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Episode Info: Can you imagine, you bought a rental home 15 years ago, and now your 60 today.   Your hope was this rental would provide retirement income needed at age 65.   Sadly, it’s obvious there is no way this income is going to make enough of a difference for them.   15 years of dealing with the property, and now they are worried they may have made a mistake.   5 years away from retirement, they have to decide…..   Keep it, sell it, re-finance, or do something different, is it too late?   I hope you’re never put in this position, especially so close to retirement.   Let me tell you how it turns out….   But first, welcome, I’m Dan Thompson, I make sure that things like that don’t happen to you.   We have a proprietary process to protect your money, create tax-free growth and income, and at growth rates you’ve likely not seen before.   No use stressing and worrying about money, income, and retirement when you can create a predictable process to grow your wealth.   So, the other day I was in a casual conversation with this person in this situation with their rental.   My heart dropped. I mean, this was their dream, to be owners of rental real estate and make their millions, have all kinds of extra income at retirement, just like a lot of people think, right?   They thought that if they owned rentals at some point they spin off income that will provide a wonderful retirement.   Sadly, that’s not always the case…..let me explain…..   This couple bought a rental 15 years ago. At the time the home was 5 years old.   They originally paid 215,000 for the rental.   They put $40,000 down and carried a mortgage for the rest.   Over the years they put all the extra money into paying off the mortgage and it was recently paid off, 15 years later.   The rents have increased over the years, just a like they’d hope.   The current rental income is 2000 per month.   The home has appreciated in value to 300,000.   So, in the 15 years they increased their equity 85,000.   They put about 10,000 into repairs and maintenance over the years, like new carpet, some painting.   Their total investment with repairs is 225,000.   Now that the mortgage is paid, if we calculate their gross return on the amount invested it’s about 10.6%.   We get there by dividing 24000 (rents for the year) by 225,000.   After insurance and taxes their net income is about 8%.   There is a 50% rule of thumb that says over the life of rents, you’ll be able to keep and spend about 50% of your rental income.   This is after repairs, maintenance, insurance, and property taxes are paid through the years.   If that holds true, then the net return on investment is 5.3%.   If you divide 12000, (½ the rental income), by 225,000, amount invested we get 5.3%.   Now, they have 85,000 in equity appreciation too, that equates to about 3% per year growth over the past 15 years.   Finally, we want to know what the return is based on the current value of the home? ...
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