The IDEAL Formula for assessing Investment Property

15 04 2011
  • Income from Cash Flow – This is is fairly obvious why it’s good, right?
  • Depreciation Deductions – You depreciate real property (not land, but a building) to help reduce your taxable income (not on your primary residence)
  • Equity Buildup – As you pay down your mortgage, you gain equity you can leverage for other properties!
  • Appreciation – The market is not always stable, but generally speaking, Real Estate appreciates.  See The Rule of 72 blog post here….
  • Leverage – If you buy $100,000 worth of stocks, you need $100,000 & you get appreciation on $100,000.  If you buy $100,000 worth of real estate, you need $20,000, but still get appreciation on $100,000.  Nice.  🙂  Yep….that spells IDEAL.



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