Is Renting Out A House A Good Investment

Is Renting Out A House A Good Investment


Kris Krohn here with Limitless TV and
today we’re discussing real estate and whether renting a home is a good idea or
not So is renting a house a good investment? It depends. I’m going to share with you in this video when you should rent and
when you absolutely should sell because there’s a difference but first step most
important, is to have a winning mindset and real estate to make sure that you
start right and win which means starting with the end in mind. And what does that really mean? it means that anytime you ever buy a house you need to view it as
an investment. This is either something I’m going to sell to make money on or
this is something that I’m going to rent and make money on. Because if I buy it with the discount and I buy it right I can rent it out and I’m going to capture
a cash flow. That’s a residual income That’s automatic money. That’s mailbox
money. It comes in every single month whether I work or not. Or it’s a house
that I’m going to sell and I’m going to make an equity margin play on it. Which
means if I bought it with $40,000 of equity than what I sell it I’m going to
get what? well I’m going to get some of that money out. Maybe all of it, maybe
more. And so how do you know whether you should rent or not? First of all
understand this, renting is a brilliant idea with the right kind of investments
because when you have enough homes that are rented out making you a cash flow,
you got that automatic mailbox money coming in. You just need to know the
difference of when to rent and when to sell. When to rent, when to sell. Let’s put
these up on the board. Let me give you some examples of both of these scenarios
and I’m going to see if you can tell me when to rent and when to sell. But before
I do, I need to give you context. I’m all about velocitising my money don’t look up
that word velocitising I think I made it up. I make up lots of words but what
it means is it, means to create velocity with your money. Once your, if money is
sitting in a bank account earning 1% then what kind of velocity do you have?
boring velocity! but if I take it out and I put it in the investment earning
20% that’s more exciting. But maybe I’m sitting it in a long term investment if
I have a chance to pull it out sooner and put it to work again then what I’m
doing is I have my money earning in multiple places at the same time. This is an important factor when deciding to rent and when to sell. So I’ve got a property and let me give you the scenario on it and then you get to be
the judge of whether we should rent or sell. the house has a value of one
hundred thousand dollars for simplicity what I owe is fifty thousand dollars and if I were to rent it it would have a cash flow of one hundred dollars a month. Now let’s just pause for a second. Every year this property’s rented out, you could get, you could make twelve hundred dollars a year. But remember you’re gonna
have some repairs this is not a strong cash flow and yet you’re sitting on how
much equity? you’re sitting on $50,000 $50,000 could buy you two homes. And if
you buy them right with cash flows of three hundred dollars a month, what we’re
talking about is my opportunity cost. Two homes producing a total of six hundred a
month or one home making me a hundred a month. Which one’s bigger? What do you think I would do? In that scenario, I would sell absolutely. If you
guessed correctly give yourself a high five. Like that. Awesome. Okay let me give
you another scenario. You have a house that is valued at magically one hundred
thousand dollars. You owe $90,000 which meant that when you bought this house
you really probably weren’t thinking a lot about equity or buying the house
with some pirate booty in it. But you can rent the house and this house has a cash
flow $300 a month should you rent or should you sell? Well, if I were to sell it am I going to get my 10 grand out of it? Well if I’m selling it on the open
market with the realtor and then I’ve got closing fees, I might sell this and
actually break even. I might even make $2,000 or I might lose a few thousand
dollars. So is there money to get out of the home? No there’s not. But guess what
there is? there’s three hundred dollars a month cash flow, thirty six hundred
dollars a year. That’s 300 less dollars you need to produce every single month
for building up your residual income. Guess what I would do on this house? correct. I would rent this house. Alright let me
give you one more scenario and see what you do. Let’s say that I have a house
that is valued at oh my goodness how’d that happen again? $100,000 Let’s say that I owe $50,000 on it is starting to look familiar. But I have a cash flow of $400 a month. Why? well let’s say I’m using one of my
aggressive strategies like a lease option. You can watch a video on that.
here on limitless TV. It’s awesome. So I’ve got a $400 cash flow but I have
equity. Man, what should I do? We’re going to velocitize our money. How
are we going to do that? we’re going to do both. We’re going to keep the house,
we’re going to refinance or do a home equity line of credit. You can also watch
a video on how to do that. And I’m going to pull out let’s say $30,000 but I’m going to keep the house. My $30,000 is going to cost me $100 a month. So now, my cash flow goes from 400 down to 300 but the $30,000 is used to buy what? a second
house. And on this house, I’m going to not only just putting $30,000 now but I
let’s say I bought it with $20,000 of equity. So guess what? On this house it’s
valued at a hundred thousand I owe, fifty thousand because I put thirty down
and bought it with twenty thousand of equity. And let’s say this house cash
flows four hundred dollars a month. Well, on this house and now owe eighty thousand
but I’m making three hundred here, I’m making four hundred here, guess how much
I’m making? seven hundred dollars a month and let’s check out where my net worth
is gone. My net worth increased by a net twenty
thousand dollars now I got fifty sitting here, I got twenty thousand here. Now I
have a $70,000 net worth and a seven hundred dollar month cash flow. So renting and selling sometimes you get a beautiful in-between option the overarching principle of, should you rent your house is, how am I velocitizing my
money? Is my money invested correctly? What’s the ROI that it’s producing? and right now should you rent? it really comes down to this principle and
economics called, “opportunity costs” What are you trading the equity or money
in that home for? and is it moving you up or is it moving you back or is it moving
you sideways? when I buy real estate I always want to level up my financial
life. And if you make that your rule too, watch some of the videos here, subscribe
on Limitless TV and learn all about that, you’ll learn when to rent, you’ll learn
when to sell and how to grow your finances. If you need some help click the
link below, reach out to my team. Because you know what? it’s time to do something
about that property you gotta figure out whether you should be renting it we’re
selling it. Thank you so much for watching Limitless TV. Don’t forget to
subscribe. I’ll see you soon.

100 thoughts on “Is Renting Out A House A Good Investment

  1. Although, I have enjoyed all of your videos, this one seems like it was made just for me. Ha! We currently have $160k worth of equity in our house thanks to market crash of 2007 and the fact that many employers/employees are moving to our immediate area soon from CA. And by many, I mean 15k to 18k employees in the next 12 to 18 months. So the value might go up even more.

    I have been considering the third option that you pointed out in this video but felt like maybe this is too advanced for my first ever real estate attempt. Good to see that I am not completely nuts for considering this idea.

  2. bought for 205k owe 194. can list for 255k after 3ys of owning and it will prob sell for more than listed. could rent it for 1800mo with mortgage of 1148. Planning to sell and pay off my 38,000 in debt and travel in my RV full time debt-free. ????The house would not be paid off until I am 81 years-old lol am I making the right choice?

  3. Khris Khron, thank you so much for your videos i think about you every day; you are truly my source for inspiration, mentoring, and motivation. Soon i am going to commence your straight path real estate system and although i dont know exactly where it is im heading to and how i will do it, you have inspired me to believe in myself. You really helped me to construct a law of attraction mentality and so far i feel like thats all i need to begin with. Everything will fall into place after. I also hope that one day i could either attend one of your seminars or at the very least meet you and thank you in person for making me change my mentality and it's former bad habits.

  4. im broke af,, no job right now,, and im really want to get myself involved in real estate investment,,, what should i do for starters? should i get a job in a real estate company to get some experience? or can i just jump into this? just wanna know how i can start real estate investment,, and i need to know what is the right path to do this,, thank you,,

  5. hey limitless tv I am 17 years old and am very interested in investments of all sorts, specifically real estate. I thank you for your videos and ask if you know where I can go for general real estate and investment knoowledge, so I can become accustomed to the market? also where I could find a mentor…. like you 😉

  6. Thank you so much for drawing everything out! Its very helpful and easy to understand!

  7. Do your techniques work in the uk

  8. Wonderful, Teaching bro.. Simple but Dynamic…I invested in 100k home recently with 20 % equity and 80 % bank loan….Planning out to rent it… How to find out how much rent i can assign for my 3 Bed Room Apartment.

  9. Your videos are amazing man. Thanks for sharing yiur experience.

  10. Also wondering for your homes where you rented out your basement while still living there yourself, did your home had a separate entrance for basement? Or did you have to worry about how to turn them into legal suites? i think herein canada it is recommended but costly toturn basement into a legal suite.

  11. Very grateful for you taking the time to make these informative videos. The knowledge is invaluable. I'm a younger guy in the process of finding my first deal. I've got a team of people that I can work with locally, but once a portfolio starts to grow, how do you find realtors/lenders nationwide that can help bring you deals from other cities? I trust my understanding of the local market, but I also understand that there is much more growth potential if I venture outside of my home state, I just do not have the knowledge about those markets. Thanks for the wisdom.

  12. Great video. Im about to close on my first house soon and this video made it easy to conclude: RENT.

  13. What to do if home is paid off and is renting for $1800 a month? And worth around 280k. What would be your best opinion? Thanks!

  14. cash flow, do you mean the money you make after rent is paid every month right?

  15. I LOVE YOUR VIDEOS. I have watched a few other of your videos and they give a lot of information that is very useful. By the way I am barely going to be 14. 😅😂

  16. How is it possible to buy a house with money you don't have? $30K for a $100K house?

  17. Hey how can I get in contact with ur team I am very interested in Learning new things

  18. 2:36
    Awsome info. Subbed.

  19. Awesome!

  20. Amazing videos.. I am inspired dude #

  21. Just subbed!

  22. Pls tell wat do u mean by "owe" English is not my native language tho 😂

  23. Love this video. About to buy your book

  24. Thanks! Huge fan of your work

  25. What about the monthly payment to the bank I have to deal with when I first start off?

  26. I hate how these real state investongs dont work in my country, we are not yet fully developed so the only way to buy a house is through bank loans that are rigid and cant be refinanced, i wish i could pull off ur advices

  27. Why are you renting a house worth 100k for only $100, what about the 1% rule? In a year you can make $12000 instead of the $1200 and in ten years you would have made $120000. Now, what if you have a bigger portfolio of homes let's say 12 houses, I will make $144000 a year and $1440000 in ten years. I would never have to work because of the cash flow. I would love to hear your feedback.

  28. I see now

  29. I love your videos man I make about 90k a year iam gonna follow ur steps because no matter how much u make at work its still work thanks for your tips okay

  30. Wow this is a great video, thanks. It got me thinking. My house value is $700k and i still owe $375k, would you sell or rent it or get money and buy another house?

  31. Keep renting my houses, that is the best idea.

  32. We need this in schools

  33. Say I have 10k in the bank what would you do with it?

  34. I appreciate your time as well as the knowledge you've shared man. Outstanding videos(4th one so far)! You learn something new everyday. Keep the information coming.🖒🖒 New subscriber✔

  35. When you say you buy houses with ___thousand of equity, do you mean you just look for a good deal? Aka buying under market value? Or is there some sort of home buyer program you use?

  36. You're doing an excellent job with your channel and a good service for the people. I appreciate your knowledge, enthusiasm, and tenacity!

  37. Your videos are so motivating!! I’m going to watch everyone! I want this so bad man!! I want success

  38. These videos are awesome. I have been doing a lot of research and have been learning all I can. I have been looking to buy my first investment property. Right now I just live well within my Means and am excited to get the ball rolling. I’ve been working my butt of and save save saving . Been Working on myself, soaking this stuff up, and doing alot of reading . Just watched your retire at 26 video. I’m 29 I’m shooting for my 30s! Very motivational , informative and easy to follow. You’ve got excellent content! Keep it coming ! Thank you !

  39. now I have that buzzer👐👐👅👅👌👌👌❤❤❤❤

  40. so where do u find such a guy that sells a house for less then its really worth instead of renting it himself

  41. Thank you for the great videos. Would you mind doing a video for using the VA benefits. I bought a house for 228K that has comps of 250K. It has a potential of a $200/month rent after all bills. Should I rent or sell? Thanks agan hope to hear from you.

  42. Good video man is ther any books that talk about thiss?? Equity tag me plse if any thankss

  43. Love it! Thank you!

  44. Thank you for this, really gave me something to think about

  45. This is so perfect! I am the last scenario and feel more confident I'm making the right choices by this video 😆 Thanks!

  46. this guy reminds me of Gerard Butler lol

  47. $100 a month?

  48. Loving listening and learning. But how to get money in the first place if you're over 40? I'm sincerely open to any ideas. Thank you

  49. i don't understand how he calculated his net worth after the last example can someone explain this to me.

  50. if you owe 50k and the house has a value of 100k that mean the old owner sell you The house is worth 100k with only 50k ?

  51. I’m 20 years old I really want to go into real estate. I’m watching all of your videos😂👌🏾💯

  52. I’m so happy I found out about this channel I’m already planning what I’m gonna do and I’m only 14,

  53. do you think there is going be a financial crisis soon? if there is, then the best time to buy is obviously after the crisis, but do you think the value of property will fall alot?

  54. This guy always looks pissed off

  55. But how do you buy the house , with a morgage and make money on it

  56. This was a great video. Good info. Thanks for putting it out there.

  57. Awesome video

  58. V e l o c i t i z e

  59. I like watching your videos because you give a lot of knowledge, but here's what i think why would anyone buy another house before paying the first 1 now you're in debt again and if i keep buying more houses with the equity from the other houses it's just more debt and it'll take a lifetime to pay it

  60. Is there any video of how much downpayment should i pay?

  61. What does he mean by I OWE ?

  62. Is there any way I can reach out to you directly!! Please and Thanks

  63. Is it really possible to buy a house for 100k? Here in Montreal you can just get good ones for minimum 350k.

  64. Hi kriss. am mohamed from morocco. am à real estate investor in morocco. i wana invest in america. can your team help me or il should visite u in america. can u give us adresse

  65. I see that you’re doing affiliate marketing on the descriptions below the video!!! 💵💵
    Great content!!! You inspire and motivate me so much everytime I see your videos!!
    I have a question and I am not sure if you will see this comment but it’s worth to try. I’m active duty in the Air Force and I would like to know if it’s possible to start real estate as a beginner in my hometown, living in another state or country (if I get stationed overseas). I hope you see this comment and maybe it’ll give you a subject to talk about on a video 🤷🏽‍♂️!! Thank you for your channel.

  66. Gold content! Easy to understand simple format in under 8 minutes! Thanks! I've done all 3 of these methods. I like selling and growing cash until $100k, and then being able to buy and fix homes with cash and then sell or rent and refinance then repeat. Keep the money moving.

  67. I’m very inexperienced in this field but I am trying to become successful in this area. Anybody in the comments section with experience willing to talk over email? I live in Indiana where houses are cheap, luckily for me I live in an area that is very populated due to a huge company. I’m looking for any advice like books, people to research, and study there action. Thank you in advanced.

  68. We just bought a home with help from my mom in law. She put a very large amount down; 200k down on a 586k home. our mortgage is about what we paid with our first home $2100 ($100 more). The prices are still going up, and 8% is predicted next year. Our prior home is a few blocks away (we love the place, and decided to keep it, we were going to sell it and throw the equity at the new one…but I think we should try to rent it out). The home has a 15 year loan with only 9.5 years left, and should rent for about the mortgage including insurance, maybe a small amount more ($150-250). The interest rate was only 2.75% when we refinanced it 6 years ago, wont ever see that again. So we don't want to let it Go. It was 252k in 2006, and is worth $425-435k now. Has about $170k left to pay off.

    We also have an airbnb like basement remodel in the new one. We plan to short term rent that space. We are nervous because even with so much down on the new one we are at 60% Debt to Income. If it is rented out, we should be okay (well, repairs "will" happen). The rental space below in the new place, whether we just get a renter full time or short term should keep us a little more afloat. We make about 85k a year. Not Rich. Very little disposable income in our situation. Thoughts?

  69. I catch the drift of it right but let’s say you fall in a dry spell where you can’t find renters but don’t wanna sell due to the potential of making 400/month and now I have two or three houses that all require payments and upkeep. What then?

  70. I don't understand, you owe 50k to the bank, you sell it and made 50k? Isn't that money supposed to go to the bank? Im a little confused. Please help!

  71. What if that house go Unrented ?

  72. I saved 130,000 how many rental properties should I buy?

  73. What about building a home. I am doing it for the experience and well a place to live. Seems to be more expensive to build, is this bad

  74. Could you do a HELCO in a LLC?

  75. He said pirate booty!!!

  76. help me i just can't figure out stuff you talk out .
    im from india the terms are called by diffrent name here its hard to co-relate.
    also im maybe a bit to young to understand the situation and risks or threats but can u make a video of explaining the real estate terms better so people like me can understand them too .
    Pls help
    like ur videos very much

    The Lannisters send their Regards.

  77. Some more quality advice from a 2 cent realtor.  You completely neglect the negative contributors like tax, insurance, damage, repairs, interest, etc.  On top of that, there's no mention of the huge risk/liability the owner takes on by having 3 mortgages.  What if the housing market tanks?  What if you can't find renters?

  78. so you have a 100k house you arent willing to rent for more than 100$ but youre willing to rent 2 50k houses for 300$??? what? lol

  79. do some more videos like this . where i can actually observe and evaluate ! practice makes better . Your Great !

  80. That what very helpful$$$

  81. Great Video! my house value is $290k, I owe 258K. Should I rent it or sell it?

  82. Ok I love the video. But let’s spell words correctly. Sale not sell.

  83. My phone felt while doing my high five 😂

  84. VELOCITISING!

  85. How do you sell a hoise you still have a morarge on ?

  86. I’ve been a landlord for 2 years. Its been the best decision financially I have ever made. With how easy it is to do background checks you really can place the best candidate in your properties. Equity is going up and someone else is having to pay the mortgage and utilities, so I can invest in other things. Its a domino effect of success

  87. What is equity?

  88. What kind of bank lets you rent a home that you don't own?

  89. wow!!! this was explained so simple! love it… thanks!!!!

  90. But what job can you get when buying a house.

  91. Lease option basically rent to own.

  92. Im finally in a position to execute these steps

  93. Planning on renting and living in my mommas house for a year or two… the wealth has to start somewhere for us millennials!

  94. Great Video, You explain it very well for the newbies to understand. Saving for a downpayment on my first investment property, can't wait..

  95. I don't know what questions to ask I'm confused about the process and paperwork of getting a house

  96. I sir am waiting on your book now. I implore you sir to help me

  97. Hi. Really enjoy vids great stuff question though. With all the respect in the world. I performed the third example. Where in the world do you pay less than 1% for your heloc?? Can you link me to or do a video on how to structure residence turned rental, and first year outlook prep for taxes etc. Aa well as should you structure it into an LLC, scorp, etc thank you and thank you for the content. You rock.

  98. Where are you finding $125,000 houses that would rent for $1,000?…

  99. ❤️

  100. Can I buy a property to live in then maybe in a year or so I start renting it out to other tenants?

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