So you’re thinking of investing in real estate? There is so much information out there and so many different opinions, so let’s break it down. Is real estate investing worth the hype?
Real Estate Investing and R.O.I.
For years growing up we has all heard of 401k’s, IRA’s and other retirement funds matched by our employers. But are they worth it? The S&P 500 has averaged about 9% over the last 30 years and only 8% over the last 50. Now granted there are more aggressive areas in the market that you can get returns of almost 12%, but is this the best option? And the real question is, Does this give you the life style that you want?
Life Style
Real-estate is known for both good and evil. Pre 2008 real-estate was a considered a great investment. Especially in a bull market. However, post 2008 real-estate became the fastest way to go broke and loose everything. With the collapse of the real estate market the their trust collapsed as well. One thing will never change though and it is real estate. Vast amounts of wealth have been created through real-estate and will continue to be created. Now before we move forward understand this, wealth is not money, but have time you have for the amount of money you have. You might have one million dollars in the bank, but if your expenses are $100,000 a month, you live for 10 months. However if you live off $10,000 a month you can live for over 8 years, and now you have time. This is what real estate allows you to achieve, real wealth and time.
Time
Investing in real estate as discussed before allows you to create wealth and half the time that you desire in your life. This is time stamped your family this is time spent doing what you love this is time chasing your dreams.There are very few other investments that will allow you to have the time and money to live the lifestyle that you desire. This is what makes real sense amazing with very minimal effort you have consistent cash flow’s and now time to spend doing what you love in creating your own dream.
Conclusion
In real estate there are there are three basic income sources from rentals being cash flow, appreciation, and principal pay-down. Cash Flow is mow much money you make after all expenses each month. For example if you are renting a house for $1200 a month and have $800 in expenses you are going to cash flow $400 a month off that property. The second is appreciation which can be hard to measure but can create massive wealth. And the last is how much money goes towards your net worth on your mortgage payment. That is the principal payment. These three methods allow you to have time and money.
To conclude real estate Investing maybe phenomenal for you if you do your research and are able to find deals they give you the cash flow and appreciation that you want. It will also allow you overtime to live the life that you want and achieve your dreams.
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