Stock investing certainly has the potential for return, but investing in real estate can offer you much more. Most people don’t realize just how great of a return you can get when it comes to real estate investments. There is a lot of money to be made with this method, but why is that? Why are so many investors hyping this up?
Gain More Leverage
It is extremely easy to get a loan. Mark J. Kohler said it best on entrepreneur.com,
“Gain more leverage. Real estate is one of the few investment vehicles where using the bank’s money couldn’t be easier. The ability to make a down payment, leverage your capital, and thus increase your overall return on investment is incredible.”
Getting a loan on a stock investment isn’t so easy because it is simply a guess on whether you will get a return or not. When it comes to real estate it is completely different. The value isn’t going to drastically drop and it is likely to even increase. While you could still get a loan for about 50 percent of the stock if it is low risk and you find the right investor it just isn’t as simple. With a property you are looking at only 10% down. There is a drastic difference in return amount and the investment amount. The property investment wins in both departments.
It is not difficult or confusing to invest in property. According to lerablog.org,
“Successful business owners are known to invest their profits in rental property. After all, properties are tangible and less volatile than stocks and other investment vehicles. Renting out property is also a favorable way to invest because houses and real estate are easy to comprehend.”
If fact, if you know what to avoid, it can be one of the simplest methods out there. It is a stable investment that can bring you a great deal of money in a short period of time. While using your own cash is acceptable here, it is also smart to take out a loan and use your money as the down payments. This will allow you to buy even more properties and see and even greater return on the money you are using.
So when asking yourself whether or not you should spend your cash, you should really be considering how you are going to spend it. You know that real estate investment has a lot to offer you but you have to know where to begin. You need to invest in advertising and marketing. This helps you to reach as many people as possible, and just like with everything else, this is a numbers game. When you use as little of your own money as possible it leaves you open for being able to find that one really great investment property that is hidden with those that look pretty but aren’t the big deal. Keep this in mind as you decide on real estate investing and how to smartly invest.