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By Paul Branton, Director of Investor Services at Home Rental Services.
When people ask me what I do for a living, I think that my new response will be…. “I help people play Real Life Monopoly.” We’ve said this inside the office for some time now, but after thinking about it more, it does seem like a reasonably accurate description.
If you look at the rules of “Classic Monopoly” you’ll see that the objective of the game is as follows: “Become the wealthiest player through buying, renting and selling property.”
Given those parameters and that objective, this is really quite similar to what I do here at Home Rental Services. My goal is to help our clients acquire, improve and maintain the best rental portfolios in Kansas City!
Here is a recent example:
A few weeks ago, I suggested to one of our investors that he sell his property that was struggling to rent and exchange it for another property. With the help of the great team at Group O’Dell, the home went under contract and sold in 40 days. The investor then took his equity by way of a 1031 exchange and was able to put about 25% down on the purchase of TWO rental properties.
In summary, here are the highlights of this transaction:
- His equity is no longer tied up in the form of 40% of one property. (Better Leverage)
- He now has ownership of two properties instead of one. (Better Diversification)
- He took his gross rent of $1,700/month and turned it into a gross rent of $2,650/month. (Increased Income Potential)
If that doesn’t resemble “real life monopoly” game play, then I’m not sure what does! If you ever find yourself wondering what you should do as a next step with your real estate investments, please give me a call!
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