2 Power Moves That Raise Your Net Worth in Real Estate Investment

Posted by Chris Clothier on Fri, May 18, 2018

Who doesn’t want a higher net worth? Whether you’re new to the investing game or you’ve been in it for years, there’s nothing quite as exciting as knowing that you’re building up your long-term investment portfolio and securing your financial future.

Sometimes our portfolio growth can just seem slow or stagnant. As real estate investors, we’re not always doing all that we can to grow our net worth efficiently and effectively. It’s important that even as passive real estate investors we’re actively pursuing our own success!

While there are a thousand different schools of thought and strategies to follow when it comes to investing in real estate, there are two things every real estate investor should be doing for the sake of growing their net worth.

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Topics: real estate investment properties, net worth

Real Estate Investment Properties: A Market Alternative

Posted by Chris Clothier on Sat, Feb 4, 2012

Recognizing market shifts

Imagine if there was a market shift in the technology sector that caused all technology stocks to temporarily drop. However, looking at the role technology plays in our modern lives, one could be confident that the prices would soon rebound. The situation just described is an example of undervaluation; or discounted property. It is analogous to the current state of the real estate property market in the United State.

Using Leverage in Property Investment

One of the most underestimated principles in property investment is that of leverage. A brilliantly simple way of understanding leverage was put forth by Eugene F. Brigham in Fundamentals of Financial Management (1995): "In finance, leverage is a general term for any technique to multiply gains and losses." This applies to Property Investment via the fixed asset nature of property. Lazymanandmoney.comcites one example of how this can be accomplished: "If one were to lock in the gains of real estate at year 8 (around $125K), the person could use the gains to buy three more $200K homes, getting more and more leverage." This is a very simple, yet effective approach to gaining leverage using real estate as a fixed asset.

Transparency in Real Estate vs. the Stock Market

One common observation in the last few years has been one that takes issue with transparency. Until recently, the commonly held knowledge was that stock investments were more transparent than other investment opportunities. There were several reasons for this belief: finance professionals such as traders were closely following the company practices, independent audits by accounting firms verified corporate claims, and the whole market is federally regulated. Once these protections were skirted by WorldCom, Tyco and Enron, transparency began to be examined more closely. Investment properties began to be seen as a stronger investment within the context of transparency. CNN Moneyput it this way: "Real estate, on the other hand, is tangible. You can check the basement, consult a termite inspector and make sure that nobody is building a pig farm next door....You can verify the property taxes, the cost of utilities and everything else about the property."

Turnkey Property Investment

Lastly is the question of ease of investment. There are companies everywhere willing and capable of helping investors choose, purchase, and manage their stock investments. A widely held misconception is that there aren't investment property companies offering similar services. Memphis Invest provides a variety of such services. Memphis Invest assists investors in identifying and acquiring undervalued properties, leveraging existing properties and holdings, and will ensure all the knowable factors are available to the investor in a clear, concise way. Image credit: Bubbels   

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Topics: Memphis real estate, real estate investment properties, Investing Alternatives