Real Estate Investment

Is Real Estate Investment Worthy?

Most entrepreneurs earn their living through their primary business, while others look for real estate property deals to earn passive income.

Starting business using traditional vehicles like 401k and IRA are great as they’re the foundations for a long term profits. But we think that entrepreneurs should also explore real estate market and use it as a key component of their investment portfolio. While many investors may throw away this concept because of the recent downturn in the real estate market, but here are few reasons that should make you think otherwise.

5 reasons why real estate investment is worthy:

1. Get full control. Getting an initial down payment from lender to purchase an investment property is cheap, fast, and easy. As an investor, you can also leverage your capital and increase your overall ROI.

2. Never pay tax on your cash flow. As you leverage your capital, you reduce mortgage rate. This way, you will never have to pay taxes on your cash flow.

3. Tax-free growth. Purchasing a property depending on its high price will not make you rich. A positive cash flow is also very important. Use strategies that will minimize your liability. Consider investing in charitable trust, 1031 exchange, or even an installment sale to depreciate the tax cuts.

4. Cut down tax. Rental properties allow investors to deduct their personal expenses as valid business expenses. For example, every trip you make to visit your property is a business expense. Similarly, every payment you make to your family members who manage the property for you are valid business expenses too. So when you deduce these expenses as business expenses, you’ll automatically increase the tax benefits.

5. Real estate is a long-term wealth building plan. As small business owners, many Americans do NOT have a habit of depositing their monthly income into their SEP, IRA, or even 401. As a result, they never build wealth over time.

Purchasing rental property is a long term commitment. One day, you’ll pat yourself for sticking up with your investment plan, especially when you start building cash flow and significant amount of wealth. That is why many entrepreneurs set aside part of their profits from the business to invest in real estate rental property.

Looking at this fact and the entire list above, we would encourage our clients to purchase a rental property every year. In fact, at the time of this writing, almost 90% of our clients are already making huge ROI from rental properties.

Remember that most of us will never make it BIG overnight. It requires a long-term vision, sound investing plan, and a wide range of portfolio to build significant amount of wealth. Real estate should be one of them in your list.

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Need assistance to know whether real estate investment is worthy of your time? Give us a call at 214-810-4DFW or email us at info@investmentclub360.com