I truly believe in investing in real estate and helping my clients do the same! Why though?! Here are my top 10 reasons why I am confident that real estate should be apart of your investment portfolio.
- Cash Flow Opportunity- Real estate investing, done correctly, has the opportunity to create cash flow or passive income. Properties can have monthly income that exceeds the monthly expense associated with owning a property. You can use this cash flow to reinvest into more properties, pay down other debts, or fund financial goals.
- Tax Benefits- The tax code is written to encourage people to invest in real estate and provide housing to the public. Tax benefits could include deductions for mortgage interest, property appreciation, operating expenses, property tax, and certain cost associated with owning and managing the property. Legally not paying Uncle Sam?! I am in!
- Appreciation- Real Estate tends to appreciate over time, meaning the value of your property is likely in increase. This appreciation can significantly boost your ROI if or when you decide to sell the property. Historically, real estate has always been a reliable long-term investment. I would way rather bet on my real estate appreciating than my dollar bill.
- Leverage Opportunities- Real estate gives you leverage, meaning you can buy property with a relatively small down payment and finance the rest. The ability to control a significant asset with borrowed money can increase your returns. Another benefit- Borrowed money is TAX FREE!
- Inflation Hedge- Real estate will be one of the best hedges against inflation. They are printing more dollar bills than they EVER have. They are not making more real estate. You can help maintain your wealth even as the cost of living increases.
- Control Over Your Investment- If you’re a control freak- Invest in real estate! You get a very high degree of control over your property and investment. You can make improvements to the property to increase the value, select your tenants, adjust rental rates, pick your sales price, etc. I personally see this as a better option than investing blindly in a stock and praying it goes up.
- Tangible Asset- Invest in tangible assets or something that you can physically touch and hold. I want to be able to see and look at my asset! Stocks, bonds, etc. could potentially be rendered worthless by market fluctuations or corporate bankruptcy. A property will always have some value. This is a sense of security for me!
- Building Wealth- Real estate builds wealth. I’ll say it again! Real estate builds wealth. The combination of all the reasons to invest in real estate can create generational wealth for your and your family!
- Community Impact- Investing in real estate can positively impact your local communities and helps you contribute to your neighborhood stability and growth. How cool that you can have that impact! You can help improve living conditions or even help increase the value of surrounding properties!
- Diversification- Real estate behaves very differently than other asset classes. Diversify your investing portfolio to make sure you don’t have all paper assets!
Real estate investing offers different benefits for every individual and there are SO many different ways to invest in real estate! Find the one that you enjoy and what makes sense for your financial goals. All of these reasons give me firm confidence in putting your dollar into real estate to reach your financial goals!
