Why should we consider real estate investment? Over the long run, the stock market yields about 5 % annual return while during the same period, the property price has only appreciated just about 2% annually. So is investing in property a sound investment?
When people compare stock market returns to real estate returns, they assume that you would buy say a home sit on it and hope to profit from it based solely on appreciation when you do sell it.
What it ignores is rental income, which generates income much the way that stocks generate income through dividends. The compounded effect of annual escalating rental income would help investors to get higher returns.
Plus investing in real estate is really about using the debt leverage, backed by a physical asset.
So when done right, real estate investors get income and leverage debt earning much higher returns than the average stock market. In fact a lot of investors are able to consistently achieve 10, 12 maybe even 15 percent return.
It’s not true that 90 percent of the billionaires and millionaires out there made their money from investing real estate alone. But what is true is that many of those millionaires and billionaires will invest in real estate as a way to preserve their capital, wealth and as a way to hedge against inflation.
To sum up why we should become a real estate investor:
Long Term Increase In Value: The real estate business can give you unique benefits like price appreciation. In the short term, the market may go up or down, but over the long term, you will have a safe investment because holding on to your property will almost guarantee an increase in value. Having a large portfolio of properties is a key secret to building massive wealth.
Leverage Your Money: A good benefit you can get if you go into real estate is its ability to be used an asset to borrow money against. You can go to a lender or bank to borrow funds to purchase a house or property of your choice. The cash you have may to go as down payment and mortgage the property with the bank or lender paying the full acquisition price. If the interest you pay on the mortgage is much lower than the return you make from the rental property, then you are profiting month after month by using someone else’s (the bank’s) money and only a little of your own.
Tax Advantages: Tax benefits can also be enjoyed when you purchase real estate and making it your permanent home. If you acquire it through a loan, the interest you pay on your mortgage can be tax deductible. The property taxes you pay for your house can also be an income tax deduction. Depreciation cost of your property will also give you added benefit because theoretically its value lowers because of age and you can reflect it in your tax return.
Ongoing Rent Income: In a “down” real estate market, the opportunities for a prospective investor are plenty. Spotting a condo you can rent out while living in your current home will give you added income. A low priced house located in a nice neighborhood will also be a good rental prospect. Rental properties provide good income opportunities and give you equity on the property itself at the same time. Remember, on top of getting rental income, you are still getting appreciation from the property over time.
The purpose of the website is to educate and help you how to invest in real estate using different investment strategies. From these strategies, learn how to evaluate and analyze real estate wholesale deal, rental income properties, multifamily investment opportunities, and commercial real estate. You will also learn how to properly execute BRRRR in Canada. (BRRRR stands for Rehab, Rent, Refinance and Repeat) And last but not least, how to invest in foreclosure properties, especially during the pre-foreclosures phase.
All of these how to invest real estate resources are provided to you, to make you a savvy real estate investor. These are the same material that people spend thousands of dollars for. I hope you can take advantage of it and join me on the path to total financial freedom.