I want to start this post off by saying MERRY CHRISTMAS to all visitors of this site, and a simple "thank you" for the support I have been given.
This month was great for me on many levels. I have successfully received over $100,000 of rental income. When I purchased my first property in 2006 I didn't foresee myself being a landlord. I really just bought the cheapest house I could find to suit my budget. When I was making $13.05/hr, my budget of course was tiny. This paid off in the long run because eventually it lead to greater cash flows.
After working construction and learning how to manage rentals, I knew real estate investing was something I could have success with. I managed to keep my overhead down by performing my own repairs and upgrades, while increasing my net income through a property manager. This formula has worked out well for me so far.
At this point I have 2 options for the future of my rental property portfolio. #1 I can either pay my mortgages off and improve my balance sheet. Or #2 I can throw down money on a down payment for a 4th property. Right now I'm leaning toward option #1. I found that once my properties are paid off I would reach FI and wouldn't need to worry about finding another job, ever. It would be a great feeling to know that all of my bills could be paid for by my rental income alone.
Once all mortgages are paid off I will begin investing into real estate and dividend stocks equally. Though stocks offer much less cash flow than real estate; they are less risky and provide much more stable forms of income.
Disclaimer: I am not a financial planner, advisor, or accountant. The financial actions mentioned were only suited for my own risk tolerance, strategy, and ideas. Copying another's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.
Congrats on hitting this milestone! Each payment is one step closer to FI.
ReplyDeleteAAI thanks for the comment.~ The above statement is very true, the majority of the payments go towards the mortgages, but the cashflows generated go straight to the mortgage with the highest interest(and also the lowest balace! =)
DeleteThe benefit of real estate is that you get to use OPM... plus you get all the tax breaks that come with it. There is very little tax breaks with stocks.
ReplyDeleteA combination of both stocks and real estate is a good approach to reaching and staying financial independent. Do you keep your real estate assets in a corporate entity?
The tax breaks do exist and are very helpful in securing long-term gains. When I first got into real estate I had a construction company (on the side from my full time job). Through this company I was able to get my 3rd loan.
DeleteIt was a construction loan that morphed into an ARM once the house was complete. I intended to build the house and sell it to build 2 more, but had to move in as I took a traveling job full-time. To get away from the ARM and lock in a good rate I 'personally' refinanced it and removed it from the books of the business.
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ReplyDeleteThanks for the support Kreative~
DeleteThanks for stopping by dsf, its been great building the various streams of income. The part I really like about it is the fact that I'm in complete control of everything and I'm not waiting for a 'raise' to come once a year from a boss... I'm experiencing raises throughout the year and its a great feeling.
ReplyDeleteWow. Well done IE. I had no idea you were renting for that long.
ReplyDelete