6 Reasons Why Real Estate Is a Great Investment

By
Real Estate Agent with AZuRE Team - Realty ONE Group
http://activerain.com/droplet/59KT

Right. The stock market is doing great, no wait, spectacular! And has done great ever since our last election. And so is our economy. 

So you invested in the stock market. But real estate is still an awesome and great investment. And I know a thing or two about it as my clients have reaped the benefits of making money in real estate. 

Real estate is a great investment for many reasons. You can enjoy an excellent rate of returns, amazing tax advantages and leverage real estate to build your wealth. Here are the top five reasons why real estate is a great investment.

Overall - REAL ESTATE PROVIDES BETTER RETURNS THAN THE STOCK MARKET WITHOUT AS MUCH VOLATILITY - you know the ups and downs. Real estate always has a long term perspective. Historically in real estate, your risk of loss is minimized by the length of time you hold on to your property. When the market improves, so does the value of your home, and as a result, you build equity. The risk never changes in the stock market and there are numerous factors beyond your control that can negatively impact your investment. Real estate gives you more control of your investment because your property is a tangible asset that you can leverage to capitalize on numerous revenue streams (rental income for example), while enjoying capital appreciation.

With real estate, it has an actual physical address, you can drive to it, look at it, touch it - it's real! A stock on a company, not quite the same. Know what I mean?

REAL ESTATE HAS A HIGH TANGIBLE ASSET VALUE. There will always be value in your land, and value in your home. Its always there. Other investments can leave you with little to no tangible asset value such as a stock which can dip to zero, or a new car which decreases in value over time. Homeowners insurance will protect your investment in real estate, so be sure to get the best policy available so your asset is protected in the worst-case scenario. A house can be destroyed, but never the land. There is always a residual value.

REAL ESTATE VALUES WILL ALWAYS INCREASE OVER TIME. History continues to prove that the longer you hold onto your real estate, the more money you will make. The housing market has always recovered from past bubbles that caused home appreciation to slip, and for those who held on to their investments during those uncertain times, prices have returned to normal, and appreciation is back on track. Now, real estate investors in the top performing markets are enjoying a windfall. In fact, this past year, every state in the nation had a positive appreciation, and many of my clients in Phoenix Scottsdale market have made absolutyely great money! I mean, GREAT MONEY.

Ok, you invest in securities, the stock market and other forms of investsments. That's great! AN INVESTMENT IN REAL ESTATE CAN ALSO DIVERSIFY YOUR PORTFOLIO. If you've ever spoken to a financial planner about investing, then you are very aware of the importance of diversification. When you diversify your portfolio, you spread out the risk. Real estate will always serve as a safe tangible asset to mitigate the risk in your portfolio. Many have amassed wealth by solely investing in real estate. But sometimes, many investment planners and wealth managers don't understand real estate or are unfamiliar with real estate - and that's a problem.

REAL ESTATE INVESTING COMES WITH NUMEROUS TAX BENEFITS. You can get tax deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance and depreciation (even if the property gains value) and other benefits. The end of the year is a very busy time for real estate because people want to take advantage of the numerous tax benefits before the end of the year!

An investment in real estate is not only a safe financial investment, it is also an investment that can provide years of fun, happiness and priceless memories that will last a lifetime.

LAST BUT NOT LEAST, try this test. Go to your favorite bank. Tell them you want to borrow $400,000 to invest in the stock market, and that you'll only put 10% down on the total investment amount. And without posting a security of any sort. When your banker has finally stopped rolling on the floor laughing, then say that you would like to borrow $400,000 with a 10% down to purchase real estate. Then you'll be given the immediate red carpet VIP treatment with a serious look. Get the idea? THAT'S REAL ESTATE.

Posted by

 

richard bazinet pllc

AZuRE Team @ REALTY ONE GROUP

REALTOR® /MBA, ABR, CRS 

(m) 602.300.7007 |(o) 480-315-1240

richard@azurerealtyteam.com |www.azurerealtyteam.com |blog at Here!

7975 N Hayden Rd., A-101   SCOTTSDALE, AZ 85258 

 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Debbie Reynolds 02/06/2018 09:30 PM
Topic:
Real Estate General Information
Location:
Arizona Maricopa County
Tags:
investing

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Anonymous
Ashwin Dalal

Great points. I had borrowed my down payment from my brother to buy my first home and I was glad I did it. Now, I am telling everybody.
Thanks for educating.

Feb 08, 2018 06:56 AM #45
Rainmaker
3,487,043
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Richard, great post, and those smart buyers that have bought in the last few years around Denver are rolling in equity!  

Feb 08, 2018 07:40 AM #46
Rainmaker
594,652
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Morning Joan Cox . Indeed, that's great. It's nice to hear ecstatic clients when they learn of their progressive values increasing and the equity building up!

Feb 08, 2018 08:26 AM #47
Rainmaker
93,663
Michele Herndon
Keller Williams Realty South Shore - Apollo Beach, FL

Thank you for these great insights!

Feb 08, 2018 08:54 AM #48
Ambassador
1,555,004
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Hi Richard, it can be an excellent piece in our investment portfolios. As for our stocks, it has been fun to see the gains of late. 

Feb 08, 2018 09:10 AM #49
Rainmaker
594,652
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Great testimonial Debb Janes EcoBroker and Bernie Stea JD . That's the best testimonial to your clients as well, as you do it yourself!

Feb 08, 2018 09:15 AM #50
Rainer
66,149
Anne Corbin
Fritz Realty LLC - Spotsylvania, VA
Serving Lake Anna & Central Virginia

I just had to share your blog on my business Facebook page. Great post.

Feb 08, 2018 09:25 AM #51
Anonymous
Sharon Ofori

Investing in real estate has made all the difference for me. esp as a Realtor.
Understanding that real estate income can be spotty at times, it is good to know that rental income has been more consistent.

Feb 08, 2018 10:45 AM #52
Rainer
436,660
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Investing in real estate requires some skin and financial obligations, yet, with a prudent opportunity, investing in commercial short-term real estate notes IMO may be just as lucrative and might even produce a greater ROI without any more financial obligations.  Regardless, a great post.

Feb 08, 2018 02:10 PM #53
Rainmaker
594,652
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Hi Kimo Jarrett . Very interesting comment. You should write a blog about investing in commercial short-term notes.... 

Feb 08, 2018 02:19 PM #54
Rainer
6,637
Shelley Kindya-Haglund
Destination Florida Realty, Inc. - Spring Hill, FL
Real Estate Broker/Owner Serving North Tampa Bay

Great post and 100% true!

 

Thank-you!

Shelley

Feb 08, 2018 02:30 PM #55
Rainmaker
436,160
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Specializing in Brookside, Waldo, Prairie Village

I have told my husband repeatedly we need to buy a one level home now that we will need at some point--and just use it as a rental. he doesn't want to buy 'at the top of the market'.  I agree with you!

Feb 08, 2018 05:29 PM #56
Rainer
402,189
Dörte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Richard,

Great summary. Someone was trying to explain how great annuities are. You invest $100k & get a guaranteed $700 a month, when you retire. If you invest the same money in a rental or two, you might also make $700 a month, when you retire, but you may already make money before then & the investment is hedged against inflation by going up some over time. Plus, you keep the underlying asset that is paid off over time. That could pay for a lot of assisted living, when it is eventually sold.

Feb 08, 2018 05:56 PM #57
Rainmaker
594,652
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

That's right Dörte Engel .... and here's the kicker: when you purchase an invetsment rental (income) property, someone else is paying your mortgage! (if you get a mortgage)...

Feb 09, 2018 12:06 PM #58
Rainmaker
877,492
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Great post Richard!  A very good argument for investing in real estate.  I attended a broker tour today and the topic switched to Air BnB, another great investment tactic.  One of our tour sponsors has a 4 bedroom he rents out consistently, but he has roommates and lives in a much smaller space.  Perfect fit for somoene else staying there on a vacation and he earns an income!

Feb 09, 2018 03:40 PM #59
Rainmaker
594,652
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Morning Jan Green . AirBnB is a totally different animal. Banned in most HOAs. Like running a hotel. I did hear that some people make good money, but the maintenance and the risks must be very high as well!

Feb 10, 2018 06:42 AM #60
Rainmaker
877,492
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

A lot of buyers in town are buying homes specifically to turn them into Air BnB's.  The Senate Bill passed a year ago opens the doors for that.  I received a call the other day from a former neighbor wherein someone specifically spent at least $700,000 for a home in a gated neighborhood to use as an Air BnB.  Fastest HOA meeting scheduled I've ever heard of to change eheir minimum renal period! 

Feb 10, 2018 09:40 AM #61
Rainmaker
594,652
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Right Jan Green . As far as I know, I was aware of our Governor passing a bill about allowing AirBnBs. However, unless prohibited in an HOA! ...as far as I recall. Let me know if it is otherwise, I responded to you without verifying.

Feb 10, 2018 10:06 AM #62
Rainmaker
594,652
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Hey Jan Green ... btw, I looked into a AirBnB for myself. But holy cow, that's a lot of work, time and maintenance with a very high turnover of strangers and who knows about the risks involved with your property. So I advise my clients accordingly - to make they them understand what they really getting into.

A good alternative is FlipKey. By making the minimal periods much longer so you minimize the wish-wash.

Feb 10, 2018 10:10 AM #63
Rainmaker
877,492
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Interesting - hadn't heard of that one yet.  I'll check it out.  Who knows, I might turn my current home into something like that.  No HOA and no drama!

Feb 10, 2018 10:20 AM #64
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Phoenix Scottsdale. Sellers, Buyers & Relocations
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