Real Estate Investors
Investment in real estate can pay significant dividends in the form of cash flow and appreciation. On the other hand, if not managed properly, it can become a time consuming task with little return for your troubles. Get the inside track on how to manage your investment, minimize your tax liability and build your wealth by working with a member of our experienced team of professionals.
The main reasons you should invest in real estate are to diversify your investment portfolio with an asset class that’s not directly correlated to the stock market, generate monthly income from rental cash flow, and benefit from long-term capital appreciation.
Active real estate investing can be an important part of a sound investment strategy but isn’t for everyone because there are unique hurdles and risks.
Purchasing and owning rental properties isn’t going to begin building wealth instantly. Real estate can be an incredibly powerful wealth creation strategy, but only if you work it right. You must learn to find, evaluate, and purchase good real estate deals. You need to build a team of go-to contractors, lenders, property managers, CPAs and other professionals who provide competent services at reasonable prices.
As you build you rental portfolio, you can put systems in place that limit the need for your active involvement. Then your wealth steadily grows through passive income, increased equity through debt paydown by your tenants, and long-term capital appreciation. It works if managed correctly!
But nothing is guaranteed in life other than death and taxes. Real estate investing has unique risks. Risks need to be understood and mitigated as much as possible. Following are a few of the significant risks of investing in real estate:
- Buying the wrong property at the wrong time
- Increased liability for accidents that my occur on your property
- Getting stuck with a “professional renter” who knows how to work the legal system at your expense
- Getting overleveraged. This is a pitfall that brings down many real estate investors. You need to be able to make monthly payments on your debt despite market dips, tenant problems, property vacancies, unexpected repairs, maintenance costs, and other expenses that are part of doing business when investing in real estate.
Investment in real estate can pay significant dividends in the form of cash flow and appreciation. On the other hand, if not managed properly, it can become a time-consuming task with little return for your troubles. And at certain income levels, some of the tax benefits no longer apply. Get the inside track on how to manage your investment, minimize your tax liability and build your wealth by working with a member of our experienced team of professionals.