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Welcome to the first post in our 6 Part series on Real Estate Investing. We really wanted to break down as much as possible to help make the process less scary and daunting.  Whether you’re looking for financial freedom, passive income, or long-term wealth building, real estate investing can give you a ton of opportunities to reach your goals. For our first post we’re going to chat about the benefits of real estate investing, the different types of real estate investments, and hopefully, debunk some common myths and misconceptions.

So what are some of the benefits of real estate investing?

Real estate investing definitely has advantages over some other forms of investments. Some main benefits are:

Passive income: Rental properties can generate a steady income stream, allowing you to earn money with minimal ongoing effort. For example, if you purchase a property for $200,000 and rent it out for $1,500 per month, you could earn $18,000 per year, assuming full occupancy.

Appreciation: Over time, property values generally increase, allowing you to build wealth as your property appreciates. For instance, if you bought a house for $250,000 and its value increased by 5% annually, it would be worth about $382,884 after ten years.

Leverage: Real estate investing allows you to use borrowed money to enhance your investment returns. By putting down a 20% down payment and financing the rest, you can acquire a property worth five times your initial investment.

Alright, so we can see there are some of the Benefits…Let’s take a peek at what type of Real Estate Investments are out there;

  1. Residential properties: With residential we’re talking about single-family homes, duplexes, triplexes, and multi-unit apartment buildings. You would be renting these properties to tenants, generating rental income and benefiting from property appreciation.
  2. Commercial properties: Office buildings, retail spaces, and industrial properties all fall under this category. These investments often involve higher risks and higher capital investment but can offer higher returns. This is not usually where we advise our clients to start since they often include more complex
  3. Real estate investment trusts (REITs): These are companies that own, operate, or finance income-producing real estate. Investors can buy shares in REITs, similar to stocks, and receive dividends from the rental income generated by the properties.
  4. Fix and flip: This strategy involves purchasing properties that have potential to be improved, renovating them, and selling them for a profit. While this approach can be lucrative(HGTV makes it seem way more fun than it actually is haha), it also carries a much higher risk and requires significant time and expertise.

So why do we feel so strongly that real estate is a stable and profitable investment option?

History shows that real estate investments tend to be more stable than stocks and other volatile assets. This is because property values are typically less affected by short-term market fluctuations. Real estate investments have the potential offer multiple income streams, such as rental income and property appreciation, making them attractive options for long-term investors.

Through the many Real Estate cycles that we have experienced we have been able to help our clients build a solid plan for their portfolios. Sometimes that means one income property, and for other it means multiple types.

Looking to find out more? Reach out and we can set up a quick chat to go into more detail or help you get a plan together!