When searching for additional streams of income either to pad your salary or improve your prospects during retirement, many people look towards investments. Of course, you should start with the tax-preferred vehicles such as an IRA and 401k.
After that, you might want to invest in real estate add to your portfolio. Even if markets fluctuate, it is worth the risk. Continue reading to learn why.
You Need Financial Freedom
Investing isn't about getting rich quickly. This is about having the financial freedom to support yourself without a salary. The truth is: at some point in your life you will have to stop working. You just won't have as much physical strength or stamina to do it.
The worst scenario is when you are forced to stop before you are financially ready. The best outcome is choosing to stop on your own terms. You're the only person who can decide if you will stop on your own terms.
Unless you are expecting a hefty inheritance--and, most of us aren't--then, no one will give you the money you need to support yourself without an income. Outside of social security--which, isn't guaranteed--investing is one way you can have an additional stream of income to save up as much as you need.
And, there is no better time to start than the present.
Real estate investments are one way you can conveniently use the bank's money. You can now make your down payment and leverage your capital.
Using someone else's money to increase the return on your investment is an amazing feeling. This what is called leverage investing.
Cash Flow is Tax Free
Due to depreciation and mortgage interest deductions, your cash flow should be tax free. Imagine not having to pay taxes on your cash flow while waiting for capital gains on the sale of your property. This means you can stash away even more money.
An Excellent Long-Term Investment
Even after a crisis, real estate is a good choice for a long-term investment. If you look back three decades, you will see that real estate is valued much higher than it was then.
If you have tenants paying your mortgage, then you get to keep any excess each month. This way, your investment is much more profitable. It couldn't be easier or more convenient.
People Want to Rent Houses Over Apartments
If you had a choice to rent a home or an apartment, which would you choose? Most people prefer a home, especially if they have a family. Yet, renting is more convenient for people who have to move for jobs or other situations.
Not everyone wants a mortgage, especially if it is not for investment purposes. Also, if someone has owned a home and lost it, they might see it as a step back to move into an apartment.
As a real estate investor, this is a win-win for you. And, tenants often prefer private landlords as they aren't as complex as apartment rental conglomerates. You might even give them a lease with the option to buy.
Those who have owned homes previously make better tenants because they have experience caring for a home. These are just one of the many reasons why people rent homes.
There really isn’t a safer investment than real estate. If you can stick it out through various bubbles and any form of crisis, you will see that real estate prices do increase over time.