Why Real Estate.
Here are several reasons that I have chosen real estate as my go to investment. It is not my only investment, but it is and will continue to be the bulk of my investment. I have also included the downsides for balance.
- I have a tangeable asset. Something I can touch and feel rather than paper equity.
- With the tangeable asset, I am in control and I choose how to deal with any issues. Not some CEO that may have other interests such as his own self interest.
- Relatively safe. Historically real estate has always performed reasonable well in a longer term in non singular-industry cities.
- Leverage. With the relative safety of the investment vehicle and the ease of leverage. I find it to be the best, safest and easiest investment vehicle to leverage.
- I have found my like minded network of people to help me along the way. I have advice from people who actually know what they are talking about from experience, not because their grandfather said it once in 1973.
- I can minimize the downsides listed below.
- It is replicable and repeatable. I can hold onto a property for a period of time and after some mortgage paydown, increase in rents and market appreciation, I can re-finance and then duplicate the situation and therefore duplicate my gains.
- I can help others invest so we both benefit from everything listed above.
- Bad tenants (not paying rent, damage, neighbor complaints)
- Market down turns (If the investment is not cashflowing and unable to ride out for the long term)
- Not a fast turnaround
- Not very liquid
- Difficult entry barriers
- Large sums of money for every investment
- You might get the urge and be able to retire early. Awe, shucks
I am trained in how to minimize any issues that come up from the “Downsides” column. With a cashflowing property, you can ride out any other issues that come up such as market corrections. I am in it for the long term and that will flatten pretty much any of the downsides.
I often hear “I don’t want to go and unclog a toilet at 2am”. Neither do I but once a year for $11k/year plus market appreciation I will. I would unclog ten, if I could for that price. I would hire someone to do it for me, pay them $3K/year and net the extra $8K and do it 100 times. Think about it.