I am asked that often. The short answer to that question is ‘yesterday’, the second best time to invest is right now. Real Estate has created more millionaires than any other investment strategy. Don’t be fooled though by what some might say. Investing in Real Estate is not a “get rich quick” scenario, but it is a get rich slowly plan.
One of the keys to a successful real estate investment portfolio is ‘cash flow’. If you take your rental income and subtract all of your expenses, that is, mortgage payments, taxes, insurance, vacancy rate, condo fees (if applicable),etc and you end up with a number greater than zero, then you have positive cash flow. That is to say that your investment is paying for itself. Let’s face it, you can’t grow a Real Estate portfolio if you personally have to top up your payments every month, it just won’t work!
Always remember, invest where returns are best!
Another great advantage to real estate investing is leverage. This is best explained with an example. Imagine you invested $100,000 in the stock market. You would need $100,000. Now, if you invested $100,000 in real estate, you would only need $20,000 (the initial deposit). Now, let’s say that both investments increased in value by 5%. Stock portfolio is now worth $105,000, real estate portfolio is now worth $105,000. So, what’s the difference? Well, you’ve only invested $20,000 of your own money in the real estate investment. So, the actual return on your invested cash is 25% not 5% (like the stock portfolio)!
Real estate has what is called the 5X multiplier. Leveraged returns on your invested dollars!
If you have ever thought about investing, give us a call. We would be more than happy to talk to you about opportunities that are out there right now!
-Brian Reiser