The popularity of real estate investing surged following the housing market crash. Suddenly, the market was flooded with low-cost properties, and investors seized the opportunity. But it wasn’t just professional and industrial investors… Mom-and-pop investors also recognized the opportunity to earn extra income and build wealth through real estate.
When purchased properly, real estate is a stable, lucrative investment that can help you reach your investment goals. What’s more, real estate also allows for the long-term benefit of creating generation wealth—or the accumulation of money, cash flow, and assets (such as property) that can be passed down to future generations. Through cash flow, appreciation, leverage, and more, real estate provides many avenues for building generational wealth.
With real estate, cash flow is king. Cash flow is the money left from the rent after the mortgage and expenses have been paid. Unlike other investments, such as stocks, bonds, and CDs, where quick returns are rare or nonexistent, the returns from a real estate investment are immediate and steady, while also helping to build wealth over time.
Appreciation is also a very lucrative benefit of real estate. Just as the stock market fluctuates, the real estate market is subject to similar ups and downs, which is why you should consider cash flow first. However, when looked at historically and over time, real estate values have appreciated at a great, steady rate.
Investors also maximize the power of their investment dollars by leveraging their money. Generally speaking, leverage is any technique that increases gains. In real estate, an investor leverages investment dollars as a down payment for a property, so as the property appreciates, money is earned on the full value of the property, not just the original payment.
Considering all the advantages, real estate is one of the best investment vehicles for building generational wealth. However, when considering investing in real estate, it is crucial that you partner with an agent who has the knowledge and tools to find the property that suits your specific needs and goals. Certified Investor Agent Specialist® (CIAS) agents are trained in serving investor needs and can help you find your next investment property.
By investing carefully and for the long-term, you can build a financial legacy and ensure that future generations of your family have secure, comfortable futures and increased opportunities available to them.