The benefits that come with investing in real estate are nearly endless. Not only do you have to ability to make a sizable profit on every deal, but also, real estate is proving to be a solid hedge against the stock market and inflation. Some other benefits that are guaranteed to come with starting a real estate business include but are not limited to:
|Image by Ashley Nicole DeLeon / The Balance 2019|
If you gross $100,000 per year at your nine to five job and I earn $100,000 per year from my rental property, who gets to keep more after taxes? You guessed it; my rental property is taxed much lower because the government rewards rental property owners. The government also offers lower tax rates on long-term profits along with other benefits like depreciation and the exclusion of self-employment tax.
Not only do real estate investors have the ability to receive a substantial cash flow from steady wholesale or rehab deals, but they can also ensure themselves a secure monthly cash flow with rental property deals. The best part about rental property cash flow is that the extra money is considered a passive income after all of your bills are paid. You get to collect a monthly paycheck, all the while managing the rest of your investing business.
While you are paying off the loan of whatever property you invested in, the value of that property is increasing or appreciating. While things like recessions and market fluctuations are bound to occur, it is safe to say that the value of real estate will increase over an extended period of time. That being said, any property you purchase today will be worth far more 30 years from now; however, with a fixed-rate mortgage, you will always be paying the same dollar amount.
Arguably the greatest benefit of starting a real estate business is the control and pride you feel due to owning something you created. Your destiny is not tied to an office on Wall Street or your company’s CEO; it only belongs to you. Real estate investing puts you and you alone in the driver’s seat of your financial future. With control, however, investors also need to learn how to manage their appetite for unfamiliar situations; or, as Roy Morejon puts it, entrepreneurs need to “be comfortable with being uncomfortable.” As the president and co-founder of Enventys Partners and a serial entrepreneur, Morejon is well aware of the control entrepreneurs must exercise over their emotions. Regardless of your own experience, “you have to be comfortable with the idea that you won’t always know where you stand financially for a time period,” says Morejon.
Of course, investing of any kind will always be associated with some risk. However, steadily building a real estate portfolio over time means that you are securing your own future. Unfortunately, too many individuals today have no specific plan for how they will secure their retirement. Real estate investing is not only what some say is the fastest way to get out of debt but is an undeniable method of creating for yourself multiple streams of income that will continue well into your retirement years and can even be passed on to future generations.
It is not advised to jump into the real estate investing world without first properly educating yourself. You must learn the best ways to find deals, how to market yourself, how to negotiate, and of course, how to finance deals; however, once you’ve mastered those, you’ll be on your way to maintaining a successful business.
So my partners at CT Homes and I put together a comprehensive list of the most common questions for you to study before embarking on your investing journey. Start from the top and work your way down and once you’ve thoroughly analyzed each question, you’re sure to already be ahead of your competition.
Ready to take the next step in your real estate education? Learn how to get started in real estate investing by attending our FREE online real estate class.