Key Financial Benefits of Investing in Real Estate that Can Make You Wealthy

Over the years, I’ve invested in various assets, and I’ve yet to come across one that beats the financial benefits of investing in real estate. In my experience, acquiring rental properties proved to be the answer to unlocking financial freedom and building great wealth. Not only did it provide consistent cash flow, but it also offered a hedge against inflation, tax benefits, and the power of leverage to expand my portfolio, among other advantages. With that in mind, I’d like to share more with you so you’re fully versed on the financial benefits of becoming a property investor – let’s dive in.

Financial Advantages  of Investing in Real Estate

I’m guessing your interest in becoming a real estate investor is financially motivated. I say this because all the investors I know started out with a goal of increasing their wealth. However, this was just a stepping stone. The increase in wealth was what they needed to reach bigger goals such as becoming financially independent, retiring early, building legacy wealth, or having the ability to walk away from their day job if they wanted to.

So, whatever your reason is, know that investing in real estate will give you the financial power to meet your goals and live the life you’re striving for. Now, let’s go over some of the financial benefits you can look forward to on your investment journey.

Rental Real Estate Generates Consistent Monthly Cash Flow

Buying rental properties is a lucrative investment strategy that produces consistent monthly cash flow. So, by becoming a rental property owner, investors receive regular monthly rental payments from tenants, which typically cover the mortgage, property taxes, insurance, and maintenance expenses, with the surplus often being pure profit.

This rental income can serve as a reliable source of earnings and is especially lucrative in locations that sport a high demand for rentals, where vacancy rates are low and rents are on the rise. Head over to our article on this topic – Why Location Matters in Real Estate Investing, if you want to know what to look for when searching for profitable locations.

Rental income can provide a stable cash flow stream, offering more predictability than the volatile stock market. Market conditions may sway stock prices, but rental properties typically stand their ground, and can even see an upward trend as a result of inflation and rising property values.

Before moving on, grab a cup of coffee and dive into the following video that covers the ins and outs of monthly cash flow:

 

In my opinion, the biggest advantage of cash flow is that with enough properties, you can gain financial freedom. This can certainly put you in the driver’s seat regarding your lifestyle and schedule – no more asking for a week off to go on vacation, hoping it gets approved. You can take a two-month cruise if you want to because your schedule is no longer constrained to 9-5, Monday – Friday. I realize some of you enjoy your day job, and nothing is wrong with that. I’m speaking to those who are longing for financial independence to leave their day job if they would like to.

To become financially independent through rental real estate, you would need to generate enough cash flow from your properties to cover your monthly expenses. You’ll have to calculate how many properties it would take to achieve this, and you can easily figure this out with the formula I came up with while trying to calculate the numbers for myself. You can gain free access to this formula through my Freedom Number Cheat Sheet.

Allows for Multiple Streams of Income While a Day Job Provides Only One

Having more than one revenue channel is crucial to building wealth, achieving financial security, and becoming financially independent. By investing in rental real estate, individuals are able to open the door to multiple income streams, rather than relying on a single paycheck from a day job. Related to this, you won’t want to miss the article we put together – 9-5 Jobs vs Rental Real Estate; it will have you contemplating the stability of your job.

Think about it, the richest people in the world typically don’t have one stream of income. No way, they have many. Why is it important to have more than one source of income? Well, for starters, what if an employee were let go from their job, which is their only source of income? This would equate to a total loss of income. In contrast, if that same person were an investor with several properties and one rental were to magically disappear, it wouldn’t be a problem because they have other monetary pipelines with money flowing in each month. Are you starting to see the big picture here?

In a nutshell, having multiple rental properties that provide several income streams creates financial stability, increased income potential, risk mitigation, a strategy for building great wealth, funds to scale and add more properties, as well as enough money to enjoy life and save for retirement. In addition to this, if you have enough properties, it can allow you to retire early. If the phrase “retire early” has grabbed your attention, then you’ll want to read my latest article – How to Retire Early Using Real Estate Investing – 35 to 50 Years of Age.

Builds Equity that Can be Used to Create More Wealth

When you own a rental property, its value should increase for various reasons. For instance, market trends often result in a general rise in property values, while specific triggers, such as a housing shortage, can cause a sharp increase in demand, leading to a surge in value. Additionally, inflation can play a role in boosting property worth, as well as upgrades made by the property owner.

When the value of the property increases, you gain what’s called equity. You also gain equity as you pay down your mortgage. This brings me to an important question: what exactly is equity? It’s simply the difference between the property’s current market value and the remaining balance on the mortgage loan. The equity can be tapped into through a home equity loan, home equity line-of-credit (HELOC), or a cash-out refi, and used to invest in an additional property. I prefer using a HELOC to tap into my equity. Still, you can see which strategy is best for you by heading over to this article I put together that describes all three methods – Harnessing the Power of Home Equity to Buy a Rental Property.

The bottom line is that leveraging home equity to acquire additional rental properties allows you to avoid putting a significant cash down payment on a property. It can also be a powerful financial strategy for expanding a real estate portfolio and building wealth.

Additional Financial Advantages of Investing in Real Estate

There are a variety of financial benefits of investing in real estate that you should be aware of; here are a few that are well worth mentioning:

• Tax Advantages: Real estate provides incredible tax advantages that can keep thousands of dollars in your pocket, or even enable some to pay zero in taxes. See our article on The Power of a Cost Segregation Study, a tax strategy that can sometimes save an investor so much in taxes that they get their entire deposit back.
• Passive Income: Rental income equates to passive earnings, which can free up the investor’s time and bulk up their bank account balance in the process.
• Appreciation: Property appreciation goes hand-in-hand with rental real estate, and this not only increases the value of your property, but also provides equity that can be tapped into.
• Builds Retirement Wealth: Owning multiple rental properties allows you to save for retirement the right way. You’ll have multiple streams of income that can literally outlive you. In contrast, those who save a lump sum of money through a traditional retirement account run the risk of depleting their funds in the middle of their golden years. See our article on the 401(k) to find out just how risky it is to keep your entire nest egg in an account such as this.
• Protects Wealth from the Economy: Having a stable, hard asset that generates monthly income is a safe and secure way to generate and grow your funds because it’s protected from the fluctuations of the economy and the volatile stock market. To find out more on this, check out our article titled – Best Investing Strategies: Real Estate vs Stocks.

Reshape Your Financial Future by Investing in Rental Real Estate!

As I come to a close, I’d like to express that the financial advantages we’ve explored are attainable for investors who are ready to take the next step and begin their investment journey. And for those who are on the fence, remember, it’s not just about increasing your wealth; it’s about reshaping your future and claiming the freedom you deserve, so don’t linger too long.

Here at Morris Invest, we can help you achieve your financial goals through real estate investing. We help clients by providing them with lucrative cash flowing rental properties – new construction single and multi-family properties that have a tenant in place before or during closing.

Becoming Financially Independent

Imagine owning a rental property where you receive a rent check like clockwork every month. Now imagine owning several properties that provide multiple streams of income that cover all your monthly expenses. At this point, you become financially free, and this is the beauty of real estate investing and why I became an investor in the first place.

If all this talk of the financial benefits of real estate investing has sparked your interest, feel free to schedule a complimentary 30-minute call. We would love to tell you about our properties, the prosperous locations they’re in, the profit margins our clients typically see, and so on. In the meantime, I’m providing a few of our financial resources that can kick-start your investment journey.

• The Financial Freedom Academy
• Freedom Number Cheat Sheet
• 90-Day Financial Empowerment Bootcamp
• Morris Invest & SDIRA Program Overview

Before you go, take a moment to check out the following video titled – The Secret to Securing Your Wealth: Buy Hard Assets with a Self-Directed IRA:

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