Learn the Real Estate Ropes Here
Individuals have attempted to use real estate as a way of building up wealth for many generations. Real estate investing is rife with both opportunities and risks and how you maneuver through them is often the deciding factor regarding how you successful you are in this process.
One of the major benefits associated with real estate (and the reason why I choose it as an investment vehicle over other investment opportunities) is the amount of leverage offered to real estate investors. If you are investing in stocks or bonds, you are likely provided an option to invest through leverage through a margin account. A margin account allows you to purchase stocks and bonds with borrowed funds. Generally speaking, the maximum margin rate provided through margin accounts is double your account balance.
As such, even if the stock market would increase significantly over this period of time, you are only trading with double your capital balance. If you compare this to real estate investing where you can purchase property with 10-20% of a down payment, you can see how you can purchase significantly higher amounts of real estate with lower amounts of capital. But realize this is not a how to make fast money plan, it will take time and dedication to pull off. This is due to the property being used as collateral by the lender, which protects them from your default. By borrowing more capital to finance a real estate acquisition, you can potentially earn more through rental payments and resale.
Real estate is therefore a unique opportunity for smaller investors who are looking to generate passive income. By becoming a landlord, you can obtain passive income through rental payments that can fuel your retirement for the remainder of your life. Forget about having to cash out your annuity. Forget having one or two weekend jobs. As inflation typically leads to a raise in the value of real estate over time, the majority of real estate investments tend to pan out for long-term holders of real estate. In addition, real estate is generally more stable than other investment types and therefore provides real estate investors with additional comfort when considering their investment portfolio, as well as needed diversification away from equity markets or bonds. Working with real estate is like having struck gold! You can buy your lady the rose gold engagement rings she’s been wanting. You can get that Nissan 370z you’ve been wanting for years. The sky is the limit with real estate. No more saving your change in a mason jar.
While this blog will discuss the opportunities available for investors, it will also discuss current events in real estate markets including the risks that real estate markets are currently facing. While many of these risks are very real, there are ways to minimize your exposure to them which can lead to a better return on your real estate investment. Regulations impacting real estate investors will also be discussed in this blog, as will tips and resources to help improve your real estate investment.
Tune in for future updates on this blog regarding the real estate market.