What you don't learn from your parents... life will teach you!

What you don't learn from your parents... life will teach you!

Like many of you, Mike and I had three "teachers"; Our parents, our schools and life. 

Over the years we have learned. Either by listening to (or watching)our parents, doing the assigned homework, or making those proverbial "mistakes" in life. Looking back, some of those "mistakes" were the best teachers of all.

When it came to investing (both our time and our money), we learned the hard way ... lots and lots of mistakes.

Today we can confidently say that buying Real Estate, and building a portfolio, is the best investment we ever made. Simply put, here is why (in our opinion):

1. Equity - Real Estate creates, and added together, increases net worth. If you are  careful about the Loan-to-Value ratio of your Real Estate portfolio, you should be able to weather any market swings. The market has historically always come back. You can still hold on to the equity and continue to increase your net worth.

2. Income - Real Estate can generate both active and passive income. As a Broker or Property Manager, you can generate active income through the fees you charge for these services. As a landlord, you can generate passive income from the rents collected, after expenses.

3. Appreciation -  Real Estate values do and will continue to go up. There is a limited supply of land on this planet, and even less supply of desirable land. Land, and housing, is not a fad, it never goes out of style and everyone needs a place to live. 

4. Depreciation - Although Real Estate values are actually increasing, the government says the property has a useful lifespan and therefore can depreciate in value, as a tax deduction over it's lifespan. In addition, the interest portion of the mortgage  can be claimed as a tax deduction. Working with a good CPA will uncover opportunities to write off the cash originally invested, and other tools to minimize tax liabilities.

5. Leverage - Real Estate is one of the few investment opportunities where other people (mainly banks) will loan you money to invest and build a Real Estate portfolio. Each wise investment will increase your net worth. You, the investor, control the decisions made about the investment, not some Board of Directors or Fund Director.

As I've mentioned in my last Blogs, I recently retired from the 9-to-5 Rat-Race. So why keep working as Real Estate agents? Because we enjoy it. We feel we have some experience with Real Estate that we want to share with others. It's a great way to meet new people and make new friends. AND we love helping people find their new home. Nothing compares to the excitement and joy of a new homeowner when we hand them the keys to their new home.

We would love to hear other opinions about Real Estate as an investment.... pros and cons!