Saturday, 1 September 2012

Top 3 Reasons Why You Should Invest In Real Estate

With the housing bubble that occurred a few years ago, several people have strayed away from any form of real estate investment and have resorted to keeping cash in their bank accounts. They are afraid that the crisis is not yet over and that there’s still some room for property prices to plunge. They are waiting in the sidelines waiting for the right buying opportunity that may never come.
Here we discuss why you should invest in real estate or stay invested if you already have one.
1. Leverage
The use of what Robert Kiyosaki calls other people’s money or OPM. With leverage, you can acquire and control properties even if you don’t have enough cash to buy them in full. This is possible through several financing options that are available. There are some property owners who rent out their properties and use the monthly rent to pay off their monthly mortgages – it’s like having someone else pay for the property you acquired!
leverage real estate investing
2. Capital Gains
People invest in real estate with the hopes that the prices of the properties they acquire will eventually go up. This difference between purchase price and the property’s current market value is called capital gains. Of course this doesn’t happen all the time. Take for example the recent housing bubble that trigerred a global recession during the late 2000. Therefore, the best strategy here is to hold on to your asset as generally, real estate prices do climb over time.
3. Passive Income
This is one stable source of passive income, especially when the property is located in an area near offices and schools. The monthly rental income becomes pure passive income once the mortgages have been completely paid off.
Remember that making money through real estate is not an overnight get-rich scheme. It takes time and effort, the essential requirement that people fail to do when they venture into real estate.

1 comment:

  1. One of the main reasons why people invest in real estate is because of the greater resale value that they can get for the property. Most often, when a property appreciates, this is the time that many real estate investors take the chance of reinvestment. It is a better option for them to grow their investment equity.

    [Allan Getter]