The A.C.E.S. of Real Estate Investing – Part 1

0
45

By Gail Pelto

Gail PeltoIn my ad, I talk about how not to gamble when choosing a real estate agent, something we all agree that we don’t want to roll the dice on.

Staying with this theme, let’s talk about a winning hand: The ACES of Real Estate Investing, one of the best hands you can have when it comes to securing your financial future!

Why is investing in real estate a secure, long-term benefit for both you and your families? First let’s think about this…

As humans we have some basic needs…food, shelter and water that give us all peace of mind and security, don’t they?

Now, I don’t sell food or drink, although I enjoy a great meal and some good wine every now and again. However, what I do sell is shelter—homes, condos and apartment buildings; and because shelter is a basic need for all of us, that makes Investing in real estate one of the best decisions we can make.

Let’s first review “why” real estate is a great investment vehicle. I call it the “A.C.E.S. Plus” of Real Estate

A = Appreciation.
Normally real estate goes up in value thus off-setting inflation. On average 3-6% per year in most cases. Not bad compared to our cars that go down 20%+ the minute we drive out of the dealership!

C = Cash Flow.
We can rent a property out and have some extra cash flow every month, and somebody else paying the bills. That’s when I say, what a country!

E= Equity Build Up.
If you want an investment property and you have a tenant paying your monthly mortgage payments, not only are they giving you cash flow, they’re also paying down that mortgage for you! That’s allowing you to own your investment property free and clear much faster and it never comes out of your own pocket. That’s when I say scary, what a great country!

S= Shelter Your Taxes.
There are some great tax benefits from owning investment real estate that may offset other income you make, thus enabling you to keep more of your hard-earned income.
Now the “Plus.” Yes there’s one more thing about investing in real estate and it’s called “Leverage!” Think about this: When you buy $200,000 worth of stocks, how much do you have to pay for those stocks upfront? That’s right, $200,000 of your hard cash!

On the other hand, with real estate, let’s say you went out and bought a $200,000 condo or home. All you have to put down is between 5 to 25% of your total investment and you still own an asset worth $200,000…AND you have the tenant paying off that mortgage AND the government is giving you some terrific tax benefits.

So, yes, investing in real estate can be a great decision; however it must be done right. In next month’s article we’ll talk about the different types of properties and how to invest in them correctly.

One last thing, although I’m a great real estate agent, I am not a CPA, attorney or tax advisor. So, please seek the advice from a person who is confident and licensed in those areas before making any investment decisions. Just sayin’…because it’s the right thing to do!

We’ll see you next time and if you have any questions for buying, selling or investing… Hey, I’m here! Gail Pelto—call me at 850-374-0454. Check out some terrific opportunities at www.GailPelto.com.