I want to talk to you today about something I call “the Unintentional Real Estate Investor”. You see, some of you might own condo's here in LA that you either bought originally as your first home or maybe you inherited it. And now you’re leasing them out, which is an awesome way to earn some additional income. Congratulations - You’re on the path to wealth building through real estate. But, I daresay, you’re still an unintentional real estate mogul. And I want to get you in the mind set of a sophisticated real estate investor!
Here’s why a condo, while a great way to start on your path to financial freedom through real estate, is not the best income producing asset. You see, many of these condo’s have pretty high HOA's, which is great when you live in your condo and you enjoy using the pool and working out in the gym. But not great when that HOA comes off the top of your profit margin each month!
If you’ve owned your condo since either before 2006 or maybe you’re one of the lucky one’s who was able to purchase your condo in the last down market – ie sometime between 2009 – 20012, you’ll almost certainly be sitting on a lot of well earned equity. But here’s the thing – this equity isn’t working for you in an income producing asset that has HOA’s biting into your profit margin and, remember, with inflationary pressure, that equity you have today will not be worth as much tomorrow.
Now, I know what you’re thinking. If I sell my condo, I have capital gains tax and then my property taxes will go up on what ever I purchase next. Don’t worry. I’m not suggesting you sell and, even if you do, I can explain how to defer that capital gain and I will show you how we’ll defray any increase in property taxes immediately.
But if you're looking to capitalize on that hard earned equity you've built up at the same time as improve your monthly rental income instead of paying it to the Home Owners Association, now is a great time to think about your options.
Now remember, I'm not saying you should sell. Far from it. I want you to keep your condo and build a portfolio. But let's make sure, first and foremost that your investment property is working for you. I can walk you through some simple steps you can take to improve your rental income, grow your profit margin, free up some of your equity, build your real estate investment portfolio and have more freedom to do what you love.
My mission is to help people take action, grow communities and earn freedom. You can find out more by visiting my website lukejonesre.com or call me anytime at 310 435 4774. Thanks!