There are so many possibilities to consider when you’re thinking about investing your money. Stocks and bonds, mutual funds and gold, crypto and bitcoin - the choices seem practically endless. You have to consider the risks you take and the rewards you reap with each of them. At the end of the day, you want to maximize the profit you’re making from your investments and minimize the risks. That is where you should invest. I don't have the risk tolerance for the "buy, hope and pray" method of investing.
Most investment options have one, maybe two potential sources of profit and you rarely have any control over the investment itself. You can cross your fingers that the value of your investment increases so you can sell it at a profit, but that’s about it. Wouldn't you rather own an investment that will give you a profit in multiple ways and that you have control over?
Which leads us to Real Estate Investing. Real estate investments provide eight profit centers, not just one or two. These are:
Cash Flow
Instant Equity
Appreciation
Depreciation
Leverage
Forced Equity
Principal Pay-Down
Reinvestment
You can see from this list alone how real estate can become a profitable investment.
From the day you invest in property, you can already find yourself better off than you were previously. That’s due to “Instant Equity”, which is what happens when you buy a property for less than its market value. You might be asking why someone would choose to sell a property for under what it’s worth.
There are a few reasons for that: the owner might have inherited the property and decided it’s not worth dealing with, or they might be in a situation where they need to liquidate their assets quickly more than they need to maximize their gains from it. Whatever the case, they need to make a quick sale, and that’s where you come in and help them by buying the property.
After that, once you own the property, you start getting into all the other profit centres real estate has to offer, many of which you have control. Property can naturally gain value over the course of time: that’s the “Appreciation” from the list. You can also expand your profit by renting out the property for an amount greater than the expenses associated with your property: that one is “Cash Flow.” And once you’ve begun making a profit with a property, you can reinvest in even more properties, granting you the ability to increase your net worth exponentially.
You want to make smart investments that are going to pay off over time. Real Estate can do that and help you build your net worth. The secret is, you need to start.
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