Making Money Investing in Real Estate
Just as in any investment, including real estate investments, we invest money in hopes of earning greater wealth from the investment. I reference real estate investments because there's 4 excellent reason why the ownership of income property makes a solid investment.
Positive Cash Flow~ Positive cash is the bottom line in dollars and cents. All the money going out verses all the money coming in. "If" the investment takes in more money than the expenses going out then the investment is a cash positive investment. Cash is king when it comes to investments, investing in real estate with a positive cash flow ensure your investment adds to your overall wealth.
Appreciation~ Overtime you will owe less, and the investment value will rise. It’s not a get rich quick mentality, and "if" you hold on to it long enough your investment will appreciate.
Principal Loan Reduction~ With each and every passing year, something in a monetarily way advantageously occurs to your real estate investment. Most all loans these days are amortizing mortgage, which means significant principle reduction, i.e., the less you owe the lender. With an amortized mortgage the longer you own the property the less money you owe on it, and year after year that really adds to your overall wealth.
Income Tax Credits~ Of course, always consult with your local tax pro before banking on any tax credits. Although, “potentially” owning income property may encounter beneficial income tax credits.
If your investment does NOT bring in a positive cash return, things can ugly real quick, and there’s a good chance you’ll likely lose your investment to the bank. On the other hand; “positive cash flow” is one of the most vital aspects when it comes to investment property and long term financial prosperity. A positive cash flowing investment pays the bills, it accumulates & earns you interest in your bank account, and it puts money in your hands.
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