Atlanta, New Jersey, San Francisco and other major city suburbs.” Investors are taking advantage of these changing trends, and focusing instead on the buying potential of modern real estate. 

As buyer choices change, so too do investment decisions. Whether you’re looking to invest in vacation rentals or you’d like to construct from the ground up, there’s a real estate opportunity for you.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #24: Gold Vs. Real Estate: Gold Is Not a Solid Investment

Blog #24: Gold Vs. Real Estate: Gold Is Not a Solid Investment

Gold has been around for centuries. From ancient royalty to present-day investing gurus, plenty of people choose gold as an investment. That many people can’t be wrong, can they?

Well, as it turns out, gold may not be such a golden choice after all. On the surface, it may seem harmless, lucrative even. However, when you look closely, you might start to notice that there are a lot of reasons that gold isn’t quite the excellent investment people have believed it to be for so long. 

Here is why:

A Market Steeped in Instability?

Let’s cut right to the chase. The gold market is simply not stable. That might seem strange, because most people associate gold with prestige and wealth. You figure that it is surely in high demand. Why would its price fluctuate wildly, if everyone wants it?

As it turns out, gold prices move with the economy, like any investment does.That said, gold also crashes harder than some other investments because it doesn’t really serve any purpose, at least not in the way it used to when currency was backed by it.

People like gold, but generally speaking, they don’t need it. It’s a market that people invest in when they’re afraid of paper currencies going under, but its value doesn’t come from it being useful or necessary for society. 

Why Real Estate Glimmers

With that in mind, maybe gold isn’t the right investment. Its instability makes it unreliable—you can’t count on gold to weather through a tough economy with you. So, what’s another investment to consider, if you can’t count on this classic?

Let’s take a look at another thing that people have trusted as an investment for centuries: land, property, and real estate. People have been profiting from owning property for as long as there have been people. Since folks actually need places to live and work, it’s a market that’s never going to go away as long as there are humans on the planet. 

Now, the real estate market does have ups and downs of its own, just like gold or any other investment. Overall, however, it’s a much more stable option. Why? Because the demand for safe housing and attractive corporate property remains constant for the most part.

Putting your money behind something necessary is a good safeguard against turbulence in the economy. You can’t always count on your coins, but real estate? Now that’s a smart investment.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #23: Why Real Estate’s Equity Building Makes It a Better Long-Term Investment Than Bonds

Blog #23: Why Real Estate’s Equity Building Makes It a Better Long-Term Investment Than Bonds

When most people think of investing, the first things that come to mind are the intangible, particularly stocks and bonds. While many people may not understand its more complex innerworkings, most have some idea about what investing in stocks entails. But what about bonds, and are bonds sound investments, especially when compared to more tangible investments like real estate? In this article, we will consider these questions carefully.

What is a bond?

To put it simply, a bond is a type of loan whereby an investor gives money to a company, an individual or the government. In exchange, these parties promise to pay back the loan by a specific date, along with regular interest. 

On one hand, bonds are typically a lower-risk investment than other more common types, especially stocks. When you buy a bond, you understand the terms and conditions from the very start and so will not likely encounter any unpleasant surprises.

That said, because they are low-risk, bonds tend to be low-yield investments unless  specified otherwise. While there is usually clear risk involved, real estate often yields higher returns while also building equity. 

Real estate builds equity in many ways. This could be through debt decreasing or property value increasing. In contrast, the gains you reap from bonds will be predictable and consistent but generally unremarkable. Additionally, bond returns do not respond well to inflation

 Real estate, however, is by nature dynamic. It responds to the market, which means when prices go up, so does the value of your units. When you own several apartment buildings and demand for housing in your city is on the rise, you can expect to earn more from each of your units. 

In sum, the higher yield, increased stability, and long-term benefits of investing in real estate prove better and more worth your investment than bonds. 

How do I invest in real estate?

There are many ways to invest in real estate. While there are intangible options like real estate investment trusts, many find it rewarding to actually manage the properties for themselves by renting them out, overseeing their maintenance, and so on.

Investing in real estate can be done through investment in rental properties or flipping property you’ve invested in. Perhaps the best way to start into real estate investment is by renting out part of a home, even if it’s just part time through a platform like Airbnb. 

For more guidance, reach out today. I want to hear from you!

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #22: Real Estate vs. Money in the Bank

Blog #22: Real Estate vs. Money in the Bank

Investing in Real Estate vs. Banking your money: Why real estate keeps your money working for you. Here’s a question you might have been asking yourself: Is it better to invest your money, or hold onto it by keeping it in the bank?

There are so many old adages about money and investing, and perhaps the most important and relevant one? “Make your money work for you!” Another common phrase is “You have to spend money to make money!”, and that’s what’s at the center of the answer to this question. These sayings may be well-worn at this point, but they hold some truth.

When you leave your money in the bank, it does very little besides just sitting there. Sure, having a big number on your account balance looks nice, and it is useful to have some liquid assets you can tap into, but if you’re looking to really pump up your net worth, you’re going to need to put your money into something. You’re going to need to invest

There are a lot of options for you when you set out to start investing, and real estate is one possible investment. It’s a popular choice, and for good reason.

Why real estate dose the Job

Real estate is an evergreen investment, because it has tangible, actual, inherent, and real value. People are always going to need places to live, and so, as long as there are people, there’s a demand for real estate. 

When you leave your money to languish in the bank, you’re trading the chance to have a tangible asset to your name for a bigger number on your account statements. That number is nice to look at, but you know what’s even nicer? Being able to drive past an apartment building, knowing that it’s yours, that it’s making you money, and that you made the right choice.

When you’re deciding what to do with your money, it’s worth remembering that doing something with it—anything, really—is how you make a profit. Money sitting in the bank isn’t doing you any good. But investing in real estate, thus using your money to make more money? Utilizing your intangible monetary resources in order to put your name on something real and eternally valuable? Now that’s smart.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #21: Real Estate Makes Money (Without You Lifting a Finger!)

Blog #21: Real Estate Makes Money (Without You Lifting a Finger!)

You want to make investments that are going to pay off. That’s kind of the point of investing, right?

With the stock market, there are a few ways to see some payoff. It’s fairly easy to sell stocks, and if you sell them for more than you paid for them, then that’s a profit.

That’s all well and good, but it’s not really something you can count on. The stock might drop in value after you buy it. And while you have the stock, it’s not directly paying you anything. It’s just sitting there. Wouldn’t a truly fantastic investment earn its keep all on its own?

That brings us to real estate. Real estate can do just that for you. If you rent out a property, you’ll see profit in the form of what’s called “cash flow”. This is the profit you see when you rent out a property for more than its expenses cost. 

The property owner charges the tenants of the building rent, which covers the mortgage and other expenses associated with the property. However, if the investors are playing smart, there’s some cash leftover from the rent payment after the expenses are paid. That investor could be you!

Real estate provides you with passive income. That’s money that you’re getting from something other than a regular job. Because of that, it’s clear that the stock market can’t always provide for you and your family the way real estate can. Real estate investments can be a great, reliable source of income. If you play your cards right, you get to see the profit without even having to regularly visit the property. The money comes to you, not the other way around.

Stocks are a popular investment, but that doesn’t mean they’re the best option. You can’t always count on your stocks to be worth what you need them to be worth, and you certainly can’t count on them to make you money passively. 

Real estate is a superior investment for a lot of reasons, chief among them the consistent income it provides you with. If you want to see a consistent, regular profit, real estate just might be the investment for you.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 10 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #20: Real Estate Gives You the Reins

Blog #20: Real Estate Gives You the Reins

When you invest in the stock market, you are, in a way, gambling. You’re entrusting your money to the whims of someone else’s company. The stock market is a popular place to invest, but when you invest in it? You don’t really control what happens next.

If you have shares in a company, sure, you might have the option to vote on things like who gets to be on the board of directors, but ultimately, what the company does is out of your hands. You’re just along for the ride.

Real estate is different. When you invest in a property, you have direct control over your investment. You decide exactly what you invest in, and what to do with it! You get to make decisions like:

  • What type of property you’re investing in
  • Where that property is located
  • What kind of market you’re buying in
  • What kind of financing you use
  • And perhaps most importantly, how the property is maintained or improved!

That last one is a big one. When you invest in real estate, you have a lot of options. You have a very serious and direct influence over the value of the property. You can choose to improve the condition of the property as you see fit, and in that way directly increase the amount of profit you can make from it, either by reselling it or by renting it out.

If you buy a property, you can do things like renovations that tangibly and immediately make it worth more than it was before. If you invest in the stock market, you’re counting on a company to perform well. Maybe it will, maybe it won’t. You don’t get to decide. You don’t have control.

With real estate, you get to make your own decisions as an investor. If a property is underperforming, there are steps you can take to get it in top-notch condition and help it get you the money you want and deserve. 

You want to have control over your financial future, right? Making the right investments is key to that. Investing in real estate means you’re handing yourself the reins of your own life. You get to make the decisions, and you get to take control.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 9 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #19: Real Estate: Stabler than Stocks

Blog #19: Real Estate: Stabler than Stocks

You’re probably familiar with the concept of investing in stocks, but here’s a quick overview. 

The “stocks” you buy are small investments in a company- a share of ownership. These can cost more or less depending on the value of the company at the time of your purchase. 

People buy stocks with the intention of making money on them, which can happen in two basic ways: either through cash dividends, which a company might distribute to shareholders if it’s doing well financially, or by selling the stocks for more than they were purchased for. 

Stocks are one of the first things people think of when they think of investing. That does NOT mean that they’re the best investment option, though. 

Stock prices are influenced by so, so many factors. Supply and demand? Those are factors influencing every market, but the stock market is especially susceptible to that influence. If you’re trying to invest in a particularly popular company… well, good luck. When the demand for a stock is high, the price gets high with it. 

A single share of the most expensive stock in the New York Stock Exchange, Berkshire Hathaway, costs around 340k per stock

But here’s the thing. On March 23rd, 2020, that price was closer to 240k– a hundred thousand dollars less. What’s going on with that?

Well, a few more things influence the stock market. Supply and demand can be shot off in different directions depending on things like how safe people are feeling in the current social and political and economic climates. 

March was around the time the pandemic started getting really bad, and for that reason, people were selling their shares like crazy. That’s the thing about stocks. They’re pretty easy to liquidate, and so when people get antsy, they cut their losses and run, taking the value of the stock down with them. 

Another thing about stocks is that they’re heavily, heavily influenced by the economy at large. If you invest in Apple, and then everyone stops buying iPhones because the economy is going sour, then suddenly, your stock isn’t going to be doing you any good. And the economy has been all over the place lately. 

So, what’s a market you can count on to weather the storms of the economy?

Think real estate. 

Real estate is a solid market. It’s right there in the name: real estate is Real. A solid piece of land, and the sturdy building that sits on it? Those things aren’t going anywhere, no matter what the economy is doing. Stocks are, in a way, abstract. They’re just reflections of how a company is doing, but they’re not an actual thing.

Real estate is stable for a few reasons. One is the above mentioned solid nature of it. Properties you’ve invested in don’t just get up and walk away.

Supply and demand also aren’t as topsy-turvy in real estate as they are in the stock market. No matter what the economy is doing, people still need places to live or do business. That’s always going to be the case. The demand is always going to be there. And the supply? That’s pretty much set. The Earth isn’t getting any bigger. The demand is more likely to outrun the supply- and that means that property you invest in is going to, if anything, increase in value. 

Even when external factors do influence the real estate market, they tend to do so much more slowly and less drastically than is the case in the stock market. Let’s talk about Berkshire Hathaway again. We already said that on the 23rd of March, it had a value of 240k per share. Want to know what it was worth three weeks before?

324k. A drop of 84 thousand dollars, in three weeks. 

Real estate doesn’t pull that kind of trick on you. If you are looking for an investment that won’t give you the run-around every other week, think about investing in properties.

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 9 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #18: Appreciate that Appreciation!

Blog #18: Appreciate that Appreciation!

All markets fluctuate based on external factors such as supply and demand. Your gold is worth one sum now, but in a few months might be worth much less or much more. It’s a little tricky to anticipate and keep track of where that value is going.

The real estate market comes in cycles, too. A key factor in real estate as an investment, however, is that real estate tends towards gaining value, or appreciating, over time. The supply of property doesn’t really change too much, but the demand keeps growing because people always need a roof over their heads. 

The thing about this kind of market is that it ebbs and flows like tides. Sometimes, the appreciation that takes place is strong and fast, and other times, it’s gentler and slower. You have to have the ability to be patient. 

An option that’s going to be a good, safe idea in the long run would involve buying property and waiting to resell or refinance it. The value will come, it just takes time. You might be able to sell your property at 200% of the price you bought it for, but that kind of thing is typically going to take some years to get in motion. 

That’s alright! As long as you have that property, you can be making money through the numerous other profit centers of real estate, like cash flow. The trick with appreciation is that you need to be patient, and good things will come to you.

Another awesome factor in this is that, when you buy a property, you generally finance it through a bank, which can cover 75-90% of the cost of the real estate. So, when you buy a property worth 400,000, you might only put down 100,000 for the down payment (and closing costs, etc.) with the bank covering the rest. Let’s say that that property then appreciates by 10%. It gains 40,000 in value- that’s a 10% return on the total previous value of the property.

But it’s a 40% return on the 100,000 you put in. Nifty, yeah? Leverage and appreciation work together in wonderful ways.

But you’ll need to get started if you want to see the full effects. Since these things have such a timeframe, starting as soon as possible is key to watching your net worth grow and grow. 

Real estate is a fantastic investment for the short and the long term. You can make money every step of the way. You just need to get started!

Robb and Penny are owners of a real estate investment company Mountain View Investors. We have been actively involved in Albuquerque NM for our Fix and Flip projects. In Kansas City MO area for our Buy and Holds properties. We have been investing in Albuquerque NM for 9 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/


Blog #17: Get Your Mortgage Down, and Your Profit Up!

Blog #17: Get Your Mortgage Down, and Your Profit Up!

Real estate has a few things going for it that other types of investments don’t. You’ll recall that we’ve already talked about some of them, like the neat way that banks will help you out in investing in real estate by financing you via a mortgage.

But mortgages aren’t all fun and games. Not only do you have to pay off the principal part of the mortgage (the actual amount borrowed), you also have to pay interest. Doesn’t sound great? Well, a great thing about real estate is that there’s a way around it. As the previous post mentioned, your tenants will be the ones paying the mortgage, not you. But there’s more to it than that.

Most of the payments you make to your bank for the mortgage will be, at least in the beginning, going towards interest, rather than the principal. You want to get that whole mortgage, both principal and interest, paid off ASAP in order to reduce the expenses associated with the building and increase the profit margin of your cash flow.

So, here’s what you gotta do. In addition to the regular payments you have to make towards the mortgage, it’s a good idea to make some extra payments to the bank, at least in the beginning, in order to knock out that interest as quickly as you can. That way, you can start chipping away at the principal portion of the mortgage, and start seeing your profits soar.

And you’re not doing this alone. As previously stated, it’s your tenants’ money, not yours, that covers this bill. You just need to make sure you’re putting the cash where it needs to go.

Paying down your mortgage is a secret towards maximizing your real estate profits. It doesn’t seem as obvious at first as other profit centers like cash flow, but mark our words, if you play your cards right, you’ll be seeing some big savings on your property. And that, friend, is money in your pocket.

Robb and Penny are owners of a real estate investment company, Mountain View Investors. We have been actively involved in Albuquerque, NM for our Fix and Flip projects. In Kansas City, MO area for our Buy and Holds properties. We have been investing in Albuquerque, NM for 9 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Blog #16: Watch the Cash Flow

Blog #16: Watch the Cash Flow

Cash flow is one of the simplest profit centers of real estate, it’s just straight-up profit. Cash flow refers to the money left over after all the expenses on the property are paid. The expenses associated with a property vary depending on what sort of property it is, but generally include:

  • Mortgage
  • Property Taxes
  • Insurance
  • Management
  • Maintenance

These things can add up, but by charging appropriate rent on your property, you cover all these expenses and have cash leftover for yourself. Say the property’s expenses add up to about 1000 dollars a month. Charge 1200 for rent, and your cash flow is 200 dollars a month. Once you have a few properties, that profit starts to add up, too.

There are a few basic ways to max out your cash flow. You want to minimize your expenses, and a good way to do that is to pay off your mortgage as quickly as you possibly can.

The mortgage is typically the largest expense on a property. So, once you get that beast out of the way, you reduce your expenses drastically. At that point you’ve drastically reduced your expenses, and thus, you get to keep a much bigger portion of that rent you’re charging. Awesome, right?

Another factor involved in your cash flow is the number of rental units you have on a single property. While a single family home provides a single stream of income, a duplex or a little apartment building presents you with several. In this way, you’re provided with a greater gross amount before expenses, and thus, the cut you have to give to the bank, insurance company, etc., has less of an impact on your profit.

Cash flow is one of the coolest profit centers in real estate, because it’s so passive. All you have to do is collect the checks. Renting out the property pays for itself if you do it right! So, make sure you’re doing it right! The rent you’re gathering for a property should always be greater than the expenses associated with that property. You don’t want to pay for a property you already own, right? You want it to pay you.

So, collect those checks, and keep your head on your shoulders. This part is so easy, it’s crazy.

Robb and Penny are owners of a real estate investment company, Mountain View Investors. We have been actively involved in Albuquerque, NM for our Fix and Flip projects. In Kansas City, MO area for our Buy and Holds properties. We have been investing in Albuquerque, NM for 9 years.

Our mission is to provide quality housing for first-time home buyers and owner-financed buyers, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!

Robb and Penny offer their investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without the hassle of being a landlord, please contact  Robb and Penny.

For more information about  Robb and Penny and their investment program,
please call (505) 404-1131, or visit  https://robbkrautbauer.com/

Contact Robb Krautbauer

 

Robb & Penny Krautbauer

Professional Real Estate Entrepreneurs

DISCOVER WHY REAL ESTATE IS AN EXCEPTIONAL WAY TO INVEST (VIDEO)


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