- You Can Build Equity for the Future – One of the advantages of investing in real estate is being able to build equity. Equity is an asset that is part of your net worth. As you pay off your mortgage, you build equity. As you build equity, you now have leverage to acquire additional rental properties and increase your cash flow.
- You Can Generate Passive Income – By investing in real estate, you can generate passive income that is nearly tax-free. Your rental properties will work for you even when you are sleeping. By buying several rental properties that generate enough income to cover your expenses, you have the freedom to do what you enjoy, instead of spending all of your time at work.
- It Can Provide Cash Flow for Retirement – Real estate investing, when done right, is a stable way to increase wealth over a period of time. Among the many benefits of real estate investing is that it can provide cash flow for retirement. This means it can help supplement your retirement years with income from your rental properties.
- Investing in Real Estate Benefits the Community – While most investors focus on the ROI, the CAP rate, the cash flow, and other financial indicators, a huge and unquantified benefit of real estate investing is the impact on the community. Responsible real estate investors improve the communities by improving available housing, maintaining properties, and increasing the local tax revenues. This directly impacts the communities and improves the lives of people living there.
- You Can Indulge Your Entrepreneurial Spirit – There are many ways to invest in real estate and become an entrepreneur. You can buy a home, fix it up and put it back on the market for a profit. Buy a property to hold and let the appreciation create wealth. Perhaps you become a landlord and start purchasing rental homes, multi-family homes, or even apartments. Maybe land development is for you. You are the boss.
- You Can Enjoy the Portfolio Diversification Benefits of Owning a Physical Asset – Investing in real estate offers inflation protection as well as the portfolio diversification benefits of owning a physical asset. Real estate is a tangible asset that can always be monetized through renting or residing in the property, regardless of financial market conditions. This makes it far more resilient against asset market swings compared to traditional stocks or bonds.
- Real Estate Investing Is a Hedge Against Inflation – While most people fear inflation, this is not the case with real estate investors. Investing in properties is an excellent hedge against inflation. As the price level goes up, so does the rental income you get from your property and your investment’s value. This means that real estate investors are protected against both the immediate and the long-term effects of inflation.
- You Can Enjoy Tax Benefits Through Depreciation – There are different reasons to invest in real estate. It is a proven way to build wealth over time and can help generate cash when leased. It can also provide you with tax benefits through depreciation, and this can help increase your returns.
- It Can Be an Alternative Means of Saving for a College Education – Real estate investing can be an alternative vehicle for college savings. It is recommended that young families invest in the purchase of one property for each child they believe will attend college. The property can be financed with a 15-year mortgage, thus being paid off prior the child’s 18th birthday. It allows families to actively save through the renters’ payments. When the property is paid off, they can either sell or continue to use it as a source of cash flow.
- Owning Property Generates Wealth – Everyone should own at least one house or a piece of property. One of the many benefits of investing in real estate is being able to generate wealth through appreciation, building equity, and hedging against inflation. It can also provide cash flow with passive income from rental properties. These are the reasons why real estate should be a key component of your investment portfolio.
Investor Relations Manager
Dave is in charge of Investor Relations for Bakerson. He was a professional speaker, trainer and best-selling author who specialized in networking, sales and marketing. Dave was an award winning retail business owner and is the author of three books. He is the proud father of two great kids and married to his wonderful Lisa. When not working, Dave loves golf, movies, photography and any kind of travel!