Why Be a Real Estate Investor?
“90% of all tycoons become so through owning land. Andrew Carnegie (Real Estate Investor)
Why would it be a good idea for you to turn into a land speculator?
There are, after all, many different ways to make more money in life.
Statistics released by the foremost authority on personal finance.
the Internal Revenue Service, revealed that the majority of personal wealth of US taxpayers is held in real estate.
Has the thought of running your own business, being your own boss, or calling your own shots ever crossed your mind?
The IRS further points out that the most likely way for anyone to become independently wealthy in one lifetime is through entrepreneurship and through owning your own business.
Opportunity seekers can spend countless hours researching the best paths for making money.
If you are one of those people, you can stop your research.
Becoming a Real Estate Investor provides you with the highest probability for economic prosperity.
One of the reasons why real estate is so good forn making money is that it is the IDEAL investment.
Real estate can provide you with steady, tax advantaged ncome, often referred to as cash flow.
You can rent real estate to a tenant.
Overtime, rental payments from that tenant can payoff your mortgage, cover any property management and maintenance costs, and can still leave enough for you to have a steady income as well.
Although there are other investments that provide steady income, such as bonds, and stocks that offer dividends, real estate typically provides a larger amount of income than bond coupon payments or stock dividends and is more tax advantaged.
This term is used for tax purposes and is of great value to real estate investors.
To illustrate the concept of depreciation, think of the life span of a tshirt.
After being worn and washed, over the course of several years, it deteriorates.
Although you may have t-shirts that have lasted decades, the average tshirt probably lasts a couple of years.
For determining how much you will pay in taxes on your real estate investment.
the IRS has recognized that the structure of a property (not the land, just the structure)
deteriorates too, and they set the life span of a residential rental property at 27 ½ years.
Does a well maintained house simply crumble to the ground after 27 ½ years? Of course not.
But for determining how much you will be paying the IRS, whatever you bought the property for (minus the land), can be depreciated over 27 ½ years.
Example : Real Estate Investor
You buy a $100,000 single family home and the land is worth $10,000.
That means, for tax purposes, your tax basis (what you bought the structure for) is $90,000.
When you divide $90,000 by 27 ½ years, you get a tax deduction of $3,272.73 per year for depreciation.
If that same single family home has a positive cash flow of $270 per month, or $3,000 per year, you get to add an additional expense to that property in the form of depreciation for $3,240 and therefore.
in this example, you don’t have to pay any income taxes on the $270 per month you were bringing in!
This is how real estate rental income is so incredibly tax advantaged.
With all the tax increases and unfair taxing rules, why would the government continue to allow this deduction for real estate investors?
The government is giving people an incentive to be real estate investor.
They want you to be a real estate investor.
When you buy real estate, you have the opportunity to purchase property at a price lower than its market value.
When you get a good deal, the difference between what you bought it for and what it is worth is called equity.
The well-known axiom, “In land, you profit when you purchase,” applies here.
When you buy a property well below market value, you instantly get equity.
By comparison, publically traded stocks are purchased at market value.
The market may be undervaluing or overvaluing the stock at the time of purchase.
but either way, at the exact moment a stock is purchased, the price paid is what the market will pay for it.
With real estate, however, you can buy a property well below market value and literally turn around and resell that same property for tens of thousands of dollars more a few moments later.
We do this quite often, actually.
Appréciation : Real Estate Investor
Over the course of the last hundred years, studies have shown that overall, residential real estate has kept pace with inflation.
In some areas, residential property values have even appreciated above and beyond inflation.
For wise and educated investors, appreciation is an added financial bonus to being a real estate owner, not the reason to buy property.
Since predicting the future has proved to be a difficult task, buying real estate based on the other factors outlined earlier is a far better decision then betting on if or when a property will appreciate.
You can possibly profit by land gratefulness on the off chance that you possess it.
Therefore, owning as much real estate as you can, as wisely as you can, can give you the best probability of gaining from appreciation. And if it comes your way, be appreciative.
When you get cash to purchase land, you are utilizing influence.
The people and companies of this world that control the majority of the money, such as banks, mortgage companies, hedge funds, mutual funds, pension funds, insurance companies and private individuals, want to lend you money to buy real estate.
That’s how many of them make their money, by lending money to you on real estate.
There are all different types of real estate lenders, from those that require good credit.
lots of money and a great loan application all the way to those who simply lend money on real estate based on the market value of the property.
If, for example, you buy a $100,000 property and you put down $10,000, you are using leverage to own a $100,000 asset with only $10,000 of your own money.
The ability to borrow money to buy real estate is the use of leverage and it allows you to buy more real estate with less money.
Real estate truly is the IDEAL investment.
That is just one of the many reasons why real estate is so attractive.
Here are several other reasons why real estate investing may be exactly what you have been looking for in a business opportunity or investment vehicle.
Real estate investing doesn’t discriminate based on your age, background or ethnicity.
You’re not too old or too young (although you must be 18 years old to own property.)
Regardless of where you come from, how old you are, or what nationality you are, you’re on a level playing field with everyone else.
Real estate investing requires no resume.
It doesn’t matter where you went to school, how many jobs you have had, the lack of professional skills you may have, or the color and texture of your resume paper.
Successful investors come from all walks of life.
You’re not inferior if you lack higher levels of education.
My mentor never went to college.
If you have a college or post college degree, that’s not a handicap either.
Everyone is on a level playing field, regardless of what you’re resume looks like.
Buying and selling real estate does not always involve the use of your cash or credit.
There are several strategies that you will learn that allow you to not only make fast money.
But also own real estate for long term wealth accumulation without having to put down any cash or borrow any money.
Certainly, when an investor has cash and/or good credit.
they will have more ways to be Real Estate Investor, but as you learned from my personal story, it is possible for you to get started from absolute economic ground zero.
Real estate is a basic human necessity.
As the saying goes, “Everyone needs a roof over their head.”
Living quarters come in all shapes and sizes too, from single family homes, to duplexes, condos, townhomes, apartments, co-ops, and much more.
Real Estate Investor, unlike many other businesses and investments, provides something that absolutely everyone needs, shelter.
Real estate is everywhere, including where you live.
A common misconception beginners have is, “Real estate investing doesn’t work in my area.”
Non-sense! There is opportunity right under your nose.
There are diamonds in your own backyard.
In fact, once you learn and apply the techniques and strategies for Real Estate Investor .
you will be shocked at how much money you can make with real estate right within your own community.
Believe it or not, you have been driving past real estate opportunities everyday.
Real estate investor opportunities are everywhere, including where you live.