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Real Estate Investment: 7 Things You Should Consider

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Today I am going to talk about whether or not real estate is a good investment. Real estate, when purchased correctly can be one of the highest performing assets that we own.

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Remember you cannot possibly get rich by just hoping that your money in a savings account is gonna grow to create wealth for you and your family. It’s not going to happen. Instead, real estate enables someone to create monthly cash flow.

Here in this article, you will find some key areas which show that real estate investing is one of the safest and best investments you can make.

Net Worth

Gary Keller said in his book named “The Millionaire Real Estate Investor” that rich people know something that other people don’t. Wealthy people understand that it’s not about how much money they buy, or sell, or trade back and forth that makes them productive. Increasing the net worth was that entire rich people cared about.

When they looked at their spreadsheets and they saw that their assets versus their liabilities, where their assets growing year after year and where their liabilities shrinking year after year.

 

That’s the net worth. The beauty of real estate investing is that when you buy a $60,000 home and you are buying it below market value, you are adding money to your net worth.

Cash Flow

People buy a rental real estate property, hold it, renovate it, and then placing a tenant in the property. This tenant will provide the cash flow. Using this approach, you are turning that money that you had sitting in that savings account. Let’s just say you have $40,000 sitting in a savings account.


Well, what if you could buy a single-family home for $40,000. Now instead of that $40,000 sitting in my bank account doing nothing for me, that $40,000 is now creating cash flow every month.

 

That is the beauty of cash flow. Through this approach, my money is working for me. So if you still have a question in your mind that is real estate investing a good investment, then the answer is yes.

Real estate investing, if done correctly, has very little fluctuation if any.

Taxes


Taxes may even be just as good as cash flow. Because once you become a real estate investor you realize why you are paying almost nothing in taxes. That’s because of real estate.

In most countries, the tax code is written for real estate investors. To save on your taxes, the purchasing of rental property and the improvements that you make to that property are a tax-write off and that will mitigate all of the other income that you have coming-in in your life.

So, when I have rental income from those tenants, that’s offset by the purchase of real estate and all of the expenses that you use to mitigate your taxes. That is why it is such a powerful way to create wealth.

Holding rental real estate creates an incredible influx of cash and the ability to mitigate that cash with tax incentives, and all sorts of write-offs that you just don’t get in any other sector of this economy.

Economy

Another important key factor that affects the worth of real estate investors is the overall performance and health of the economy.

The economy of the place and property is generally measured by using the definite economic indicators such as manufacturing data, price of goods.

Real Estate never hits zero

The fifth reason that shows that real estate investing is one of the best tools out there is that real estate never hits zero. That’s right. Think about the stock market. Think about all of those people that lost tens of millions of dollars in their 401(k) s, and it took ten years for the economy, their 401(k) to go back to where it was ten years before that.

It means there is no growth in ten years because they had to wait for it all to bounce back. In the stock market, stocks can hit zero. The things can show up with zero value. But in real estate, this is not going to happen. Real estate never goes to zero.

Interest

The interest rates also have a main impact on the real estate market. People love to have a home of their own. The home which they love and the place where they love to live. People made plans according to it and buy the area which fulfills their demands. One can also get information from people about this.

Seek professional help

In case you find it hard to understand what real estate and how it works, then the best approach is to seek professional help. The professional reputation is one of the most important things which should be kept in mind before taking help from any real estate investment company.

Check the reputation of the company in the market which you select. The company from which you wish to get the service has a good reputation in the market then it means that it works according to the choice of their customers and helps them in the best way. Ask about all the real estate investing strategies from the experts before bringing your foot in this business.

Also, read our post on How to start investing in Real Estate and Real Investment Guide: When to or not to buy.

 

 

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