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Consider Real Estate Rather Than Stocks & Bonds Viewed 75,107 timesBy: Chris Tew
Published for Providence, Utah (Area-Info.net Jun. 12, 2012)
The newspapers and TV talk alot about the stock market and the bond market. They talk less about the real estate market for investors. There are some great reasons to consider investing in real estate.
I like real estate because I know what I'm buying. Many stocks are much harder to get your arms around and to really know. A piece of real estate is fairly easy to get to know. It's bricks and mortar.
Real estate investments provide opportunities for leverage (see: http://www.area-info.net/articles/show.php?cty=Providence&st=Utah&article_id=1833). If the property appraises high enough you can cover 70% or more of the cost with a loan. This debt provides you with leverage that can multiply your return on investment.
An investment in an income property can provide some tax shelter as you can write off the depreciation on the building. There are some qualifying criteria that you must meet to do this, but for most people this is a real benefit.
Tenants pay your loan off with their rents and, thereby, build your equity. When have you ever taken out a loan and had someone else pay it off for you? Every month a portion of the income from rent goes towards the mortgage. A portion of that payment applies to principal. That principal that is paid off represents an increase in your net worth. With every payment your net worth grows.
The right property will earn enough revenue to pay operating expenses, the mortgage payment, and still throw off income and free cash flow for you, the investor.
Currently we are experiencing a residential real estate deflation. However, in the Multi-Family property market there exists the potential to enjoy appreciation. As more and more people lose their homes they need a place to live. This has driven the value of many multi-family properties up.
Over time these combined benefits from the right real estate investment can add up to a considerable value. Insurance companies, banks, and the wealthy have known for a very long time about the value of real estate investment. Not all real estate investments are created equal. You will want to do some research to understand the differences between investing in land, office, multi-family, storage, industrial, retail and other commercial real estate investments.
You can start out with a single rental house, a duplex, or a four-plex. You don't have to start big (see: http://www.area-info.net/articles/show.php?cty=Salt%20Lake%20City&st=Utah&article_id=1224). Crawl, walk, run. If you have the patience and the risk tolerance and the work ethic, real estate can be a great alternative to stocks and bonds. Be careful to learn and study about real estate investment before making theleap. Then do your homework (see: http://www.area-info.net/articles/show.php?cty=Salt%20Lake%20City&st=Utah&article_id=1354)
There are great opportunities in real estate. If you buy right you will find that not only will real estate help you to keep your net worth in tact, it will also help you to add to it.
Investing in stocks, real estate, and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I promote precious metals through American Gold Reserve. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.
Chris Tew received his degree from BYU. He has worked for over thirty years in promoting various disruptive medical and pharmaceutical technologies. He currently serves on the Board of Directors for Phoenix PharmaLabs, Inc, a pharmaceutical development company developing a family of safe narcotics. He is an active real estate investor and developer. Chris is the owner of Multi-Channel Marketing, LLC, a consulting firm specializing in revenue improvement.
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