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Why Real Estate?

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Benefits to Real Estate Investing

A lot of people ask me, “why real estate?”. I think Donald Trump put it best when he said, “It’s tangible, it’s solid, it’s beautiful, and it’s artistic, from my standpoint. I just love real estate.” And I agree. But even more than the real estate, is the cash flow.

But before we talk about the positive aspects of real estate, let me share with you the different type of real estate options available to you:

  • Single-family homes
  • Duplex
  • Fourplex
  • Apartments
  • Office Buildings
  • Retail Spaces
  • Storage Unit Buildings

All these real estate options are rentals that produce positive cash flow. But what are the other benefits to real estate?

Let’s dive more into the positive aspects of real estate investing:

  • Using Other People’s Money – leveraging other people’s money to create a cashflow opportunity is always ideal. In the realm of real estate investing, this is very common. You might only pay down 10% on a property, have a private party or bank provide the rest of the funding, and be bringing in money! Just think about this; you can own a $500,000 property for just $50,000 and it brings in over $5,000 a month in cashflow!
  • Appreciation– this is the increase in value of the property over time. If you can manage your property well, take care of your tenants and strategize, you can increase your rent rates. When the rent increases, your expenses go down. This causes the property to increase in value.
  • Control –when you own the property, you have control over the income and expenses of your property. So, if you’re able to have your property cashflow, it is not subject to the ups and downs of the market.
  • Tax Advantages there are some tax advantages to owning real estate properties. Depreciation is something that you can write off as an expense against your revenue. Not to mention the tax credits available if you offer low-income housing or if you restore a historical building. When you’re looking at a tax credit, it is directly deducted from the taxes you owe at the end of the year. And lastly, capital gains deferral. If you wanted to sell your property to reinvest in a different property, the capital gains will be deferred.

Every single successful real estate investor will tell you that their journey began by starting small. There is so much to learn and research when you investigate real estate investing that you have to start small. Mistakes will always be made, it’s all part of the process. But it’s easier to handle those mistakes when you start small.

If you want to invest in real estate but aren’t sure where to start, you first need to understand the foundations of what real estate investing entails. That begins with some financial education. To learn how to start investing in real estate, here's your first step: discover leading strategies to find, fund, and finalize lucrative real estate deals. Then you need to learn ways to create an action plan to understand how to create multiple sources of cash flow.

If you want to learn more, make sure to read The ABC’s of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss

Original publish date: February 20, 2020

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