Eight (8) reasons why investing in real estate is an excellent choice
Inflation is defined as, “a general increase in prices and fall in the purchasing value of money.” Your money doesn’t go as far -- simple. The 300k you made at your job 10 years ago and lived comfortably with barely gets you by now.
The government cannot save you or your family, or ensure your financial freedom. Set your mind right about earning money. More cash = more freedom! Money itself won’t make you happy, but it will give you the ability to provide a better life for yourself and your loved ones. You must invest with income streams that give you positive cash flow, learn to leverage your debt, learn to handle inflation and take control of your physical assets.
Here are eight reasons why investing in real estate is an excellent choice for protecting and growing your wealth:
Positive cash flow.
One of the biggest benefits to in real estate investments is that leases generally secure the assets. This provides a regular income stream that is significantly higher than the typical stock dividend yields.
Using leverage to multiply asset value.
Another important characteristic of commercial real estate investing is the ability to place debt on the asset, which is several times the original equity. This allows you to buy more assets with less money and significantly multiply asset value and increase equity as the loans are paid down.
Low-cost debt leveraged to multiply cash flow.
Placing “positive leverage” on an asset allows for investors to effectively increase positive cash flow from operations by borrowing money at a lower cost than the property pays out
4. Hedge on inflation.
Capitalize on the physical assets.
Real estate is one of the few investment classes that, as a hard asset, has meaningful value. The property’s land has value, as does the structure itself, and the income it produces has value to future investors. Income producing real estate investments do not have red and green days, as does the stock market.
Maximizing tax benefits.
The governement Tax Code benefits real estate owners in a number of ways, including fair mortgage interest deductions and depreciation accelerations that can shield a portion of the positive cash flow generated and paid out to investors. (See your tax advisor for full explanation.)
Asset value appreciation.
Over time, more and more inflation has made it into the economy, drastically reducing purchasing power. However, real estate investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.
Feeling the pride of ownership.
The right property in the right location with the right tenants and ownership mindset can produce a tremendous pride of ownership factor that is highest among all asset classes. Homeownership is out of reach for most people. Imagine owning thousands of multi-family housing units instead?