Real estate investments offer some of the greatest returns when things go right. It can also have devastating losses, as can any investment, but the benefits of investing in real estate outweigh the benefits of many other investment options.
Check out the top four benefits of investing in real estate.
- Positive Cash Flow
Who doesn’t love cash flow? When you invest in real estate, especially buy and hold real estate, you have the potential to earn monthly cash flow. Investing in areas in high demand can provide a nice cash flow. Of course, there’s the risk of vacancies and non-payers, but every investment has risks, and often the higher the risk you take, the higher your returns in the long run. To run the numbers on your next deal, use this simple rental property calculator to ensure the ROI is positive.
- The Ability To Build Equity
As the home appreciates and you pay your mortgage down, you build equity in the home. This builds a nice equity for the future. If you rely on your real estate investments for your retirement income, equity can be a nice start. Equity is also a great way to build your real estate investment portfolio, as you can use the equity to buy more properties.
- Earning Passive Income
Passive income is the best way to diversify your income. It doesn’t require your effort often, and you make money while you sleep. Of course, renting properties out means you must maintain the property and be available for late-night repairs, but overall, one of the benefits of investing in real estate is the ability to earn money while you do very little work.
- You Are Your Own Boss
Investing in real estate means you’re on your own. There aren’t any bosses to answer to or a 9 to 5 job to report to. You decide how much you want to invest, how many houses you want to buy, and manage, and how much money you make. If you want to hire help, you can. Hiring a property manager takes the work off your shoulders and gives you even more freedom.
The benefits of investing in real estate are numerous. If you have the capital and can start even small, it’s a great way to break into a diversified investment that takes away the market risk. The equity, passive income, and freedom that investing in real estate provides is something that no other investment option offers.