The Freedom of Choice in Real Estate
If you like to having control over your investments, turn to real estate
Real estate is my favorite investment vehicle for many reasons. It's fun, profitable, and it gives me the freedom to control my own investment.
Money is one of the most stressful parts of life. And the biggest reason why is that oftentimes, people feel like they don't have any control over their money. Everyone is clamoring for your money, whether its your utilities or insurance or mortgage or taxes. Many times, you don't have a say in where your money goes.
You also have limited control over the money you invest. You can choose where to invest, picking your preferred asset class. But even the savviest investors with tremendous financial knowledge are limited in their power to control how an investment performs.
Which is why real estate is so enticing. When you invest in real estate, you have 100% control over your investment. You do the research, you call the shots, and you profit from the results.
For many hard-working people, this is music to their ears.
Let's say you invest in a company, or buy a share of their stock. You can do your homework and study market trends, but at the end of the day companies are run by people who aren't you. They make decisions and moves that affect your money.
But if you put your money in a real estate investment you call the shots. The power is in your hands, and so are the profits.
Below are three things you get to control when you invest in real estate. All of these decisions are within your power, and the profits you make become extra cash that you can do whatever you want with.
1) How you profit
When investing in real estate there are two things you can invest for: cash flow and capital gains.
My preferred method of investing is for cash flow. When you invest for cash flow, you invest in properties that will provide a steady stream of income each month that you can pocket.
Investing for capital gains, on the other hand, involves buying a property and then selling it for a one-time payoff.
When you buy a real estate investment, this choice is yours to make. What will you invest for? Do you want to make a long-term investment, and profit off the steady flow of cash each month? Or do you want to flip the property quickly, and invest for a one-time sum?
Both strategies can be lucrative when executed correctly. And the great thing is, you have direct control over how you will receive your returns.
Many investment vehicles don't give you the choice in how you will profit. Or if they do, there are a lot of rules dictating when and how you will receive your returns.
But with real estate, you have more flexibility to earn the profits when and how you want to. You can set rent, and buy and sell properties when you want to, without anyone dictating how you profit.
2) Your investment's value
When you have the power to directly increase your investment's value.
Almost no other asset class lets you have this type of impact or control. You have no say in how stocks will perform or what commodities are worth. So many external factors, from politics to war to economy cycles, have sway of your other investments.
But in real estate, you can take action that will directly reflect in your profits. You can make improvements on the property, increase the square footage, get creative with the property lot, and increase the efficiency of the property's operations, all the increase your ROI.
How many other investments can say that? If you invest in a company, that doesn't mean you can start rearranging their business operations to make it more profitable. You have no power to increase or decrease the price of oil so that you get better returns.
But with real estate, the power is in your hands. And while it can be a hug responsibility, it also symbolizes sweet freedom.
3) Who you work with
If you invest in a business, or purchase a share of a company's stock, do they call you up every time they decide to hire a new employee? Of course not!
But when you invest in real estate, the choice of tenant is yours to make. You get to choose whether you rent your house to a group of rowdy college kids or a nice newly-wed couple.
You also control who you invest with. One of the best parts of real estate investing is getting to use other people's money (OPM) to purchase your investment. You don't have to fund the whole investment by yourself, but can approach other investors to help you purchase the property.
If you put together a strong deal, you will attract plenty of investors who want to give you their money. The best part is that you get to choose who you work with.
Finding and building the right team of investors is vital to your investment strategy. Which is why you need to work with people you trust. Not all investments allow you that choice. Other people's actions and choices affect your money all the time. Real estate investing is one area where you have some say in the people who surround your investment.
There aren't many things in life that we have a lot of control over. Money shouldn't be one of them. If you're looking to take back control of your investments, it might be time to turn to real estate.