Sorry stock market, our heart belongs to another. There are many reasons to choose real estate for your investment, but we’ve chosen our top ten.
Get More Than You Have
Unlike stock or other investments where you need all the cash up front, rental properties allow you to use leverage. So, let’s say you have $50,000. You can Buy a $200,000 rental property using the $50,000 cash you have on hand and use an investment property financing method to borrow $150,000. This equals 75% leverage. By using more leveraged real estate investing, you’re also increasing your ability to purchase higher value investment properties, which in effect increases your net gain when property values appreciate.
Hard Work, Better Returns.
You can’t really work harder for your money in the stock market. The stock market does what it does. Real estate, on the other hand, has a direct return based on how much work you put in. Want to have a higher value? Refurbish the building. Want to find better deals? You can do that. There are a plethora of options to increase your return. It just depends how hard you want to work.
Control freaks love this aspect of the business. With investment properties you have complete control – up to a point. There are obviously laws to abide by and tenants to keep happy, but compared to stocks, this is all you.
Prices may fluctuate over time, and sure a crisis can happen, but people will always need a place to live. In many parts of the country there is actually a housing shortage. So instead of investing in the latest tech trend that could fold in a year, there is no folding a place to live.
Furthermore, homeowning isn’t as essential a lifestyle as it used to be. Younger people are just fine renting an apartment – which means demand will continue to go up.
Real estate is an umbrella term that covers a wide variety of investments: single-family, multi-family, Airbnb, office buildings, high end, low end, the list goes on. If you’re getting bored renting to one or two tenants, get into multi-family housing of office space. That’s an entirely different ballgame with a new set of challenges.
There Are Deals to Be Found
Real estate is sold for many reasons. Sometimes it’s brand new, the city is booming and demand is high. In that case, deals are pretty tough to come by. But, if you find a distressed seller or a shrinking city then below market values may be all around you. It’s a great feeling to find a $200,000 home that you can get for $150,000.
Multiple Profit Streams.
- Cash flow
- Loan Paydown
- Tax Benefits
Work From Home
Working in an office is so 2009. With real estate you don’t have even be present to be making money. Obviously, there is still a lot of work to be done – but it can be done from anywhere and typically without a daunting time frame.
You Don’t Need A Finance Degree
Too often with investments you have the guy (or woman) who “understands it” and then theirs you – the persona who trusts that person to get it right. Real estate is pretty straight forward. Sure, there are things you will need to learn, but the world wide web is a marvelous place. If you really dedicated yourself to learning the ins and outs, you could do so for very cheap, and with an outcome of great success.
For decades people have been making money from real estate. It’s not rocket science. Since it worked for other people it can work for you – especially since, as we said, real estate is not going anywhere.