Real Estate Investor versus Private Money Mortgage Lender – Part 2

This is the second of six articles in a series to discuss the Pro’s and Con’s of Real Estate Investing and Private Money Mortgage Lending.

The series consists of
Part 1 – The Introduction
Part 2 – The Pro’s of Real Estate Investing
Part 3 – The Con’s of Real Estate Investing
Part 4 – The Pro’s of Private Money Mortgage Lending
Part 5 – The Con’s of Private Money Mortgage Lending
Part 6 – Putting it All Together

There are numerous Pro’s of Real Estate Investing. Some of the Pro’s are shared with the Pro’s of Private Money Mortgage Lending, and they include:

Business Tax Deductions – This Pro only applies if you establish a business to purchase Real Estate (which I recommend for many reasons). Consult with a certified CPA or tax attorney about business related tax deductions.

Income Source - If the property is rented and there is positive cash flow, you will receive a monthly income.

Passive Income - This Pro only applies to if a property management company manages all aspects of the rental property.

Several Pro’s of Real Estate Investing only apply to Real Estate Investing, and they include:

Property Tax Deductions - Tax Deductions related to property ownership are a huge Pro for Real Estate Investing. If your goal is to maximize tax deductions, then becoming a Real Estate Investor and acquiring Rental Properties is probably your best option. I am not a CPA or tax attorney, and I highly recommend you consult a certified CPA or tax attorney about all tax related questions before making a decision based on tax benefits.

Property Appreciation – Over the long run, real estate values have traditional increased; however, we have seen many real estate markets lose value over the last few years. If your goal is to invest for the long term, then Property Appreciation is still an attractive Pro for Real Estate Investing.

Long Term Wealth Generation – This Pro is tied into Property Appreciation and having your Rental Property mortgage paid by your tenants. Long Term Wealth Generation is my favorite Pro of Real Estate Investing.

Maintain Control of the Property – This Pro is typically for investors who prefer to actively control their money and investments.

Property Ownership – This Pro is tied into Property Tax Deductions and Maintain Control of the Property.

When compared with Parts 3, 4 and 5 of this article series, the Pro’s of Real Estate Investing seems to be easily outweighed; however, this might not be the case for you. Take me for example - I am a Real Estate Investor, and I love it. It works for me.

Is it right for you?

Only you can answer that question. If you have not done so, you need to answer the questions posed in Part 1 before you move onto Part 3.

The next article is Part 3 – The Con’s of Real Estate Investing.

Aaron