When you read this title, you were probably intrigued by it, right? How can your Michigan realtor help send your kids to college, or how can they help you earn money at all? We all know what realtors are for – to help us sell or buy a home, and seemingly nothing else. Well, that is not true. Your Michigan realtor can do a lot more. He or she can help you earn enough money to send your kids to Genesis college in Nashville or another one through real estate investment.
What is the Plan?
First, you have to buy a second home in Michigan. Then, let tenants move in and have them pay off your mortgage for the next 18-20 years.
Moreover, every month, your mortgage will be lower and lower, while the funds coming from tenants will be higher. Also, as the years go by, your property value will rise. Thus, your wealth will increase without you having to do anything!
Once the mortgage has been paid off and your children are ready for college, you can sell the property or even refinance it. Finally, take your profits and pay for your children’s tuition with that money. Simple, right?
Finding the Right Property
Of course, your Michigan realtor is there to help you find your property and to provide you with tips any smart buyer should keep in mind. Together, you’ll research the market around you and find the right opportunity for investing. Think about the future needs of the property you plan on buying – if you purchase something huge and far away from where you live now, will you be able to go there often and pay the costs of maintaining it? Consider everything!
Making the Necessary Renovations
Many people avoid this step – they just buy a home and put it on the market without any kind of renovating. If the property you invest in is dated, forgoing updates could cause many tenants to overlook the space, and you won’t be able to charge as much as you could otherwise.
Once you buy the property, you have to make it look inviting both inside and out so that it attracts the best possible renters.
Also, you may need to renovate more than once. You cannot just buy a home and leave it in the same condition for the next 20 years. You must continuously update it. Why? In order to stay competitive and keep making money. Make a change after every tenant. Keep an eye on home styles popular in Michigan, and base your updates on them.
Moreover, besides making the property look good, you must also make sure it can ‘take a beating.’ Don’t invest in cheap appliances or furniture. Not only do these things break easy, but they won’t last more than a few years.
Maintain and Update the Property
If you invested well in your property and did not cut quality corners, your maintenance costs will be low. But, they will still exist from time to time. Keep in mind that it is your job, as a landlord, to constantly check up on the property. You must visit it often and take care of any problems your tenants have encountered.
In the End, Know When to Sell or Refinance It
If you did everything right, your tenants have paid off your mortgage and you are now turning a large monthly profit. This is called positive cash flow! Because of this, you will have no costs for your mortgage nor for maintaining your property. This is what you can achieve with the right property and the right real estate agent!
Once your children are ready for college, you can sell the property in Michigan and pay the tuition. Or, you can refinance it. By refinancing it, you actually get a new loan for approximately 70% of your property value. This way, you will have enough money for your children’s college, but also for another investment property if you like.
Call your real estate agent today to start exploring investment opportunities!