Why Invest In Real Estate?


Why invest in Real Estate?

In my opinion, Real estate is the best way to build wealth and create long-term hard physical assets. It initially sounds intimidating, but it’s surprisingly straightforward and very accessible. There are many ways to start a real estate investment portfolio, and you’ll likely be surprised at how little money you need.

Knowing that most millionaires become so through real estate might be helpful because real estate provides the highest return, most significant values, and the least risk. It is also a stream of passive income.

It’s hard to overemphasize the benefits of investing in real estate because there are numerous. But I will give it a try. With real estate, investors can enjoy predictable cash flow, monthly passive income, excellent rate of returns, long-term security, tax advantages, diversification, leverage funds, protection against inflation, quick increase in net worth, ability to build tax-free capital, and most importantly, control. I am sure I am overlooking something.

There have been books written on each of the benefits of real estate investments, and I will post on each, but I will quickly summarize five below.

PREDICTABLE CASH FLOW and PASSIVE INCOME

What is cash flow? When looking at a real estate investment, there are two primary components you need to understand, income and expenses. Cash flow is the profit (RENT) minus all operating costs and cash reserves for future repairs. Cash flow provides the passive monthly income we all love, and so will you; once you understand this, passive income will lead you to financial freedom from the proverbial rat race most of us are born into.

Real estate investments are your ticket out of the unpleasant life of people who have jobs that require them to work day in and day out to barely get by paying their bills. To some, it only takes as little as five rental properties or fewer, yet to others, it may be ten or more. The number of properties it will take for your financial freedom depends on your monthly expenses or income.

You are free once you have replaced your monthly income with the passive cash flow. Free from a day-to-day job. Free to travel and enjoy the best things in life, like family and friends. Imagine if parents give their children investment properties instead of college tuition. In fact, for much less than college tuition, parents could probably give their children five investment properties cash flowing 1 thousand dollars a month, do the math. That’s 5 thousand dollars a month of passive income or 60 thousand yearly. What a real headstart in life that would be. This brings me to our next benefit of real estate investments.

LEVERAGE FUNDS, EXCELLENT RATE OF RETURN, and QUICKLY INCREASE YOUR NET-WORTH

When investing in real estate, leverage means using other people’s money to purchase properties. This is what Ilovesub2.com is all about. The less out-of-pocket you spend on a property, the higher return on investment (ROI) you will have and the better your leverage. In other words, leverage is the use of debt, or money borrowed, to increase the potential return of an investment. Mortgages are the most common and straightforward example of leverage.

Instead of paying the total price when buying a property, with a traditional loan, you will pay around 20% and borrow 80%. So to keep it simple, with $20 thousand, you can buy a 100 thousand dollar property. Do you see the leverage you have? Your 20 thousand dollars bought you a 100 thousand-dollar home. Do you also see how the same purchase quickly increases your net worth by 100 thousand?

I go into much more detail and examples in the video above, but there is always room for improvement. So ask questions in the comments section below and tell me what you want to see more of. I will start making videos and posting based on your questions.

Related Articles

Responses

Your email address will not be published. Required fields are marked *