Why Invest in Real Estate?
The stock market, the bond market and savings accounts simply
cannot provide the return that one can make in real estate. Why?
Because this is the only investment set up where you can get your
initial capital back…and create wealth. Here are several reasons
that Real Estate, in my opinion is the best investment one can
make:
- Real Estate Appreciates As dollars
are created by the Federal Reserve Bank and spent by the Government
our money supply grows. As the supply of currency increases, the
value of our currency decreases. Inflation is a way of life in our
debt driven world. Take advantage of inflation by buying assets
that appreciate with good debt. Use leverage to battle inflation.
Buying assets that trend up with inflation or "appreciate" is the
greatest wealth generating tool available. Saving dollars is a
HORRIBLE idea, as inflation destroys currency.
- You are using borrowed money to buy an appreciating
asset. This appreciating asset is being paid for by a
renter…therefore you are getting money from a bank in the form of a
loan and someone else is paying it back for you…all the while you
are taking advantage of appreciation.
- Tax benefits. Real Estate can be
depreciated on paper…consult your CPA!! This is a huge reason why I
got into real estate. You can also sell real estate without being
taxed if you do a 1031 tax exchange…consult your CPA!! I am not a
CPA nor do I claim to know tax law…consult your CPA on the tax
benefits of real estate.
- You don't just generate income…you create
wealth. Through equity, principal reduction and
appreciation you will put together a huge stockpile of wealth. When
I first started buying real estate my goal was to become a custom
home builder. Now, I would never build homes…the reason…because you
have to keep building homes to make money. With rental real estate
that you hold, you will have a portfolio or real estate that was
purchased with the bank's money, is appreciating in your name and
is being paid for by someone else!! You will have sustained
income.
- My Real Estate has very little risk.
The real estate that I buy and sell has very little risk…homes
priced under $175,000 for example…move at an extremely fast pace
compared to higher price levels. First time homebuyers and other
investors look at this price range favorably. By effectively
borrowing the funds to buy "real" assets and allowing your tenants
to foot the bill for you, you can create massive amounts of wealth
with very little risk.