It seems that just about everywhere you look, there are investment “opportunities.” Yet, when investing for the future, it is essential to know what your end goal is. For many people, that goal can be income – current and / or future. That is because, while a high net worth may be great, the reality is that in order to truly achieve financial independence, you will need cash flow.
With that in mind, the rental property (or properties) that you own could be your most important investment. Here are just a few reasons why:
Incoming / Positive Cash Flow
Certainly, one of the key advantages to owning rental real estate is the incoming cash flow that it can provide. Having the right tenants residing in your properties can help you to ensure that your cash flow will continue.
When securing income for the future, you will want to be sure that your incoming cash will keep pace with the rising cost of the goods and services that you’ll need to purchase. Your properties can help you to attain that, too. In fact, real estate can oftentimes have a significantly higher correlation to inflation as compared to other asset classes such as bonds, notes, and even stock dividends.
Unlike purchasing a stock, bond, or CD, when you purchase real estate, you do not need to fund the entire purchase price in order to secure the asset. Because of this “positive leverage”, you can not only obtain property that is worth well above your down payment amount, but you can also purchase multiple units in order to increase your incoming cash flow – as well as your net worth.
Rental real estate ownership can also allow you to leverage your time. You can do so by handing over the day to day management responsibilities to a property manager. By not being tied to the property in terms of maintenance, collecting rent, or even finding tenants in the first place, you will be able to focus on other pressing issues – while still reaping the benefits of your investments.
For more details on how working with a property manager can help you to move forward in your real estate endeavors, Contact Us.