I’ve spent a lot of time investing, buying into all sorts of markets over the years. There are so many ways to put your money to work, but real estate always remains one of my favorite options. While it isn’t without risk, buying a property can add stability to your holdings while also increasing your cash flow. I could ramble on for hours about the advantages of owning real estate, but I’ll control myself and just stick with these three for now.
1. Avoid the Uncertainty
There are no sure things when it comes to investing, but good real estate comes pretty close. On days when the stock market seems insanely volatile and anything but safe, your property will still be there. The price might fluctuate, but the highs are usually higher than the lows are low. For many investors, the best part of owning property is having a tangible asset, something you can actually see and therefore feels more stable.
Of course, investing in real estate isn’t just the “safe” choice; within that security is also an opportunity for increased earnings. A multi-family home historically has a fantastic risk/return ratio, providing security and value. I know many Americans are still a little shell shocked from the housing crisis, but it’s important to remember the long-term trajectory of your investments. If you look at a graph, you’ll see that property has been rising steadily for a long, long time.
2. Bring in More Money
If you buy a property at the right time, it could quadruple in value by the time you retire. That alone makes it a great investment, but why stop there? With a rental property, you can literally make money while you sleep. From single-family homes to commercial complexes,leasing space to tenants is one of the best ways to generate income while growing your capital through an investment.
In addition to creating monthly income,renting property eases the stress of purchasing. With the payments from renters, you can expedite your debt reimbursement. I talk to a lot of people who don’t believe they have the money to buy real estate. When you buy a rental property, you get to bring in another party to help you cover the cost of your mortgage. In a few years, once you owe less on debt, the payments from your renters will start going straight into your bank account, at which point you can look into buying another rental property.
3. Enjoy Your Investing
Money often comes with a lot of stress, and saving for retirement or your kid’s tuition can be a real headache. I find that buying real estate adds a bit of excitement to the investing process. There’s the thrill of the chase as you look for a house or a commercial property, and then the aesthetic rewards as you start fixing the place up. Flipping houses has become extremely popular, both because of the potential for returns and the fun of renovating.
While you still need to be smart, you’re allowed to have fun with real estate investing. I’m all for hobbies that generate income, and restoring houses and apartments is a great side gig.There’s plenty of work that goes into ownership, and some days will be less fun than others, but active investing can be extremely fulfilling when you go about it the right way.
When you start viewing real estate as a strategic investment and not just a massive expense, you’ll be surprised at how many opportunities suddenly seem feasible. As long as your expectations are realistic and you put in enough effort, you’ll be able to enjoy real estate investing as much as I have.
Sam Schwartz
Ben Bailey
Rob LeMay
Janine Perri
aPennyLearned