Why Own Investment Property — Benefits
As an investment, ownership of rental property provides considerable cash flow as well as other benefits. In general income property provides a better total investment package than any other investment available. However, owning income property often comes with considerable inconvenience and uncertainty—what happens if the tenant does not pay the rent? How much maintenance will the property require? These concerns cause many potential investors to avoid owning income property.
To reduce these inconveniences and uncertainties, RBS has developed a comprehensive package-RBS InvestorCare©-that provides a security blanket for owning income property in a distant location. Specifically, RBS InvestorCare© provides six distinct benefits for investors:
- High current income – 9+% (all-cash purchase) to 12+% (25% down payment). The return percentage is set by the purchase price and the rental income. But, just in case the tenant misses a rent payment, RBS guarantees the rent income for the first year, as a part of RBS InvestorCare©.
- Long-term stability of income and asset value – The Houston metro area has shown steady job growth and population growth over the past ten years, even during the current recession. Unemployment in the Houston area is 3-4% below the national average. Residential real estate values in Houston have dropped only 7% from their peak in 2006, and recently showed a 3% uptick.
- Complete Management Support for Investors – The RBS team provides every property service locally, including rent collection, bill payment (including mortgage, insurance, and property taxes), tenant services, and property maintenance. The investor receives monthly income directly via auto-deposit and receives financial reports via email.
- Security – The investor takes title to each property and has full ownership of it. The investor chooses how to manage the property. There is no financial market risk or management risk.
- Inflation protection – Prices for single family residences have tracked 1-3% above inflation for the past 20 years. Job growth and population growth in Houston will continue to put upward pressure on the housing market, keeping property values and rental rates in line with inflation. In September, single family residences in Houston showed a 3% increase in market value.
- Significant tax benefits – include tax deductions for depreciation, mortgage interest, travel, property management and maintenance expenses, and the opportunity to defer capital gains for many years. For income property, a buy-and-hold strategy is still in fashion. For investors with significant capital gains, RBS offers "1031 exchanges" to trade up to more properties. This strategy increases the current income, while deferring all taxes on capital gains from the original properties.