Real estate investing is the best way to earn a passive income, save for retirement, and build a diversified investment portfolio. It is the best form of investment because you get to use other people’s money (a renter or tenant) to pay off your initial investment while simultaneously increasing your monthly cash flow.
Here are the top ten reasons why investing in real estate through is a turnkey solution to your investment strategy.
The number one reason to invest in real estate is to generate a passive income for yourself so you can enjoy more of the things you want. However, not all real estate investments are created equal. Maybe you are hesitant to invest in real estate because you’re not looking for another full-time or part-time obligation. Maybe the thought of owning and maintaining an investment property on the other side of the country sounds daunting and difficult to do with your already busy schedule.
Many investors strive to reduce the overall risk of their portfolio through allocating funds to various types of assets and securities. A good investment advisor will tell you the fundamental component of investment risk reduction is asset class diversification (or put more simply, not putting all your eggs in one basket). This variation of assets helps to ensure that a portion of your investment portfolio is performing well at all times, increasing the overall value of your portfolio at any given point in a fluctuating economic cycle.
Effective market timing (buy low/sell high) is a crucial component of successful real estate investing. While it is difficult to time when a market has reached the bottom of the real estate cycle, noting an upward trend and taking action (even if it means paying slightly more than you would at the bottom of the cycle) can translate into strong future returns.
When you use borrowed capital to enhance the earning potential of an investment, you are using the full power of leverage; and since real estate is a tangible or hard asset, financing is readily available. The potential return on your leveraged real estate investment is substantially increased compared to a non-leveraged investment.
Tax Deferred Growth / Tax Breaks / Tax Deductions. Similar to a Registered Retirement Savings Plan (RRSP), the value appreciation of your real estate investment is sheltered from tax until you sell the property. Real estate investing allows for several tax deductions. The cost of financing and operating your property can be deducted from the income you earn.
A fundamental benefit of real estate investing is its potential to generate income, especially over the long-term as your mortgage is paid down. The income generated from your investment property will often be sufficient to offset your mortgage payment, taxes, condominium fees and other expenses, while still providing you with increased monthly cash flow.
Investment real estate also provides you with a renewable source of capital through re-financing options, as property values increase and mortgage financing decreases over time.
The multifamily real estate investment properties we offer are individually titled in your name, giving you complete and total control over your property.
Over time, strategically selected real estate investments can be powerful vehicles for wealth creation. The value of your investment property increases, while the corresponding mortgage financing is reduced nominally through regular mortgage payments. The result is increased equity and increased wealth.
A long-term real estate investing strategy is an effective hedge against inflation because the value of this asset class has historically increased at a rate similar to the rate of inflation. You are thereby ensuring that your “real” or hard asset will help maintain your wealth and your standard of living.
if you’re thinking of Real Estate Investing, feel free to contact us at 216-282-4332.