from Jason Hartman’s Financial Freedom Report
From corporate CEOs and entrepreneurs to sports icons and political figures, very wealthy individuals invest for success.
While your investing career may not have quite the scope of those multimillionaires, you can share in some of the investing strategies that they and their financial managers use to keep those mega- bucks coming.
THEY INVEST NATIONALLY
Very wealthy investors cast a wide net, putting money into solid investments in places far beyond their local area. They keep an eye on trends in emerging markets, often putting money into lesser known markets and enterprises under the radar of conventional investing wisdom. Investors in income property can use this strategy too, by taking Jason Hartman’s advice to diversify, looking beyond local markets for potential good deals. Investing in another city – or another country – creates a hedge against downturns in any one market.
THEY INVEST IN SOLID ASSETS
The ultra-rich are pretty conservative when it comes to investing. They sink their money into tangibles like property, precious metals and even art. Stocks and securities make up a surprisingly small part of their portfolios. The takeaway for real estate investors: as Jason Hartman says, real estate is a vehicle for building long term wealth – a tangible commodity that will be in demand as long as people need places to live.
THEY DON’T SPECULATE
Very wealthy investors stick with known quantities and stay away from hot new deals promising quick money. Although they have money to risk, they listen to smart financial advisors and keep their wealth in proven assets with a long track record of success, such as property, solid businesses and physical commodities.
For income property investors, the same is true. House flipping and real estate schemes promising fast money don’t deliver for the long term. Creating an income stream that lasts calls for patience and perseverance backed by good financial advice and an investing strategy with clear goals.
THEY GET GOOD ADVICE
Rich investors have a plan and they look for good financial advice to help them implement it. Although they’re in charge of their investing decisions, they recognize the need for qualified money managers to execute those decisions. That’s good advice for the independent property investor – and one of Jason Hartman’s investing commandments. You don’t have to be a multimillionaire investor to learn about investing and locate the best advice you can afford.
House flipping and real estate schemes promising fast money don’t deliver for the long term.
THEY INVEST IN THEMSELVES
Whether they’re the face of a corporation or a face on a billboard, ultra-wealthy investors invest in themselves. They recognize that their image and their brand plays a role in their investing success and they put money toward developing and protecting that brand. And you don’t have to have that high a profile to recognize the importance of seeing your investing career as a business, with a story and a personal brand all its own. That means investing in the right tools for managing your enterprise, from courses to computer software. And it also means creating and presenting a professional image when you’re conducting investing business, such as interviewing tenants.
It’s often said that the rich are just like you and me. And while that’s not necessarily true in all ways, even the smallest income property investor can make good use of the investing “secrets” of the ultra-wealthy.
For many people, the first foray into creating income from real estate comes from renting out a home they already own. Life changes and economic conditions can quickly turn homeowners into landlords. But making that shift successfully requires re-thinking your role and your relationship to the property.
Making the Shift From
Homeowner to Landlord
CHANGE YOUR INSURANCE
If you decide to rent out a home that once was your primary residence, an important first step is to switch from a standard homeowner’s policy to rental home insurance. This covers the property itself and provides liability protection, but it doesn’t cover possessions, furnishings, and the like. That becomes the responsibility of tenants, who can get renter’s insurance to protect any possessions they bring onto the property.
PREPARE TO DEAL WITH TENANTS
One of the most daunting tasks facing new landlords is actually renting out the property. It may be simple to advertise the house for rent, but then come steps like screening tenants and finalizing the lease agreement. Inexperienced landlords may fail to screen tenants carefully, or leave important clauses out of the lease or rental agreement. Getting the help of a real estate professional or even a lawyer to create a good rental agreement can help forestall issues down the line.
PLAN FOR TAX TIME
As a rental property owner, you’ll be reporting rental income on your taxes. But you’ll also be reporting a variety of deductible expenses. Although tax laws are subject to change, the long list of deductibles begins with your mortgage interest and includes such expenditures as real estate taxes, costs of advertising the house for rent, travel, accounting and depreciation on the house. Repairs and renovations can also be deducted under certain circumstances. And you can also deduct expenses related to your home office, which brings us to the last point:
THINK LIKE A PROFESSIONAL
If you’ve made the shift from homeowner to landlord, you now have a business, so it’s important to see your income property in that light. Even if you choose to outsource aspects of managing the property to a management company, you’re still the one in charge. Maintaining a home office, keeping goof records, and establishing a businesslike relationship with tenants builds credibility and establishes authority.
Renting out your residence may be a response to unexpected circumstances, or the first step toward an investing career that involves multiple properties, as Jason Hartman recommends. With careful planning, though, learning to think like a landlord can save headaches and open doors to building long term wealth.
Jason Hartman has been involved in several thousand real estate transactions and has owned income properties in 11 states and 17 cities. His company, Platinum Properties Investor Network, Inc. Helps people achieve The American Dream of financial freedom by purchasing income property in prudent markets nationwide.
Jason’s Complete Solution for Real Estate Investors™ is a comprehensive system providing real estate investors with education, research, resources and technology to deal with all areas of their income property investment needs. Contact Jason at www.JasonHartman.com or 714-820-4200.