What Makes Real Estate Such a Good Investment?

Posted by Chris Clothier on Sun, Nov 13, 2016

realestateinvestment-positivecashflow.jpgIn the world of investment, there are a lot of options. Stocks, bonds, gold, gas, technology. There are a million ideas, products, assets, and companies all vying for the attention of investors looking to capitalize on the next big thing, or just on something that’s worth something. Something reliable and time-tested.

Real estate definitely falls into the latter: it’s one of the oldest investments out there. Even just being a homeowner is considered an investment in our culture. It’s a mark of “making it,” even today.

But why, above gold, above stocks, above all of the things we can invest our time, money, and futures into, why is real estate considered the best? What makes it such a good investment? For someone looking for a solid financial future, why should you choose to invest in real estate over anything else?

5 Things That Make Real Estate the Top Way to Invest

1. Leverage

One of the biggest advantages to real estate investment is that of leverage. Because you can borrow to buy, usually with a 20% down payment, you can reach much higher for properties that you wouldn’t be able to buy with cash alone. That allows you to hit above your weight class, compared to other investments. Leverage can be a powerful tool—not just with banks, but private money lenders, too. The less you have to use your own money, the better.

2. Scalability

Real estate investment, particularly turnkey investments, are passive. That, combined with the leverage you can build up means that scaling can happen relatively quickly. Investors can build up their portfolio in multiple markets, mitigating risk, and increase their streams of cash flow across multiple properties. Because investors don’t have to actively manage their properties and it can be such a passive investment, scaling at higher volumes is possible!

3. Tried and True

Real estate investment is one of the oldest kinds of investments. It’s not a startup venture. It really doesn’t have anything to prove! Pretty much everything that’s happening has been done. Even new things are just twists on the old. Real estate investment is, in a nutshell, a tried and true investment. New investors have a wealth of information to draw on. They can go back and learn from the mistakes and successes of the masters. There have been volumes written on the subject. There’s no reinventing the wheel, no trailblazing, no huge unseen, unknown risks.

It’s already been worked out and proven. That’s why real estate does so well for so many people!

4. There’s a Niche for Everyone

Unlike many other investments, real estate investment is a customizable experience. You can decide how hands-on or hands-off you want to be on a broad scale, but you can also determine what kind of real estate you want to invest in. That means answering questions like residential or commercial and single-family or multifamily and what markets do I want to invest in? There are vacation homes, high rises, bungalows, college towns, duplexes, condominiums, office buildings, and more! There turnkey, there’s land development, there’s flipping…

There are hundreds of ways to invest in real estate! You can find your niche. Something that excites you and something you find fulfilling. Unlike other investments, there are a lot of different ways to go about reaching your goals.

5. Freedom to Invest How You Want

Speaking of different ways to go about things, one of the distinct advantages of real estate investment is just how self-directed it all is. Other investments will have you just throw your money into the ring and hope for a payout. With real estate investment, you are active in determining your future! Due diligence puts the decisions in your hands—you aren’t at the mercy of someone else calling the shots with your money.

Does that make it risky? Sometimes. But it also makes it that much more rewarding when you can invest your money with transparency and total control.

When it comes to real estate investment, there is absolutely risk. It’s not a sure thing—no investment is. But time and time again, real estate investment has proven itself to be one of the best ways to secure a strong financial footing for the future.

If you’ve ever wanted to invest in real estate, you can get started today in some of the country’s best markets:

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