Real Estate can have several advantages over many other investments such as stocks, bonds, CDs, and mutual funds. A few advantages include:
- Passive Income – Holding Real Estate as rental properties generates income each month the property is occupied by a good tenant. If a professional property management is in place, that income is considered Passive Income, which is taxed at a lower rate than “active” or “earned” income.
- Inflationary Hedge – Real estate investments have traditionally been a terrific inflation hedge to protect against a loss in purchasing power of the dollar.
- Stability – The stock market is more volatile, and the value of a mutual fund can change significantly over a relatively short period of time. Investing in rental Real Estate is a long term pursuit of wealth through the generation of monthly cash flow and steadily increasing values while maintaining stability if purchased correctly, regardless of “boom and bust” cycles.
- Control – Real Estate Investors have direct control over the decisions which govern the state of affairs regarding their properties. Investors in stocks and mutual funds are subjected to daily market whims as well as foreign and domestic economic turbulence – governed primarily by company directors, fund managers, bureaucrats, and central banks
- Leverage – Real Estate is one of the only investments where people are able to borrow money specifically for purchasing. A real estate investor can borrow a significant portion of the cost of a property. Not only that, people are also able to refinance better terms whenever interest rates become more favorable.