Inflation is defined as, “a general increase in
prices and fall in the purchasing value of money.” Your money doesn’t go as far
-- simple. The $30 k you made at your job 10 years ago and lived
comfortably with barely gets you by now. You can’t control inflation and the government has doubled their debt since
2008. It’s now at $18.3 trillion and grows every day.
The government cannot save you or your family,
or ensure your financial freedom. Set your mind right about earning money. More
cash more freedom! Money itself won’t make you happy, but it will give you
the ability to provide a better life for yourself and your loved ones. You must
invest with income streams that give you positive cash flow, learn to leverage
your debt, learn to handle inflation and take control of your physical assets.
Do you as of now have commercial real estate assets
in your investment portfolio? Are you scared to have your money in the stock
market but also fed up with almost no return on investment with your money at
the bank? Do you instinctively like the idea of being expended in income
producing real estate with comes about (results) you can see?
1. Positive cash
flow.
One of the biggest advantages to income producing
real estate investments is that leases generally secure the benefits. This gives
a regular income stream that is essentially higher than the typical stock dividend
yields.
2. Using leverage
to multiply asset value.
Another vital normal for business land
contributing is the capacity to put obligation on the benefit, which is few times
the original value. This enables you to buy more resources with less money and
significantly multiply asset value and increment value as the advances are paid
down.
3. Low-cost debt
leveraged to multiply cash flow.
Placing “positive use”
on a benefit takes for investors to effectively build positive cash flow from
operations by acquiring cash at a lower cost than the property pays out. For instance,
if a property producing a 6% money-on-money return were to have obligation
set on it at 4%, the investors would be paid 6% on the equity portion and
approximately 2% on the money obtained, thereby leveraging debt.
4. Hedge on inflation.
For each dollar that is made, there is a
corresponding liability. Real estate investments have historically shown the
highest correlation to inflation when compared to other asset classes, for
example, the S&P 500, 10-year Treasury notes and corporate securities.
As nations around the world continue to printing
money to spur economic development, it is important to recognize the advantages
of owning income producing real estate as a hedge against inflation. Generally,
when inflation occurs, the price of real estate, particularly multi-tenant
assets that have a high ratio of work and replacement costs, will likewise
rise.
5. Capitalize on
the physical assets.
Pay creating real estate is one of the only few
investment classes that, as a hard asset, has meaningful value. The property’s
land has esteem, as does the structure itself, and the income it produces has incentive
to future speculators. Income producing real estate speculations don’t have red
and green days, as does the stock exchange.
6. Maximizing
tax benefits.
The US Tax Code benefits real estate owners in a several
of ways, including boundless home loan interest deductions and depreciation
accelerations that can shield a portion of the positive cash flow generated and
paid out to investors. At the time of sale, IRS permits investors a 1031
provision, enabling investors to trade into a like-kind instrument and defer every
taxable gains into the future.
7. Asset value
appreciation.
After some time, increasingly inflation has made it
into the economy, radically reducing buying power. In any case, income creating
real estate investments have historically provided excellent appreciation in
value that meet and exceed other investment types. Properties truly increment
in esteem as the networking income of the property enhances through rent
increments and more effective management of the benefit.
8. Feeling the
pride of ownership.
The correct property in the right location with the
right occupants and possession mind-set can produce a tremendous pride of
ownership factor that is most among all advantage classes. Homeownership is out
of reach for most people. Envision owning thousands of multi-family housing
units instead?
