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Real Estate: Moneypete's two cents worth
Real Estate, what a great investment! The wealthy have invested in real estate down through the ages as the principle way of holding their wealth. Real estate holds value. The dollar is loosing value due to inflation. If you deposit one dollar into your savings account, it will loose its value right along with inflation when more money is printed. If you invest that same dollar in real estate, the price of your real estate will go up with inflation so your dollar has held value. That is just one reason why real estate is a great investment.
Passive income is another great reason. When you buy an investment property and have tenants pay rent, they are paying your mortgage for you. You must do your homework before buying a property to make sure you will have positive cash flow. Positive cash flow is having money left after all expenses are paid at the end of the month. That cash flow, plus the equity you are building each month, makes your real estate investment exciting. When your property is paid for you have lots of passive income each month to enjoy. Real estate is a great way to let your money work for you.
There are many wonderful books in the Moneypete book room for you to read about real estate investing. By increasing your knowledge about real estate you make your investing journey a lot easier, but there is no substitute for experience. You will find that things will happen as a real estate investor which will take you by surprise. I think that is why there is so much material to read about real estate investing. There are so many different and individual experiences to pass along. One fantastic book to read on real estate investing is the ABC’s of Real Estate Investing by Ken McElroy. Click here The ABC’s of Real Estate Investing. By Ken McElroy.
Ken is a member of Robert Kiyosaki’s “Rich Dad” team of advisors. He is an expert on property management and multi-unit properties. Good property management is the key to increasing your cash flow on your real estate investments. Multiple unit properties also increase your cash flow. A duplex costs about the same as a single family dwelling, but will sometimes bring in nearly twice as much rental income. The more units you have in your property, the more you will increase your cash flow.
We have mentioned that real estate investing is a business like any other entrepreneurial venture. Like any other business venture, applying good entrepreneurial and management principles will help you along the way. As the “E-Myth Revisited” tells you, your systems are the most integral part of a successful business. You can create systems as a landlord and property owner that will help your business run smoothly and effectively. Almost everything you read about real estate investing will tell you to just get started. That is the best advice you can get. When you buy the first property you sort of get it. You think to yourself, “I can do this! I could do this again!” Then, you do it again and get even more confidence. It all happens one day at a time and is very manageable if you look at it that way.
We have one final bit of advice to those wanting to get started investing in real estate. Come up with an investment plan and stick with it. Investing in anything takes a plan. Most people who have had financial problems investing in real estate have participated in get rich quick programs, or have tried to gather lots of properties with “no money down” techniques. Sometimes you might be able to use those techniques with success, but the answer lies in the word “investment.” How can you make an investment without anything to invest? Most of that kind of activity stems from an anxiousness for riches. Proverbs in the Old Testament says to not be weary for riches because the money will grow wings and fly away. Having a prudent plan will guard against moving too fast
