The Hidden Gems of Real Estate Investing

Cash Flow? That's Just the Start.

Everyone gets the basics: Tenant pays rent, rent pays the bills, you get what's left (hopefully). Cashflow may be king, but its only one of the benefits of real estate investing.

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Appreciation

Simply put, real estate tends to increase in value over time. Property you own now will likely be worth more later. Ask your parents what they paid for their house 20 years ago. Check out the value now. Willing to bet there's a big difference, even if it still has shag carpet and wood paneling! So if you can afford to buy and hold for a bit, chances are the property will be worth more in 2-5-10 years time.

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Tax Benefits

Without getting into the weeds here, owning real estate offers tax benefits. Mortgage interest, property taxes, repairs and maintenance, insurance, and other expenses can offset your taxable income. We’re no experts, and encourage you to talk to a CPA, but we like saving money on taxes, who doesn't?!

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Hedge Against Inflation

Things cost more. Gas, groceries, beers (we know this and are reminded often). A dollar sitting in your bank, or under your mattress, won't be worth a dollar next year. Inflation eats away at it. But that same dollar invested in real estate, assuming appreciation works its magic, will hold its value as the asset (home) increases in value.

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The Power of Leverage

A bit advanced here, but by borrowing money to purchase real estate, you are “leveraging”  OPM (other people’s money) to earn rental income, and using that income to pay back the debt. You can also “leverage” the equity in one property to buy another, and another…

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Making a Positive Impact

If you do it right, you are providing quality housing to people who may not be able to otherwise afford it. If you are maintaining and improving your properties, you can attract better quality tenants, and improve the neighborhood.  Again, you’re doing this to make money- but if you care about your community, you can have a positive impact.

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Look At The Whole Picture

Cash flow keeps you in the game, and rewards you for your efforts- but real estate is a get rich slow game, and if you’re willing to look beyond instant gratification, you’ll realize the true value of real estate.

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