Episode 10: Real Estate: The Second Source of Residual Income
Of the 7 Sources of Residual Income that Uncommon Wealth Partners champion, real estate may be the most obvious source. It’s one of the first places your mind goes when you think “residual income.” But this is the Uncommon Life Project, so the way our co-hosts talk about real estate probably holds some surprises.
For Phillip Ramsey and Bryan Dewhurst, the uncommon path leads to a rewarding life. That’s why they have dedicated their financial services practice to help clients define their goals, implement a plan, create wealth, and ultimately create time freedom.
In this podcast we’ll take a close look at what rental property can do for you in terms of financial security, tax advantages, and long term financial health and freedom.
What you’ll learn
- Understanding interest rates, cash flow, and tax favorable income
- Just what exactly a cap rate is
- Tax advantages of owning real estate
- Why leveraging other people’s money – especially when interest rates are so low – can be very beneficial
- Not to downplay the maintenance and other expenses associated with income properties
- A granular level look at a 401(k) investment compared with a rental investment
- Having some sort of business entity to run these properties through – for tax savings.
Golden NuggetsWe’re assuming that if you are taking out a mortgage right now, it’s a fixed rate, 15 or 30 year mortgage. There’s no reason to get an adjustable rate mortgage with rates still as low as they are. – Bryan Dewhurst Click To Tweet With $100,000 you could buy 1 rental property for $100,000. Or you could put 20% down ($20,000) on 5 rental properties. Which way should you go? – Phillip Ramsey and Bryan Dewhurst Click To Tweet When you leverage correctly, your cap rate increases over time – as the mortgage goes down and rent increases, you might go from a 10% cap rate to well up from that. – Bryan Dewhurst Click To Tweet As you consider owning rental properties, here’s the deal: at the end of the day, you just have to figure out what your capacity is or what your risk tolerance is. – Phillip Ramsey Click To Tweet When you're putting money in your 401(k), you're really trying to buy the last year of your life and working backwards. But when you buy a rental property, you're buying the next day of your life and working forwards. – Bryan Dewhurst Click To Tweet At the end of the day, I’d rather have 5 rental properties, but then that’s why we’re uncommon. – Bryan Dewhurst and Phillip Ramsey Click To Tweet A lot of time when you get into the real estate environment, you start thinking of different ways that you can scale it and make it more profitable. The potential is pretty awesome. – Phillip Ramsey Click To Tweet
Ways to contact Phillip Ramsey and Bryan Dewhurst: