When you’re building for your financial future, you have a ton of choices about what to do with your money. You can invest in the stock market, help build businesses, purchase commodities, or bury treasure chests in your backyard. The options seem endless!
We would like to make a case for real estate. While every option has its advantages and disadvantages, there are a TON of reasons to seriously consider investing in land, buildings, and homes. Here are a few of our favorites.
1. Flexibility
First, there are many, many ways to invest in real estate. Most people think they can choose to either A) flip houses (thanks HGTV!) or B) become a landlord. While these are popular, and potentially profitable, options, your choices don’t end there.
If you’re not interested in swinging hammers or fixing toilets, you could invest in real estate notes. Or purchase tax liens. Or become a hard money lender. Or act as a silent partner to another investor. Or help others find great deals. The list goes on and on!
In the end, the choice is yours with real estate. You can choose your level of time commitment and investment style, and that is a nice advantage.
2. Control
With most methods of real estate investing, there are many ways to exert control over your investment. If you’re fixing a house, you get to choose how much updating it needs. If you decide to become a landlord, you get to choose the neighborhoods you buy in. If you are investing in notes, you can pick what kind of return on investment you would like to earn.
With many other investing options, this just isn’t feasible. You can’t control whether a stock goes up or down, and in most cases, you can’t control the fees charged by your company’s 401(k) plan. Real estate offers some great options to customize your financial strategy.
3. Long Term Income
Once you develop the skills necessary to succeed in real estate, you can build on it continuously. Not only can you build a portfolio that will support you comfortably, but you can easily pass it on to your children, grandchildren, or best friend!
With many forms of real estate investing, your income actually improves over time (for instance, you may earn more from a rental house as you pay down the mortgage). If you stick with it, you can build a financial foundation that will support you and your family through retirement and beyond. That is exciting stuff!
4. Financing
We don’t know of any banks that will loan money to add to a 401(k). However, banks and credit unions will provide mortgages for investment houses. When used properly, his can be a great way to speed up your financial growth.
In addition, there are many other funding sources available for real estate (especially once you get some experience under your belt). This opens up a world of opportunity.
5. Money Access
Real estate allows you a level of access to your money that just isn’t available in some other investment vehicles. For instance, to pull money out of a retirement account, you’ll pay a boatload of penalties and fees. However, if you want to pull equity out of a home you own, you can either sell or refinance it, getting you what you need without punishment.
Granted, it’s not the same as having cash sewn into your mattress. But this ability to access your funds quicker is very nice.
6. Tax Advantages
We are not CPAs or Attorneys, but real estate offers many tax advantages for investors. From depreciation to write-offs, there are many ways to structure your purchases to help you at tax time.
7. Helping People!
Finally, and most importantly, we love real estate because it offers many opportunities for us to help people. Whether we are turning a run down house into the prettiest one on the block, or providing a great place for someone to live, it is wonderful to see the smile on people’s faces.
Helping a neighborhood grow, providing a baby a nice place to grow up, and finding someone the home of their dreams is a great way to spend your days.
So give real estate a try… we think you’ll like it!