Real Estate investing is popular and can provide for an income stream in retirement as well as diversification in your portfolio. But what are some of the important factors to think about before investing in real estate? What are the tax considerations you should be aware of before investing? And what’s a §1031 exchange? In today’s Money Checkup, Christina Woo and I answer these questions about real estate investing and more to see if this is the right investing path for you. We will talk about the metrics to know and understand when vetting an investment property. We will do a deep dive into what a 1031 one exchange is as well as provide key tax considerations to think about. We’ll also provide you some questions you can ask yourself to see if real estate investing is something you might want to add to your investment portfolio.
Christina is a top realtor in the San Francisco bay area with over 20 years of business experience. She has an MBA from Harvard and worked in management consulting at Bain and was an equity researcher for Morgan Stanley for a number of years before transitioning to real estate. She started investing in real estate in 2005 and now has a real estate portfolio that spans across 9 states. She is passionate about helping clients establish passive income streams through real estate investing.
What We Will Cover
- Why so many people are attracted to real estate investing
- The two benefits of rental real estate
- Understanding what a §1031 exchange is and how to use it
- An explanation of capital gains tax
- How to find that right property to invest in
- The importance of knowing your “why” in real estate investing
- Key metrics to utilize
- How you can benefit from the power of leverage
- Analyzing an investment with cash-on-cash returns and the capitalization (aka “cap”) rate
- Figuring out your debt-to-income ratio (and why that’s important)
- How an interest only mortgage works
- Why interest only loans aren’t for everyone
- How to get creative with financial investing in real estate
- Some thoughts on real estate bubbles
- How to look for opportunities even when the market doesn’t look that great
- Things to focus on when looking at an investment property
- How to look at your investment like your tenant would
- The benefits of getting and having long-term tenants
A Financial Goal in the Works
- Working on having her children learn the value of money
One Piece of Financial Advice
- Pay yourself first. (Set aside money for your future self first, not treat yourself!)
- Live beneath your means.
Getting Connected With Christina
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