We wanted to go over the reasons why people buy Investment real estate, Esteban
share with us.
Yea guys so there’s basically four reasons why people buy income property one reason
is appreciation.
And Eric tell us what that means, So appreciation is the increase in equity of when you
bought it two main ways over time or through value add, which we touched on in
another video taking something that is deferred, Low rents, High vacancy and correcting
the issues then increases the value.
Yeap and uh number two would be tax shelter we have a few clients that they don’t buy
properties based on the amount of cash they’re going to generate. They’re high W2
earners, you’re talking people with multimillion dollar salaries whereas they actually
need to buy real estate to depreciate it to save on taxes off of their W2 income.
Typically we see attorneys, some doctors that are really involved in that type of investing.
Yeah very, very few clients actually buy for tax shelter but it’s usually the high net worth
clients that are buying for that purpose and number three guys is going to be cash flow.
Cash flow of course this is the number one reason people get into investment real
estate is they’re trying to buy income or what they perceive as passive income everyone
says it’s passive, It’s not passive you still gotta do work. Still great money you buy the
right deal you can make a ton of cash with it.
So cashflow the amount of money you make every month off the money you’re putting
in.
Yeah it’s that simple guys and there’s a bonus one, and that one is legacy people buy
for legacy. What does that mean Eric?
Legacy is you’re buying that asset because you want to be able to give it to your kids,
your family you want it to be able to earn income and be a asset for your family for well
past your generational hopefully your kids, kids generation there’s tons of legacy
properties in bakersfield you’ve got properties 200 units that are now on the third
generation of that family that own it.
Those parents bought that knowing that, That asset was going to stay in the family long term. Yeah that’s really good that the people that bought it for legacy reasons are putting their families in a good position moving forward so we commend that we always commend them on that when we talk to them. And that guys is the four reasons why people buy investment real estate.
Stay tuned for our next video thank you, thanks guys.
