| This ideal wealth builder concept is very simple, | | | | in value. |
| and can be summed up in one sentence! Buy one | | | | * The rental market for the area has also |
| investment property per year for the next 10 | | | | increased. |
| years. Or be even more aggressive and buy 2 | | | | So, here's how it works: |
| properties a year. Double your tax-free income! | | | | Refinance the home you bought in year #1. This |
| However, for this overview, we will use one | | | | $150,000 home (at least in the Middle Tennessee |
| property. Here's how it works: | | | | market) should now (10 years later) be worth |
| Find yourself an Exclusive Buyer's Agent who | | | | $225,000-$250,000, if you have purchased it |
| knows what you're trying to accomplish. This | | | | following the above guidelines. You will have also |
| person will be invaluable to you in locating the right | | | | kept the property rented, which has made all |
| properties. This person will not have any conflict | | | | your payments...and you've been able to take |
| of interest and will be there just for you. | | | | advantage of all the tax breaks associated with |
| Then get to work! Locate and purchase one great | | | | rental property. |
| investment property. Try to stay in a | | | | Proceeds from a refinance are not taxable |
| $125,000-$150,000 price range, because you want | | | | income, so you are looking at approximately |
| this property to appeal to the widest segment of | | | | $100,000.00 of tax-free income. You've not sold |
| renters without being on the low end. Look for a | | | | the home (which would be taxable income)...you've |
| home in an up-and-coming area. One that is well | | | | only refinanced it! Could most people live on this |
| constructed. If it's priced under market, that's | | | | amount of money for a year? You bet they |
| great. But keep in mind that the most important | | | | could! |
| consideration is the location and the property | | | | OK - So now we start repeating the process all |
| itself. You're going to be in this for the long-term! | | | | over again. In year #11, you will refinance the |
| Year #2 - Repeat the same procedure. Then | | | | property you bought in year #2...and so on. This |
| keep repeating the procedure for up to 10 years, | | | | system will provide tax free income for years to |
| always being careful to find just the right | | | | come. You will only have to work if you choose |
| property. | | | | to do so! Isn't that a great feeling? |
| The example I'm presenting will be based on the | | | | Just be sure to keep the properties in good |
| following considerations: | | | | condition and they will serve you well for years to |
| * The home has been maintained in ideal condition. | | | | come. It just requires some careful planning. |
| * Both the area and the home have appreciated | | | | |
