How to Use Rental Properties to Increase Your Net Worth

Los Angeles + Orange County Real Estate Podcast with Alfie McFadden

By buying real estate and using it as a rental property, you’ll have an asset that’s appreciating in value and increasing your net worth.

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As you know, we’re well into the holiday season. This means everybody’s out there filling out their shopping lists. As for me, I try not to buy things that depreciate in value. Being in real estate, this gave me an idea for people in the market looking to buy a car and how they can appreciate their value.

You see, my wife and I recently bought a truck, and our plan was to make a down payment on the truck. Instead, we financed the entire purchase of the truck. Rather than putting a down payment on the truck, we used that money as a down payment for a real estate property. This way, the income the property was making for us as we rented it out would actually pay for the car itself.

If you tried the same thing, sometime in the near future when the car is paid off, you’d still have an asset that’s providing you income every single month. Not only that, but over the long term, you’ll have an asset that’s appreciating in value, thus increasing your net worth.

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The income you can make from renting a property can pay for other things.

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This is in contrast to the more common method of using that money to pay off the car and watch it depreciate in value the minute you drive it off the dealership lot. It’s never the best idea to use an income-producing property to pay off liabilities such as cars that depreciate in value, but it’s a better method than actually taking that money and just paying off a car that doesn’t appreciate in value at all.

There are many ways you can appreciate your value, so if you’re thinking of buying, selling, or investing in real estate, give me a call or send me an email. I look forward to collaborating with you!