Is real estate investing worth it?

Question

Good evening all,

I have not started my real estate investing journey, set to graduate college in 10 months and already have a job lined up. I have noticed a large influx of youtubers and online individuals preaching real estate as a great investment. However, others proclaim that the returns from real estate are not that great unless you buy all properties in cash and only invest in properties near where you live. They state that for a given property, say purchased with an FHA loan, the rent will almost never exceed the mortgage by a significant amount. Therefore, when an emergency happens with the property, such as a broken waterheater/newroof, the net cash flow that was generated is essentially washed out. If you were to stay net zero on the property after 30 years and decide to sell, you will recoup the home price, but after 30 years of work, they state that it is not worth it. Of course, if real estate is your full time business, it becomes more worthwhile.

Therefore, can anyone dispell the potential rumors that real estate is not a decent investment vehicle versus stocks, mutual funds, or an assorted variety of investment options? Does the difference between part time versus full time make a significant difference such to dissaude part time investors? I am sure times are currently different because of the great economy before covid as well, so that plays a factor.

Thank you for your time!

Erickson Sainval · Answer

Real estate is worth it because you have more control, tax benefits, and more. The laws favor those in business and in real estate.

Only thing I can assure you is that being a saver-investor is the only way to take control of your life. You must save and invest your money in a VEHICLE that can bring all your goals into reality. Real estate is just one of those things.

If you educate yourself, and act, you will get where you want to be.

Do you want to work your whole life? If not, real estate is just one way of achieving passive income. There are other ways, but real estate has simply fared better for the masses.

Mike Dymski · Answer

You have a whole forum of members here who are making outpaced returns investing in real estate. You may want to read some books and listen to podcasts on real estate investing. That will help you decide if the real estate process fits with your interests and goals.

Marlen Weber · Answer

Excellent advice and information on real estate investing from @Erickson Sainval

Greg Ryba · Answer

Fair enough @Mike Dymski. I have read a few of the books from biggerpockets and listened to their podcasts over the years. I will definitely take advantage of the forums though! Thank you!

Brian Geiger · Answer

@Erickson Sainval Nailed it. There so many opportunities to make money in RE and you can truly replace your 9-to-5 income with RE.

Greg Ryba · Answer

Thank you to all, this was quite informative. In any of your experiences, has real estate come out ahead of what you put into it from a monthly perspective and from an overall perspective?

Jason Wray · Answer

Greg,

I would suggest you first get pre-approved by a bank/lender to help you find out first how much you qualify for and what program might work best for your goals. There are a lot of programs available other than FHA that require less money down and have no monthly PMI/MIP/UFMIP. You do not have to buy an overly expensive home in order to make a decent NOI off of your investment. Also if you buy something that only needs cosmetic renovations keeping costs to a minimal. You can save money in the long run just by making sure most household repairs stay to a minimum. Also once you own the home you can always apply for a HELOC or do a cash our refinance to recapture your initial DP/investment renovation costs.

When you go to retire and you have a free and clear property it can help alleviate your SSI or retirement income. In addition you can always take out cash using the equity as you need it or if something happens down the road.

Is real estate investing worth it?

Is real estate investing worth it?

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