[Editor] Our featured partner for this position is Trion Properties, a private equity investment firm focused on maximizing investor returns by increasing net operating profit over the holding period. Enjoy!
With so many different investment opportunities, a lot of people wonder if real estate is Yes, really Well worth the effort. I hear it all the time: “If I can invest 7-10% a year in index funds, why should I invest in real estate at all?”
It’s a legitimate question, and it usually turns into a discussion between stocks and real estate. But that’s not where this post will go. Personally, I think there’s a place for both, but I’ve invested 75-80% of my net worth in real estate.
I know it can feel like there is a lot to learn when it comes to real estate investing. However, generating monthly passive cash flow (which can buy back time for you) always requires an upfront investment of time, energy, or money. Maybe all three.
But once you get started, the investment is definitely worth it.
Passive income is worth it
What is your ultimate goal? Is it to sacrifice 20-30 years to hopefully enjoy the next 20-30 years? When I speak to a lot of doctors this is the mindset.
Or do you want to create your ideal life now and enjoy the best that life has to offer at one point in time?
If your goal is the latter, I believe the only way to make this possible is to create passive non-lottery income streams.
Real estate investments are one of the best ways to create these passive streams of income. Sure, I invested some time to make this happen, but that time is far outweighed by the return on my investments.
Passive income has absolutely allowed me to regain control of my time.
It also gives me and my family a security that my career in medicine cannot offer. Things happen and nothing in life is ever guaranteed.
Any of our circumstances could change in the blink of an eye, and having additional streams of income given that knowledge gives me peace of mind. I know that if for any reason things were to change drastically in my life, I could still take care of my family.
Real estate investment doesn’t always mean being a landlord
So I know what you’re thinking, I don’t want to get into the double-ts of real estate that seem to consume time and energy – toilets and tenants.
Well, if, like me, you think your time is too valuable to spend 24/7 answering tenants’ calls, there are plenty of real estate investments that don’t require you to be a landlord.
These options are:
- Real estate
- To name a few …
That’s why real estate is certainly It is worth it
There are several ways to make money
When real estate naysayers cite returns, they usually only consider part of the potential returns – price increases. In reality, there are several ways that real estate investors make money and why you can vastly multiply your returns.
Appreciation – There aren’t many things we’ll buy in our lifetime that are likely to increase in value as long as we own them, as long as we make a solid investment. Think about it. You are buying a car and its value has been seared tremendously the second you drive out of the parking lot. This is not the case with real estate. As long as you take the time to examine a business, property, and market well, the odds of moving forward are in your favor.
Cash Flow – In addition to the property’s increasing value over time, due to the nature of real estate ownership, whether through direct ownership or by passive investment in a syndication or fund, the end product is usually a monthly or quarterly cash flow. It is this cash flow that enables you to choose how you want to live your life. This is what another source of income can do for you.
Tax Benefits – Quickly, you’d rather pay a dollar less in taxes or earn an extra dollar in returns. Well, depending on how you are taxed for those returns, it may be better to save on those taxes in the end. Real estate investments can be one of the best ways to invest in a tax efficient way. Just ask any real estate investor who has managed to defer paying taxes and still receive monthly cash flow.
It can be something You Need to be
Versatility is one of the best aspects of investing in real estate. You don’t have to be the landlady on TV showing up with her tool kit in the middle of the night to fix the pipes. Your investment of time and energy is entirely up to you and you can customize this by managing your properties and / or investing in properties in different ways.
Suppose you want to invest in real estate but don’t feel like being a landlord. You may not want to be responsible for a property or any of the decisions that come with owning a property. Syndication or a REIT could be the right choice for you.
You may be okay with being a landlord, but it’s not worth worrying about all the “landlord things”. You can hire a property manager.
The many ways to invest in real estate investments mean that you can be as practical or practical as you want. You can go big and make a big investment in an entire property, or you can dip your little toe in the pool through crowdfunding or syndication and see how it feels to you first. There are so many ways to tailor your investment strategy to suit your needs.
You can learn at your own pace
One of the best things about real estate investing is that you don’t need a college degree to get the job done, and there is a ton of information to absorb at your own pace.
There are so many amazing resources out there including books, conferences, and courses (like our very own Passive Real Estate Academy). There are books and websites out there to help people learn all about real estate investing so that they can create passive streams of income that will enable them to live life the way they always dreamed it would be.
I will say that the best investment you have ever made is to educate yourself and invest well. You want to make sure you know how to do proper due diligence before investing your hard earned money.
Successful real estate investment also requires ongoing education as the market is constantly changing and any new property or deal should be carefully considered. Fortunately, there are so many networking opportunities such as conferences and Online groups where to find support and ask questions to build your real estate knowledge base.
So is it worth it?
Is it worth the time and money and effort and risk? If you want to create a passive income that can have an impact on the way you live today … absolutely.