Real estate, I am sure all of you young folks thinks about it at the back of your mind. Why not? As a human being we all wish for abundance. Real estate plays an important role in fulfilling our idea of living a life of abundance.
But many people have been turning away from real estate investment because of fear, in the aftermath of housing bubble crisis that crushed many householders around the developed world.
True, markets are not that easy. It is a place filled with traps and we ought to be very careful behind every decision we make.
But that said, running away from real estate fearing a bubble-burst is an insane idea that you should drop from your mind immediately.
“Why?”, you may ask. Well because, bubbles will get created in any asset class you can possibly imagine. Stocks, bonds, cryptocurrencies, you name it. There is no asset class that is free from becoming a bubble as markets are ruled baby two very fundamental human emotions- greed & fear.
It is upto us to educate ourselves and make wise decisions to tread ahead in life.
So I guess you are convinced by now that real estate s not that bad and a deeper understanding is certainly not going to hurt anyone.
Here in this article, you will discover 7 reasons why you should seriously, I mean seriously consider investing into real estate.
Real estate offers you true leverage that no other asset class can offer.
Even stock markets offer leverage only on intra-day trading, where most of the people end up loosing money, due to lack of appropriate knowlede. As far as normal stock investing is concerned, there is not much of a leverage that you have.
To own Apple stock of let’s say a 100 shares, you must have an amount equivalent of 1 share price of Apple times the No. of shares you want to buy.
In simple terms, you must have the money to own the asset.
On the other hand, real estate allows you to own a tangible asset by just putting up the down payment.
Confused? Don’t worry, I will put up an infographic to explain the concept of leverage later.
Leverage allows you to own an asset class with it’s full equity, by just paying a fraction of the cost.
You enjoy all the gains associated with owning an asset class, even though you have not fully paid for it.
I believe that’s a huge plus in real estate investing. Let’s explore reason #2
2. Creative control
Once you own a property or many properties, you can unleash your creative potential and up it’s value many folds.
You can change the roof, the flooring , the wallpapers, etc. You may choose to furnish it and decorate it with beautiful artefacts.
Why would you do that? Well, because you are not only satisfying your creative self, but you are simultaneously creating a lot of value in the house equity.
Your tiny touch-ups can incredibly boost the value of your house in the market and you can end up getting handsome returns on your property.
I didn’t had a rich dad, but thank God, I have Robert Kiyosaki .
Rich dad poor dad is one of all time bestsellers in the business category. I believe many of you have probably read it a couple of times. But the fundamental problem is we don’t keep faith on what we read.
How many of you actually have faith on his teachings? I would emphasise on developing faith on your knowledge, else it will get eroded with time without giving you much returns that you awesome people deserve.
Sorry for digressing, but I thought it was important to highlight the power of faith.
As far as cashflow is concerned, it is the most awesome thing about real estate investing. You can set up systems that put money in your pocket, month after month.
Want more? With good research and planning, you can end up with a surplus-after paying all the mortgage and taxes.
I am not going to hyper inflate the importance of cashflow, but if I say that you can retire in a decade with a proper cashflow system established using real estate, well then, that would not be an overstatement!
Real estate is just like any other asset class. It carries with itself both risk and reward. Reward in the form of capital gains and risk in the form of depreciation and worse, a housing bubble collapse.
But if propertly managed, the reward outweighs the risk by many times. That’s because home is a fundamental requirement.
People need housing. That’s it. If you can fulfil this fundamental need, you are in business, and perhaps you will remain here for a very long period of time.
Appreciation of a property can be leveraged in many ways like getting higher rents or higher loans out of a mortgage, that you can use to buy more properties.
Amazing! isn’t it.
5. Tax benefits
A regular salaried employee owning no property will have to pay much more taxes than a person owing property, due to the tax breaks a property owner gets.
Owning a property greatly reduces your tax obligation, leaving you with a lots of free cash todo whatever you desire.
Therefore even if you don’t want to be a real estate investor, take my advice and get a roof on your head at atleast.
Taxation is big topic, so I will elaborate it in my future article.
6. No time commitment
Real estate investment only needs your knowledge and attention during the initial stage. Once you are done researching your properties, you just have to create few systems- employ few people if you have to- for maintaining tax sheets and overviewing your empire!
That’s it. You are set, month after month your value will go up (to a great degree of certainity), without you have to be bothered.
Now that is what I call true freedom.
7. Secured future for your loved ones.
Family is the most important thing in our lives. How can a person feel alive without having someone to love and care about?
We all strive hard to provide for our families, yet are barely able to make our ends meet.
With proper real estate investing we can secure the future of our children, and can raise them in a much more secured environment.
What more can one ask for?
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