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The Best Investment For Your Money


Real estate investment has become a popular and highly lucrative way for people to make money. Buying rental properties can be a great investment if you take the time to educate yourself about the process and the best ways to get great returns. Just as Louis Glickman rightly said, “The best investment on earth is earth.” The increasing population of the human race, increases the demand for shelter. Hence, the business has become a booming source of income for smart entrepreneurs.

Over the years, some entrepreneurs have become skeptical about investing in real estate due to previous experiences. Those bitter experiences should not stop you from tapping into ocean of wealth. Here are seven reasons why real estate is the best investment for your money.


Cash flow
Real estate business is a great source of immense cash flow – the extra money that is left over after all the bills (mortgage, taxes, insurance and any repairs) have been paid. 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. This benefit of real estate business allows you to quickly build up a nice income especially as a start-up entrepreneur.
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 through the bad times and live well during the good times. The cash flow a property generates is the single most important thing about real estate investment. In real estate business cash will be generated reliably year after year with no significant reduction, but slow consistent increases.


Stable and Attractive Income Return
Real estate business when compared with other sources of income such as stock is more stable and sometime attractive with regards to return. The total return accruing from this investment over a long period of time is very attractive
The income stream it produces tends to be extremely stable and predictable. Rents in most areas tend to slowly rise over time but even during tough economic times they tend to be fairly stable, falling only modestly.
                                        
More Leverage
Real estate business is one of the few investment vehicles with more leverage. It allows leverage on Other People’s Money (OPM). You can get a mortgage to buy a rental property and pay it back over a period of time depending on the structure of your deal. This payment will be done with the rents from your tenant, thus increasing your net worth each month. When the payment is complete, the property becomes yours, a significant asset that you can sell or continue renting.

Appreciation
Real estate property generally appreciate over time. As the property appreciates rents will tend to rise with it meaning that your income stream will also grow over time. Although property appreciate, recessions do happen and values go up and down. Regardless of this, property appreciate overtime. It generates income while you wait.

Tax benefits
In real estate business, the cash flow received from your rentals are not subject to self-employment tax. Due to depreciation and mortgage interest deduction, the government offers tax benefits and significantly lower tax-rates for long-term profits.

Rental property afford investors with another incredible opportunity to convert personal expenses to potentially valid business deductions. Don’t forget that rental real estate is a business. This means that travel expenses to check on your properties and payments to family members who manage your properties (such as students away at college) can be deductible and increase the tax benefits when it comes to cash flow and the future sale of the property. 

 Unique Security Advantage
This is one of the few investment classes that is a hard asset that has meaningful intrinsic value. The property’s land has value, as does the structure itself. By choosing the location and asset quality wisely, investors can benefit from the security of knowing that they own an asset that has the potential to earn income regardless of what happens to the existing tenant(s). For this reason, commercial real estate investments do not fluctuate with the same volatility as the stock market. *

 Control
Real estate business is an investment channel that grant investors great deal of control over their income. With the property appreciation overtime, the investor is certain of steady flow of income and gradual increase.This is one of the major reason why most of the wealthiest men on earth are into real estate business.


The Bottom Line
Real estate business can also enhance a portfolio, by lowering volatility through diversification. Real estate has a low, and in some cases, negative, correlation with other major asset classes. This means the addition of real estate to a portfolio of diversified assets can lower portfolio volatility and provide a higher return per unit of risk. *
Real estate business provides an income on other people’s money while giving tax breaks and increasing your balance sheet and hedging against inflation.
Investing in real estate is a great means of generating income but owning some property is not enough to bring in the wealth you desire. You have work for it, do it right. You must learn how to find great deals, how to evaluate a real estate investment, and how to finance any properties you want to buy.
It is not just enough for you to acquire enough property, getting the right deal and maintenance of the property are vital. There are several other unmentioned benefits of investing in the real estate business.

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