That title kind of sounds oxy – moronish, right? How can you save at the same time that you are investing? Actually, it can be done quite easily by working to lower your fixed costs. As the home owner you are paying for the utilities so that you can increase the profits from renting it. You can save money on the utilities and energy bills by having the latest in technology installed and finding a power provider like Enmax which exists in free electiricty markets, where you may not even be paying the lowest price for the same product, electrcitiy.
You might not know this, but your thermostat is responsible for a full half of your utility bill. This is more than all of your electronics and all of your appliances. For this reason, you need one that will assist you with saving energy. Enter the Nest thermostat. It does help you save energy. It is a type of technology that ‘learns’. It learns the temperature that you prefer and then builds that into a schedule right around your schedule. Just since 2011, this thermostat is responsible for saving more than 8 BILLION kWh when it comes to energy and this is throughout homes across the globe. Furthermore, there have been independent studies done that show that with this thermostat, you can save up to 12% on your heating bills and up to 15% on your cooling bills. That means that in less than 2 years, it will have paid for itself. Now, don’t you think that tech like this, that can save you money, is worth investing in?
There are many reasons that people invest in property and one of those reasons is for the tax deductions. One thing that might qualify for a tax deduction when it comes to property investments is the money that you are paying for interest on your loans. For example, if you mortgaged your home to get the money to invest in a rental property, you will be able to claim the interest paid on that mortgage as a tax deduction.
Positive Flow of Cash
When talking about investing in real estate, there are a couple of ways to save money – the cash flow that is before taxes and the one after taxes. The before tax cash flow is when the money brought in is more than your expenses. The after tax cash flow is when the expenses are more than what you bring in, but because of the tax breaks, you are still in the black. Whichever way this goes for you, if you properly budget for your real estate investment, you will be able to both save money and turn a profit.
Start Out as an Owner – Occupant
If you live in the property that you buy for a minimum of a year, you will be able to make a down payment that is smaller. This is particularly true with VA or HUD approved properties. Once you have been in the house for a year, find another house to purchase and move into the new house and then rent out the original house. Do this as often as you like.
If you are able to follow a few of these tips, you will be able to save money. You might break even when it comes to the expenses and if you keep up with the repairs on the property, you should even be able to turn a profit and the property could gain in value over time. Be prepared for the landlord responsibilities though, and you should also be able to withstand a month or two of the property being vacant and still be able to stay afloat.