Apart from being your own boss, having the freedom to travel at the same time you earn money and increase your assets, investing in real estate sustains even more benefits.
There are two kinds of appreciation.
The first is that of economic conditions beyond your control, such as inflation. But you will not gain much from this type of appreciation since the gain is offset by the higher cost of living.
The second type is the revaluation of the market, which can be controlled. When you improve a property (through renovations), a higher value is forced. You can buy a property in need of repairs and take it to the height of the neighborhood or up a little higher; this will give you a property that is much better in value.
Cash Flow: Cash flow is the difference between your income and your expenses on a property. You can have a positive or negative cash flow. Obviously, you will feel much better if the cash flow is positive.
Tax Depreciation: Tax Advantage: Owning real estate with the objective of obtaining a profit allows you to deduct interest payments and other expenses that come in the tax season. But do not be fooled into buying real estate for tax advantages; rather, you must buy because it makes economic sense to do so.
The Pride of Property (the tangible against the actions, etc.). Maintaining a real estate portfolio guarantees you not to depend on anyone for the future vs. a portfolio of actions that depend on good performance in the management of the managers of the companies in which you own those shares. With the property you control the asset, while with the shares, it is the management team of the company that controls the asset.
Mental tranquility (buy for children, parents, etc.). Have a heritage formed by a portfolio of properties that transmits a family tranquility by obtaining periodic rents that can be passed down from generation to generation.
Amortization: With impulse, from the use of the money of others, comes a payment schedule. Your outstanding balance is reduced with each payment you make. A part of each payment goes to interest (applied first) and the rest goes to pay the principal. The main reduction is called debt reduction amortization. Therefore, amortization can make you rich, little by little and steadily.
Your money using others’ money to Build Wealth: This drive is the ability to borrow a percentage of the value of a property. In real estate, compared to other investments, a very high degree of leverage is offered. In some cases, a couple that buys a single-family home can get 95% financing. This allows people to buy real estate with little, or nothing, of their own money. What other investments offer such a high degree of momentum?
Long Term Wealth: Real Estate remains in time. You can keep it as an investment, and with the passage of time continue to generate periodic rents, which can be inherited from parents to children and continue to add value.
Long-Term Security: Having an investment portfolio composed of a set of real estate offers you security in obtaining continuous cash flows with consequent security for the owner. Having a good support of real estate in profitability guarantees an economic security for your family and a lasting tranquility.