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