Purchasing a Home is an Excellent Investment

Real Estate Broker/Owner with Sandra Nickel REALTORS

Investing in real estate is a time-tested way to successfully build wealth.  

While there are many ways to invest your savings, investing in real estate is unique in that it offers cash-flow, liquidity, profitability, and tax and diversification benefits those other investments do not.  If you’ve been thinking about how to build wealth for your retirement, you would be smart to consider investing in real estate.

There are four primary ways to make money in real estate:

  1. Appreciation. When a property increases in value, you have real estate appreciation. Sometimes is happens due to changes in the market and other times it may be due to upgrades made on the property.
  2. Cash flow income (rent). Cash flow income is a nice perk of real estate investment that you do not have in other types of investments.  It is generated when you purchase a home or apartment building or an office building and rent them out.
  3. Real Estate Income.  This is income earned by people who earn commissions through real estate transactions or buy property managers who oversee the operations of rental properties.
  4. Ancillary Real Estate Income. This can be a huge source of profit.  Things like application fees, vending machines and laundry facilities are money makers that go beyond the monthly rent. 

While there are certainly risks that come with investing in real estate, there are a lot of benefits that outweigh the risks:

  • Real estate is something that most people grow up being aware of. You may not have been exposed to things like stocks and bonds, but you likely know the importance of owning a home. Buying a home is an investment that is reachable.
  • Having an investment that you can see; something that is tangible, is psychologically important.
  • You have the control in a real estate investment.  You do not have to worry as much about being defrauded the way you might when entrusting your money to someone else to invest for you.
  • You will reap the benefits of tax advantages.
  • You can use money you make on a home sale to buy more real estate and increase your net worth.

Whether you are thinking of purchasing a home for yourself and investing in your own future by building equity or you are considering buying property to rent out, investing in real estate is great way to build wealth!

If you are in the market to buy or sell a home (or both), let me, Sandra Nickel, and my Hat Team of Professionals assist you with all your real estate needs! Call us today at 334-834-1500 and check out http://www.homesforsaleinmontgomeryalabama.com for more information.

Photo credits: thesavvycouple.com, portugalresident.com, pharmeceuticalonline.com, tmcfinancing.com

Comments (2)

M.C. Dwyer
Melody Russell Team at eXp Realty of California, Inc. - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

You've explained the many ways real estate can help make money for it's owners in an easy to read post.   I feel like all  the intangible benefits of owning one's own home are just as rewarding, even if they can't be measured as directly.    

Jul 07, 2022 09:09 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.   Thanks for sharing and enjoy your day!

Jul 13, 2022 05:58 AM