10 Reasons to Invest in Real Estate

Really?  Do you need more reasons?

Well, foreclosure rates remain high, mortgage lending continues to tighten, job growth and wages are still down, home ownership is declining.

So why do I continue to sing the praises of owning real estate? What makes property such a great investment? You cannot shake my faith. As a landlord or a homeowner, I believe there is not a better way to create and control your financial security. Here are just 10 of my many reasons:

1. 1. Value Increase. Real estate is a long term investment and property value does increase over time. Did you know that, even with the recent dip in values, most home values have gone up since 2000? For example where I live, in 2000, home retail values averaged $104,700. In 2011, the same home value is $115,400. That’s a 7.4% increase. Not a lot but, even in these tough economic times, property values have increased. (and our mortgages have been paid down, and our properties cash flow, and they have given us tax write-offs, and..)
   2. Cash flow. When purchased right, rental income exceeds property expenses creating positive cash flow. That positive cash flow is real, spendable cash. By raising rents over time, the cash flow you produce increases.
   3. Equity build up. Your equity builds up as your mortgage is paid down and, if it’s a rental, the mortgage balance is paid down by your tenant, not by you! How sweet is that?
   4. Income growth potential – Opportunities to increase positive cashflow abound and you can take advantage of any or all. These opportunities include lowering your expenses (installing energy saving appliances, water flow controls and heating units, etc.), updating the property (better flooring, solid stone countertops, etc.), enlarging the property (adding a bonus room, adding a garage, finishing a basement, etc.), increasing rents, buying another income producing rental, on and on. Ultimately, you have tremendous control, income protection and growth potential that you don’t have in a W-2 job.
   5. Retirement income – Pensions are gone, social security is at risk, but rental properties continue to produce income year after year. Additionally, the income actually increases while the expense (mortgage) does not.
   6. Estate creation. Hold onto your properties long-term and pass them on to your heirs.
   7. Tax advantages. If you invest in property, many expenses are tax deductible. These include mortgage interest payments, maintenance and repairs, insurance, advertising, legal and professional expenses and more.
   8. Borrowing. Even though it’s harder right now to get a loan than in recent years, you can still borrow a lot of money to make a purchase. Unlike most investments, in real estate you can borrow 80%, 85%, even 90% of the purchase price to buy a property!
   9. You can touch it, it’s tangible. Unlike a stock or commodity, you actually have an asset that has physical worth. And, unlike a stock or commodity, you can live in it.
   10. Property is something almost everyone understands. There is a lot of information available about what’s happening in your area as well as around the country.

   Are you convinced?  What are you waiting for? Buy, buy, buy!