Table Of Contents
One of the most powerful thing about property or real estate investing is that you can harness the power of leverage; also known as “debt”. Banks and financial institutions looooooooove property, so they’re often very willing to loan you money to finance your property purchase. How much they can (and will) loan you will depend on
- how much net earning and debts you have
- the value of the property
They will be willing to loan you more based on the % of the value of the property.
Practical: people gonna live some place
Rental properties aren’t some complicated rocket science stuff.
- People will need a place to live
- People will need a place to work
That pretty much sums up rental property investing. Of course you will need to consider nuances such as size, location and amenities etc, but those 2 points above is key.
Tax benefits (depending on your country)
This one can be tricky, depending on your country’s tax laws, and since I’m no accountant nor lawyer, I cannot advise on this. But there are often tax breaks and incentives, that’s tied to mortgage loans that you can consider; as well as expenses that you can attribute as legit (of course it needs to be legit eh) business expenses.
Bonus Point: refinancing magic
One bonus point on refinancing is this: if your property increases in value (they call this capital appreciation), you can actually “pull” out the value in cash by refinancing your mortgage loan…and use the money to buy another rental property. This is on top of rental markets going up and you not only get more rental yield too. Nifty huh.
I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian.
Started and sold off a business for 7-figures; built another 7-figure one and growing it further, plus building/investing into other businesses and investments as well as advisory works.
Nowadays I share and teach entrepreneurship, financial independence, retiring early as well as building and living a life you love.
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