1) It’s a low risk investment
Real estate is essentially low-risk because of the different exit strategies you may have. You can sell, refinance, rent, sell via seller finance or just hold and let the tenant pay off the mortgage. Buy low and sell high are not the only options when it comes to real estate.
You’re not at the mercy of the Wall Street like the stock market where the only exit strategy is to buy low and sell high.
To be clear, that control needs to be harnessed through reading everything you can about Real Estate Investing. There’s obviously a lot more to it than meets the eye and that’s where Youtube university and networking with other investors comes in handy. I’d advise anyone to invest their time learning about real estate before blindly investing their money into something that can become a money pit.
Real estate is low risk because it is not going anywhere (you can’t just pick up and move a home), and because it won’t ever go to zero like a tech stock or bitcoin. At the very least the house is worth the materials, unlike a paper asset that is nothing but paper.
2) Tax advantages are a plus.
Rental income is considered passive income and gets taxed at a much lower rate than capital gains. Not to mention you can claim depreciation and write off every cent of that income. In the end, what we cough up for taxes is far less than other investments or other sources of income.
3) It is a learning experience for future business owners.
From calculating rent, to marketing, to tenant relations, to operations and property management. Owning a rental property comes with a lot of valuable experience for future entrepreneurs. This is experience that will likely pay dividends in places you wouldn’t expect. You become a more valuable employee, a more valuable business owner and even a more skilled spouse as you learn to negotiate hard, sell yourself, manage multiple tasks, relationships and personalities. The skills you learn provide a massive ROI outside of the income and appreciation you derive from the asset class.
4) Rental properties help reduce life expenses.
You can use rental property to write off expenses like a cell phone, a laptop and your a home office. All of these things that you use or do anyway can now be taken advantage of at a nice discount. Because you’re a tequila drinking, relaxing on the beach, hard-working landlord and you don’t have to use after-tax money for any of the tools of your trade.
Another point that Lisa Philips makes is that owning a rental property ensures you will never be homeless. At the very least you can live in one of your rentals.
5) Most importantly, DIY projects.
Maybe you get a kick out of renovating a 1970s style home into a modern family’s paradise. Maybe nothing pleases you more than deciding between colors and furniture and lights until the feng shui of a room is perfect. It’ll be a bit of work, but if you’re handy or design-savvy, you can cut corners (and save yourself a ton of money with DIY projects. You’ll take pleasure in the accomplishment of doing something you and have fun in the process.
A Final Word On Rental Properties
Generally those who criticize owning rental properties are renters themselves. Their advice is lazy at best. Real estate is great not only because of the return on investment and tax benefits, but because there is a certain pride in being a landlord.
If you are interested in learning how to invest long distance email firstname.lastname@example.org
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If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership. Email email@example.com today to join.
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Director of Real Estate Operations