When you go to your 9-5 job, you’re trading your hours for dollars. Your paycheck is a direct reflection of how many hours you work. But when you invest in real estate, you’re able to bring in four different streams of income on a monthly basis. This is what makes real estate the best investment vehicle for building wealth.
On this episode of Investing in Real Estate, I’m sharing the four streams of income you can earn as a real estate investor. You’ll learn about appreciation, cash flow, principle reduction, and so much more!
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With real estate investing, you can protect your dollars from inflation through appreciation. Real estate naturally grows in value (or appreciates) over time. As a long-term real estate investor, appreciation is incredibly powerful because it allows you to slowly and steadily build your net worth over time.
My favorite CPA Tom Wheelwright refers to depreciation as “the magic deduction.” Utilizing depreciation on your taxes allows you to keep more of your money in your pocket. Even better, you can take a deduction not only for the money you’ve invested in your rental property, but also the money the bank has invested. There’s no other asset type that allows you to maximize taxes in this way.
One of my favorite benefits of real estate is the amount of control you’re able to have. Real estate doesn’t diminish in value when the stock market swings. In fact, your tenant is helping you pay down the mortgage on your property every single month, helping you build equity and reducing your overall debt.
Here’s what I love about real estate: you can look at a home and the metrics in a market yourself. There’s no telling how a stock might perform, but when you analyze a real estate market, it’s easy to predict what types of tenants you might have or how long they will stay in your rental.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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