Why buying an investment property can help you retire younger, and richer!

By
Real Estate Broker/Owner with BIG Realty

With the turbulence of the stock market, people are interested in a solid safer growth of money rather than slow growth or high risk fast growth. Instead of saving all your income and using it for your post-retirement life, you can invest your income in a judicious manner to multiply it and earn much more from it. Buying investment properties is a hot option for that kind of a plan. Investment property is a property that is not occupied by the owner, usually purchased specifically to generate profit through rental income or capital gains. There are lots of convincing reasons for you to realize the benefits of investment properties.

Buying a property investment is where you make a small investment into a property, typically one still being built, which is known as an off plan property and then go on to rent it out to get good dividends, and then once raised in price, you can sell it to gain a profit or to purchase more property. 

No investment today offers the stability and simplicity along with the excellent returns offered by investing in property. The stock market can offer high returns, but it is a very volatile and unsteady place. This is especially true for non-professionals and there are so many external factors that can effect your financial investment. Not to mention the fact that the major stock markets have generally been underperforming and property investment stands head and shoulders above other forms of investments.  There are a lot of options when it comes to investing in property, as you can choose the option of investing in commercial property such as industrial/offices, hotels, apartments, retail shops and the list goes on. It can be a residential property; you can buy it and sell it at a higher rate for capital gain or rent it for regular dividends. 

Property is now the wise investor’s weapon of choice. No other investment allows you to purchase with other people's money (Equity partners) and then pay this back with other people's money (the rental income from tenants), and hand off the day to day operations to a qualified property management company.  Also, if you own a property, you can release equity against that property. Although there is no guarantee that states that your property will increase in value year on year, it is accepted that a well maintained property in a reasonable area will appreciate in value, because as rents rise, so does the value of that property to an investor who may want to purchase it.

Here are some points which are sure to make you flabbergasted about the profits of investment properties:

50% of individuals mentioned on The Times Rich List made their money through investing in Property.

A property worth just $15,000 just 30 years ago would be today worth around $300,000.

Equities or Stocks can be volatile, as with the .com crash, whereas a property is historically stable.

It is well documented that on average the value of a property doubles every 7 years.

As a Main Line REALTOR, I have had the opportunity of showing clients the benefit of investing in a property.  I have taught them the value of working with a property management company and that it is imperative that you remove the emotion from the purchase and look at the property as an investment vehicle.  The common misconception is that property owners are landlords, and that is simply not the case for many educated investors who put together a solid management team.

 

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Rainer
178,611
Judi Boad
SOLUTIONS REAL ESTATE - Scottsdale, AZ

Hi Christopher,

All great points for new investors to take the leap!

Best regards,

 

Jan 20, 2010 01:56 AM #1
Rainmaker
1,269,607
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

A good diversified real estate portfolio defies the stock market

Jan 20, 2010 08:44 AM #2
Rainmaker
254,487
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management

Investor should not ignore the fact that markets do deflate and prices do come down as they have in our market over the past 3 years.  Also, too much debt can sink a property during higher vacancies or big repairs.

I own rental property but rental ownership is not for everyone.

Jan 20, 2010 04:35 PM #3
Rainer
234,728
Diane Rice
Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL - Lansing, IL
SFR, SRES, CNC

Well written post!  Thanks for placing it in the Property Management group for our professionals! I have to agree with Robert - rental property ownership is not for everyone... with the exception of unless a professional property management company is used! 

Jan 22, 2010 06:43 AM #4
Ambassador
2,305,947
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

It is difficult for investors to know where to put their money these days.  It sounds like you've been able to off er advice to them about your local market.  Wishing you the best.

Mar 15, 2010 04:24 PM #5
Rainer
90,161
Phil Hillerman
Crye-Leike Realtors® - Rogers, AR
Crye-Leike Realtors®

Rental property is great when it is paid for.  It is when you are using other peoples money (OPM) that can end up biting a person in the behind.

Jun 15, 2012 04:22 AM #6
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Rainer
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Christopher Benedict

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