What Are the Benefits of Investing in Real Estate?

    Real estate investing is a great way to build wealth. If you can get a mortgage, half the battle is already won.

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    Anyone who knows me knows how much I believe in the power of real estate as an investment vehicle. Here are just a few of the benefits to owning real estate investment properties:

    1. Cash flow. This is defined as the difference between the payments you make on your mortgage and the rent you get from your tenants. Let’s say your monthly mortgage payment is $1,300, but you rent the property out for $1,600. You would passively make $300 per month and establish cash flow.
    1. Equity gains. Over time, real estate prices tend to go up. A 3% to 5% appreciation rate is typical each year. This whole time while you have that cash flow, you also build equity. When you have built up some equity, you can either sell the home and cash out or you can take out an equity line of credit and get another rental property.
    1. Mortgage paydown. In addition to providing you with cash flow, the rent your tenants pay every month will help pay down your mortgage. After the term of the loan is completed, your house will be completely paid off and you will make a lot more money every month.

    This is an extremely simple view of investing. Of course, there are always expenses related to maintenance as well as ways to make even more money. Overall, the principles hold true, though. If you want to learn more about how to invest in real estate, give me a call or send me an email. I would be happy to speak with you.

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    6 Responses to “What Are the Benefits of Investing in Real Estate?”

    • Trayson Evans

      Written on

      Equity is a great reason to invest in real estate. Even if you don’t live in your house though the whole mortgage, the equity travels with you. This is why I agree with the article that it would be a good idea to use that equity to get another rental property.

      Reply
      • Gregory Tran

        Written on

        You’re right Trayson. The equity continues to build, either by long term appreciation or by mortgage paydown, regardless of if you or a tenant is paying the mortgage.

        Reply
    • John Ferrell

      Written on

      I like that you said that there are other ways that we can invest in real estate to get more money. I think that if I was going to make a big investment in real estate then I would want to make sure that everything is updated.

      Reply
      • Gregory Tran

        Written on

        John, when you say “updated”, what exactly are you referring to? Like an updated house?

        Reply
    • Frank Delaware

      Written on

      A friend of mine is thinking about investing in real estate, and I was curious about how it would benefit him. It’s interesting that it can actually help you come up with a positive cash flow! It would be nice to know that you will be able to make some money out of it.

      Reply
      • Gregory Tran

        Written on

        Real Estate is the #1 avenue to wealth in this country. If you or your friend are interested in learning more, call me at 512-765-4337. I’d be happy to meet for a coffee or in the office and show you what can be done.

        Reply

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