As a real estate investor and agent, I love real estate – and I’m not shy about telling people about how it’s changed my life. And you may be thinking….
“But that’s your business – obviously a real estate agent is going to tell you to buy a house!”
Truth be told, I was an investor first, leveraging real estate using multiple strategies. It was only after years of buying multiple properties, renovating them or holding onto them as long-term rentals, that I decided to become an agent and go all in on real estate. Because I personally know the benefits of investing in real estate, I now try to educate others.
Here are a few of my favorites:
- Cash-Flow
- This steady stream of monthly income you receive from an investment property may just be the best money you can make. The additional stream of income can change your life.
- Equity
- Think about this as owning a piece of something and having skin in the game. Equity in real estate is the amount of money you’ll receive after the mortgage or borrowed money is paid off. You can build equity by increasing the value of your home or paying down what you owe.
- Appreciation
- Your house or investment property will increase in value over time, typically 3-4% a year (depending on your market). Purchasing a home that needs work, then fixing it up, is how you force appreciation. So the longer you own, the more you improve the quality of the home, the more your home is worth…and when you go to sell, the profit you make can be huge!
- Leverage
- Leveraging other people’s money – usually the bank – to purchase a large percentage of an asset, with only a small percentage of your own money being used.
- Tax Benefits
- Taxes are usually thought of negatively, but as a home or investment property owner, there are many benefits that come with owning really. Mortgage interest, property taxes, property maintenance, property insurance and contractors. If you purchase real estate within an LLC, there are additional benefits including professional fees, advertising expenses, meals, travel expenses to name a few!
- Diversify your Capital
- Index Funds, 401K’s, Roths, S&P 500 & individual stocks are perhaps how you’ve traditionally thought about investing. But real estate is yet another asset you can invest in to get a return. From syndications, to cash flowing rentals, to REITS – there are multiple ways to invest in real estate.
- People will Always need somewhere to live
- Mark Twain said, “Buy land, they’re not making it anymore.” Real Estate is a tangible asset that provides someone a place to live and if you buy in the right area, someone will always need a roof over their head.
- Mortgage PayDown
- Imagine if someone was paying your debt for you!? That’s essentially what having an investment property does – it has your tenant pay down your mortgage.
- Hedge against Inflation
- Inflation is currently around 6.4% year over year – yikes! Putting your money into an appreciating asset can hedge against inflation – especially as rents rise with inflation!
- Control
- When you invest in real estate, you control much of the investment. You control where you purchase, you can research rents/returns in the area, you control what type of investment you want (long-term rental, mid-term rental, a syndication, multi-family, house-hack) and can control how much additional value you add to the property with renovations.
If you have any questions or want to talk though how investing can benefit you, reach out today!