- Cashflow. Cash is king as they say. Assuming you’re investing the way we invest and teach, you’ll structure the deal and buy your property at prices that provide you with the benefit of a positive flow of cash. Having a steady stream of income coming into your pocket each month from your real estate investments brings great peace of mind. Compare and contrast this with investing in the stock market, where the most you might hope for are the occasional dividends (which average between 1-5% for the S&P 500).
- Leverage. When you invest in real estate, you’re typically able to control an asset worth significantly more than the amount of money you’re investing out of pocket. Whether it’s a minimum down payment of 5-25%, or an option fee for even less, you’re in a better position to leverage a small amount of capital to obtain a significantly larger number of assets, with and through leverage. Leverage that is more easily obtained from banks and investors, who favor real estate, than what you can likely obtain by investing in the stock market.
- Control. The reason banks and investors like real estate as an investment so much more than other asset classes, like stocks and bonds, is because you have better control over it. You can redo the landscaping, add a garage, rezone it, improve it in any way that makes sense. Because you have control, you have the power to make whatever decisions you deem best to maximize the underlying value. When you invest in the stock market, of course, you have little control over what decisions managers make that impact the value of your stock.
Never Fall in Love with a Deal
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