Slow and Steady: How to Build Wealth through Real Estate

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Here’s a helpful analogy to buying a home as an investment: think of it as a bucket.

You have an empty bucket when you first buy a real estate property. If you put 10 to 20 percent down on the purchase, you have filled your bucket by that percentage. Then, your renter starts filling the bucket slowly for you as their rent pays the loan’s principal and interest.

Over the course of a 15-year or 30-year loan, you have a full bucket that other people have paid for. At that point, the home generates pure income after you have managed the flow of payments and cared for the property over the years.

Sure, some real estate investors still “flip” homes for a quick profit, but for most of us, slow and steady wins the race.

Beyond Income from Renters

In addition to renters, there are two other ways to earn real estate income: appreciation and tax deductions.

Despite the bursting of the real estate bubble, there are certain neighborhoods – such as those here in Washington, D.C. – where home values are improving. We have tools that can help you project the appreciation of real estate that we’d love to share with you.

You also can gain value through income tax write-offs, such as real estate tax and interest on your loan payment. There’s also the depreciation income-tax deduction. You might not realize that this is the second-biggest tax write-off after your interest payment.

Ready to jump into the real estate game? We are the experts to turn to when investing in real estate in D.C., Virginia or Maryland. Call us or drop us a line by email, and we’ll be happy to answer your questions on these topics and others and devise a strategy that best works for you.