How to Maximize Your Travel Rewards as a Real Estate Investor
As a real estate investor, you have the opportunity to fund serious travel adventures through credit card rewards.
Whether you are building a real estate business or choosing to house hack, the expenses can add up quickly. Since you will be spending this money to reach your real estate goals, you should take steps to ensure that you are maximizing your spending in every possible way.
We will dive into how to maximize your real estate expenditures and turn them into free vacations that will satisfy your need for adventure.
When you take the time to open a credit card, many will reward your initial spending with a hefty appreciation gift. These welcome bonuses are the quickest way to amass travel rewards points in a short amount of time.
For example, the Chase Sapphire Preferred offers new cardholders 60,000 points after spending $4,000 in the first 3 months. Those points can be turned into $750 of travel!
Imagine how multiple offers like that could turn into a fabulously free vacation. If you are thinking that spending thousands of dollars over the course of several months is not feasible, then think again. With careful planning, you may be able to time your real estate spending to maximize your travel rewards.
Plan ahead for big spending
Although not all expenses can be planned for, you can plan for many real estate expenses. A big expense such as a renovation can easily help you score a welcome bonus. Even a simple unit turnover when a tenant leaves could cost several thousand dollars.
When you anticipate a big expense, open a credit card to coincide with this significant amount of spending. Some expenses you might be able to anticipate include a major renovation of a newly acquired property, a turn when a lease expires, or new appliances for a property. Each of these expenses is relatively large and could be planned in advance.
Take this large expense and put it on a premium travel rewards credit card. The welcome bonus will reward you highly for the spending you had to do anyways.
Maximize welcome bonuses
While opening a credit card and enjoying the welcome bonus is a great option, you can take this to the next level. Instead of leaving the card open for years, cancel it before the annual fee rolls around. That way you can enjoy the rewards without being forced to pay an annual fee.
For example, you may open a new credit card for a big renovation. After scoring the initial sign up bonus, you may decide to fund an exotic trip that satiates your wanderlust. You can close the card before the annual fee touches your credit card. This allows you to maximize the value of your welcome bonus.
You can take this one step further by closing a credit card and reopening it later. This practice is often referred to as credit card churning. It allows you to reap the benefits of a welcome bonus with your favorite card over and over again.
If you are considering this option, then make sure to start with one card. Don’t sign up for too many cards at once in the beginning. Take your time adjusting the world of travel rewards. Also, don’t get stuck with a single card. New credit card offers are advertised on a regular basis. Although your favorite card’s offer may be exciting, it is important to check out what other cards have to offer before signing up again.
Redeem the Points Effectively
The spending that allowed you to amass these points is important. Once you have the points, it is essential to redeem them effectively. Otherwise, your careful planning efforts could be wasted!
Travel rewards points have many redemption options. Some cards will allow you to redeem your points to book flights, hotels, and rental cars. Other cards offer the ability to erase any travel spending on your rewards statement with your points. Still, other cards allow you to transfer your travel rewards points to travel partners for a slightly better redemption ratio.
For example, Chase Ultimate Rewards points are more valuable when transferred to select travel partners. Although you may be able to score a great deal through the Chase Ultimate Travel Portal, you would get more bang for your point by transferring the points to a travel partner.
In the end, you will get a fairly good deal no matter how you redeem your points. At the very least, the points will partially fund a vacation for which you would have happily paid full price. Travel rewards points can reduce the overall price tag no matter what. However, if you spend some time looking at the options of your particular travel rewards program you may find that some redemption options are better than others.
The bottom line
Although there are many options to maximize your travel rewards, the most important thing is to get started. No matter how you look at it, travel rewards can allow you to take an amazing vacation without paying a dime.
Get started by finding your perfect daily use card to fund your first free vacation. If you enjoyed this article, be sure to check out the next article in our credit card reward series: https://fibyrei.com/should-real-estate-investors-avoid-opening-new-credit-cards/