Value Your Time: Start Making ~$100/hr Investing in Real Estate
High Hourly Wages Investing in Real Estate
I promise you this is not a get rich scheme! This post is designed to give you a paradigm shift when it comes to spending time investing in real estate and how you can earn a considerable salary over time. You too can spend those pesky hours on the nights and weekends making some extra money for yourself and accelerating your road to financial independence.
But I am SUPER busy. I don’t have time to deal with real estate and find investment properties, can’t I just throw my money into the stock market and forget about it?
– Swamped Skeptic
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Sure you can Mr. Skeptic, but don’t you think successful stock market investing takes research and time too? It most certainly does! Picking a different asset class doesn’t get you out of doing your homework. One of my favorite personal development coaches, Brian Tracy, says you should “spend as much time investigating the investment as you spend earning the money.”
With that being said, no offense, but suck it up! Live with the fact that it takes time to find good investments, especially the best ones. This applies to investing in real estate just as it does any other form of investing. What it all comes down to is priorities. You always make time for what is important. Is it more important to catch the latest football game on television or search for a property with life-changing cash flow, tax benefits, equity, and appreciation over the long term?
Yes...you too could make $100/hour investing in Real Estate #RealEstateInvesting http://wp.me/p6GBMd-6d Click To Tweet
A Quick Example:
For 2 months you worked hard to find a new investment property and spent weekends and sometime during the week to find it. After you received your appraisal, you’ve confirmed that you bought the property $10K below market value, even better than your conservative estimate. Great job!
For simplicity purposes, let’s say you spent 100 hours finding that property. Guess what? You just made $100/hour on all of that time you spent! That’s a great way to give yourself a raise.
$10K below market / 100 hrs = $100/hour
Maybe you won’t be able to find something every time in 100 hours, but what if you spent say, 140 hours? That’s still over $70 an hour and we are only scratching the surface on the long-term benefits. You spend 40 or more hours at work every week and most people are not making that kind of hourly rate, especially after payroll taxes kick in. Well, how about those taxes on my real estate income, or lack thereof? Did you forget about depreciation and real estate tax deductions? Your $70 an hour might not even be taxed due to depreciation which means at a 30% income tax rate, you are back to technically making over $100 an hour in terms of regular employment wages!
$10K below market / 140 hrs = $71.42/hour
Potentially Save 30% Due to Depreciation:
$71.42 / (1-0.30) = $102.02/hour (earn at your job before tax to match)
Even if you didn’t get your property below market value, you certainly didn’t waste your time putting the hours in. You also found out that you could get $300 in cash flow per month after taking your mortgage payment and other expenses into account. How many hours are you working for that $300, especially if you have a property manager? Little to none. If you leveraged, you are getting the tenant to pay some equity and also appreciation on a pie much larger than the money you put in. The hours you put into real estate went to residual income. The hours you put in at your day job did not.
Now that you understand the amount of money you are really getting for your time, it should help you feel like the time is not wasted. You may still feel like you don’t have time since you are not quite ready to ditch your day job and do this 40 hours a week. In order to make better use of your time, the goal here is to find a system that does the calculations for you and eliminate the guesswork. Knowing your neighborhood, having a great way to “filter out the dogs”, and making sure the numbers work will streamline your process.Make $100/hour AFTER taxes by investing in Real Estate, a paradigm shift #RealEstateInvesting http://wp.me/p6GBMd-6d Click To Tweet
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Before you leave:Don't forget to check out our free rental property calculator. This will be a valuable tool in your arsenal as you analyze your existing or potential rental properties.
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