The biggest and brightest money has always loved real estate investing in income properties. That has been true since medieval times. It is true today, and it isn’t changing.
Billionaires, sovereign funds, corporations, and big investment firms all prize income property investing. It’s what has made the financial difference for many individuals and families and has made most millionaires.
Income Property Investing: What Is It?
As the term suggests, this form of real estate investing is about investing in properties that can produce regular income.
Most often, this is multifamily apartments or single-family homes. As well as duplexes and townhouses. Though some also used to invest in student housing and office or retail property.
You buy a property or part of one, collect monthly rents, and often end up rolling your equity gains into newer and bigger properties over time.
The Benefits Of Income Property Investing
There are many benefits of this type of real estate investing, including the following.
It doesn’t matter if you have millions of dollars in a nest egg in the bank. Without income coming in, you will blow through that far faster than you think. In fact, most retirees seem to deplete most of their life savings within just five years of retiring. Plus, you never know when you are going to need another source of income.
Real estate has long proven to deliver strong investment returns. Sitting idle, your money will just be devalued and be subject to a variety of risks. This is how you multiply what you have and get money working for you, instead of you working for money.
One of the top reasons the wealthy invest in real estate is for the tax benefits. There are many different potential layers of tax benefits. Meaning protecting what you have and your gains, as well as offsetting the taxes on other income you may have.
While you are gaining income from your properties each month, your properties are typically going up in value too. Or you may add value by remodeling, rebranding, releasing, etc. This is the path to amassing great wealth over time while enjoying profits now too.
Inflation devalues your money. It makes everything in life more expensive. Real estate has proven to be one of the few things to continue to grow in line or better than inflation. So, your assets and income grow faster than your expenses rising.
There is no substitute for the hard and tangible security of the bricks and mortar and land real estate offers. While real estate values can fluctuate over time too, it is not subject to the extreme and rapid volatility of other asset classes. As we recently saw with bitcoin losing investors half of their money in just about a single day. Or their related stocks dropping 30% in a month. When stocks and cryptocurrencies go bust, there is no downside protection. You can be left with absolutely nothing. In contrast, real estate will always have value and something to bounce back with.
The Best Ways To Invest In Income Property
There are many ways to invest in income property.
Whether you are already a savvy investor with plenty of capital, or you are looking for the best ideas for real estate investing for beginners, there are three key things to look for.
- Residential real estate can be the most straightforward type of property, with the most flexibility and simplicity
- Prize truly passive, hands-free income, versus trying to be a DIY landlord
- Coinvest with experienced investors and managers, who are also putting in smart capital