Financial Resource

of your primary residence until you have exceeded 0,000 in sheltered gains.

For example, lets say you just sell one home. You’re in your early 60’s and you have had the house for 25 years. Lets assume you paid 0,000 for it and it has appreciated at a moderate rate of 5% each year on average. For those 25 years, its present value now would be 8,635.31. That is a capital gain of 8,635.31. You pay zero, nothing, in taxes on your profit, using your exemption up to a 0,000 lifetime cap for married couples or 0,000 for single folks.

The entire 8,635.31 is yours to do with whatever you please. It is 25 years later, so your buying power as a result of 3% inflation has eroded your buying power but think about all the people who have no real estate to fall back on. Ouch! That’s no way to live.

No surprises here. You can actively manage your own properties for years and if you do it right and use my methods of acquiring tenants, you just might get lucky and get a lifetime tenant. I’m not going to let you say that it’s impossible because I’m going to agree with you that it’s probably not going to happen.

Here’s what the statistics say (no charts or graphs). People move on average every 5 years so you should reasonably expect to have at least 5 different sets of tenants.

That’s fine because every 5 years, you can update your properties appearance and raise the rent to match current market conditions. Long-term tenants always seem to keep you from achieving a true market rent if they stay for 10-15 years, and they do stay. I see it all the time and I still get market rent…you’ll see!

The figure that says people on average move every 5 years applies to you too. If you get itchy to move or sell, then do the following: Don’t sell anything! Just use equity lines to acquire your next, nicer house and don’t move further than 10 miles away from your investments. Even the pros blow it on this one.

If you pay attention to what I just said, you should retire comfortably, with more money than the average person ever needs. You have a choice.

I will use a true story to illustrate my point. My wife’s uncle bought 2 ½ acres, in what his buddies from his telephone company job used to say was no man’s land. He bought it for ,000 in 1972. He financed his 3 bed/2.5 bath/2 car garage, ranch style, block home construction for an additional ,000, for a total of ,000.

Well, he sold that house in 2001 for 5,000. He paid no commission (I showed him how) and he paid no capital gains. That’s a real life story of a 8,000 tax-free gain or profit on a ,000 investment. He did hold it for 29 years but he has no money worries and lives a life of ease and comfort.
So my point: Collect a few houses and don’t sell them. That is the Magic Bullet of this story!

I’ll admit to you that I’ve shorted the stock market a few times and never lost on stocks either, but there are way to many closed-door conversations that I’m not allowed to listen to. I have a feeling that there is a reason for that. Can you guess what it is?

I learn more, make more, have more, do more and help more by actively managing my investment from less than ten miles away. I know all the players and there are no closed doors. My business associates are true friends, who help each other make money by providing excellent value for our customer’s dollar, and that customer is my tenant.

My rentals are superior to my competition, to the degree that my wonderful tenants remain tenants for life, or they buy it from me if I decide to sell.

Rental real estate is a rewarding investment. It is not just the money; it’s the value that you personally deliver.

I choose to live with purpose, passion and desire. I can’t do that in the stock market. How can I help you personally by investing in stocks?

Author Biography: Dan Auito is a dual-licensed real estate agent and appraisal assistant. In addition to being a 20-year veteran of the United States Coast Guard, Dan has also founded a non-profit drug prevention corporation, a real estate consulting group and is the author of “Magic Bullets in Real Estate.” This 300-page power-packed book comes with a website that further supports its readers.

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