Should You Be Investing in Real Estate?

Here are a few things to consider:

 

90% of all millionaires become so through owning real estate

1.       Wealth Creation - 90% of the wealth generated in the US was done with real estate. It has always been and remains the single greatest opportunity for middle America to create wealth and still remains so today.

 


 

        2.      Cash Flow - One of the major benefits of owning real estate is that it creates cash flow or passive income. Cash flow from real estate is stable and far more predictable than most other businesses. That's great for entrepreneurs enduring the ups and downs of start-up life. The cash flow can help float you though the bad times and live well during the good times. The cash flow can provide ongoing, monthly income that is mostly passive, allowing you to spend your time building a business, traveling or reinvesting in more real estate. Good luck finding this with your dividend producing stocks.


 

3.      Leverage - Real estate gives the ability to leverage your investment as collateral. We all know this but it’s important to point out, it gives you the ability to purchase a substantial investment with minimal investment for greater returns. Further, investment real estate allows you to allow someone to indirectly make the payments for you. There is an old adage, that landlords get rich while they sleep.  But even beyond that is the power of Positive leverage. Investments financed at rates below your actual return on the property will increase your ROI. Again, difficult to find in the stock market unless you purchase on margin, but the risk is of a margin call can be off the charts!


 

4.     Tax Advantages – Only in certain circumstances would I recommend someone invest in real estate for the write-offs, but it is a factor that can’t be ignored. Money spent on your investments are used to reduce your taxable basis and also has the great benefit of tax-deferred exchange when you’re ready to transfer to another investment.

The tax advantages to owning real estate are significant


 

5.      Asset Depreciation – Again with the taxes, sorry. The IRS gives you the ability to depreciate your initial basis in the property over time (actual period depends on the type of investment but it’s important to note that residential investment property allows for a higher percentage as compared to commercial property).  Other types of investments don’t allow for depreciation. which is a huge plus for real estate. It’s also a major factor of why other types of investments fail to out-perform investment real estate.


 

6.      Investment Growth - through both appreciation and principle reduction. This is a double ended opportunity to your investment to compound. Provided we have appreciation, your investment will continue to grow in value. And on the other side, as long as you keep making payments on the mortgage, your debt will continue to decrease.


 

Keep calm and invest in real estate

         7.      Investment Control – what other type of investment out there gives you the ability to have personal control over the expenses, income and the ability to improve to create additional wealth.


 

Investing in real estate is the single greatest opportunity for you and me to create wealth for our livelihoods, our families and our legacies. Clearly there is risk involved, as with any investment. And it is imperative to note that wealth is created over long-term investments, harnessing the power of compounding – This is not a get rich quick endeavor (even though there are countless gurus promising just that).


 

Give me the time and I can show how passive income can build wealth with less risk than alternative forms of investment. Nothing excites me more than wealth creation and I’d welcome the opportunity to help guide and consult with you and help you to evaluate potential opportunities in the marketplace. Give me a shout and let’s get things started for you.

 

-  Ed Grabowski, Jr.

 

Please remember too, that I’m available to answer questions and share my thoughts and advise. Email me on egrabowski@ccim.net or call me @ 480-359-5150.  I really look forward to hearing from you!

 

We welcome the opportunity to share with you what we do that makes us more effective in generating results for our clients.  At the very least, the possibility to put more money in your pocket should be worth a discussion before tackling selling your own home.

So let’s talk –

480-359-5150 | egrabowski@ccim.net 

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About the author: The above Real Estate information was provided by Ed Grabowski, Owner/Broker of Grabowski & Associates Realty in Scottsadale ©Reserved. “My experience provides and insight you just simply won’t find with other professionals. My goal in representing my clients is offer true value, far beyond just dollars & cents.”

 

Thinking of investing in real estate? I'd love to share my passion for real estate and expertise! Ed can be reached via email at egrabowski@ccim.net  or by phone at (480) 359-5150.