Of all the financial instruments and opportunities currently available for investors, real estate remains to be one of the most lucrative. Real estate has grown into a trillion-dollar industry and has created a vast number of millionaires; in fact, 90% of all millionaires become so through real estate investment. Having said that, understanding real estate is still a maze of sorts, especially for first-time investors. Aside from geographical knowledge of your property, you must also understand taxation, cash flow, and costs to establish a healthy return on your investment. And if you’d like to understand how you can make those returns passively, the expert to learn from is Sam Flamont.

Sam Flamont
Sam Flamont Sam Flamont

As a top-producing realtor in Traverse City, Michigan, Sam has more than six years of experience in creating wealth for his network of high-net-worth clients through property investment. The biggest opportunity for passive returns? According to Sam, it’s in short-term rentals.

Through his brokerage, eXp Realty, Sam works with developers in building condos and a multitude of commercial and residential properties. According to the sought-after realtor, the first benefit of having a short-term rental is that cash flow is often better. You get higher rates of returns, and in many cases, you get completely passive returns if you manage your existing properties through a management company.

Another benefit is found in bonus depreciation. This is a tax benefit that allows you to save on tax payments by frontloading your tax deductions. Through a cost segregation study, you’ll be able to identify all property-related costs that can be depreciated over 5 to 15 years. Once you understand your depreciation schedule, you can do a straight write-off on parts of your property such as your flooring, electrical system, furnace, and countertops, among others. Sam explains, “the IRS considers short-term rentals a business. And with businesses, you can cost-segregate anything that’s on a 5-15 year depreciation schedule.” This means a large saving on your tax payments.

Sam adds that a related benefit to bonus depreciation is that investors can roll forward any unused depreciation for up to 20 years. Sam and The Mitten Group, a team brokered by eXp Realty, has already helped a network of clients make 15-30% returns and helped them understand the tax law that will allow them to save thousands and in some cases hundreds of thousands of dollars in tax payments. Sam suggests that although his team is well-versed with these taxation laws, it is a must you consult your accountant to make sure your books are sound.

Short-term rentals are going to be great sources of passive income, but according to Sam, the call to invest today has never been more urgent. Sam says 2022 is the last year you can do 100% bonus depreciation. The way the law on bonus depreciation is currently written, this tax benefit will disappear come 2025. But don’t let fear drive your investment moves. If you’re in Michigan, Traverse City boasts many reasons for you to invest in real estate. One of these is their booming tourism. Their Cherry Capital Airport had plans to begin a 15-jet bridge expansion as they anticipate an increase in traffic after their record-breaking travel year in 2020. With tourism bursting at the seams in Traverse City, now is the time to start looking at short-term rental properties in the area.

Sam shares an uplifting note for first-time and seasoned investors alike: Real estate can help you make extra income, whether it’s passive or not. It’s different numbers and different goals for everyone, and in real estate, there’s always a way to achieve those goals.

If you’re looking to understand real estate and get into investment properties, there’s no better person to lean on than Sam and his team at The Mitten Group. By educating more investors, Sam wishes to fulfill his long-term ambition of helping as many people as possible achieve retirement and freedom through passive income with real estate.