5 Reasons to Invest in Real Estate as Early as Possible
Investing in real estate used to be a venture for the rich folks. Nowadays, this type of investing is far more accessible to ordinary people with ordinary jobs thanks to creative financing options and joint venture opportunities. In other words, with the right approach and some time and effort put into it, anyone can start investing in real estate and building up a portfolio that could eventually lead to complete financial freedom. With that said, here are five reasons why you should invest in real estate as early as possible!
#1 You Have Many Options
With real estate, you really have more than one option on the table. There are so many different ways you can invest in real estate, including passive and active options. One of the most common strategies is the buy and hold strategy that provides a nice monthly cash flow at a consistent rate. If you’re not up for property management and long-term projects, you can always do flipping or even wholesaling where you’re not even that involved with the property. What I’m trying to say is that the real estate industry provides the largest variety of options when it comes to deciding how you want to invest your money. There are so many opportunities that can be seized as long as you take the right route and choose the right guidance along the way.
#2 You Don’t Need a Lot of Money to Invest In Real Estate
There’s this myth going around that you need to have a ton of money to be able to purchase a property. In reality, there are many ways to buy real estate without your own money. For instance, all you need is a 20% down payment to be able to get a mortgage for your property investment. If you’re stuck with bad credit or you can’t qualify for a loan at the bank, there are always other options known as B and C lenders. There’s even an option that allows you to get into it without getting the loan yourself. I’m talking about joint venture deals where you can have your partner or partners bring forth their capital and mortgage capabilities. The point is, there is always a way, you just need to find it.
#3 Real Estate is a Tangible Asset
When you think of investing, stocks and bonds probably come to mind first. These are intangible assets where you don’t really have the ownership of anything and all of your success depends on the stock market and its position. In real estate, you’re dealing with a tangible asset that gives you a lot more control over the outcome of your investment. It allows you to analyze your investment in detail, make changes to it that could increase the ROI (renovations) and eventually control what to do with the property itself (rent or sell). While some types of investments bring along a lot of risk, meaning you can lose your money at any time, with real estate you can always exit the venture by selling the property and getting the money back.
#4 Real Estate Provides Cash Flow
One of the most obvious reasons as to why you should invest in real estate as early as possible is to take advantage of that consistent cash flow. All you need is a couple of buy and hold properties in your portfolio to be able to collect a hefty amount of rent each month. Keep in mind that these properties pay off for themselves, as you can use a portion of the monthly income to cover loans and additional expenses. All that’s left over is pure profit. Most other investments don’t provide cash flow, which is why real estate is usually a much better option than collecting dividends and eventually hoping the stock market doesn’t crash.
#5 It’s a Great Retirement Savings Plan
Lastly, investing in real estate is a long-term kind of game, meaning it is going to set you up for successful retirement if you do it right. As time passes, you will earn more equity in your properties, which gives you an opportunity to sell at a much higher rate in the future. Many people call their real estate investing ventures a retirement plan because it is far more lucrative than just putting money away in a 401K or IRA. While this is a great opportunity to work for your future, make sure to consult with your tax advisor before seriously planning for retirement.