By Lisa Iannucci
Looking to make some extra money each month? There are so many ways you can, from taking on an extra job or starting a side hustle, but Devon Kennard urges you to consider investing in real estate.
Kennard is the author of “It All Adds Up: Designing Your Game Plan for Financial Success” (HarperCollins Leadership), which debuts April 18. He began his NFL career with the New York Giants in 2014 and has since played with the Detroit Lions and the Arizona Cardinals.
Knowing that his NFL career wouldn’t last forever, Kennard became passionate about real estate investing. In his second year in the NFL, he purchased his first investment property, a modest home for $86,000, and started making money right away. Today, he owns 20 single-family and multifamily properties and teaches others how to do the same.
“Owning a property is having an investment that will earn you extra income – otherwise known as mailbox money – each month,” said Kennard. “Tenants will live in it and pay down the mortgage and you’ll earn tax benefits. Year over year, depending on the area where you live, your property is also going appreciate in value.”
The next benefit, according to Kennard, takes a few years, but it’s worth the wait.
“Fast forward three to five years and you can refinance your property and draw some of the capital you put in; then you use that to invest in another property,” he explains. “Over the long term, this puts you in a position to scale and your net worth can grow rapidly because now you own multiple properties, and your mailbox money increases.”
But Kennard stresses that you do not need an NFL salary to invest in real estate.
“There are investors who are finding ways to get into deals with little or no money,” he said.
However, in today’s current housing market, the increasing mortgage rates (6.871% as of this writing) might also sway you against investing, but Kennard urges you to reconsider.
“Have a criterion of what you’re looking to accomplish,” he said. “What cash return are you looking for? If it meets those criteria, it doesn't matter what the interest rates are. You can always refinance a few years from now, but if you don’t and the rates go up to 10 percent, then you’ll regret not buying the property at the lower interest rate. If they stay the same, you didn’t do yourself a disservice.”
If the idea of being a landlord turns you off, Kennard has a suggestion. “I never want to manage my own properties,” he said. “Yes, there is work involved when you own a rental property. You need to keep that home in good condition, and you have tenants to deal with, but to me, the benefits outweigh all the work you need to do."
He suggests finding a home you want to buy and factor in paying a property management company, especially if you don’t have the time or desire to do the work yourself.
“It's still cash flow and can hit the benchmarks that you want,” he said.
Kennard cautions potential investors from jumping into opportunities that sound too good to be true, such as late-night infomercials or ‘buy now ’real estate seminars.
“Learn first,” he said.
In “It All Adds Up: Designing Your Game Plan for Financial Success,” Kennard explains how he had a daily routine of listening to real estate podcasts and reading many, many books on investing. During the off-season, he would travel to see potential properties and then to properties he owned to check on his investment. He kept this routine up for the last nine years.
“You should have core people in your network before you buy – such as an agent, a lender, a property manager if you don’t plan on managing it yourself – who you can ask about the properties you want to buy. Don’t plunk down money at a seminar because those people are making money on getting people to sit down with them. The best thing you can do is get your boots on the ground and learn about buying real estate before you actually do.”
For more information on Devon Kennard and his book, check out his website at https://www.devonkennard.com.