Real estate investing is one of the most lucrative ways to build a business. It is also one of the safest since real estate is less volatile than the stock market. Here are four more reasons why you should invest in real estate.
Properties appreciate in value
Property values appreciate over time due to inflation, supply and demand, capital improvements and other factors.
Most real estate investors purchase income property for capital appreciation. And a lot of people opt to purchase a home instead of renting out one because they can increase their net worth when the value of the property goes up. The property, over time, is going to be worth more than what you initially paid for it.
Properties provide a steady stream of income
Going hand-in-hand with appreciation is rental income ñ not only is your property increasing in value, but your tenant will be making the payments on your property for you!
Any amount that is more than what you are required to pay for the property is considered income. So if you are required to pay $800 for the property, and your tenant pays $1100 in rent, you receive an income of $300 every month for that property.
Also, when a renter pays down your mortgage, you begin to accumulate equity. You can use this equity to fund more deals and expand your real estate portfolio.
Properties provide large sums of money
While renting creates a steady stream of income, other real estate investing techniques such as flipping houses, wholesaling, rehabbing and short sales can create large chunks of money. The investor contracts or buys a property under market value and resells the property for more than the original price in a short period of time.
For example, you purchase a property for $50,000. Spend around $30,000 to fix it up and make repairs. Now sell the property for $130,000 and you get a gross profit of $50,000.
Properties provide substantial returns for minimal investment
Properties appreciate in value
Property values appreciate over time due to inflation, supply and demand, capital improvements and other factors.
Most real estate investors purchase income property for capital appreciation. And a lot of people opt to purchase a home instead of renting out one because they can increase their net worth when the value of the property goes up. The property, over time, is going to be worth more than what you initially paid for it.
Properties provide a steady stream of income
Going hand-in-hand with appreciation is rental income ñ not only is your property increasing in value, but your tenant will be making the payments on your property for you!
Any amount that is more than what you are required to pay for the property is considered income. So if you are required to pay $800 for the property, and your tenant pays $1100 in rent, you receive an income of $300 every month for that property.
Also, when a renter pays down your mortgage, you begin to accumulate equity. You can use this equity to fund more deals and expand your real estate portfolio.
Properties provide large sums of money
While renting creates a steady stream of income, other real estate investing techniques such as flipping houses, wholesaling, rehabbing and short sales can create large chunks of money. The investor contracts or buys a property under market value and resells the property for more than the original price in a short period of time.
For example, you purchase a property for $50,000. Spend around $30,000 to fix it up and make repairs. Now sell the property for $130,000 and you get a gross profit of $50,000.
Properties provide substantial returns for minimal investment
