You might be wondering why I’m talking about investment real estate versus real estate investment. What does this mean to you? How does investment real estate fit into your life?
- A Strong Financial Foundation
- Unlocking Sustainable Wealth
- Creating a Living Legacy
Strong Financial Foundation
Think of investment first and real estate as the vehicle second.
Investment real estate is a way of saving, sharing, securing, investing and getting a return on capital; all these words are stable. Unlike the words attributed to most investments: speculation, outlay, deal, and venture capital – words that carry a connotation of risk.
Generation Xers and Millenials don’t let history repeat itself. Don’t look back on your financial foundation and ask why did I not learn from watching my folks? I am not critical of your parents; as Xers and Millenials you have the know how to access some incredible advice driven by technology. Let’s start building on this investment real estate knowledge.
Take the wealth of information created in our technological world, and implement an action plan building on your investment real estate knowledge. The return on this education is the best investment one can make.
Are you ready to jump into the driver’s seat and take control of your financial journey?
The 3 Main Drivers of Investment Real Estate
- Positive Cash Flow
- Appreciating Asset
- Mortgage Paydown
Having three primary drivers to earn returns on your investment is a significant reason investment real estate outperforms most investment vehicles. I challenge you to look at most financial vehicles; only a few even have two elements to earning returns.
It is nice to have the security of three drivers through investment real estate, but you only need one of the three primary investment real estate drivers working for you to beat the stock market, mutual funds, ETFs, and a multitude of other investment vehicles.
With Investment Real Estate you don’t need appreciation every year (cannot spend unless you sell the asset), and positive cash flow is not necessary if you break even on cash flow against all expenses including a contingency fund.
The real return starts the moment your tenant makes the first rent payment and your start making your mortgage payment; paying off the principal.
Earlier I challenged you to review your return on your initial investment (down payment on your principal residence); this is where the real magic begins. Remember your performance is on your cash input to purchase the investment property. Your initial investment is between 5% and 20% of the total cost of the ownership. The financial institution what lends you the funds to purchase the property puts up the majority of the investment. Your tenant the moment they start paying you rent are paying down your mortgage. The money you begin to see as a return on principal paydown is a calculation against your investment as a return, not the financial institution you used. Don’t feel sorry for the lender they are not going to suffer in this deal.
Do the calculation, and you will see that the performance of your downpayment funds is outperforming most of today’s stock markets, mutual funds, EFTs and many other investments.
A Sense of Guilt – Almost
“Don’t wait to buy investment real estate, buy investment real estate and wait.”
The rate of return on investment real estate compounds faster each year than most investments and in the years where you get appreciation and positive cash flow; you as an investor almost feel guilty with such high returns.
Yes, I said almost.
Are you ready to use investment real estate to fill your life’s vault?
Thank you for taking the only asset you can never get back your time and joining me on living my mantra:
” Prosperity for all aspects of your life forever.”