By Johnny MendezIn the spirit of Valentine's Day, here are just a few reasons why people love using real estate to build wealth:
Leverage: With as little as 3% down (0% for veterans) you can control hundreds of thousands of dollars worth of real estate. Let's say you put down $15,000 (3%) on a $500,000 house, if that house goes up 3% ($15,000) in value, that's a 100% return on your investment. You cannot safely use that amount of leverage in any other industry.
Tax savings: Things like the 1031 exchange, depreciation, and stepped up basis can help you save a small fortune in taxes over your lifetime.
Cashflow: Rent is due on the 1st for every month that they will ever make calendars for. Cashflow for you and whoever comes after you is a blessing.
Appreciation: While you're collecting rent every month, the value of your property will continue to increase over the long term and is a great hedge against inflation.
Tangible asset: You can't live inside your bitcoin... Owning property gives you options and freedom. You can get that 3rd dog when there's no landlord or HOA to tell you no.
Diversification: Rent and home prices are not directly correlated to 401(k) or other investments. When you retire you'll want to be able to rely on more than one source of income.
The benefits of owning property go on and on, but you can put all of that aside and think about the human aspect of owning a home. You're going to need a place to live with the ones you love and do the things you want to accomplish. The stability that comes with owning your home and other properties is hard to quantify, but I hope one day I can help you get there or continue to build onto what you've already started.