Lets compare the difference between owning a Note and Being a Landlord to see which keeps more money in your pocket:
The Paper side of Real Estate
The Landlord side of Real Estate
Which one puts more money in your Pocket?
Here are straight forward answers to the most common questions on mortgage notes versus being the landlord . We also invite you to visit our learning center filled with helpful articles and tips for understanding mortgage notes and exploring investment opportunities.
The Paper side of Real Estate
Mortgage Notes are the paper side of real estate business. The House and Property are the collateral that you can take back in a worst-case scenario and the note is not repaid. Yet in the best-case scenario you will receive the following:
- Monthly income from the note which includes principle and interest
- No hassles from property ownership
If the worst-case scenario comes to fruition, what options do we have:
- Reclaim the property for a Quick sale of the property
- Restructure the terms of the Note for the borrower
The Landlord side of Real Estate
Rental Property is the physical side of real estate business. Landlords often carry a mortgage on the property which of course is paid for by the renter and the corresponding lease agreement. Responsibilities of rental property include:
- Taxes
- Maintenance
- Mortgage payment
- Vacancies
Which one puts more money in our pocket?
Lets compare the income streams of the same property but from the two perspectives of Note ownership vs Rental Property. To keep the comparison as close as possible we will have both examples bring in $1000 per month. Lets look at monthly fees – Note servicing fees are around $50 per month and Property Management firms charge around $100 per month. In addition, Rental owners should set aside at least $50 per month for vacancies; at least $100 for paying the property taxes; another $50 for paying insurance; and $100 for anticipated repairs.
Note investing clearly puts more money in your pocket and avoids, taxes, toilets, tenants, and turnover.
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