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- May 11, 2024
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The Book on Rental Property Investing by Brandon Turner
In his book on Rental Real Estate Investing, Brandon Turner offers an educational guide to effectively locating, purchasing, and managing properties. Turner identifies the main obstacles new investors face and suggests how to profitably overcome them by working smarter, not harder.
In the book on rental property investing, Brandon Turner covers every step of the process of investing in rental properties. Additionally, he explores general strategies that will help new investors think professionally about their portfolios.
“The Rental Property Investing Book” by Brandon Turner is a comprehensive guide for anyone looking to build wealth through real estate investing, focusing specifically on rental properties. Turner, a well-known real estate investor and entrepreneur, shares his ideas, strategies and practical advice for succeeding in the rental property market.
The book covers various aspects of investing in rental properties, including research, financing, managing and making a profit on rental properties. Turner emphasizes the importance of thorough research and due diligence before making any investment decisions, as well as the importance of understanding market trends and dynamics.
One of the key concepts discussed in the book is the idea of “stack,” which refers to the different levels of potential profits in a real estate rental business. Turner explains how investors can maximize their returns by optimizing each layer of the whole, such as cash flow, capital acquisition, appreciation, tax benefits, and loan repayment.
Additionally, the book delves into practical strategies for property management, tenant selection, lease agreements, and managing common challenges landlords may face. Turner also shares real-life examples and case studies to illustrate her points and provide readers with helpful tips.
Turner is a real estate investor with hundreds of profitable properties. He is also a best-selling author and former host of Bigger Pockets, a podcast about real estate investing.
How Rental Properties Make Money
Turner recognizes that most people buy rental properties to make money and specifies four ways they generate income:
1) Cash flow: It is the money that comes in after paying expenses. This is usually a regular rent paid by tenants. Turner maintains that cash flow is the most important source of income: it creates an immediate return on investment and funds future growth. Therefore, he recommends selecting properties that produce immediate cash flow.
2) Tax benefits: Turner notes that governments consider rental property owners to be economically beneficial because they provide housing for people who cannot afford to own property. Therefore, they often offer tax benefits to owners.
3) Appreciation: the value of a property increases over time. Turner explains that real estate has two main forms of appreciation:
Natural appreciation: Caused by economic factors such as inflation, supply, demand and scarcity
Forced appreciation: usually caused by improvements to the property, such as installing new hardware, a garage door, or even attractive landscaping features such as ivy or hedges)
4) “Loan Payoff”: Turner explains that receiving regular rent from tenants pays off the mortgage, accelerating full ownership of the property. Typically, lenders apply a device called amortization to your loan payment: Initially, a larger portion of your payment is applied toward interest on the loan. Over time, however, the weight of each payment shifts toward repaying the principal (the initial amount of the loan).
Choice of property type
Consider what type of home you want to rent. Each has pros and cons: Turner suggests considering things like maintenance needs, financing options and competition when choosing what’s right for you.
Identification of possible properties:
Turner notes that once you’ve chosen a property type, you can use several methods to identify potential properties to invest in:
The Multiple Listing Service (MLS): a database with the most accurate listing detection. The MLS brings together smaller catalogs from regional listings to form one national database. You’ll probably need an agent to access it, another reason to cultivate this relationship early.
Direct Mail Marketing: Send regular postcards or letters to property owners you think can sell. Some owner lists are accessible for a fee, but you can also create your own lists. This cold calling approach is primarily intended for owners in need who want to sell quickly and hassle-free.
Driving around, looking for real estate – an inexpensive option that is especially useful in finding options. Look out for signs of distress or neglect, which often mean that no one is living in a property; the owner may be ready to sell.
Evictions: Turner points out that landlords often face stressful and legally complex experiences when evicting tenants. They are more likely to sell quickly and at a lower price if you provide them with an exit opportunity in a timely manner. Eviction data is generally available to the public.
