Investing in real estate for financial growth
By Guest Columnist Mallory Savner, Licensed realtor, Veterans Realty
Let’s talk real estate investing. I love real estate (obviously), and I love real estate investing. In a blog I read recently, the author said, “If you want to diversify your income streams, make yourself less susceptible to economic downturns, and reap tax benefits, then rentals are still one of the best assets you can invest in.” I couldn’t have said that better myself. I wholeheartedly believe that real estate should be a part of any long-term strategy to achieve financial growth.
Now, let me start by saying this: I am not telling you that investing in real estate will build massive wealth. It’s a long game—slow and deliberate. It takes discipline. It is not a “get rich quick” scheme. But I do believe investing in real estate is key to building a diverse portfolio that will achieve financial growth and independence. There’s a reason some of the wealthiest people in the world-- including Warren Buffett, George Soros, Jeff Bezos, Mark Cuban—invest in real estate.
A vast majority of investments are centered around the idea of buying something that we believe will be worth more later, such as stocks, collectible items, etc. Other times, an investor may buy a business that is performing poorly in hopes of increasing its performance, and thus, increasing its value. In essence, investing in this manner means you are banking on appreciation. Sometimes we may even see real estate investing done in this manner—buying properties when prices are rising, with the intent to sell later.
In my opinion, real estate investing should be done with the intention of a positive cash flow, not solely on the basis of appreciation. Absolutely you want the property you buy to appreciate, but that shouldn’t be the only goal. When your intent is to generate a positive cash flow from the very beginning, your investment is not so heavily influenced by the ebbs and flows of the market. I would dare say that, when invested properly, your properties will be shielded from any downturns in the market.
In saying all this, you need to know what your goals are and what you hope to accomplish before investing. Every investor has a different formula for determining which investments are right for them, but having a game plan and knowing exactly what you want to get from each investment will keep you focused and on track to building wealth with real estate.