I am often asked: "Wouldn't it Be Better If I Just Keep My House as a Rental Until My Basis is Stepped Up?”
This is certainly an option. After all, you’re already familiar with the property and you may already have a good property manager, so it may look like the best move, but let me tell you, you’ll be throwing money out the window – a lot of money. You'll also be incurring the risks and hassles of maintenance, repairs and tenant turnover.
Let’s look at a comparison of returns with keeping your house or putting your money into a solid commercial property lease for example like a Starbucks Coffee building or a Chase Bank building.
 
Let's say your mid-Peninsula house is worth 3 million dollars. It would probably rent for about $6,000 a month, give or take. Now, let’s take that $3 million and put it into a single-tenant commercial property leased by Chase Bank with an absolute triple net lease and a corporate guarantee. These are often available at a five and a half percent annual return so your income would be $165,000 a year or $13,750 a month with NO expenses and NO management or maintenance headaches.
 
In contrast, let’s look at the expenses on your house as a rental earning $6,000 a month:
 
Property Taxes (est.):                                                      $300
Fire and Hazard Insurance (est.):                        $150
Property Management (est. 8%):                       $480
Property Maintenance (est. 5%):                        $300
 
Total monthly expenses:                                            $1,230
 
Net monthly rental income from house:     $4,770
 
Return on $3,000,000 Investment:                     1.9%
 
Net monthly income from a Chase Bank lease @5.5%:            $13,750
 
That’s a loss of $8,980 a month!
 
What looks better to you, $4,770 per month or $13,750?
 
And what’s going to give you more peace of mind, a roof that might start leaking, a tenant who may suddenly move out or any number of repairs to make, some of which could be major, like a roof or furnace replacement?  Compare that to the comfort of knowing that Chase takes care of everything for you, including guaranteeing the rent and making all the repairs at its own expense.
 
By the way, do you carry Earthquake Insurance? I didn’t factor it in because most homeowners don’t carry it because of how expensive it is and how big the deductible can be.
 
Exchanging into a single-tenant property with an absolute NNN lease and a corporate guarantee for the rent is about the biggest no-brainer I’ve ever seen. You have only one risk: Chase going bankrupt. They've been in business now since 1799 so I don’t think that’s going to happen anytime soon. How about you?

In this presentation, we will drill down on these strategies and take a look at some actual properties  like U.S Bank, Chase Bank, Starbucks Coffee, etc. Learn how to double your rental income and get rid of property management and tenant headaches.  Don't miss this very important opportunity to double your cash flow! Just fill in the form below and I'll see you in the presentation!