21 Mar The Advantages of Investing in Real Estate
The advantages of investing in real estate are huge compared to any other investment. Knowing those advantages can give you keen insight into being a better real estate investor and accumulating the wealth you need to be financially free! In the book “Think like a Billionaire” Donald Trump states, “Real estate is at the core of almost every business, and it’s certainly at the core of most people’s wealth. In order to build your wealth and improve your business smarts, you need to know about real estate.” I agree!
Real Estate is one of the best ways to build wealth, but most people aren’t convinced by that statement. In today’s blog post, I’m going to list out several advantages of investing in real estate that make it the best investment you can make!
real Estate Is the Best Investment – Here’s Why!
Advantage # 1: Demand
Everybody needs a place to live so demand for real estate is built in. Any time a new business is started, the question is always “will anybody want this product or service?” With real estate, that question has already been answered. Everybody needs a place to live! You can find renters anywhere in the world.
Advantage #2: Leverage
Leverage allows you to own a $100,000 house when you only have $3,000. This can happen because the bank will loan you the rest of the money ($97,000) to purchase the house. Now the beauty of leverage is when the house appreciates, let’s say 3% in a year, the appreciation value is on the whole $100,000 not just the $3,000 you put down. So you gained $3,000 which is a 100% (not a misprint) cash on cash return.
Advantage #3: Cash Flow
I learned about the cash flow advantage back in the early 1980’s. I was moving out of state and could not sell my house. It was a nice 3 bedroom, 2 bath in a popular middle class neighborhood. I was forced to rent it and it turned into one of the best investments I ever had. I needed the rent to pay the mortgage.
What I didn’t know at the time was that in a year or so, the rent would go up but the mortgage would stay the same. This produced a positive cash flow. In several years, I was receiving a positive cash flow of over $500 per month! The beauty of it was that I did not have to sell the house to get cash.
Having rental properties is like having an orchard. The houses produce cash (fruit) and you are able to pick the fruit without killing the tree.
Advantage #4: Control
I also like the fact that you have direct control over your investment. My wife’s grandfather had a pecan orchard. We were able to pick pecans every year and sell them for cash. In fact, her grandfather was a wise man. He “grafted” branches into some of the young pecan trees. That produced pecans that were much larger. They also had a softer shell so you could easily crack them with your bare hands. He improved his investment because he had control over it.
You can do the same thing with real estate. You can paint a house, put in new carpet or floors, and landscape it to increase the value of your property.
These are just a few of the reasons why I personally advocate for investing in real estate! What are the advantages of real estate that you’ve seen in your life? Comment below!
I am hosting a real estate workshop in a few weeks in Denver, Colorado where I will teach you all my se