Real estate investing has proven to be a very good investments for lots of people.
The passive income real estate provides allows you to escape the Rat Race by creating great monthly cash flow and long-term wealth.
That said, you shouldn’t jump into real estate investing without understanding the game.
Let’s think about the reason you should consider real estate as an investment vehicle.
Here are 6 major advantages to investing in real estate.
Using other people’s money
When investing in real estate, most of the money is the banks. Typically, only a small percentage is your own, and of course there are many ways to leverage other sources of money that you can learn about later.
- Cash flow. If you purchase and manage real-estate properties wisely, they can provide consistent and significant cash flow each month.
- Appreciation. This isn’t guaranteed of course, but over time rents and property values can increase so that while you are acquiring cash flow, the value of your asset is simultaneously growing.
- Control. I find real estate gives you more control over income and expenses than any other type of investing. When I invest, I don’t like to gamble. Control is important.
- Stability. Although all investments can go up and down depending upon the economy and other factors, cash-flowing properties are generally less subject to daily ups and downs. Many people just dump their money into the stock market and hope it turns out well, but I prefer the stability of real estate.
- Tax Advantages. There are significant tax advantages to real estate, including depreciation and write-offs, that are not available in other forms of investing.
Real estate investing, like other forms of investing, has some factors that make it not right for everyone. Don’t march blindly ahead without understanding a few of the trade-offs. A few factors you should keep in mind.
- Due diligence. Other than perhaps investing in businesses, real estate requires more time-consuming upfront due diligence than other forms of investing. Getting educated and surrounding yourself with the right team can help a great deal.
- Liquidity. The ability to turn your asset into cash is a consideration. For real estate it could take weeks or months to move your money into and out of real estate.
- Management. Investing in real estate can require more time-consuming management than other forms of investing. Depending on your preference here, you can also get help with this area.
I hope this review is helpful for you. Real estate has created more millionaires than any other form of investing, but you must understand what you are doing. That said, don’t be intimidated or get stuck behind a wall of fear.
I suggest you start small, learn fast, and then grow when you are ready.