Whether it’s your first investment, or your 10th, we’ve got you covered. Our advice comes from personal experience taking risks with our own money. We’ve invested in both multi and single family properties. Currently we maintain and manage our own portfolio of rental properties.
We believe in real estate as an investment vehicle. Beyond our retail real estate experience working as Realtors®, our knowledge spans from wholesale, rehab costs, private money, and more.
8 WAYS REAL ESTATE IS YOUR SMARTEST INVESTMENT
One of the biggest benefits to income-producing real estate investments is that leases generally secure the assets. This provides a regular income stream that is significantly higher than the typical stock dividend yields.
USING LEVERAGE TO MULTIPLY ASSET VALUE
Another important characteristic of commercial real estate investing is the ability to place debt on the asset, which is several times the original equity. This allows you to buy more assets with less money and significantly multiply asset value and increase equity as the loans are paid down.
Low-cost debt leveraged to multiply cashflow
Placing “positive leverage” on an asset allows for investors to effectively increase positive cash flow from operations by borrowing money at a lower cost than the property pays out.
For example, if a property generating a 6 percent cash-on-cash return were to have debt placed on it at 4 percent, the investors would be paid 6 percent on the equity portion and approximately 2 percent on the money borrowed, thereby leveraging debt.
Hedge on inflation
For each dollar that is created, there is a corresponding liability. Real estate investments have historically shown the highest correlation to inflation when compared to other asset classes, such as the S&P 500, 10-year Treasury notes and corporate bonds.
As countries around the world continue to print money to spur economic growth, it is important to recognize the benefits of owning income-producing real estate as a hedge against inflation. Generally speaking, when inflation occurs, the price of real estate — particularly multi-tenant assets that have a high ratio of labor and replacement costs — will also rise.
Capitalize on the physical assets
Income-producing real estate is one of the few investment classes that, as a hard asset, has meaningful value. The property’s land has value, as does the structure itself, and the income it produces has value to future investors. Income-producing real estate investments do not have red and green days like the stock market does.
Maximizing tax benefits
The US Tax Code benefits real estate owners in a number of ways, including unlimited mortgage interest deductions and depreciation accelerations that can shield a portion of the positive cash flow generated and paid out to investors.
At the time of sale, IRS allows investors a 1031 provision, allowing investors to exchange into a like-kind instrument and defer all taxable gains into the future. (See your tax advisor for a full explanation.)
Asset value appreciation
Over time, more and more inflation has made it into the economy, drastically reducing purchasing power. However, income-producing real estate investments have historically provided excellent appreciation in value that have met and exceeded other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.
Feeling the pride of ownership
The right property in the right location with the right tenants and ownership mindset can produce a tremendous pride of ownership factor that is highest among all asset classes. Homeownership is out of reach for most people. Imagine owning thousands of multi-family housing units instead?
What strategy is right for you? Let’s find out!
READY TO PLAY A BIGGER GAME?
There are many investment strategies and objectives to consider when looking for an investment property:
• 1031 Tax Exchange
• Monthly Cashflow
We have extensive experience with all of the above, both from our own pocketbooks to representing hundreds of others in their investment pursuits. We’re long-term relationship people. Even if you are only beginning to think about buying, or if you’re ready to buy as soon as possible, let’s connect and get the dream started!