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Why I invest in Real Estate over Other Options.
Why Real Estate:
I decided to invest in real assets such as real estate because of all the advantages there are to owning real estate. Such as Cash flow, Debt Pay down, Depreciation, Appreciation and Tax benefits and more. Real Estate, itself is such a broad topic too. There are REITs, Single Family, Multi Family, Commercial, Residential Apartment Complexes Mobile Homes Parks, Land, Notes and so much more.
Benefits of Real Estate. :
Real Estate always intrigued me, and after reading for about 6 months to a year, I felt comfortable with the basic principles of the real estate. I decided I wanted to first start with a single family to dip my feet in. I have a full time career at this time so, I would be managing this rental from a far. It was going to be bought using conventional financing.
I knew that with the following benefits in real estate and understanding the numbers for mt Investing Criteria, real estate was a no brainer.
Cash Flow: This is the difference between your rents and your expense. Positive Cash Flow is important to having "Passive Income" and reinvesting those earning has a snowballing effect.
Debt Pay down: Having your tenants pay down your mortgage is a powerful tool to build equity within a property.
Depreciation: Being able to reduce your net income due to updating your property and keeping it up to code is always a benefit not only to yourself, but also your tenants and the community.
Tax Benefits: Just as I mentioned above with Depreciation, being to write off other things that are approved by a CPA (of course), such as repairs, marketing, adverting, and other business related things can help reduce your net income just for being a good investor.
Appreciation: Organic or forced Appreciation on an investment property is just icing on the cake when it comes to an investment property. Obviously we can't predict when a market will crash, we never are able to capture that appreciation unless we refi, or sell which cost fees and
The reasons I didn't choose REITS, stocks, cryptocurrencies or any investments which is based on how the Media is feeling that day didn't work for my investing portfolio. The market kind of decides what it does or doesn't like based on the media exposure for the company in that given quarter. REIT doesn't interest me when they are just a glorified property manager. However, they get all the tax benefits that you don't get. I can invest in my own property and hiring a property manager and gain all the benefits listed above. The loss of control on the above listed investment just does't work for my investing strategy.
I would be interested in notes, however. I do not know too much about note investing yet! However, I did buy @Dave van Horn's Book, so I plan to read more about this part of real estate.
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