Build Wealth with Real Estate
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- เผยแพร่เมื่อ 7 ก.ย. 2024
- In this video I explain how to build your wealth with real estate including an example with details of how one property grew my wealth by over $700,000. I discuss the purchase, renovations, property deductions, cash out refinancing, depreciation and rent growth in this video.
Tenant Cloud Property Management
Landlords, I highly recommend TenantCloud for your property management needs. It has a great application process with credit/background checks, lease management, maintenance requests and more. Use this link for a free account (not a trial account) and see for yourself - home.tenantclo...
Rentometer - rentometer.ref...
Kenton Realty Group - kentonrg.tenan...
Contact Kenton Knows
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DISCLAIMER
I am Not a CPA, Attorney, Insurance Agent, Contractor, Lender or a Financial Advisor. None of the information in these videos shall not be construed as tax, legal, insurance, financial, engineering, construction or any other advice of any kind. This TH-cam video is for entertainment purposes ONLY. If you need any professional advice, please contact a professional in the that specific subject matter. Linked items may create a financial benefit for Kenton Realty Group, LLC. Kenton Realty Group, LLC is a licensed real estate brokerage in Illinois License 481.010945.
This is not an advertisement of property for sale and any mention of any real estate shall not be construed as anything other than an opinion for entertainment purposes only.
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what a great video - love all the detail you provide. thanks kenton.
Thanks so much for watching and commenting!
Great content! Real Estate is a tried and true method to wealth from what we've experienced! Love the channel!
I agree completely, thanks so much for the comment and support!
Great video, keep them coming! About to close on my first cash out refinance, very excited!
Congrats, that's great to hear! Also, glad to hear you like the videos too, thanks for the support!
Amazing returns considering the reputation Chicago has as a expensive and high tax city!
I think there can be deals to be had in most markets, you just need to know where to look and be ready when a deal presents itself.
Good information. Thanks! I am a new homeowner of a duplex. I live in one unit, and I rent the other. I won't be paying rent, but I will be paying utilities for both units plus propane for one. You mentioned keeping the rent low to avoid vacancy. However, my tenants are currently paying $600-$800 under market. Additionally, the house needs some love. How can I experience growth without risking too much?
First, congrats on your purchase and welcome to the world of residential real estate property management. I definitely believe you should be getting market rent, my only caveat is that if you push the rents too much and are not getting qualified applicants to maybe step it back a little, but I'm saying you should always be around the market rent. If you are $600 or more under market you need to honor the lease, but before renewal you need to talk with your tenants to explain where the market is and that you will need to raise the rent considerably. If they can't afford it, you'll want to start the conversation early to urge them to start looking for a new place. As you can see in this video, I had a tenant who was grossly under market after I purchased this 2 duplex. I explain how I raised the rent and gave them a few months to move out on their own if they wouldn't agree to the actual market rent (which they didn't and willingly moved out) - th-cam.com/video/z3Fhg2k_Wpw/w-d-xo.html
@@KentonKnows Thanks! You made some good points. I made some upgrades to my unit before I moved in. It will be difficult to attract good candidates to unit two in its current condition. Ideally, if unit two moves, it will be easier to rent my unit although at a lower rate. At least they would pay their own utilities. I could slowly repair unit two while living there. However, if unit two vacates, and I have difficulty finding new tenants, I would be on the hook for all of the expenses. This is not easy.
@@Chrissy726 yes, it's a risk, but you already took the biggest risk in buying the property. You got this. I have worked with tenants in the past to do some repairs and upgrades while the tenant was in place. Especially if they leave on vacation or the upgrade isn't too intrusive, like a new appliance or something. I have also made deals where I might renovate a kitchen or bathroom with either reduced rent or sometimes they understand that the upgrade is sorely needed so they are willing to accommodate the work. You won't know till you have the conversation with the tenant to see what they are open to doing.
Subscribed! Great content and real examples! Thank you! Questions. How does the depreciation changes? I see that the depreciation changes a bit. Also, does refinancing reset the depreciation? Instead of $400k/27.5year into $700k/27.5 year? Thanks again! 🙏🏻
Thank you, so glad you like it. The depreciation on property is based on the purchase price and does NOT reset or change over the 27.5 years for any reason. The reason my total depreciation is not constant over the years in this example is due to the portions of the renovation/improvements which are depreciated over different periods of time after the purchase, such as new appliances, locks, windows, etc. So the original purchase is the bulk of my deprecation, but I also added on some other items with shorter depreciation schedules which causes the total number to fluctuate a little. You might like this tax accounting video - th-cam.com/video/afQ4wlJxogE/w-d-xo.html
I’m a subscriber and love and appreciate the info…..but…..are you reading from a computer? I just happened to notice what looks like side-to-side eye movement lol.
Yes, I write out a script and read it. I don't exactly have any "acting" experience, nor do I have a lot of time to do the recordings, so I write it all out to be sure the video flows well and I get across all the info in an organized manner.
Hi Kenton, thank you for sharing. This is very educational. Can you share how many months every year any units in this building have been vacant? Do your properties have low turnover rates?
I do not have any vacancies and I discuss how I do that in a bunch of my videos - this one should have it in it where I talk about reducing your rent to avoid a vacancy - th-cam.com/video/rvg-8PRVhao/w-d-xo.html
I don't recommend settling for an unqualified tenant, but I do recommend dropping the rent to get a good tenant and avoid vacancies. If you drop the rent 8.3% or less, you are better off having the unit occupied with the lower rent than having it vacant for one month.
For turnover, I normally have about 30% of my units turnover each year, which is probably higher than most because I have a lot of students and young adults which move around more often.
@@KentonKnows thank you!
do you lose out on growth if you don't refinance and take money out? If you just keep paying down the original loan, are you losing some potential money (opportunity cost aside).
I like to think about real estate as being independent from the financing. What I mean is that the real estate value will go up or down regardless of whether it is fully paid for, have a mortgage for 100% of the value or anywhere in between. So if you pay down the mortgage, that cash investment is just sitting there and you won't get any more or less growth in the value of the real estate. So, if you can invest the money at a rate of return higher than the loan on the debt, you'll grow your wealth faster with that investment. If you can't find an investment with a higher rate of return, then paying down the loan will give you a guaranteed return equal to the rate on of your loan.
Very informative. I own a 3 unit for my first investment. What software do you use to keep up with the numbers like that?
I used to use Quickbooks, but recently switched to wave apps. I am working on a wave apps video now. Here is how I set up my banking and accounting - th-cam.com/video/VlPYkzfhz4s/w-d-xo.html
Register LLC for rental property, may just I use rental property address for business address?
You definitely can, but I prefer to register my LLC’s at my home address to be sure I get any correspondence as my tenants don’t always send it to me if they get mail addressed to me or the LLC.
Hey Kenton. Are the estimates on those real estate sites accurate or at least close?
It's hit or miss. If you are talking about rental rates I recommend this as a better explanation - th-cam.com/video/6XKm53KHNNA/w-d-xo.html
@@KentonKnows Thanks for the idea on rentals. I will keep those in mind. I was really asking about the rates posted for the value of houses.