The “Why” to Real Estate Investing
What do you really think it means to be an investor? I always tell everyone that there are two distinct people in your life. . . your Stock Broker that deals with your liquid assets and then there is the Realtor that will work with you to most likely purchase the single largest asset in your portfolio, your home. You probably spend more time finding a Dentist to put on a new crown than the individual that will help you purchase your largest fixed asset?
If you’re laughing right now, you know I hit the nail on the head. Being a student of Real Estate when I came in the industry became a passion for me. Our group can literally show you from a map study how the map moves from an investment standpoint, and help you in putting up walls of protection for this monumental investment. Being a “good” investor often means learning more than just one industry. Let’s face it you’ve got to own your opinions. Money in the Stock Market can fly off the shelves and it is gone and to me it seems a little more manipulated; however with housing you have an asset that regardless of the market is real, touchable, and whether the market is trending up or down. . . it’s yours.
If you look at the market in 2004-2005 everyone was flying high in Real Estate. Look at real estate in 2008 and through the distressed market, it could literally make you sick. The theme overall if that you have to have staying power when dealing with a fixed asset like Real Estate, and this is not an investment for sissy’s, but dedicated Investors. Look at the market in 2016 and the market is trending upwards, and in some areas has already hit 2005 numbers. I own several properties, and I like the touch and feel to Real Estate as it is mine, and personally I don’t like to see anything fly off the shelf.
Conversely, my husband was a Financial Advisor and obviously we were invested in the market. Let’s use Mackey’s rule of thumb. . . put 40% in the stock market and 60% in Real Estate. You know at the end of the day everyone has an opinion but as you can see I have no problem with owning my thought process. Oh I forgot to even venture into the tax scenarios that benefit one from owning Real Estate. I am not sure if real estate investing is for you, but if not call me for counseling? Here are some reasons real estate investing is worth considering:
1. Controlling Your Investment
Do you want to be in control of your success with each investment? Real estate investing allows you to do this, as it gives you the chance to:
– Search for deals based on your needs.
– You can adapt your moves (sell, make updates, rent, etc.) based on how the market is performing.
– Compete by increasing advertisement.
2. Increasing Your Net Worth
When a tenant pays rent every month, that money can go towards the mortgage payment. This will help to increase your net worth, especially once the home is fully paid off and you can continue collecting monthly payments with no mortgage to satisfy.
3. Steady Cash Flow
What’s better than having a steady stream of cash coming in every month from rental properties? The money from these types of investments is more stable than it would be from others, so you’ll be able to count on it for further business deals or to get you through more difficult times.
4. Tax Savings
Did you know that the money you make through rental properties is not subject to the same tax that other self-employed earnings are? This is because the government wants you to own real estate, so they offer much lower tax-rates for the income you make form them.
5. Fight Inflation With Real Estate Investing
Inflation might sound bad when you consider that it can double the price of a loaf of bread, but it’s not all that terrible if you’re invested in real estate. That’s because inflation means that property values (and therefore your rent) is going to rise as well. If you have a fixed-rate mortgage or property that is paid off, you will have more cash to pay for the higher cost of living with ease.
6. Watch Property Values Increase
As with any investment, real estate is not guaranteed to be a success, especially if a recession occurs. However, if you’re willing to stick out the ups and downs, you will see property values rise with time. Just imagine 20 years from now having a home that’s worth double what you paid for it!
Real estate investments can lead to incredible success, but that’s never guaranteed. You have to work hard, roll with the punches, and learn the business in order to make the money you’d like.